As filed with the United States Securities and Exchange Commission
on May 26, 2023
Registration No. 333-264972
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
Post-Effective
Amendment No. 1
On
FORM S-3 to Form S-1
REGISTRATION
STATEMENT UNDER THE SECURITIES ACT OF 1933;
SOUNDHOUND
AI, INC.
(Exact
name of registrant as specified in its charter)
Delaware |
|
7372 |
|
86-1286799 |
(State or other jurisdiction of |
|
(Primary Standard Industrial |
|
(I.R.S. Employer |
incorporation or organization) |
|
Classification Code Number) |
|
Identification Number) |
5400 Betsy Ross Drive
Santa Clara, CA 95054
Telephone: (408) 441-3200
(Address, including zip code, and telephone number,
including area code, of registrant’s principal executive offices)
Dr. Keyvan
Mohajer
SoundHound AI, Inc.
5400 Betsy Ross Drive
Santa Clara, CA 95054
Telephone: (408) 441-3200
(Name, address, including zip code, and telephone
number, including area code, of agent for service)
Please send a copy of all communications to:
Douglas Ellenoff, Esq.
Matthew Bernstein, Esq.
Ellenoff Grossman & Schole LLP
1345 Avenue of the Americas, 11th Floor
New York, New York 10105
Telephone: (212) 370-1300
Fax: (212) 370-7889
Approximate date of commencement of proposed sale
to the public: From time to time after the effective date of this Registration Statement.
If the only securities being registered on this
Form are being offered pursuant to dividend or interest reinvestment plans, please check the following box. ☐
If any of the securities being registered on this
Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities offered
only in connection with dividend or interest reinvestment plans, check the following box. ☒
If this Form is filed to register additional securities
for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration
statement number of the earlier effective registration statement for the same offering. ☐
If this Form is a post-effective amendment filed
pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of
the earlier effective registration statement for the same offering. ☐
If this Form is a registration statement pursuant
to General Instruction I.D. or a post-effective amendment thereto that shall become effective upon filing with the Commission pursuant
to Rule 462(e) under the Securities Act, check the following box. ☐
If this Form is a post-effective amendment to
a registration statement filed pursuant to General Instruction I.D. filed to register additional securities or additional classes of securities
pursuant to Rule 413(b) under the Securities Act, check the following box. ☐
Indicate by check mark whether the registrant
is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company.
See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company”
and “emerging growth company” in Rule 12b-2 of the Exchange Act.:
Large accelerated filer ☐ |
|
Accelerated filer ☐ |
Non-accelerated filer ☒ |
|
Smaller reporting company ☒ |
|
|
Emerging growth company ☒ |
If an emerging growth company, indicate by check
mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting
standards provided pursuant to Section 7(a)(2)(B) of Securities Act. ☐
The registrant hereby amends this registration
statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment that
specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities
Act, or until the registration statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant
to said Section 8(a), may determine.
The information in
this preliminary prospectus is not complete and may be changed. The securities may not be sold pursuant to this registration statement
until the registration statement filed with the Securities and Exchange Commission, of which this prospectus is a part, is effective.
This preliminary prospectus is not an offer to sell these securities and is not soliciting an offer to buy these securities in any state
where the offer or sale is not permitted.
SUBJECT TO COMPLETION,
DATED MAY 26, 2023
Prospectus
SOUNDHOUND
AI, INC.
55,999,499 Shares of Class A Common
Stock
39,735,408 Shares of Class A Common Stock Underlying Shares of Class B Common Stock
174,750 Placement Warrants
3,457,996 Shares of Class A Common Stock Underlying Warrants
This prospectus relates
to (i) the offer and resale of an aggregate of up to 55,999,499 shares of Class A common stock, par value $0.0001 per
share (the “Class A Shares” or “Class A Common Stock”), of SoundHound AI, Inc. (“SoundHound AI,”
“the Company,” “we,” “us” or “our”) held by selling securityholders named in this prospectus
(each a “Selling Securityholder” and, collectively with the securityholders in (ii) and (iii) below, the “Selling
Securityholders”), including (a) the PIPE Shares (as defined below) issued at $10.00 per share, (b) securities held by
our officers, directors and their affiliates which were originally issued as (1) founder shares in connection with ATSP’s
IPO (each as defined below) for approximately $0.009 per share and (2) as part of placement units in connection with ATSP’s
IPO at a price of $10.00 per placement unit, and (c) shares of Class A Common Stock exercisable under options held by certain
of the Selling Securityholders which were assumed by us and converted into options of SoundHound AI in connection with the Business Combination
(as defined below) and have an weighted average exercise price of $3.05 per share after giving effect to the Business Combination, (ii) the
resale by certain of our affiliates from time to time of up to 39,735,408 Class A Shares issuable upon conversion of shares of Class B
common stock, par value $0.0001 per share, issued pursuant to the Merger Agreement (as defined below) in connection with the Business
Combination as merger consideration at an acquiror share value of $0.0073 per share (the “Class B Shares” or “Class B
Common Stock”), (iii) the resale from time to time of up to 174,750 unregistered warrants, each exercisable for one share
of Class A Common Stock at a price of $11.50, subject to adjustment, which were originally issued as part of placement units in
connection with ATSP’s IPO at a price of $10.00 per placement unit (the “Placement Warrants”) and (iv) the issuance
by us of up to 3,457,996 Class A Shares upon the exercise of outstanding registered warrants to purchase our Class A Shares
at an exercise price of $11.50, which were originally issued as part of the units in connection with ATSP’s IPO at a price of $10.00
per unit (the “Registered Warrants”).
On April 26, 2022, pursuant
to the merger agreement (the “Merger Agreement”) dated as of November 15, 2021 by and among Archimedes Tech SPAC Partners
Co. (“ATSP”), ATSPC Merger Sub, Inc. and SoundHound, Inc., the parties consummated the merger of ATSPC Merger Sub, Inc. with
and into SoundHound, Inc., with SoundHound, Inc. continuing as the surviving corporation (the “Merger”), as well as the other
transactions contemplated by the Merger Agreement (the Merger and such other transactions, the “Business Combination”). As
a result of the Business Combination, SoundHound became a wholly owned subsidiary of ATSP and ATSP changed its name to “SoundHound
AI, Inc.” SoundHound AI currently owns 100% of the outstanding common stock of SoundHound, Inc.
In connection with the Merger
Agreement, ATSP entered into subscription agreements (collectively, the “Subscription Agreements”) with certain accredited
investors (the “Subscribers”) pursuant to which the Subscribers agreed to purchase, and ATSP agreed to sell to the Subscribers,
an aggregate of 11,300,000 shares of Class A Common Stock (“PIPE Shares”), for a purchase price of $10.00 per share and
an aggregate purchase price of $113,000,000 (the “PIPE Investment”). The PIPE Shares are identical to the shares of common
stock that were held by the Company’s public stockholders at the time of the closing of the Business Combination, except that the
PIPE Shares were not registered under the Securities Act of 1933, as amended, and are restricted shares. The sale of PIPE Shares
was consummated concurrently with the closing of the Merger Agreement.
We are also registering
the issuance of shares of Class A Common Stock issuable upon exercise of certain Registered Warrants as provided in the Warrant
Agreement (as defined below) and the resale of certain of the unregistered Placement Warrants. The shares of common stock issuable upon
exercise of the Registered Warrants, as a percentage of the total number of shares of common stock issuable upon exercise of the Warrants
(as hereinafter defined), represent 94.4% of the total number of shares of common stock issuable upon exercise of Warrants. Whether we
will receive cash proceeds associated with the exercise of Warrants is dependent on our stock price. To the extent the sales price of
Class A Shares is lower than the exercise price of such Warrants, we are unlikely to receive proceeds from the exercise of such
Warrants. None of the Warrants have been exercised to date. We do not currently anticipate this will have a material impact on our liquidity.
This prospectus also covers
any additional shares of Class A Common Stock that may become issuable upon any anti-dilution adjustment pursuant to the terms of
the Warrants by reason of stock splits, stock dividends, and other events described therein.
In connection with the
Business Combination, holders of 96% of ATSP’s securities with redemption rights exercised their right to redeem their securities
for cash at a redemption price of approximately $10.00 per unit, for an aggregate redemption amount of $127,679,500. The shares of Class A
Common Stock being offered for resale pursuant to this prospectus by the selling securityholders represent approximately 23.5% of shares
outstanding on a fully diluted basis as of May 15, 2023. Given the substantial number of shares of Class A Common Stock being registered
for potential resale by selling securityholders pursuant to this prospectus, the sale of shares by the selling securityholders, or the
perception in the market that the selling securityholders of a large number of shares intend to sell shares, could increase the volatility
of the market price of our common stock or result in a significant decline in the public trading price of our common stock. Even if our
trading price is significantly below $10.00, the offering price for the units offered in ATSP’s IPO, certain of the selling securityholders
may still have an incentive to sell shares of our common stock because they purchased or received the shares at prices lower than the
public investors or the current trading price of our common stock. For example, based on the closing price of our Class A Common
Stock of $2.57 as of May 1, 2023, holders of the founder shares may experience a potential profit of up to approximately $2.56 per share,
or approximately $8.52 million in the aggregate.
The Selling Securityholders,
or their respective transferees, pledgees, donees or other successors-in-interest, may sell their securities through public or private
transactions at prevailing market prices, at prices related to prevailing market prices or at privately negotiated prices. The Selling
Securityholders may sell any, all or none of the securities offered by this prospectus, and we do not know when or in what amount the
Selling Securityholders may sell their shares, Placement Warrants or Warrant Shares hereunder following the effective date of the registration
statement of which this prospectus forms a part. We provide more information about how a Selling Securityholder may sell shares or Warrant
Shares in the section titled “Plan of Distribution” on page 28.
We are registering the securities
on behalf of the Selling Securityholders, to be offered and sold by them from time to time as well as on behalf of the Company with respect
to the Warrant Shares issuable upon exercise of the Registered Warrants. We will not receive any proceeds from the sale of our shares
or Placement Warrants by the Selling Securityholders in the offering described in this prospectus, but we will receive proceeds resulting
from any exercise of the Registered Warrants and Placement Warrants. We cannot predict when and in what amounts or if the Registered Warrants
or Placement Warrants will be exercised. We have agreed to bear all of the expenses incurred in connection with the registration of the
securities registered hereunder. The Selling Securityholders will be responsible for the payment of all discounts, commissions and fees
of underwriters, selling brokers or dealer managers and similar expenses, if any, incurred in connection with the sale of their shares
and Placement Warrants.
The number of shares
available for re-sale under this prospectus on the date hereof may have changed since the SEC declared this Registration Statement
effective. See “Selling Securityholders” beginning on page 18 for an updated list of the shares still available for sale
under this prospectus to the extent that the Company is aware of any such changes.
We are an “emerging growth
company” and a “smaller reporting company” as such terms are defined under federal securities laws, and, as such have
elected to take advantage of certain reduced public company reporting requirements for this prospectus and may elect to do so in future
filings.
Our Class A Shares
and Registered Warrants are listed on The Nasdaq Global Market under the symbols “SOUN” and “SOUNW,” respectively.
On May 15, 2023, the last reported sales price of the Class A Common Stock was $2.60 per share and the last reported sales price
of our Registered Warrants was $0.3386 per warrant.
We may amend or supplement
this prospectus from time to time by filing amendments or supplements as required. You should read this entire prospectus and any amendments
or supplements carefully before you make your investment decision.
Investing in our securities
involves a high degree of risk. Please read “Risk Factors” beginning on page 9 of this prospectus.
Neither the Securities and
Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed upon the adequacy or
accuracy of this prospectus. Any representation to the contrary is a criminal offense.
The date of this prospectus is ,
2023.
TABLE OF CONTENTS
We urge you to read carefully
this prospectus, any applicable prospectus supplement and any free writing prospectuses we have authorized for use in connection herewith,
together with the information incorporated herein by reference as described under the heading “Incorporation of Documents by Reference,”
before investing in any of the securities being offered. You should rely only on the information contained in, or incorporated by reference
into, this prospectus and any applicable prospectus supplement, along with the information contained in any free writing prospectuses
we have authorized for use in connection herewith. Neither we nor the Selling Securityholders have authorized anyone to provide you with
different or additional information. If anyone provides you with different or inconsistent information, you should not rely on it. This
prospectus is an offer to sell only the securities offered hereby, but only under circumstances and in jurisdictions where it is lawful
to do so.
The information appearing
in this prospectus, any applicable prospectus supplement or any related free writing prospectus is accurate only as of the date on the
front of the document and any information we have incorporated by reference is accurate only as of the date of the document incorporated
by reference, regardless of the time of delivery of this prospectus, any applicable prospectus supplement or any related free writing
prospectus, or any sale of a security. Our business, financial condition, results of operations and prospects may have changed since that
date.
We further note that the
representations, warranties and covenants made by us in any document that is filed as an exhibit to the registration statement of which
this prospectus is a part and in any document that is incorporated by reference herein were made solely for the benefit of the parties
to such agreement, including, in some cases, for the purpose of allocating risk among the parties to such agreements, and should not be
deemed to be a representation, warranty or covenant to you. Moreover, such representations, warranties or covenants were accurate only
as of the date when made. Accordingly, such representations, warranties and covenants should not be relied on as accurately representing
the current state of our affairs.
This prospectus contains
summaries of certain provisions contained in some of the documents described herein, but reference is made to the actual documents for
complete information. All of the summaries are qualified in their entirety by the actual documents. Copies of some of the documents referred
to herein have been filed, will be filed or will be incorporated by reference as exhibits to the registration statement of which this
prospectus is a part, and you may obtain copies of those documents as described below under the section entitled “Where You Can
Find Additional Information.”
This prospectus includes
industry position and industry data and forecasts that we obtained or derived from internal company reports, independent third party publications
and other industry data. Some data are also based on good faith estimates, which are derived from internal company analyses or review
of internal company reports as well as the independent sources referred to above.
Although we believe that
the information on which it has based these estimates of industry position and industry data are generally reliable, the accuracy and
completeness of this information is not guaranteed and we have not independently verified any of the data from third-party sources nor
have we ascertained the underlying economic assumptions relied upon therein. Statements as to industry position are based on market data
currently available. While we are not aware of any misstatements regarding the industry data presented herein, these estimates involve
risks and uncertainties and are subject to change based on various factors, including those discussed under the heading “Risk Factors”
in this prospectus.
This prospectus contains,
or incorporates by reference, trademarks, tradenames, service marks and service names of SoundHound AI and its subsidiaries.
FREQUENTLY USED TERMS
Unless otherwise stated in
this prospectus, the terms, “we,” “us,” “our” “the Company” or “SoundHound AI”
refer to SoundHound AI, Inc., a Delaware corporation, and its subsidiaries. Further, in this document:
| ● | “ATSP” means Archimedes Tech SPAC Partners Co. |
| ● | “Bylaws” means the Amended & Restated
Bylaws of the Company, which took effect upon the effectiveness of the Charter. |
| ● | “Board” means the board of directors of the Company. |
| ● | “Business Combination” means the merger contemplated
by the Merger Agreement. |
| ● | “Charter” means the Second Amended &
Restated Certificate of Incorporation of the Company, which took effect upon the filing thereof in the State of Delaware. Among other
things, pursuant to the Charter, ATSP changed its name to SoundHound AI, Inc. |
| ● | “Class A Common Stock” or “Class A
Shares” mean the Class A common stock, $0.0001 par value per share, of the Company. |
| ● | “Class B Common Stock” or “Class B
Shares” mean the Class B common stock, $0.0001 par value per share, of the Company, issued at the closing to the SoundHound
Founders, having the rights and terms set forth in the Charter, which are generally the same as the rights and terms as shares of Class A
Common Stock, except that each share of Class B Common Stock is entitled to ten votes per share and except that shares of Class B
Common Stock may be converted into, or under some circumstances shall be mandatorily converted into, shares of Class A Common Stock. |
| ● | “Closing” means the consummation of the Business
Combination. |
| ● | “Closing Date” means April 26, 2022, the
date of the Closing. |
| ● | “Code” means the Internal Revenue Code of 1986,
as amended. |
| ● | “Common Stock” or “common stock”
means the shares of common stock, par value $0.0001 per share, of ATSP prior to the Closing, and the Class A Common Stock and Class B
Common Stock of the Company following the Closing, as applicable. |
| ● | “Continental” means Continental Stock Transfer &
Trust Company, our transfer agent and warrant agent. |
| ● | “EarlyBirdCapital” means EarlyBirdCapital, Inc.,
the representative of the underwriters in the IPO. |
| ● | “Exchange Act” means the Securities Exchange Act of 1934,
as amended. |
| ● | “founder shares” means the 3,325,000 outstanding
shares of common stock initially purchased by the Sponsor for an aggregate purchase price of $25,000 on January 4, 2021. |
| ● | “GAAP” means accounting principles generally
accepted in the United States of America. |
| ● | “IPO” refers to the initial public offering of
13,300,000 units of ATSP consummated in March 2021, inclusive of the partial exercise of the over-allotment option. |
| ● | “IRS” means the United States Internal Revenue
Service. |
| ● | “Merger Agreement” means that certain Merger
Agreement, dated as of November 15, 2021, by and among ATSP, Merger Sub and SoundHound, as it may be amended or supplemented |
| ● | “Merger Sub” means ATSPC Merger Sub, Inc., a
Delaware corporation, which was, prior to the Closing, a wholly-owned subsidiary of the Company. |
| ● | “PIPE Investment” means the issuance of 11.3 million
shares of Class A Common Stock to certain investors for an aggregate purchase price of $113.0 million in a private placement
immediately prior to the Closing of the Business Combination. |
| ● | “Placement Warrants” means 174,750 Warrants sold
in private placement consummated concurrently with the IPO as well as 33,250 Warrants held by EarlyBirdCapital or its transferees or
designees. |
| ● | “Private Units” mean the 416,000 units issued
to the Sponsor and EarlyBirdCapital in a private placement concurrently with the IPO. |
| ● | “Registered Warrants” means our registered warrants to
purchase our Class A Shares at an exercise price of $11.50, which were originally issued as part of the units in connection with
ATSP’s IPO at a price of $10.00 per unit. |
| ● | “Representative Shares” means the 420,000 shares
of common stock issued to EarlyBirdCapital, the representative of the underwriters in the IPO. |
| ● | “SEC” means the U.S. Securities and Exchange
Commission. |
| ● | “Securities Act” means the Securities Act of 1933,
as amended. |
| ● | “SoundHound Founders” means Dr. Keyvan Mohajer,
Dr. Majid Emami and James Hom. |
| ● | “Sponsor” means Archimedes Tech SPAC Sponsors
LLC., a Delaware limited liability company. |
| ● | “Subscription Agreements” means the Subscription
Agreements with the PIPE Investors subscribing to participate in the PIPE Investment. |
| ● | “Trust Account” means the Company’s trust
account maintained by Continental prior to the Closing. |
| ● | “units” means the units of the Company, each
consisting of one subunit (each subunit consisting of one share of common stock and one-quarter of one redeemable Warrant) and one-quarter of
one redeemable Warrant. |
| ● | “Warrant Agreement” refers to that certain Amended
and Restated Warrant Agreement, dated as of April 26, 2022, between ATSP and Continental Stock Transfer & Trust Company,
as warrant agent. |
| ● | “Warrants” refer to the warrants of SoundHound
AI, including the Placement Warrants and the Registered Warrants, in each case redeemable and entitling the holder thereof to purchase
one share of Class A Common Stock at a price of $11.50 per share (subject to adjustment). |
| ● | “Warrant
Shares” refer to the Class A Shares issuable upon exercise of the Warrants. |
CAUTIONARY NOTE REGARDING FORWARD LOOKING STATEMENTS
This prospectus, any
accompanying prospectus supplement and the documents incorporated by reference herein contain forward-looking statements within
the meaning of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange
Act”), that are forward-looking and as such are not historical facts. These forward-looking statements include, without limitation,
statements regarding future financial performance, business strategies, expansion plans, future operations, future operating results,
estimated revenues, losses, projected costs, prospects, plans and objectives of management. These forward-looking statements are based
on our management’s current expectations, estimates, projections and beliefs, as well as a number of assumptions concerning future
events, and are not guarantees of performance. Such statements can be identified by the fact that they do not relate strictly to historical
or current facts. When used in this prospectus and any accompanying prospectus supplement, words such as “outlook,” “believes,”
“expects,” “potential,” “continues,” “may,” “will,” “should,”
“would,” “could,” “seeks,” “approximately,” “predicts,” “intends,”
“plans,” “estimates,” “anticipates,” “projects” or the negative version of these words
or other comparable words or phrases, may identify forward-looking statements, but the absence of these words does not mean that a statement
is not forward-looking. The following factors among others, could cause actual results and future events to differ materially from those
set forth or contemplated in the forward-looking statements:
| ● | execution of our business strategy, including launching new
product offerings and expanding information and technology capabilities, particularly following our recent restructuring efforts; |
| ● | our market opportunity and our ability to acquire new customers
and retain existing customers; |
| ● | the timing and impact of our growth initiatives on our future
financial performance; |
| ● | the ability of SoundHound AI to protect intellectual property
and trade secrets; |
| ● | the ability to obtain additional capital, including equity
or debt financing, on terms that are acceptable to SoundHound AI, if at all, particularly in light of inflationary pressures and resulting
increases in the cost of borrowing; |
| ● | our ability to maintain the listing of our securities on
the Nasdaq Global Market; |
| ● | changes in applicable laws or regulations and extensive and
evolving government regulations that impact the Company’s operations and business; |
| ● | the ability to attract or maintain a qualified workforce,
particularly following our recent restructuring efforts; |
| ● | level of product service failures that could lead SoundHound
AI customers to use competitors’ services; |
| ● | investigations, claims, disputes, enforcement actions, litigation
and/or other regulatory or legal proceedings, including with respect to our AI technology; |
| ● | the effects of the COVID-19 pandemic or any similar public
health developments on SoundHound AI’s business; |
| ● | risks relating to uncertainty of our estimates of market
opportunity and forecasts of market growth; |
| ● | the possibility that SoundHound AI may be adversely affected
by other economic, business, and/or competitive factors; and |
| ● | other risks and uncertainties described under the section
titled “Risk Factors” in this prospectus. |
The forward-looking statements
contained in this prospectus are based on our current expectations and beliefs concerning future developments and their potential effects
on our business. There can be no assurance that future developments affecting our business will be those that we have anticipated. These
forward-looking statements involve a number of risks, uncertainties (some of which are beyond our control) or other assumptions that may
cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. These
risks and uncertainties include, but are not limited to, those factors described in the section entitled “Risk Factors.”
Moreover, we operate in a
very competitive and rapidly changing environment. New risks and uncertainties emerge from time to time and it is not possible for us
to predict all such risk factors, nor can we assess the effect of all such risk factors on our business or the extent to which any factor
or combination of factors may cause actual results to differ materially from those contained in any forward-looking statements. Should
one or more of these risks or uncertainties materialize, or should any of the assumptions prove incorrect, actual results may vary in
material respects from those projected in these forward-looking statements.
The forward-looking statements
made by us in this prospectus and any accompanying prospectus supplement speak only as of the date of this prospectus and the accompanying
prospectus supplement. Except to the extent required under the federal securities laws and rules and regulations of the SEC, we disclaim
any obligation to update any forward-looking statement to reflect events or circumstances after the date on which the statement is made
or to reflect the occurrence of unanticipated events. In light of these risks and uncertainties, there is no assurance that the events
or results suggested by the forward-looking statements will in fact occur, and you should not place undue reliance on these forward-looking
statements.
PROSPECTUS SUMMARY
This summary highlights
selected information contained elsewhere in this prospectus. This summary does not contain all the information that you should consider
before investing in our Company. You should carefully read the entire prospectus, including all documents incorporated by reference herein.
In particular, attention should be directed to our “Risk Factors,” “Information With Respect to the Company,”
“Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the financial statements
and related notes thereto contained herein or otherwise incorporated by reference hereto, before making an investment decision.
As used herein, and any amendment
or supplement hereto, unless otherwise indicated, “we,” “us,” “our,” the “Company,” or
“SoundHound AI” means SoundHound AI, Inc. and its subsidiaries.
Unless otherwise indicated, all references in this prospectus to “dollars” or “$” refer to US dollars.
Company Overview
SoundHound AI is a leading
innovator of conversational intelligence, offering an independent Voice AI platform that enables businesses across industries to deliver
high quality conversational experiences to their customers. Built on proprietary Speech-to-Meaning® and Deep Meaning
Understanding® technologies developed over the past 17 years, our advanced Voice AI platform provides exceptional
speed and accuracy.
We envision a future where
people interact with products on a daily basis through voice-enabled AI. Our technology provides a conversational voice-enabled user
interface, allowing a more natural and more productive way of interacting with the products and services we use. SoundHound AI is also
committed to enabling product creators to design, customize, differentiate, innovate, and monetize the voice interfaces to their own products
and services, as opposed to outsourcing to a third-party assistant.
More often than not, we currently
interact with voice-enabled third-party assistants using halted speech patterns, consciously dividing queries into limited,
broken, and unnatural instructions. By contrast, using SoundHound AI, businesses can voice-enable their products so consumers can
say things like, “Turn off the air conditioning and lower the windows,” while in their cars, “Find romantic comedies
released in the last year,” while streaming on their TV, and even place food orders before arriving at a restaurant by talking to
their cars, TVs, or other “internet of things” (“IoT”) devices. Additionally, SoundHound AI’s technology
can address complex user queries such as, “Show me all restaurants within half a mile of the Space Needle that are open past 9pm
on Wednesdays and have outdoor seating,” and follow-on qualifications such as “Okay, don’t show me anything with
less than 3 stars or fast food.”
SoundHound AI’s technology
is currently being used globally by customers that include Hyundai, Mercedes-Benz, Pandora, Snap, VIZIO, Square, Toast, Oracle, KIA, and
Stellantis. We have seen significant inflection in customer adoption of our technology, as measured through activity on our Houndify platform,
which surpassed 1 billion annual queries in 2021 and experienced over 85% growth during 2022. Our current customers, which in many
cases have contractual obligations that average multiple years (often between three to five years), span multiple industries
and geographies, and together have an estimated combined reach of over two billion end users. We consider our long-term customers
our “partners” and, by growing these strategic relationships, SoundHound AI’s revenues have grown by more than 45% year
over year each fiscal year over the past four years.
We support our customers by
providing them access to Houndify® — an open-access platform that allows developers to leverage SoundHound
AI’s Voice AI technology and a library of over 100 content domains, including commonly used domains for points of interest, weather,
flight status, sports, and more. To ensure that our content domains continue to evolve and grow, our platform is built on our breakthrough
Collective AI® — an architecture for connecting domain knowledge, which encourages collaboration and contribution
among developers, is always learning, and is greater than the sum of its parts. This architecture allows us to improve the understanding
capability of our platform super-linearly and even exponentially based on linear contributions because of how the domains interact
with one another. They can be inter-connected and can learn from each other and, as developers contribute to the platform, its understanding
capability can grow exponentially.
Our technology is backed by
SoundHound AI’s investments in intellectual property, with over 120 patents granted and over 140 patents pending, spanning multiple
fields including speech recognition, natural language, machine learning, monetization, and more. We have achieved this critical momentum
in part thanks to a leadership team with deep expertise and proven ability to attract and retain talent.
Our Mission
SoundHound AI’s mission
is to voice-enable the world with conversational intelligence through an independent AI platform enabling humans to interact with
products and services like they interact with each other — by speaking naturally.
Our Opportunity
Industry sources predict that
90% of new vehicles globally will have voice assistants by 2028 and that there will be 75 billion connected devices worldwide by
2025. The number of devices with their own voice assistant is expected to surpass the world’s population within four years.
Across industries, 94% of large companies expect to use Voice AI within two years, according to a Pindrop Security, Inc. study, indicating
the imperative most companies feel to provide a voice user interface to their products and services. These and other trends are adding
up to exponential growth for Voice AI in a variety of markets, including IoT, automotive, retail, hospitality, enterprise, healthcare,
contact center, and banking and finance.
Our Vision
We aim to change the way people
talk to voice assistants by making computers better than humans in language understanding. As a result, SoundHound AI can make humans
more productive and help make the world a better place. Our vision further includes empowering billions of devices around the world using
our technology, with innovation and monetization opportunities for the product creators that integrate the Houndify platform. It means
product creators can not only use Voice AI to make their product better they can also generate incremental recurring revenues from customer
interactions. Our vision also places a high emphasis on user experience. Before monetization growth can occur, delivering value and delight
to end users is paramount. As a result, the most effective monetizable interactions will be those that flow naturally based on context,
create value for the end-user, and would not be perceived by users as intrusive advertisements.
Our Products
Houndify platform, SoundHound
Ai’s Voice AI platform, combines advanced AI with engineering expertise to help brands build conversational voice assistants.
From proprietary components to customizable and scalable solutions, we offer tools to build a highly accurate and responsive voice user
interface. The suite of Houndify tools, includes Application Programming Interfaces (“API”) for text and voice queries, support
for custom commands, extensive library of content domains, inclusive Software Development Kit platforms, collaboration capabilities, diagnostic
tools, and built-in analytics. Houndify provides a web API that takes in text queries or audio and returns actionable JavaScript
Object Notation to anyone with an internet connection wanting to add Voice AI to any product or application.
Automatic Speech Recognition,
our highly optimized, tunable, and scalable ASR engine, supports vocabulary sizes containing millions of words. Houndify’s machine
learning infrastructure allows us to tune the engine to achieve optimal Computer Processing Unit (“CPU”) performance while
delivering high accuracy rates. Houndify’s language and acoustic modelling architecture also uses machine learning to increase word
recognition accuracy. Rapid iteration is possible due to our accelerated training pipeline and architecture that improves as data is collected.
Highly accurate transcriptions result from advanced acoustic models trained to perform in a variety of scenarios — including
in severely noisy environments and when accented language is spoken.
Natural Language Understanding
(“NLU”), our proprietary Speech-to-Meaning technology, tracks speech in real-time and understands the
context, even before the user has finished speaking. Instead of the typical two-step process of transcribing speech into text and
then passing the text into an NLU model, Houndify can accomplish both of these tasks in one step, delivering faster and more accurate
results. Houndify’s ability to process and understand speech the instant a user stops speaking gives voice assistants the ability
to respond faster. Understanding speech in real-time without requiring additional processing or waiting for the user to finish speaking
creates responsive and natural conversations between people and products. By understanding context, Houndify responds accurately to users
by distinguishing between similar words and names. Our NLU can discern the difference between words that sound the same, but have different
spellings and meanings. For example, if users want to navigate to 272 Hoch Street in Dayton, Ohio, it won’t look for Hawk Street.
Using our proprietary Deep Meaning Understanding technology, a custom voice assistant can handle complex queries with compound criteria
including conversational follow up, address multiple questions and filter results simultaneously — accurately and quickly
answering users’ most complex questions.
Wake Words are the
entry point into branded voice experiences, allowing users to invoke the assistant by literally speaking the company’s name. Examples
range from “Hey Pandora” in a mobile app to “Hey Peugeot” within a vehicle. Rigorous development and testing enable
our wake words to perform in noisy environments and minimize false-positives or false-negatives. We use advanced machine learning
algorithms and Deep Neural Networks to provide broad robustness to our high-volume training data, resulting in high accuracy.
Custom Domains, a library
of over 100 public domains, is available with a free Houndify account. Houndify public domains give developers instant access to a broad
range of content to fit their unique use cases. This includes multi-category content intended to appeal to broad range of audiences,
including, for instance, sports scores, weather, podcasts, travel information, recipes, stock prices, among many others. Companies can
enhance product functionality or proprietary operations with Houndify Private Domains, allowing customization and development of more
specific content. Customers who subscribe for this service have full access to their private domains securely on the Houndify platform
while retaining the ability to iterate and update content. For example, an automotive manufacturer can make helpful updates about
the car’s user manual over time. In this way, SoundHound AI becomes a long-term “partner” to its customers, helping
companies create the domains that they need in order to improve brand value for their own customers or end users.
Text-to-speech (“TTS”). A
high-quality TTS helps companies create a unique voice that differentiates them from the competition. Brands can fully express their personality
by choosing the gender, tone, and personality that will become their vocal identity. Our machine learning algorithms transform recorded
voices into large databases of spoken sounds to form entire vocabularies of natural language — adapted to the user’s
environment. We can transform any voice to generate a high-quality TTS with a small CPU footprint.
Edge (Embedded) is
a fully-embedded voice solution for brands seeking the convenience of a voice user interface without the privacy or connectivity
concerns of the internet. Edge includes full access to custom commands and the ability to instantly update commands during development.
To harness the capabilities
of full cloud connectivity with the reliability of embedded voice technology. Houndify Edge Hybrid solutions are designed
to ensure that devices are always-on and responsive to commands. Allows for over-the-air product updates and a broader voice
experience with the level of cloud-connectivity that best matches the product and its users.
Our Competitive Advantage
The majority of participants
in the Voice AI industry can be characterized as either “big tech” companies (meaning large corporations offering Voice AI
as an extension of other services) and “legacy vendors” (meaning long-time Voice-AI industry participants with older
technologies). Brands relying on big tech Voice AI frequently experience decreased ability to innovate, differentiate, and customize the
way that their products interact with Voice AI platforms and/or end users. In some cases, these big tech Voice AI providers even compete
with the customers whose products their technologies support, making them increasingly less attractive as a choice for a voice interface.
Many “legacy vendors” offer dated technologies at a high price. Furthermore, in many cases, legacy vendor technologies still
require significant effort by product creators to turn legacy AI product offerings into solutions that can compete with the quality of
Voice AI products currently offered by big tech companies, which is oftentimes neither economical nor practical.
There is currently a high
barrier to entry into Voice AI and we view the current environment as an opportunity to provide disruptive technologies with capabilities
we believe are superior to existing alternatives, allowing customers to maintain their brand, control the user experience, get access
to the data, and define their own privacy policies, while being able to customize, differentiate, innovate, and monetize.
Our Revenue Model
We have identified three pillars
for revenue growth: Royalties, Subscription, and Monetization, and all three pillars contribute to our current revenues today. While the
majority of current revenues come from royalties, over time we expect our revenues from subscription and monetization pillars to increase
and eventually represent a larger portion of our overall revenues.
Royalties: This
involves voice-enabling a product. The product creator pays us a royalty based on volume, usage, or duration. SoundHound AI collects
royalties when Houndify is integrated into a product such as a car, smart speaker, or appliance.
Subscription: This
involves voice-enabling a service that doesn’t rely on a physical product. Examples include when SoundHound AI enables customer
service or food ordering for restaurants or content management, appointments, or voice commerce, we generate subscription revenue from
the service providers.
Monetization: This
pillar creates an ecosystem that enables monetization services in products and services from both pillar one and pillar two. When users
of a voice-enabled product access the voice-enabled monetization, this creates new leads and transactions. SoundHound AI generates
monetization revenue for generating these leads and transactions, and will share revenue with the product creators. Through December 31,
2022, we have not generated revenue from leads and transactions on voice-enabled products from voice-enabled services other
than from the SoundHound AI music identification app. Going forward, SoundHound AI expects monetization revenue to be generated through
a combination of advertising revenue from the music identification app and from leads and transactions on voice-enabled products
from voice-enabled services.
Our Sales and Marketing
We employ Account-Based Marketing
(“ABM”) leveraging leading-edge platforms supported by fully-current Marketing Automation tools to capture and nurture
business leads through to Marketing Qualified Leads (“MQL”), Sales Accepted Leads (“SAL”), and Sales Qualified
Leads (“SQL”) ultimately to drive towards return-on-investment-positive marketing expenditures. We also see strategic
partnerships as the foundation for our ongoing growth and success. Our deep collaboration with leading companies across industries has
allowed our technology to reach millions of customers. Largely through our existing customer base, query volume exceeded 1 billion
at the end of 2021 and experienced over 85% growth during 2022. Information provided to us by our strategic partners suggests that our
customers’ products have a reach of over a billion users. Our sales and marketing efforts may be impacted by our Restructuring
Plan, see “Prospectus Summary — Recent Developments” herein.
Our Intellectual Property
SoundHound AI’s intellectual
property portfolio includes over 120 patents granted and over 140 patents pending. These patents cover areas such as speech recognition,
natural language understanding, machine learning, human interfaces, and others, including monetization and advertising. Out of our over
260 patents granted and pending, more than 40 of these patents are in conversational monetization. Because we predict that search traffic
will change from keyword-based queries to conversational interactions, we have a large number of patents in the area of conversational
advertising.
Implications of Being
an Emerging Growth Company and a Smaller Reporting Company
We
qualify as an “emerging growth company,” as defined in the JOBS Act. For as long as we remain an emerging growth company,
we may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies. These provisions
include, but are not limited to:
| ● | being permitted to have only two years of audited financial
statements and only two years of related selected financial data and management’s discussion and analysis of financial condition
and results of operations disclosure; |
| ● | an exemption from compliance with the auditor attestation
requirement in the assessment of our internal control over financial reporting pursuant to Section 404 of the Sarbanes-Oxley Act of 2002,
as amended, or the Sarbanes-Oxley Act; |
| ● | reduced disclosure about executive compensation arrangements
in our periodic reports, registration statements and proxy statements; and |
| ● | exemptions from the requirements to seek non-binding advisory
votes on executive compensation or golden parachute arrangements. |
In
addition, the JOBS Act permits emerging growth companies to take advantage of an extended transition period to comply with new or revised
accounting standards applicable to public companies. We are not choosing to “opt out” of this provision. We will remain an
emerging growth company until the earliest of (i) the last day of the fiscal year following the fifth anniversary of the completion
of our initial public offering, (ii) the last day of the first fiscal year in which our annual gross revenues exceed $1.235 billion,
(iii) the date on which we have, during the immediately preceding three-year period, issued more than $1.0 billion in non-convertible debt
securities and (iv) the end of any fiscal year in which the market value of our common stock held by non-affiliates exceeds
$700 million as of the end of the second quarter of that fiscal year. We have elected to take advantage of certain of the reduced
disclosure obligations in the registration statement of which this prospectus forms a part and may elect to take advantage of other reduced
reporting requirements in future filings. As a result, the information that we provide to our stockholders may be different than you might
receive from other public reporting companies in which you hold equity interests.
We
are also a “smaller reporting company” as defined in the Securities Exchange Act of 1934, as amended, or the
Exchange Act. We may continue to be a smaller reporting company even after we are no longer an emerging growth company. We may take
advantage of certain of the scaled disclosures available to smaller reporting companies and will be able to take advantage of these scaled
disclosures for so long as the market value of our voting and non-voting common stock held by non-affiliates is less than $250 million
measured on the last business day of our second fiscal quarter, or our annual revenue is less than $100 million during the most
recently completed fiscal year and the market value of our voting and non-voting common stock held by non-affiliates is more
than $700 million measured on the last business day of our second fiscal quarter.
Summary of Risks Related
to Our Business
Our
business is subject to a number of risks, including risks that may prevent us from achieving our business objectives or may
adversely affect our business, financial condition, results of operations, cash flows and prospects that you should consider before
making a decision to invest in our common stock. These risks are discussed more fully in “Risk Factors” beginning on
page 9 of this prospectus. These risks include, but are not limited to, the following:
Risks Related to SoundHound
AI’s Business
| ● | The Voice AI market is a relatively new and rapidly changing
market, and we may be unable to compete successfully. |
| ● | If SoundHound AI does not maintain a customer base that will
generate a recurring stream of revenues, its operating results may be adversely affected. |
| ● | If SoundHound AI fails to grow its business as anticipated,
particularly in light of the Restructuring Plan, its revenues and gross margin will be adversely affected. |
| ● | If SoundHound AI does not successfully anticipate market
needs, enhance its existing products, execute on delivering quality products and services, or develop new products and services, it may
not be able to compete effectively and its ability to generate revenues will suffer. |
| ● | Actual or alleged failure to comply with data privacy laws
and regulations could damage SoundHound AI’s reputation, result in government action and have an adverse impact on its operating
results. |
| ● | Failure to attract and retain key personnel in the future,
particularly in light of our Restructuring Plan, could harm SoundHound AI’s business and negatively affect our ability to successfully
grow our business. |
| ● | SoundHound AI’s use of open source technology could
impose limitations on its ability to commercialize its software. |
| ● | Unauthorized use of SoundHound AI’s proprietary technology
and intellectual property could adversely affect its business and results of operations. |
| ● | Failure to comply with applicable anti-corruption legislation
and other governmental laws and regulations, including consumer and data privacy laws, could result in fines, criminal penalties and
materially adversely affect its business, financial condition and results of operations. |
| ● | The continuation or worsening of the COVID-19 pandemic, or
other similar public health developments, could have an adverse effect on business, results of operations, and financial condition. |
| ● | Our management has limited experience in operating a public
company. |
| ● | We operate in an uncertain regulatory environment and may
from time to time be subject to governmental investigations or other inquiries by state, federal and local governmental authorities. |
Risks Related to our Securities
| ● | The market price of our securities is likely to be highly
volatile, and you may lose some or all of your investment. |
| ● | Volatility in our share price could subject us to securities
class action litigation. |
Corporate Information
Our principal executive
offices are located at 5400 Betsy Ross Drive, Santa Clara, CA 95054, and our telephone number is (408) 441-3200. Our corporate
website address is www.soundhound.com. The information contained on or accessible through our website is not a part of this prospectus.
The Offering
Issuer |
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SoundHound AI, Inc. |
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Resale of Class A Common Stock |
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|
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Class A Common Stock Offered by the Selling Securityholders |
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Up to 55,999,499 shares. |
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|
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Use of proceeds |
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We will not receive any proceeds from the sale of the Class A Common Stock by the Selling Securityholders. |
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Class A
Common Stock Offered by certain Affiliates Issuable on Conversion of Class B Common Stock Held by Such Affiliates |
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Up to 39,735,408
shares. |
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|
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Use of proceeds |
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No proceeds will be payable to us on the conversion of the Class B Common Stock into Class A Common Stock. |
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|
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Issuance of Class A Common Stock |
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Shares of Class A Common Stock Offered by
Us |
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Up to 3,457,996 shares of Class A Common Stock upon the exercise of outstanding Registered Warrants. |
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|
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Exercise Price of the Registered Warrants |
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$11.50 per warrant, subject to adjustment. |
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|
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Use of Proceeds |
|
We will receive proceeds equal to the aggregate exercise price from any exercises of the Registered Warrants, assuming the exercise of the Registered Warrants for cash. We expect to use the net proceeds from the exercise of the Registered Warrants for general corporate purposes, including working capital, operating expenses and capital expenditures. To the extent that any Registered Warrants are exercised on a “cashless basis,” the amount of cash we would receive from the exercise of the Registered Warrants will decrease. Cash proceeds associated with the exercise of Registered Warrants to purchase our Class A Shares are dependent on our stock price. To the extent the sales price of Class A Shares is lower than the exercise price of such Registered Warrants, we are unlikely to receive proceeds from the exercise of such Registered Warrants. We do not currently anticipate this will have a material impact on our liquidity. |
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|
|
See “Use of Proceeds.” |
|
|
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Resale of Warrants |
|
|
|
|
|
Placement Warrants Offered by the Selling
Warrantholders |
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Up to 174,750 Placement Warrants. |
|
|
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Use of Proceeds |
|
We will not receive any of the proceeds from the sale of the Placement Warrants by the Selling Securityholders, though we will receive proceeds equal to the aggregate exercise price from any exercises of the Placement Warrants, assuming the exercise of the Placement Warrants for cash. |
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Transfer Agent |
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Continental Stock Transfer & Trust Company. |
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Nasdaq Global Market Symbols |
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Our Class A Common Stock is listed under the symbol “SOUN”. Our Registered Warrants are listed under the symbol “SOUNW”. |
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Risk Factors |
|
An investment in our Class A Shares and Warrants involves a high degree of risk. You should read this prospectus carefully, including the section titled “Risk Factors” and the combined and condensed consolidated financial statements and the related notes to those statements included in this prospectus, before investing in our common stock. |
Outstanding Shares of Common Stock
217,392,348 shares of
Company common stock were issued and outstanding as of May 15, 2023, which calculation includes (i) 177,656,940 shares of the Company’s
Class A Common Stock and (ii) 39,735,408 shares of the Company’s Class B Common Stock. Such amount does not include
shares issuable upon exercise of Warrants or options being registered hereunder.
A Note About this Offering
This prospectus relates
to (i) the offer and resale of an aggregate of up to 55,999,499 shares of Class A Shares of the Company held by Selling
Securityholders, including (a) the PIPE Shares issued at $10.00 per share, (b) securities held by our officers, directors and
their affiliates which were originally issued as (1) founder shares in connection with ATSP’s IPO for approximately $0.009
per share and (2) as part of placement units in connection with ATSP’s IPO at a price of $10.00 per placement unit, and (c) shares
of Class A Common Stock exercisable under options held by certain of the Selling Securityholders which were assumed by us and converted
into options of SoundHound AI in connection with the Business Combination and have an weighted average exercise price of $3.05 per share
after giving effect to the Business Combination, (ii) the resale by certain of our affiliates from time to time of up to 39,735,408
Class A Shares issuable upon conversion of Class B Shares issued pursuant to the Merger Agreement in connection with the Business
Combination as merger consideration at an acquiror share value of $0.0073 per share, (iii) the resale from time to time of up to
174,750 Placement Warrants, each exercisable for one share of Class A Common Stock at a price of $11.50, subject to adjustment,
which were originally issued as part of placement units in connection with ATSP’s IPO at a price of $10.00 per placement unit and
(iv) the issuance by us of up to 3,457,996 Class A Shares upon the exercise of outstanding Registered Warrants to purchase
our Class A Shares at an exercise price of $11.50, which were originally issued as part of the units in connection with ATSP’s
IPO at a price of $10.00 per unit.
Even if the trading price of
our Class A Common Stock is significantly below $10.00, the offering price for the units offered in ATSP’s IPO, certain of
the selling securityholders may still have an incentive to sell shares of our Class A Common Stock because they purchased or received
the shares at prices lower than the public investors or the current trading price of our Class A Common Stock and thus have an incentive
to sell because they will still profit on sales and receive a positive rate of return due to the lower price that they purchased or received
their shares than the public investors, who may not experience a similar rate of return on the securities they purchased due to differences
in the purchase prices and the current trading price.
Based on the closing
price of our Class A Common Stock of $2.57 as of May 1, 2023, holders of (i) 55,999,499 shares of Class A Common Stock
of SoundHound AI held by Selling Securityholders, including the PIPE Shares issued at $10.00 per share would be expected to earn a potential
loss of $7.43 per share (exclusive of the value of any other securities issued in the original transaction), securities held by our officers,
directors and their affiliates (which were originally issued as founder shares in connection with ATSP’s IPO for approximately
$0.009 would be expected to earn a potential profit of $2.56 per share, and as part of placement units in connection with ATSP’s
IPO at a price of $10.00 per placement unit would be expected to earn a potential loss of $7.43 per share (exclusive of the value of
any other securities issued in the original transaction), shares of Class A Common Stock exercisable under options held by certain
of the Selling Securityholders which were assumed by us and converted into options of SoundHound AI in connection with the Business Combination
and have an weighted average exercise price of $3.05 per share after giving effect to the Business Combination would be expected to earn
a potential profit, upon exercise, of $0.48 per share, (ii) the resale by certain of our affiliates from time to time of up to 39,735,408
Class A Shares (representing approximately 15.8% of the total number of shares of Class A Common Stock outstanding on a fully
diluted basis) issuable upon conversion of shares of Class B Common Stock issued pursuant to the Merger Agreement in connection
with the Business Combination as merger consideration at an acquiror share value of $0.0073 per share would be expected to earn a potential
profit of $2.56 per share, (iii) the resale from time to time of up to 174,750 Placement Warrants, each exercisable for one share
of Class A Common Stock at a price of $11.50, subject to adjustment, which were originally issued as part of placement units in
connection with ATSP’s IPO at a price of $10.00 per placement unit, would be expected to earn upon exercise a potential loss of
$7.43 per share (exclusive of the value of any other securities issued in the original transaction) and (iv) the issuance by us
of up to 3,457,996 Class A Shares upon the exercise of outstanding Warrants to purchase our Class A Shares at an exercise price
of $11.50 (upon exercise representing approximately 1.4% of the total number of shares of Class A Common Stock outstanding on a
fully diluted basis), as part of the units in connection with ATSP’s IPO at a price of $10.00 per unit, would be expected to earn
upon exercise a potential loss of $7.43 per share (exclusive of the value of any other securities issued in the original transaction).
RISK FACTORS
Investing in our securities
involves a high degree of risk. Before deciding whether to invest in our securities, you should carefully consider the risk factors we
describe herein, in any prospectus supplement, in any related free writing prospectus, as well as those incorporated by reference into
this prospectus and any prospectus supplement, including, but not limited to the risk factors set forth on page 13 of our Annual Report
on Form 10-K for the year ended December 31, 2022 filed on March 28, 2023. You should also carefully consider other information contained
and incorporated by reference in this prospectus and any applicable prospectus supplement, including our financial statements and the
related notes thereto incorporated by reference in this prospectus. The risks and uncertainties described in the applicable prospectus
supplement and our other filings with the SEC incorporated by reference herein are not the only ones we face. Additional risks and uncertainties
not presently known to us or that we currently consider immaterial may also adversely affect us. If any of the described risks occur,
our business, financial condition or results of operations could be materially harmed. In such case, the value of our securities could
decline and you may lose all or part of your investment.
Certain Risks Related to Ownership of our Securities
SoundHound AI’s
stock price and trading volume may fluctuate significantly.
The
market price and trading volume of SoundHound AI’s Class A Common Stock has fluctuated widely and may continue to fluctuate widely,
depending on many factors, some of which may be beyond our control, including:
| ● | actual or anticipated fluctuations in our results of operations
due to factors related to our business; |
| ● | success or failure of our business strategies; |
| ● | competition and industry capacity; |
| ● | changes in interest rates and other factors that affect earnings
and cash flow; |
| ● | our level of indebtedness, our ability to make payments on
or service our indebtedness and our ability to obtain financing as needed; |
| ● | our ability to retain and recruit qualified personnel, particularly
in light of our recent restructuring; |
| ● | our quarterly or annual earnings, or those of other companies
in our industry |
| ● | announcements by us or our competitors of significant acquisitions
or dispositions; |
| ● | changes in accounting standards, policies, guidance, interpretations
or principles; |
| ● | the failure of securities analysts to cover, or positively
cover, our Class A Common Stock; |
| ● | changes in earnings estimates by securities analysts or our
ability to meet those estimates; |
| ● | the operating and stock price performance of other comparable
companies; |
| ● | investor perception of the Company and the AI industry; |
| ● | overall market fluctuations unrelated to our operating performance; |
| ● | results from any material litigation or government investigation; |
| ● | changes in laws and regulations (including tax laws and regulations)
affecting our business; |
| ● | changes in capital gains taxes and taxes on dividends affecting
stockholders; and |
| ● | general economic conditions and other external factors. |
Low
trading volume for SoundHound AI’s Class A Common Stock, which may occur if an active trading market does not develop, among other
reasons, would amplify the effect of the above factors on stock price volatility.
In
addition, over the last few years, the stock market more broadly has experienced price and volume fluctuations, including due to factors
relating to the ongoing outbreak of COVID-19 and the war in Ukraine, and this volatility has sometimes been unrelated to the operating
performance of particular companies. As a result, there is a potential for rapid and substantial decreases in the price of our Class A
Common Stock, including decreases unrelated to our operating performance or prospects. This market and share price volatility relating
to the effects of COVID-19 or the war in Ukraine, as well as general economic, market or political conditions, has and could further reduce
the market price of our Class A Common Stock in spite of our operating performance and could also increase our cost of capital, which
could prevent us from accessing debt and equity capital on terms acceptable to us or at all.
Additionally,
a proportion of our Class A Common Stock may be traded by short sellers which may put pressure on the supply and demand for our Class
A Common Stock, creating further price volatility. In particular, a possible “short squeeze” due to a sudden increase in demand
of our Class A Common Stock that largely exceeds supply may lead to sudden extreme price volatility in our Class A Common Stock. Investors
may purchase our Class A Common Stock to hedge existing exposure in our Class A Common Stock or to speculate on the price of our Class
A Common Stock. Speculation on the price of our Class A Common Stock may involve long and short exposures. To the extent aggregate short
exposure exceeds the number of shares of Class A Common Stock available for purchase in the open market, investors with short exposure
may have to pay a premium to repurchase our Class A Common Stock for delivery to lenders of our Class A Common Stock. Those repurchases
may in turn, dramatically increase the price of our Class A Common Stock until investors with short exposure are able to purchase additional
shares to cover their short position. This is often referred to as a “short squeeze.” Following such a short squeeze, once
investors purchase the shares necessary to cover their short position, the price of our Class A Common Stock may rapidly decline. A short
squeeze could lead to volatile price movements in our shares that are not directly correlated to the performance or prospects of our company
and could cause purchasers of our Class A Common Stock to incur substantial losses.
Should
the market price of our shares drop significantly, stockholders may institute securities class action lawsuits against us. A lawsuit against
SoundHound AI could cause SoundHound AI to incur substantial costs and could divert the time and attention of its management and other
resources.
SoundHound AI will
require additional capital to continue its planned business operations but may not be able to obtain such capital when desired on favorable
terms, if at all, or without dilution to its stockholders.
SoundHound
AI will require additional capital to continue its planned business operations. SoundHound AI implemented its restructuring plan to reduce
the amount of capital required to meet its current business needs, but anticipates that current cash, cash equivalents, cash provided
by operating activities and funds available through SoundHound AI’s equity line of credit, will not be sufficient to meet its future
capital needs. SoundHound AI will need additional financing to execute on its current or future business strategies, including to:
| ● | potentially hire additional software engineers, sales and
marketing professionals, and other personnel as needed following implementation of the restructuring plan; |
| ● | develop new or enhance existing products and services; |
| ● | enhance SoundHound AI’s operating infrastructure; |
| ● | acquire complementary businesses or technologies; or |
| ● | otherwise respond to competitive pressures. |
If
SoundHound AI raises additional funds through the issuance of equity, including its current equity line of credit arrangement, or convertible
debt securities, the percentage ownership of its stockholders could be significantly diluted, and these newly-issued securities may have
rights, preferences or privileges senior to those of existing stockholders, including those acquiring shares in this offering. SoundHound
AI cannot assure you that additional financing will be available on terms favorable to SoundHound AI, or at all, particularly in light
of inflationary pressures and resulting increases in the cost of borrowing. If adequate funds are not available or are not available on
acceptable terms, if and when needed, SoundHound AI’s ability to fund its operations, take advantage of unanticipated opportunities,
develop or enhance its products, or otherwise respond to competitive pressures would be significantly limited.
Future sales, or
the perception of future sales, of SoundHound AI’s common stock by SoundHound AI or its existing stockholders in the public market
(such as through this prospectus) could cause the market price for SoundHound AI’s common stock to decline.
The
sale of substantial amounts of shares of SoundHound AI’s common stock in the public market (such as through this prospectus), or
the perception that such sales could occur, could harm the prevailing market price of shares of common stock. These sales, including sale
pursuant to this prospectus, or the possibility that these sales may occur, also might make it more difficult for us to sell equity securities
in the future at a time and at a price that we deem appropriate.
The
securities being offered in this prospectus represent a substantial percentage of our outstanding Class A Common Stock and Warrants,
and the sales of such securities could cause the market price of our Class A Common Stock and Warrants to decline significantly.
This prospectus relates to (i) the offer and resale of an aggregate
of up to 55,999,499 shares of Class A Shares of the Company held by Selling Securityholders (representing 22.2% of the
total number of shares of Class A Common Stock outstanding on a fully diluted basis), including (a) the PIPE Shares issued at
$10.00 per share, (b) securities held by our officers, directors and their affiliates which were originally issued as (1) founder
shares in connection with ATSP’s IPO for approximately $0.009 per share and (2) as part of placement units in connection with
ATSP’s IPO at a price of $10.00 per placement unit, and (c) shares of Class A Common Stock exercisable under options held
by certain of the Selling Securityholders which were assumed by us and converted into options of SoundHound AI in connection with the
Business Combination and have an weighted average exercise price of $3.05 per share after giving effect to the Business Combination, (ii) the
resale by certain of our affiliates from time to time of up to 39,735,408 Class A Shares (representing approximately 16.7% of the
total number of shares of Class A Common Stock outstanding on a fully diluted basis) issuable upon conversion of Class B Shares
issued pursuant to the Merger Agreement in connection with the Business Combination as merger consideration at an acquiror share value
of $0.0073 per share, (iii) the resale from time to time of up to 174,750 Placement Warrants, each exercisable for one share of Class A
Common Stock at a price of $11.50, subject to adjustment, which were originally issued as part of placement units in connection with ATSP’s
IPO at a price of $10.00 per placement unit and (iv) the issuance by us of up to 3,457,996 Class A Shares upon the exercise
of outstanding Warrants to purchase our Class A Shares at an exercise price of $11.50, which were originally issued as part of the
units in connection with ATSP’s IPO at a price of $10.00 per unit.
Even
if the trading price of our Class A Common Stock is significantly below $10.00, the offering price for the units offered in ATSP’s
IPO, certain of the selling securityholders may still have an incentive to sell shares of our Class A Common Stock because they purchased
or received the shares at prices lower than the public investors or the current trading price of our Class A Common Stock and thus
have an incentive to sell because they will still profit on sales due to the lower price that they purchased or received their shares
than the public investors. For example, based on the closing price of our Class A Common Stock of $2.57 as of May 1, 2023, holders
of the founder shares may experience a potential profit of up to approximately $2.56 per share, or approximately $8.52 million in
the aggregate.
In
connection with the Business Combination, certain of the Company’s stockholders, including certain of the Selling Securityholders,
agreed that, subject to certain exceptions, they would not, during the period beginning at the effective time of the Business Combination
and ending on October 26, 2022 (or April 26, 2023 in the case of our chief executive officer) (subject to early release if SoundHound
AI consummates a liquidation, merger, share exchange or other similar transaction with an unaffiliated third party), directly or indirectly,
offer, sell, contract to sell, pledge, grant any option to purchase, make any short sale, or otherwise dispose of any shares of common
stock, or any options or Warrants to purchase any shares of common stock, or any securities convertible into, exchangeable for, or that
represent the right to receive shares of common stock, or any interest in any of the foregoing.
In
addition, shares of our common stock issuable upon exercise or vesting of incentive awards under our incentive plans are, once issued,
eligible for sale in the public market, subject to any lock-up agreements and, in some cases, limitations on volume and manner of
sale applicable to affiliates under Rule 144. Furthermore, shares of our common stock reserved for future issuance under SoundHound
AI Holdings, Inc. 2022 Incentive Award Plan and SoundHound AI Holdings, Inc. 2022 ESPP may become available for sale in future.
Furthermore,
on August 16, 2022, the Company entered into a common stock purchase agreement (the “Purchase Agreement”) and related
registration rights agreement (the “CFPI Registration Rights Agreement”) with CF Principal Investments LLC (“CFPI”).
Pursuant to the Purchase Agreement, The Company, has the right to sell to CFPI up to the lesser of (i) 25,000,000 shares of Class
A Shares, and (ii) the Exchange Cap (as defined in the Purchase Agreement), subject to certain limitations and conditions set forth in
the Purchase Agreement. The purchase price of the Class A Shares that the Company elects to sell to CFPI pursuant to the Purchase Agreement
will be the volume weighted average price of the Class A Shares during the applicable purchase date on which the Company has timely delivered
written notice to CFPI directing it to purchase the shares under the Purchase Agreement. The Company will receive 97% of the volume weighted
average price of the shares so sold. The Company has filed a resale registration statement with the SEC to register under the Securities
Act for the resale by CFPI of the Class A Shares that the Company may issue to CFPI under the Purchase Agreement.
The
market price of shares of our Class A Common Stock could drop significantly if the holders of the shares described above sell them
or are perceived by the market as intending to sell them or if we sell any shares pursuant to the Purchase Agreement. These factors could
also make it more difficult for us to raise additional funds through future offerings of shares of our common stock or other securities.
Your percentage
ownership in SoundHound AI may be diluted in the future.
Stockholders’
percentage ownership in SoundHound AI may be diluted in the future because of equity issuances for acquisitions, capital market transactions
or otherwise, including equity awards that SoundHound AI will be granting to directors, officers and other employees. Our Board has adopted
the incentive plan and ESPP for the benefit of certain of our current and future employees, service providers and non-employee directors.
Such awards will have a dilutive effect on our earnings per share, which could adversely affect the market price of our Class A Common
Stock.
From
time-to-time, SoundHound AI may opportunistically evaluate and pursue acquisition opportunities, including acquisitions for which the
consideration thereof may consist partially or entirely of newly-issued shares of SoundHound AI common stock and, therefore, such
transactions, if consummated, would dilute the voting power and/or reduce the value of our common stock.
The issuance of
additional shares of common stock or convertible securities may dilute your ownership and could adversely affect the stock price.
From
time to time in the future, SoundHound AI may issue additional shares of common stock or securities convertible into common stock pursuant
to a variety of transactions, including acquisitions. Additional shares of common stock may also be issued upon exercise of outstanding
stock options and Warrants to purchase common stock. The issuance by us of additional shares of common stock or securities convertible
into common stock would dilute your ownership of SoundHound AI and the sale of a significant amount of such shares in the public market
could adversely affect prevailing market prices of our common stock. Subject to the satisfaction of vesting conditions and the expiration
of lockup agreements, shares issuable upon exercise of options will be available for resale immediately in the public market without restriction.
Issuing
additional shares of SoundHound AI’s capital stock, other equity securities, or securities convertible into equity may dilute the
economic and voting rights of our existing stockholders, reduce the market price of our common stock, or both. Debt securities convertible
into equity could be subject to adjustments in the conversion ratio pursuant to which certain events may increase the number of equity
securities issuable upon conversion. Preferred stock, if issued, could have a preference with respect to liquidating distributions or
a preference with respect to dividend payments that could limit our ability to pay dividends to the holders of our common stock. SoundHound
AI’s decision to issue securities in any future offering will depend on market conditions and other factors beyond our control,
which may adversely affect the amount, timing, or nature of our future offerings. As a result, holders of SoundHound AI’s common
stock bear the risk that SoundHound AI’s future offerings may reduce the market price of SoundHound AI’s common stock and
dilute their percentage ownership.
USE OF PROCEEDS
All of the securities offered
by the Selling Securityholders pursuant to this prospectus will be sold by the Selling Securityholders for their respective accounts.
We will not receive any of the proceeds from these sales.
Assuming the cash exercise
of all outstanding Warrants, we will receive an aggregate of approximately $42.2 million. We expect to use the net proceeds from
the exercise of the Warrants, if any, for working capital and general corporate purposes. We will have broad discretion over the use
of any proceeds from the exercise of the Warrants. There is no assurance that the holders of the Warrants will elect to exercise any
or all of their Warrants. To the extent that any Warrants are exercised on a “cashless basis,” the amount of cash we would
receive from the exercise of the Warrants will decrease. Cash proceeds associated with the exercise of Warrants to purchase our Class A
Shares are dependent on our stock price. To the extent the sales price of Class A Shares is lower than the exercise price of such
Warrants, we are unlikely to receive proceeds from the exercise of such Warrants. We do not currently anticipate this will have a material
impact on our liquidity.
The Selling Securityholders
will pay any underwriting discounts and commissions and expenses for brokerage, accounting, tax or legal services or any other expenses
incurred by the Selling Securityholders in disposing of the securities. We will bear the costs, fees and expenses incurred in effecting
the registration of the securities covered by this prospectus, including all registration and filing fees, Nasdaq listing fees and fees
and expenses of our counsel and our independent registered public accounting firm.
DETERMINATION OF OFFERING PRICE
The
offering price of the shares of Class A Common Stock underlying the Warrants offered hereby is determined by reference to the exercise
price of the Warrants of $11.50 per share. The Registered Warrants are listed on Nasdaq under the symbol “SOUNW”
We
cannot currently determine the price at which shares of our Class A Common Stock may be sold by the Selling Securityholders under
this prospectus.
MARKET INFORMATION AND DIVIDEND POLICY
Market Information
Our Class A Common
Stock and Warrants are currently listed on Nasdaq under the symbols “SOUN” and “SOUNW,” respectively. As of May
15, 2023, there were 104 holders of record of our Class A Common Stock, three holders of record of our Class B Common Stock,
and 31 holders of record of our Warrants. Our Class B Common Stock is not listed on any exchange and we do not intend to list the
Class B Common Stock on any exchange or stock market.
Dividend Policy
We have not paid any cash dividends
on our Class A Common Stock to date. The payment of cash dividends in the future will be dependent upon our revenues and earnings,
if any, capital requirements and general financial condition. The payment of any cash dividends will be within the discretion of our Board
at such time. We do not anticipate declaring any cash dividends to holders of our Class A Common Stock in the foreseeable future.
DESCRIPTION OF SECURITIES TO BE REGISTERED
General
The following description
is not complete and may not contain all the information you should consider before investing in our securities. For a more detailed description
of these securities, you should read the applicable provisions of Delaware law and our second amended and restated certificate of incorporation,
referred to herein as our Charter, and our amended and restated bylaws, referred to herein as our Bylaws.
Our
authorized capital stock consists of 500,000,000 shares, par value $0.0001 per share, consisting of: 499,000,000 shares of common
stock, of which, 455,000,000 shares are designated as Class A Common Stock and 44,000,000 shares are designated as Class B
common stock (“Class B Common Stock”); and 1,000,000 shares of preferred stock, all of which are designated as Series
A Preferred Stock. Our authorized but unissued shares of common stock
and preferred stock are available for issuance without further action by our stockholders, unless such action is required by applicable
law or the rules of any stock exchange or automated quotation system on which our securities may be listed or traded in the future.
As of May 15, 2023, there
were 217,392,348 shares of Company common stock issued and outstanding, which calculation includes 177,656,940 shares of the Company’s
Class A Common Stock and 39,735,408 shares of the Company’s Class B Common Stock. In addition, there were 3,665,996 shares
of Class A Common Stock issuable upon exercise of outstanding Warrants, no shares of Class B Common Stock issuable upon exercise
of outstanding Warrants, 21,255,735 shares of Class A Common Stock issuable upon exercise of outstanding stock options, 9,928,736
shares of Class A Common Stock issuable upon vesting of restricted stock units and no shares of Class B Common Stock issuable
upon exercise of outstanding stock options or restricted stock units.
Class A Common Stock
Our Charter provides for two
classes of common stock, and provides that, subject to the rights of any holders of any series of preferred stock, each holder of Class A
Common Stock shall have the right to one (1) vote per share of Class A Common Stock held of record by such holder as of the
applicable record date on all matters submitted to a vote at any meeting of stockholders and each holder of Class B Common Stock
shall have the right to ten votes per share of Class B Common Stock held of record by such holder as of the applicable record
date on all matters properly submitted to stockholders entitled to vote thereon. The holders of outstanding shares of Class A Common
Stock are entitled to receive dividends out of assets or funds legally available for the payment of dividends of such times and in such
amounts as our Board from time to time may determine. Our Class A Common Stock is not entitled to pre-emptive rights and are not
subject to redemption. Upon liquidation, dissolution or winding up of our company, the assets legally available for distribution to stockholders
are distributable ratably among the holders of our Class A Common Stock and Class B Common Stock after payment of liquidation
preferences, if any, on any outstanding payment of other claims of creditors. The rights, preferences and privileges of holders of Class A
Common Stock are subject to and may be adversely affected by the rights of the holders of shares of any series of preferred stock that
we may designate and issue in the future.
Placement Warrants
As of May 1, 2023, 174,750
Placement Warrants outstanding. The terms of our Placement Warrants and the terms of our Registered Warrants are identical. Each whole
Warrant entitles the registered holder to purchase one share of Class A Common Stock at a price of $11.50 per share, subject to adjustment
as discussed below, at any time commencing 30 days after the completion of the Business Combination on April 26, 2022. However,
no Warrants will be exercisable for cash unless we have an effective and current registration statement covering the shares of Class A
Common Stock issuable upon exercise of the Warrants and a current prospectus relating to such shares of Class A Common Stock. The
Warrants will expire on April 26, 2027, which is the fifth anniversary of our completion of the Business Combination, at 5:00 p.m.,
New York City time, or earlier upon redemption or liquidation.
The right to exercise will
be forfeited unless the Warrants are exercised prior to the date specified in the notice of redemption. On and after the redemption date,
a record holder of a Warrant will have no further rights except to receive the redemption price for such holder’s Warrant upon surrender
of such warrant.
The redemption criteria for
our Warrants have been established at a price which is intended to provide warrant holders a reasonable premium to the initial exercise
price and provide a sufficient differential between the then-prevailing share price and the warrant exercise price so that if the
share price declines as a result of our redemption call, the redemption will not cause the share price to drop below the exercise price
of the Warrants.
If we call the Warrants for
redemption as described above, our management will have the option to require all holders that wish to exercise Warrants to do so on a
“cashless basis.” In such event, each holder would pay the exercise price by surrendering the Warrants for that number of
shares of Class A Common Stock equal to the quotient obtained by dividing (x) the product of the number of shares of Class A
Common Stock underlying the Warrants, multiplied by the difference between the exercise price of the Warrants and the “fair market
value” (defined below) by (y) the fair market value. The “fair market value” for this purpose shall mean the average
reported last sale price of the shares of the Class A Common Stock for the 5 trading days ending on the third trading day
prior to the date on which the notice of redemption is sent to the holders of Warrants.
The Warrants were issued in
registered form under a Warrant Agreement between Continental Stock Transfer & Trust Company, as warrant agent, and us. The Warrant
Agreement provides that the terms of the Warrants may be amended without the consent of any holder to cure any ambiguity or correct any
defective provision, but requires the approval, by written consent or vote, of the holders of at least 50% of the then outstanding Registered
Warrants, in order to make any change that adversely affects the interests of the registered holders.
The exercise price and number
of shares of Class A Common Stock issuable on exercise of the Warrants may be adjusted in certain circumstances including in the
event of a stock dividend, extraordinary dividend or our recapitalization, reorganization, merger or consolidation. However, except as
described below, the Warrants will not be adjusted for issuances of shares of Class A Common Stock at a price below their respective
exercise prices.
The Warrants may be exercised
upon surrender of the warrant certificate on or prior to the expiration date at the offices of the warrant agent, with the exercise form
on the reverse side of the warrant certificate completed and executed as indicated, accompanied by full payment of the exercise price,
by certified or official bank check payable to us, for the number of Warrants being exercised. The warrant holders do not have the rights
or privileges of holders of shares of Class A Common Stock and any voting rights until they exercise their Warrants and receive shares
of Class A Common Stock. After the issuance of shares of Class A Common Stock upon exercise of the Warrants, each holder will
be entitled to one vote for each share held of record on all matters to be voted on by stockholders.
Warrant holders may elect
to be subject to a restriction on the exercise of their Warrants such that an electing warrant holder would not be able to exercise their
Warrants to the extent that, after giving effect to such exercise, such holder would beneficially own in excess of 9.8% of the shares
of Class A Common Stock outstanding.
No fractional shares will
be issued upon exercise of the Warrants. If, upon exercise of the Warrants, a holder would be entitled to receive a fractional interest
in a share, we will, upon exercise, round up to the nearest whole number the number of shares of Class A Common Stock to be issued
to the warrant holder.
Subject to applicable law,
any action, proceeding or claim against us arising out of or relating in any way to the Warrant Agreement will be brought and enforced
in the courts of the State of New York or the United States District Court for the Southern District of New York, and we
irrevocably submit to such jurisdiction, which jurisdiction will be the exclusive forum for any such action, proceeding or claim. This
provision applies to claims under the Securities Act but does not apply to claims under the Exchange Act or any claim for which the
federal district courts of the United States of America are the sole and exclusive forum.
Anti-Takeover Provisions of Delaware Law and
Our Charter and Bylaws
Special meeting
of stockholders
Our Bylaws provide that special
meetings of our stockholders may be called only by a majority vote of the Board, by our president or by our chairman or by our secretary
at the request in writing of stockholders owning a majority of our issued and outstanding capital stock entitled to vote.
Advance notice
requirements for stockholder proposals and director nominations
Our Bylaws provide that stockholders
seeking to bring business before our annual meeting of stockholders, or to nominate candidates for election as directors at our annual
meeting of stockholders must provide timely notice of their intent in writing. To be timely, a stockholder’s notice will need to
be delivered to our principal executive offices not later than the close of business on the 60th day nor earlier than
the close of business on the 90th day prior to the scheduled date of the annual meeting of stockholders. In the event
that less than 70 days’ notice or prior public disclosure of the date of the annual meeting of stockholders is given, a stockholder’s
notice shall be timely if delivered to our principal executive offices not later than the 10th day following the day
on which public announcement of the date of our annual meeting of stockholders is first made or sent by us. Our Bylaws also specify certain
requirement as to the form and content of a stockholders’ meeting. These provisions may preclude our stockholders from bringing
matters before our annual meeting of stockholders or from making nominations for directors at our annual meeting of stockholders.
Authorized but
unissued shares
Our authorized but unissued
common stock and preferred stock are available for future issuances without stockholder approval and could be utilized for a variety of
corporate purposes, including future offerings to raise additional capital, acquisitions and employee benefit plans. The existence of
authorized but unissued and unreserved common stock and preferred stock could render more difficult or discourage an attempt to obtain
control of us by means of a proxy contest, tender offer, merger or otherwise.
The combination of these provisions
will make it more difficult for our existing stockholders to replace our Board as well as for another party to obtain control of us by
replacing our Board. Because our Board has the power to retain and discharge our officers, these provisions could also make it more difficult
for existing stockholders or another party to effect a change in management. In addition, the authorization of undesignated preferred
stock makes it possible for our Board to issue preferred stock with voting or other rights or preferences that could impede the success
of any attempt to change our control.
These provisions are intended
to enhance the likelihood of continued stability in the composition of our Board and its policies and to discourage coercive takeover
practices and inadequate takeover bids. These provisions are also designed to reduce our vulnerability to hostile takeovers and to discourage
certain tactics that may be used in proxy fights. However, such provisions could have the effect of discouraging others from making tender
offers for our shares and may have the effect of delaying changes in our control or management. As a consequence, these provisions may
also inhibit fluctuations in the market price of our stock that could result from actual or rumored takeover attempts. We believe that
the benefits of these provisions, including increased protection of our potential ability to negotiate with the proponent of an unfriendly
or unsolicited proposal to acquire or restructure our company, outweigh the disadvantages of discouraging takeover proposals, because
negotiation of takeover proposals could result in an improvement of their terms.
Choice of Forum
The Charter provides that,
unless SoundHound AI consents in writing to the selection of an alternative forum, to the fullest extent permitted by the applicable law,
the Court of Chancery of the State of Delaware shall be the sole and exclusive forum for any stockholder (including a beneficial owner)
to bring (i) any derivative action or proceeding brought on behalf of SoundHound AI, (ii) any action asserting a claim of breach
of a fiduciary duty owed by any director, officer or other employee of SoundHound AI to SoundHound AI or SoundHound AI’s stockholders,
(iii) any action asserting a claim against SoundHound AI, its directors, officers or employees arising pursuant to any provision
of the DGCL or the Charter or the Bylaws of SoundHound AI, or (iv) any action asserting a claim against SoundHound AI, its directors,
officers or employees governed by the internal affairs doctrine and, if brought outside of Delaware, the stockholder bringing the suit
will be deemed to have consented to service of process on such stockholder’s counsel except any action (A) as to which the
Court of Chancery in the State of Delaware determines that there is an indispensable party not subject to the jurisdiction of the Court
of Chancery (and the indispensable party does not consent to the personal jurisdiction of the Court of Chancery within ten days following
such determination), (B) which is vested in the exclusive jurisdiction of a court or forum other than the Court of Chancery, or (C) for
which the Court of Chancery does not have subject matter jurisdiction. However, the foregoing will not apply to suits brought to enforce
any liability or duty created by the Exchange Act or any other claim for which the federal courts have exclusive jurisdiction and
(ii) unless SoundHound AI consents in writing to the selection of an alternative forum, the federal district courts of the United States
of America shall, to the fullest extent permitted by law, be the exclusive forum for the resolution of any complaint asserting a cause
of action arising under the Securities Act of 1933, as amended, or the rules and regulations promulgated thereunder.
Limitation on Liability and Indemnification
The Charter provides that,
to the fullest extent permitted by the Delaware General Corporation Law, a director of SoundHound AI shall not be personally liable to
SoundHound AI or its stockholders for monetary damages for breach of fiduciary duty as a director, except for liability (i) for any
breach of the director’s duty of loyalty to SoundHound AI or its stockholders, (ii) for acts or omissions not in good faith
or which involve intentional misconduct or a knowing violation of law, (iii) under Section 174 of the DGCL, or (iv) for
any transaction from which the director derived an improper personal benefit. Any repeal or modification of foregoing paragraph by the
stockholders of SoundHound AI shall not adversely affect any right or protection of a director of SoundHound AI with respect to events
occurring prior to the time of such repeal or modification. The Charter, to the full extent permitted by Section 145 of the DGCL,
as amended from time to time, shall indemnify all persons whom it may indemnify pursuant thereto. Expenses (including attorneys’
fees) incurred by an officer or director in defending any civil, criminal, administrative, or investigative action, suit or proceeding
for which such officer or director may be entitled to indemnification hereunder shall be paid by SoundHound AI in advance of the final
disposition of such action, suit or proceeding upon receipt of an undertaking by or on behalf of such director or officer to repay such
amount if it shall ultimately be determined that he or she is not entitled to be indemnified by SoundHound AI as authorized hereby. The
Bylaws of SoundHound AI will permit SoundHound AI to purchase and maintain insurance on behalf of any person who is or was a director,
officer, employee or agent of SoundHound AI, or is or was serving at the request of SoundHound AI as a director, officer, employee or
agent of another corporation, partnership, joint venture, trust or other enterprise against any liability asserted against him and incurred
by him in any such capacity, or arising out of his or her status as such, whether or not SoundHound AI would have the power to indemnify
him against such liability.
Listing
Our Class A Common Stock
and Warrants are listed on The Nasdaq Global Market under the trading symbols “SOUN” and “SOUNW.”
Transfer Agent and Registrar
The transfer agent and registrar
for our Class A Common Stock, and our warrant agent, is Continental Stock Transfer & Trust Company. The Transfer Agent’s
address is 1 State Street, 30th Floor, New York, New York 10004.
SELLING SECURITYHOLDERS
This prospectus relates
to the offer and resale of an aggregate of up to (i) 55,999,499 Class A Shares by Selling Securityholders (ii) the resale
by certain of our affiliates from time to time of up to 39,735,408 Class A Shares issuable upon conversion of shares of Class B
Shares, (iii) the resale from time to time of up to 174,750 Placement Warrants and (iv) the issuance by us of up to 3,457,996
Class A Shares upon the exercise of outstanding Registered Warrants. The Selling Securityholders may from time to time offer and
sell any or all of the shares of Class A Common Stock and Placement Warrants set forth below pursuant to this prospectus and any
accompanying prospectus supplement. When we refer to the “Selling Securityholders” in this prospectus, we mean the persons
listed in the table below, and the pledgees, donees, transferees, assignees, successors, designees, and others who later come to hold
any of the Selling Securityholders’ interest in the Class A Common Stock or Placement Warrants other than through a public
sale. We are also registering the issuance of shares of Class A Common Stock issuable on exercise of Registered Warrants as
required by the Warrant Agreement by and between ATSP and Continental Stock Transfer & Trust Company.
The table below lists
the Selling Securityholders and other information regarding the beneficial ownership of the shares of Common Stock by each of the Selling
Securityholders. Percentage of beneficial ownership of shares of Class A Common Stock by a Selling Securityholder after this offering
is based on 177,656,940 shares of Class A Common Stock issued and outstanding on May 15, 2023 Additionally, in determining the percentage
beneficial ownership of shares of Class A Common Stock of a Selling Securityholder shares of Class A Common Stock issuable
to such Selling Securityholder upon the exercise of stock options are included in the number of issued and outstanding shares of Class A
Common Stock for such Selling Securityholder, but not stock options held by any other Selling Securityholder.
We cannot advise you as to
whether the Selling Securityholders will in fact sell any or all of such securities. In particular, the Selling Securityholders identified
below may have sold, transferred or otherwise disposed of all or a portion of their securities after the date on which they provided us
with information regarding their securities. Any changed or new information given to us by the Selling Securityholders, including regarding
the identity of, and the securities held by, each Selling Securityholder, will be set forth in a prospectus supplement or amendments to
the registration statement of which this prospectus is a part, if and when necessary.
Please see the section entitled
“Plan of Distribution” for further information regarding the Selling Securityholders’ method of distributing
these securities.
| |
Securities Owned prior
to this Offering | | |
Securities to be Sold
in this Offering | | |
Securities
Owned after this Offering(1) | |
Names and Addresses | |
Shares of Class A
Common Stock | | |
Warrants | | |
Shares of Class A
Common Stock | | |
Warrants | | |
Shares of Class A
Common Stock | | |
Percentage | | |
Warrants | | |
Percentage | |
Al Gassar International Limited | |
| 1,000,000 | | |
| — | | |
| 1,000,000 | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | |
Andrew Jordan | |
| 75,000 | | |
| 12,500 | | |
| 75,000 | | |
| 12,500 | | |
| — | | |
| — | | |
| — | | |
| — | |
Arvind Reddy Ramalingam | |
| 7,500 | | |
| 1,250 | | |
| 7,500 | | |
| 1,250 | | |
| — | | |
| — | | |
| — | | |
| — | |
Balasubramanya Bhat | |
| 30,000 | | |
| 5,000 | | |
| 30,000 | | |
| 5,000 | | |
| — | | |
| — | | |
| — | | |
| — | |
Blythe Elizabeth Edwards | |
| 97,676 | | |
| 6,037 | | |
| 97,676 | | |
| 6,037 | | |
| — | | |
| — | | |
| — | | |
| — | |
Brent Callinicos | |
| 75,000 | | |
| — | | |
| 75,000 | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | |
Bryant B. Edwards | |
| 181,399 | | |
| 11,213 | | |
| 181,399 | | |
| 11,213 | | |
| — | | |
| — | | |
| — | | |
| — | |
CDRD Irrevocable Trust | |
| 248,000 | | |
| — | | |
| 248,000 | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | |
Christy Albeck | |
| 30,000 | | |
| — | | |
| 30,000 | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | |
CPS 2022 Trust | |
| 204,250 | | |
| — | | |
| 204,250 | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | |
Daniel L. Sheehan | |
| 100,000 | | |
| — | | |
| 100,000 | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | |
Cota Capital Master Fund, L.P.(2) | |
| 2,038,595 | | |
| — | | |
| 300,000 | | |
| — | | |
| 1,738,595 | | |
| 1.0 | % | |
| — | | |
| — | |
Delphi Asset Management
Corporation(2) | |
| 5,000,000 | | |
| — | | |
| 5,000,000 | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | |
Doug Rogers | |
| 2,400 | | |
| — | | |
| 2,400 | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | |
Dr. Keyvan
Mohajer(3) | |
| 17,472,499 | | |
| — | | |
| 17,472,499 | | |
| — | | |
| — | | |
| * | | |
| — | | |
| — | |
Dr. Majid
Emami(4) | |
| 19,250,504 | | |
| — | | |
| 19,250,504 | | |
| — | | |
| — | | |
| * | | |
| — | | |
| — | |
Eyal Gutkind | |
| 15,000 | | |
| 2,500 | | |
| 15,000 | | |
| 2,500 | | |
| — | | |
| — | | |
| — | | |
| — | |
Global
Catalyst Partners III, L.P.(2)(5) | |
| 35,188,205 | | |
| — | | |
| 35,188,205 | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | |
Gopi Rao | |
| 15,000 | | |
| 2,500 | | |
| 15,000 | | |
| 2,500 | | |
| — | | |
| — | | |
| — | | |
| — | |
Harald Link | |
| 200,000 | | |
| — | | |
| 200,000 | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | |
HTC (BVI) Corp. | |
| 5,931.938 | | |
| — | | |
| 100,000 | | |
| — | | |
| 5,831,938 | | |
| 3.3 | % | |
| — | | |
| — | |
IB Capital LLC | |
| 100,000 | | |
| — | | |
| 100,000 | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | |
Jagannadha Sri Harsha Putrevu | |
| 15,000 | | |
| 2,500 | | |
| 15,000 | | |
| 2,500 | | |
| — | | |
| — | | |
| — | | |
| — | |
|
|
Securities
Owned prior
to this Offering |
|
|
Securities
to be Sold
in this Offering |
|
|
Securities
Owned
after this Offering(1) |
|
Names
and Addresses |
|
Shares
of
Class A
Common
Stock |
|
|
Warrants |
|
|
Shares
of
Class A
Common
Stock |
|
|
Warrants |
|
|
Shares
of
Class A
Common
Stock |
|
|
Percentage |
|
|
Warrants |
|
|
Percentage |
|
Jalender
Reddy Musku |
|
|
7,500 |
|
|
|
1,250 |
|
|
|
7,500 |
|
|
|
1,250 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Jennifer
Wade |
|
|
30,000 |
|
|
|
5,000 |
|
|
|
30,000 |
|
|
|
5,000 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Kai
Ming Chan |
|
|
50,000 |
|
|
|
— |
|
|
|
50,000 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Laxminarayan
Chavani |
|
|
7,500 |
|
|
|
1,250 |
|
|
|
7,500 |
|
|
|
1,250 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Long
Long |
|
|
484,963 |
|
|
|
— |
|
|
|
484,963 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Lorenzen
Family Holdings, LLC |
|
|
15,000 |
|
|
|
2,500 |
|
|
|
15,000 |
|
|
|
2,500 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Luc
Julia |
|
|
25,000 |
|
|
|
— |
|
|
|
25,000 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
James
Hom(6) |
|
|
4,512,588 |
|
|
|
— |
|
|
|
4,512,588 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Jennifer
Wade |
|
|
30,000 |
|
|
|
5,000 |
|
|
|
30,000 |
|
|
|
5,000 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
M&F
Fund I LP |
|
|
225,000 |
|
|
|
37,500 |
|
|
|
225,000 |
|
|
|
37,500 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Maheedhar
Gunturu |
|
|
40,000 |
|
|
|
2,500 |
|
|
|
40,000 |
|
|
|
2,500 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Marcus
Family Trust, dated 7/8/04(7) |
|
|
595,846 |
|
|
|
— |
|
|
|
595,846 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Mayank
Kaul |
|
|
15,000 |
|
|
|
2,500 |
|
|
|
15,000 |
|
|
|
2,500 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Melvin
Honda |
|
|
5,000 |
|
|
|
— |
|
|
|
5,000 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Meteora
Capital Partners, LP |
|
|
225,000 |
|
|
|
37,500 |
|
|
|
225,000 |
|
|
|
37,500 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Michael
Zagorsek(8) |
|
|
1,139,030 |
|
|
|
— |
|
|
|
1,139,030 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Mike
Zabaneh |
|
|
1,000 |
|
|
|
— |
|
|
|
1,000 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
MKaNN
LLC |
|
|
3,198,444 |
|
|
|
— |
|
|
|
100,000 |
|
|
|
— |
|
|
|
3,098,444 |
|
|
|
1.7 |
% |
|
|
— |
|
|
|
— |
|
Naveen
Adibhatla |
|
|
30,000 |
|
|
|
2,500 |
|
|
|
30,000 |
|
|
|
2,500 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Nikesh
Mukesh Jain |
|
|
15,000 |
|
|
|
2,500 |
|
|
|
15,000 |
|
|
|
2,500 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Nitesh
Sharan(9) |
|
|
308,677 |
|
|
|
— |
|
|
|
308,677 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Pai
Family Irrevocable Trust, dated 02-22-2021 |
|
|
30,000 |
|
|
|
5,000 |
|
|
|
30,000 |
|
|
|
5,000 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Patanjali
Peri |
|
|
15,000 |
|
|
|
2,500 |
|
|
|
15,000 |
|
|
|
2,500 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Patrick
Jordan |
|
|
15,000 |
|
|
|
2,500 |
|
|
|
15,000 |
|
|
|
2,500 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Pavan
Reddy |
|
|
15,000 |
|
|
|
2,500 |
|
|
|
15,000 |
|
|
|
2,500 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Pejman
Capital, LLC |
|
|
496,293 |
|
|
|
— |
|
|
|
100,000 |
|
|
|
— |
|
|
|
396,293 |
|
|
|
* |
|
|
|
— |
|
|
|
— |
|
Provco
Ventures I, LP |
|
|
100,000 |
|
|
|
— |
|
|
|
100,000 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
QFB
Tech LP(2) |
|
|
2,000,000 |
|
|
|
— |
|
|
|
2,000,000 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Qualcomm
Ventures LLC |
|
|
500,000 |
|
|
|
— |
|
|
|
500,000 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Rajan
Pai |
|
|
25,000 |
|
|
|
— |
|
|
|
25,000 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Ralph
Kuskye Jr. |
|
|
25,000 |
|
|
|
— |
|
|
|
25,000 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Ronald
Perkes |
|
|
2,000 |
|
|
|
— |
|
|
|
2,000 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Sasidhar
Gunturu |
|
|
15,000 |
|
|
|
2,500 |
|
|
|
15,000 |
|
|
|
2,500 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Seshu
Kalluri |
|
|
22,500 |
|
|
|
3,750 |
|
|
|
22,500 |
|
|
|
3,750 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Sharny
Cherie Kieser |
|
|
15,000 |
|
|
|
2,500 |
|
|
|
15,000 |
|
|
|
2,500 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
SOMPO
Light Vortex Inc. |
|
|
100,000 |
|
|
|
— |
|
|
|
100,000 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Sophia
Laurice Casey Cannon |
|
|
25,000 |
|
|
|
— |
|
|
|
25,000 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Spring
Creek Capital, LLC |
|
|
1,500,000 |
|
|
|
— |
|
|
|
1,500,000 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Stephen
N. Cannon |
|
|
34,962 |
|
|
|
— |
|
|
|
34,962 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Structural
Capital Investments III, LP |
|
|
279,394 |
|
|
|
— |
|
|
|
100,000 |
|
|
|
— |
|
|
|
179,394 |
|
|
|
* |
|
|
|
— |
|
|
|
— |
|
Subramanian
Srinivasan |
|
|
30,000 |
|
|
|
5,000 |
|
|
|
30,000 |
|
|
|
5,000 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
The
Ball Axline Living Trust, dated July 22, 2014(10) |
|
|
560,250 |
|
|
|
— |
|
|
|
560,250 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
The
Kollengode Family Trust, dated April 8, 2022 |
|
|
30,000 |
|
|
|
5,000 |
|
|
|
30,000 |
|
|
|
5,000 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Timothy
Stonehocker(11) |
|
|
1,531,621 |
|
|
|
— |
|
|
|
1,531,621 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
VIZIO
Investments LLC |
|
|
100,000 |
|
|
|
— |
|
|
|
100,000 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Vijay
Parthasarathy |
|
|
15,000 |
|
|
|
2,500 |
|
|
|
15,000 |
|
|
|
2,500 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Vishwesh
Pai |
|
|
55,000 |
|
|
|
2,500 |
|
|
|
55,000 |
|
|
|
2,500 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Walden Sprout Opportunities
Fund-A, LLC(12) |
|
|
525,650 |
|
|
|
— |
|
|
|
525,650 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Wing
Yee Teresa Yeung |
|
|
375,000 |
|
|
|
— |
|
|
|
375,000 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Worthy
Ray Limited |
|
|
100,000 |
|
|
|
— |
|
|
|
100,000 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Zubin
Irani(13) |
|
|
205,787 |
|
|
|
— |
|
|
|
205,787 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
* | Less than 1% |
(1) | We do not know when or in what amounts the Selling Securityholders
will offer the resale securities for sale, if at all. The Selling Securityholders may sell any or all of the resale securities included
in and offered by this prospectus. We cannot estimate the number of resale securities that will be held by the Selling Securityholders
after completion of the offering. However, for purposes of this table, we have assumed that after completion of the offering all of the
resale securities will have been sold by the Selling Securityholders. |
(2) | These securities are being registered in accordance with
the terms of Subscription Agreements dated November 15, 2021 and April 9, 2022, by and between the Company and certain accredited
investors. |
(3) | Represents 16,639,064 shares of Class A Common Stock
issuable upon conversion of 16,639,064 shares of Class B Common Stock of SoundHound AI. These securities are subject to a contractual
lock-up for 12 months following the Closing, subject to limited exceptions, and are being registered in accordance with the terms
of an Amended and Restated Registration Rights Agreement, dated as of April 26, 2022, by and between the Company, the Selling Securityholder
and the other parties thereto. Also represents 833,435 shares of Class A Common Stock issuable upon exercise of stock options issued
pursuant to the Merger Agreement in exchange for SoundHound options granted on March 28, 2017. The shares subject to the option
vested 100% at grant date. Dr. Keyvan Mohajer has served as the Chief Executive Officer and a member of the Board since the Closing. |
(4) | Represents 18,583,756 shares of Class A Common Stock
issuable upon conversion of 18,583,756 shares of Class B Common Stock of SoundHound AI. These securities are being registered
in accordance with the terms of an Amended and Restated Registration Rights Agreement, dated as of April 26, 2022, by and between
the Company, the Selling Securityholder and the other parties thereto. Also represents 666,748 shares of Class A Common Stock
issuable upon exercise of stock options issued pursuant to the Merger Agreement in exchange for SoundHound options granted on March 28,
2017. The shares subject to the option vested 100% at grant date. Dr. Majid Emami has served as a member of the Board since the
Closing. |
(5) | Consists of 35,188,205 shares of Class A Common Stock
of SoundHound AI, Inc. Kamran Elahian has voting and investment control of the shares held by Global Catalyst Partners III, L.P.
and may be deemed to beneficially own the securities owned directly by Global Catalyst Partners III, L.P. Kamran Elahian served
as a member of the board of directors of SoundHound, Inc. prior to the Closing. |
(6) | Represents 4,512,588
shares of Class A Common Stock issuable upon conversion of 4,512,588
shares of Class B Common Stock of SoundHound AI. James Hom has served as a member
of the Board since the Closing. These securities are being registered in accordance with the terms
of an Amended and Restated Registration Rights Agreement, dated as of April 26, 2022, by and
between the Company, the Selling Securityholder and the other parties thereto. |
(7) | The Marcus Family Trust, dated 7/8/04, is a trust, with Larry
Marcus appointed as the trustee with investment authority. Larry Marcus has served as a member of the Board since the Closing. |
(8) | Represents the issuance of (i) 416,718 shares of Class A
Common Stock issuable upon exercise of stock options issued pursuant to the Merger Agreement in exchange for SoundHound options granted
July 26, 2016 which are fully vested as of the date of this filing, (ii) 138,906 shares of Class A Common Stock issuable
upon exercise of stock options issued pursuant to the Merger Agreement in exchange for SoundHound options granted on September 6,
2017 which are fully vested as of the date of this filing, (iii) 138,907 shares of Class A Common Stock issuable upon exercise
of stock options issued pursuant to the Merger Agreement in exchange for SoundHound options granted on August 15, 2019; the shares
subject to the option vested 25% of the shares on August 1, 2020 and the remainder vests in 36 equal monthly installments thereafter
and (iv) 444,499 shares of Class A Common Stock issuable upon exercise of stock options issued pursuant to the Merger Agreement
in exchange for SoundHound options granted on October 27, 2020; the shares subject to the option vest in 48 equal monthly installments
beginning November 1, 2020. Michael Zagorsek served as the Chief Operating Officer of SoundHound, Inc. prior to the Closing. |
(9) | Consists of 308,677 shares of Class A Common Stock of
SoundHound AI, Inc., issuable upon exercise of options, issued pursuant to the Merger Agreement in exchange for SoundHound options granted
on September 27, 2021. The shares subject to the option vested 25% of the shares on September 15, 2022 and the remainder vests
in 36 equal monthly installments thereafter, subject to Mr. Nitesh’s continuous service through each such vesting date. Nitesh
Sharan served as the Chief Financial Officer of SoundHound, Inc. prior to the Closing. |
(10) | The Ball Axline Living Trust, dated July 22, 2014, is
a trust, with Dr. Eric Ball appointed as the trustee with investment authority. Dr. Eric Ball has served as a member of the
Board since the Closing. |
(11) | Represents the issuance of (i) 725,964 Class A Shares in
exchange for securities of SoundHound, Inc. pursuant to the Merger Agreement (ii) 222,250 shares of Class A Common Stock issuable
upon exercise of stock options issued pursuant to the Merger Agreement in exchange for SoundHound options granted on May19, 2015 which
vested 100% at grant date, (iii) 416,719 shares of Class A Common Stock issuable upon exercise of stock options issued pursuant
to the Merger Agreement in exchange for SoundHound options granted on December 15, 2016 which are fully vested as of the date of
this filing and (iv) 166,688 shares of Class A Common Stock issuable upon exercise of stock options issued pursuant to the Merger
Agreement in exchange for SoundHound options granted on August 15, 2019. The shares subject to the option vested 25% of the shares
on January 8, 2019 and the remainder vests in 36 equal monthly installments thereafter, subject to Mr. Stonehocker’s continuous
service through each such vesting date. Timothy Stonehocker served as the Chief Technology Officer of SoundHound, Inc. prior to the Closing. |
(12) | Consists of 525,650 shares of Class A Common Stock of
SoundHound AI, Inc. Larry Marcus has voting and investment control of the shares held by Walden Sprout Opportunities Fund-A, LLC and
may be deemed to beneficially own the securities owned directly by Walden Sprout Opportunities Fund-A, LLC. Larry Marcus has served
as a member of the Board since the Closing. |
(13) | Consists of 205,787 shares of Class A Common Stock issuable
upon exercise of stock options issued pursuant to the Merger Agreement in exchange for SoundHound options granted September 27,
2021 which vest quarterly over 4 years. Zubin Irani served as the Chief Revenue Officer of SoundHound, Inc. prior to the Closing. |
A Note About this Offering
This prospectus relates (i) the offer and resale of an aggregate
of up to 55,999,499 shares of Class A Shares of the Company held by Selling Securityholders (representing 22.2% of the total
number of shares of Class A Common Stock outstanding on a fully diluted basis), including (a) the PIPE Shares issued at $10.00
per share, (b) securities held by our officers, directors and their affiliates which were originally issued as (1) founder shares
in connection with ATSP’s IPO for approximately $0.009 per share and (2) as part of placement units in connection with ATSP’s
IPO at a price of $10.00 per placement unit, and (c) shares of Class A Common Stock exercisable under options held by certain
of the Selling Securityholders which were assumed by us and converted into options of SoundHound AI in connection with the Business Combination
and have an weighted average exercise price of $3.05 per share after giving effect to the Business Combination, (ii) the resale by
certain of our affiliates from time to time of up to 39,735,408 Class A Shares (representing approximately 15.8% of the total number
of shares of Class A Common Stock outstanding on a fully diluted basis) issuable upon conversion of Class B Shares issued pursuant
to the Merger Agreement in connection with the Business Combination as merger consideration at an acquiror share value of $0.0073 per
share, (iii) the resale from time to time of up to 174,750 Placement Warrants, each exercisable for one share of Class A Common
Stock at a price of $11.50, subject to adjustment, which were originally issued as part of placement units in connection with ATSP’s
IPO at a price of $10.00 per placement unit and (iv) the issuance by us of up to 3,457,996 Class A Shares upon the exercise
of outstanding Warrants to purchase our Class A Shares at an exercise price of $11.50, which were originally issued as part of the
units in connection with ATSP’s IPO at a price of $10.00 per unit.
Even if the trading price
of our Class A Common Stock is significantly below $10.00, the offering price for the units offered in ATSP’s IPO, certain
of the selling securityholders may still have an incentive to sell shares of our Class A Common Stock because they purchased or received
the shares at prices lower than the public investors or the current trading price of our Class A Common Stock and thus have an incentive
to sell because they will still profit on sales and receive a positive rate of return due to the lower price that they purchased or received
their shares than the public investors, who may not experience a similar rate of return on the securities they purchased due to differences
in the purchase prices and the current trading price.
Based on the closing
price of our Class A Common Stock of $2.57 as of May 1, 2023, holders of (i) 55,999,499 shares of Class A Common Stock
of SoundHound AI held by Selling Securityholders, including the PIPE Shares issued at $10.00 per share would be expected to earn a potential
loss of $7.43 per share (exclusive of the value of any other securities issued in the original transaction), securities held by our officers,
directors and their affiliates (which were originally issued as founder shares in connection with ATSP’s IPO for approximately
$0.009 would be expected to earn a potential profit of $2.56 per share, and as part of placement units in connection with ATSP’s
IPO at a price of $10.00 per placement unit would be expected to earn a potential loss of $7.43 per share (exclusive of the value of
any other securities issued in the original transaction)), shares of Class A Common Stock exercisable under options held by certain
of the Selling Securityholders which were assumed by us and converted into options of SoundHound AI in connection with the Business Combination
and have an weighted average exercise price of $3.05 per share after giving effect to the Business Combination would be expected to earn
a potential profit, upon exercise, of $0.48 per share, (ii) the resale by certain of our affiliates from time to time of up to 39,735,408
Class A Shares (representing approximately 15.8% of the total number of shares of Class A Common Stock outstanding on a fully
diluted basis) issuable upon conversion of shares of Class B Common Stock issued pursuant to the Merger Agreement in connection
with the Business Combination as merger consideration at an acquiror share value of $0.0073 per share would be expected to earn a potential
profit of $2.56 per share, (iii) the resale from time to time of up to 174,750 Placement Warrants, each exercisable for one share
of Class A Common Stock at a price of $11.50, subject to adjustment, which were originally issued as part of placement units in
connection with ATSP’s IPO at a price of $10.00 per placement unit, would be expected to earn upon exercise a potential loss of
$7.43 per share (exclusive of the value of any other securities issued in the original transaction) and (iv) the issuance by us
of up to 3,457,996 Class A Shares upon the exercise of outstanding Warrants to purchase our Class A Shares at an exercise price
of $11.50 (upon exercise representing approximately 1.4% of the total number of shares of Class A Common Stock outstanding on a
fully diluted basis), as part of the units in connection with ATSP’s IPO at a price of $10.00 per unit, would be expected to earn
upon exercise a potential loss of $7.43 per share (exclusive of the value of any other securities issued in the original transaction).
CERTAIN UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS
The following discussion is
a summary of certain U.S. federal income tax considerations generally applicable to the ownership and disposition of our Class A
Common Stock and Warrants, which we refer to collectively as our securities. This summary is based upon U.S. federal income tax law
as of the date of this prospectus, which is subject to change or differing interpretations, possibly with retroactive effect. This summary
does not discuss all aspects of U.S. federal income taxation that may be important to particular investors in light of their individual
circumstances, including investors subject to special tax rules (e.g., financial institutions, insurance companies, broker-dealers, dealers
or traders in securities, tax-exempt organizations (including private foundations), taxpayers that have elected mark-to-market accounting,
S corporations, regulated investment companies, real estate investment trusts, passive foreign investment companies, controlled foreign
corporations, U.S. Holders (as defined below) that will hold Class A Common Stock or Warrants as part of a straddle, hedge,
conversion, or other integrated transaction for U.S. federal income tax purposes, expatriates or former long-term residents of the
United States, or investors that have a functional currency other than the U.S. dollar), all of whom may be subject to tax rules
that differ materially from those summarized below. This summary does not discuss other U.S. federal tax consequences (e.g., estate
or gift tax), any state, local, or non-U.S. tax considerations or the Medicare tax or alternative minimum tax. In addition, this
summary is limited to investors that will hold our securities as “capital assets” (generally, property held for investment)
under the Code, and that acquire our Class A Common Stock and Warrants for cash pursuant to this prospectus. No ruling from the IRS
has been or will be sought regarding any matter discussed herein. No assurance can be given that the IRS would not assert, or that a court
would not sustain, a position contrary to any of the tax aspects set forth below.
For purposes of this summary,
a “U.S. Holder” is a beneficial holder of securities who or that, for U.S. federal income tax purposes is:
| ● | an individual who is a United States citizen or resident
of the United States; |
| ● | a corporation or other entity treated as a corporation for
United States federal income tax purposes created in, or organized under the law of, the United States or any state or political
subdivision thereof; |
| ● | an estate the income of which is includible in gross income
for United States federal income tax purposes regardless of its source; or |
| ● | a trust (A) the administration of which is subject to
the primary supervision of a United States court and which has one or more United States persons (within the meaning of the
Code) who have the authority to control all substantial decisions of the trust or (B) that has in effect a valid election under
applicable Treasury regulations to be treated as a United States person. |
A “non-U.S. Holder”
is a beneficial holder of securities who or that is neither a U.S. Holder nor an entity or arrangement treated as a partnership for
U.S. federal income tax purposes.
If a partnership (including
an entity or arrangement treated as a partnership for U.S. federal income tax purposes) holds our securities, the tax treatment of
a partner, member or other beneficial owner in such partnership will generally depend upon the status of the partner, member or other
beneficial owner, the activities of the partnership and certain determinations made at the partner, member or other beneficial owner level.
If you are a partner, member or other beneficial owner of a partnership holding our securities, you are urged to consult your tax advisor
regarding the tax consequences of the ownership and disposition of our securities.
THIS DISCUSSION OF U.S. FEDERAL
INCOME TAX CONSIDERATIONS IS FOR GENERAL INFORMATION PURPOSES ONLY AND IS NOT TAX ADVICE. PROSPECTIVE HOLDERS SHOULD CONSULT THEIR
TAX ADVISORS CONCERNING THE U.S. FEDERAL INCOME TAX CONSEQUENCES TO THEM OF OWNING AND DISPOSING OF OUR SECURITIES, AS WELL AS THE
APPLICATION OF ANY, STATE, LOCAL AND NON-U.S. INCOME, ESTATE AND OTHER TAX CONSIDERATIONS.
U.S. Holders
Taxation of Distributions
If we pay distributions or
make constructive distributions (other than certain distributions of our capital stock or rights to acquire our capital stock) to U.S. Holders
of shares of our Class A Common Stock, such distributions generally will constitute dividends for U.S. federal income tax purposes
to the extent paid from our current or accumulated earnings and profits, as determined under U.S. federal income tax principles.
Distributions in excess of our current and accumulated earnings and profits will constitute a return of capital that will be applied against
and reduce (but not below zero) the U.S. Holder’s adjusted tax basis in our Class A Common Stock. Any remaining excess
will be treated as gain realized on the sale or other disposition of the Class A Common Stock and will be treated as described under
“U.S. Holders — Gain or Loss on Sale, Taxable Exchange or Other Taxable Disposition of Class A Common
Stock” below.
Dividends we pay to a U.S. Holder
that is a taxable corporation will generally qualify for the dividends received deduction if the requisite holding period is satisfied.
With certain exceptions (including dividends treated as investment income for purposes of investment interest deduction limitations),
and provided certain holding period requirements are met, dividends we pay to a non-corporate U.S. Holder will generally constitute
“qualified dividends” that will be subject to tax at the maximum tax rate accorded to long-term capital gains. If the holding
period requirements are not satisfied, a corporation may not be able to qualify for the dividends received deduction and would have taxable
income equal to the entire dividend amount, and non-corporate holders may be subject to tax on such dividend at ordinary income tax rates
instead of the preferential rates that apply to qualified dividend income.
Gain or Loss on Sale, Taxable Exchange or Other
Taxable Disposition of Class A Common Stock
A U.S. Holder generally
will recognize gain or loss on the sale, taxable exchange or other taxable disposition of our Class A Common Stock. Any such gain
or loss will be capital gain or loss, and will be long-term capital gain or loss if the U.S. Holder’s holding period for the
Class A Common Stock so disposed of exceeds one year. The amount of gain or loss recognized will generally be equal to the difference
between (1) the sum of the amount of cash and the fair market value of any property received in such disposition and (2) the
U.S. Holder’s adjusted tax basis in its Class A Common Stock so disposed of. A U.S. Holder’s adjusted tax basis
in its Class A Common Stock will generally equal the U.S. Holder’s acquisition cost for such Class A Common Stock
(or, in the case of Class A Common Stock received upon exercise of a Warrant, the U.S. Holder’s initial basis for such
Class A Common Stock, as discussed below), less any prior distributions treated as a return of capital. The deductibility of capital
losses is subject to limitations. Long-term capital gains recognized by non-corporate U.S. Holders are generally eligible for reduced
rates of tax. If the U.S. Holder’s holding period for the Class A Common Stock so disposed of is one year or less, any
gain on a sale or other taxable disposition of the shares would be subject to short-term capital gain treatment and would be taxed at
ordinary income tax rates. The deductibility of capital losses is subject to limitations.
Exercise of a Warrant
Except as discussed below with
respect to the cashless exercise of a warrant, a U.S. Holder generally will not recognize taxable gain or loss upon the exercise
of a warrant for cash. The U.S. Holder’s initial tax basis in the share of our Class A Common Stock received upon exercise
of the warrant will generally be an amount equal to the sum of the U.S. Holder’s acquisition cost of the warrant and the exercise
price of such warrant. It is unclear whether a U.S. Holder’s holding period for the Class A Common Stock received upon
exercise of the warrant would commence on the date of exercise of the warrant or the day following the date of exercise of the warrant;
however, in either case the holding period will not include the period during which the U.S. Holder held the warrants.
The tax consequences of a cashless
exercise of a warrant are not clear under current tax law. A cashless exercise may be nontaxable, either because the exercise is not a
realization event or because the exercise is treated as a recapitalization for U.S. federal income tax purposes. In either situation,
a U.S. Holder’s initial tax basis in the Class A Common Stock received generally should equal the holder’s adjusted
tax basis in the warrant. If the cashless exercise were treated as not being a realization event, it is unclear whether a U.S. Holder’s
holding period for the Class A Common Stock would commence on the date of exercise of the warrant or the day following the date
of exercise of the warrant; in either case, the holding period would not include the period during which the U.S. Holder held the
warrant. If, instead, the cashless exercise were treated as a recapitalization, the holding period of the Class A Common Stock generally
would include the holding period of the warrant.
It is also possible that a
cashless exercise of a warrant could be treated in part as a taxable exchange in which gain or loss is recognized. In such event, a U.S. Holder
could be deemed to have surrendered a portion of the warrants being exercised having a value equal to the exercise price of such warrants
in satisfaction of such exercise price. Although not free from doubt, such U.S. Holder generally should recognize capital gain or
loss in an amount equal to the difference between the fair market value of the warrants deemed surrendered to satisfy the exercise price
and the U.S. Holder’s adjusted tax basis in such warrants. In this case, a U.S. Holder’s initial tax basis in the
Class A Common Stock received would equal the sum of the exercise price and the U.S. holder’s adjusted tax basis in the
warrants exercised. It is unclear whether a U.S. Holder’s holding period for the Class A Common Stock would commence on
the date of exercise of the warrant or the day following the date of exercise of the warrant; in either case, the holding period
would not include the period during which the U.S. Holder held the warrant. Due to the uncertainty and absence of authority on the
U.S. federal income tax treatment of a cashless exercise, including when a U.S. Holder’s holding period would commence
with respect to the Class A Common Stock received, U.S. Holders are urged to consult their tax advisors regarding the tax consequences
of a cashless exercise.
Sale, Exchange, Redemption or Expiration of
a Warrant
Upon a sale, exchange (other
than by exercise), redemption (other than a redemption for Class A Common Stock), or expiration of a warrant, a U.S. Holder
will recognize taxable gain or loss in an amount equal to the difference between (1) the amount realized upon such disposition or
expiration and (2) the U.S. Holder’s adjusted tax basis in the warrant. A U.S. Holder’s adjusted tax basis
in its warrants will generally equal the U.S. Holder’s acquisition cost, increased by the amount of any constructive distributions
included in income by such U.S. Holder (as described below under “U.S. Holders — Possible Constructive
Distributions”). Such gain or loss generally will be treated as long-term capital gain or loss if the warrant is held by the
U.S. Holder for more than one year at the time of such disposition or expiration. If a warrant is allowed to lapse unexercised, a
U.S. Holder will generally recognize a capital loss equal to such holder’s adjusted tax basis in the warrant. The deductibility
of capital losses is subject to certain limitations.
A redemption of warrants for
Class A Common Stock described in this prospectus under “Description of Capital Stock — Warrants”
should be treated as a “recapitalization” for U.S. federal income tax purposes. Accordingly, you should not recognize
any gain or loss on the redemption of warrants for shares of our Class A Common Stock. Your aggregate initial tax basis in the shares
of Class A Common Stock received in the redemption should equal your aggregate adjusted tax basis in your warrants redeemed and your
holding period for the shares of Class A Common Stock received in redemption of your warrants should include your holding period
for your surrendered warrants.
Possible Constructive Distributions
The terms of each warrant provide
for an adjustment to the number of shares of Class A Common Stock for which the warrant may be exercised or to the exercise price
of the warrant in certain events. An adjustment which has the effect of preventing dilution generally should not be a taxable event. Nevertheless,
a U.S. Holder of warrants would be treated as receiving a constructive distribution from us if, for example, the adjustment increases
the holder’s proportionate interest in our assets or earnings and profits (e.g., through an increase in the number of shares of
Class A Common Stock that would be obtained upon exercise) as a result of a distribution of cash to the holders of shares of our
Class A Common Stock which is taxable to such holders as a distribution. Such constructive distribution would be subject to tax as
described above under “U.S. Holders — Taxation of Distributions” in the same manner as if such
U.S. Holder received a cash distribution from us on Class A Common Stock equal to the fair market value of such increased interest.
Information Reporting and Backup Withholding
In general, information reporting
requirements may apply to dividends paid to a U.S. Holder and to the proceeds of the sale or other disposition of shares of Class A
Common Stock and Warrants, unless the U.S. Holder is an exempt recipient. Backup withholding may apply to such payments if the U.S. Holder
fails to provide a taxpayer identification number, a certification of exempt status or has been notified by the IRS that it is subject
to backup withholding (and such notification has not been withdrawn).
Backup withholding is not an
additional tax. Any amounts withheld under the backup withholding rules will be allowed as a credit against a U.S. Holder’s
U.S. federal income tax liability and may entitle such holder to a refund, provided the required information is timely furnished
to the IRS.
Non-U.S. Holders
Taxation of Distributions
In general, any distributions
(including constructive distributions) we make to a non-U.S. Holder of shares of our Class A Common Stock, to the extent paid
out of our current or accumulated earnings and profits (as determined under U.S. federal income tax principles), will constitute
dividends for U.S. federal income tax purposes and, provided such dividends are not effectively connected with the non-U.S. Holder’s
conduct of a trade or business within the United States, we will be required to withhold tax from the gross amount of the dividend
at a rate of 30%, unless such non-U.S. Holder is eligible for a reduced rate of withholding tax under an applicable income tax treaty
and provides proper certification of its eligibility for such reduced rate (usually on an IRS Form W-8BEN or W-8BEN-E, as applicable).
In the case of any constructive dividend (as described below under “Non-U.S. Holders — Possible Constructive
Distributions”), it is possible that this tax would be withheld from any amount owed to a non-U.S. Holder by the applicable
withholding agent, including cash distributions on other property or sale proceeds from warrants or other property subsequently paid or
credited to such holder. Any distribution not constituting a dividend will be treated first as reducing (but not below zero) the non-U.S. Holder’s
adjusted tax basis in its shares of our Class A Common Stock and, to the extent such distribution exceeds the non-U.S. Holder’s
adjusted tax basis, as gain realized from the sale or other disposition of the Class A Common Stock, which will be treated as described
under “Non-U.S. Holders — Gain on Sale, Taxable Exchange or Other Taxable Disposition of Class A Common
Stock and Warrants” below. In addition, if we determine that we are likely to be classified as a “United States real
property holding corporation” (see “Non-U.S. Holders — Gain on Sale, Exchange or Other Taxable Disposition
of Class A Common Stock and Warrants” below), we will withhold 15% of any distribution that exceeds our current and accumulated
earnings and profits.
Dividends we pay to a non-U.S. Holder
that are effectively connected with such non-U.S. Holder’s conduct of a trade or business within the United States (or
if a tax treaty applies are attributable to a U.S. permanent establishment or fixed base maintained by the non-U.S. Holder)
will generally not be subject to U.S. withholding tax, provided such non-U.S. Holder complies with certain certification and
disclosure requirements (generally by providing an IRS Form W-8ECI). Instead, such dividends generally will be subject to U.S. federal
income tax, net of certain deductions, at the same graduated individual or corporate rates applicable to U.S. Holders. If the non-U.S. Holder
is a corporation, dividends that are effectively connected income may also be subject to a “branch profits tax” at a rate
of 30% (or such lower rate as may be specified by an applicable income tax treaty).
Exercise of a Warrant
The U.S. federal income
tax treatment of a non-U.S. Holder’s exercise of a warrant will generally correspond to the U.S. federal income tax treatment
of the exercise of a warrant by a U.S. Holder, as described under “U.S. Holders — Exercise of a Warrant”
above, although to the extent a cashless exercise results in a taxable exchange, the tax consequences to the non-U.S. Holder would
be the same as those described below in “Non-U.S. Holders — Gain on Sale, Exchange or Other Taxable Disposition
of Class A Common Stock and Warrants.”
Redemption of Warrants for Class A Common
Stock
A redemption of Warrants for
Class A Common Stock described in this prospectus under “Description of Capital Stock — Warrants”
should be treated as a “recapitalization” for U.S. federal income tax purposes. Accordingly, you should not recognize
any gain or loss on the redemption of warrants for shares of our Class A Common Stock. Your aggregate initial tax basis in the shares
of Class A Common Stock received in the redemption should equal your aggregate adjusted tax basis in your warrants redeemed and your
holding period for the shares of Class A Common Stock received in redemption of your warrants should include your holding period
for your surrendered warrants.
Gain on Sale, Exchange or Other Taxable Disposition
of Class A Common Stock and Warrants
A non-U.S. Holder generally
will not be subject to U.S. federal income or withholding tax in respect of gain recognized on a sale, taxable exchange or other
taxable disposition of our Class A Common Stock or Warrants or an expiration or redemption of our warrants, unless:
| ● | the gain is effectively connected with the conduct of a trade
or business by the non-U.S. Holder within the United States (and, if an applicable tax treaty so requires, is attributable
to a U.S. permanent establishment or fixed base maintained by the non-U.S. Holder); |
| ● | the non-U.S. Holder is an individual who is present
in the United States for 183 days or more in the taxable year of disposition and certain other conditions are met; or |
| ● | we are or have been a “United States real property
holding corporation” for U.S. federal income tax purposes at any time during the shorter of the five-year period ending on
the date of disposition or the period that the non-U.S. Holder held our Class A Common Stock or Warrants and, in the case where
shares of our Class A Common Stock are regularly traded on an established securities market, the non-U.S. Holder has owned,
directly or constructively, more than 5% of our Class A Common Stock at any time within the shorter of the five-year period preceding
the disposition or such Non-U.S. holder’s holding period for the shares of our Class A Common Stock. There can be no
assurance that our Class A Common Stock will be treated as regularly traded on an established securities market for this purpose. |
Gain described in the first
bullet point above will be subject to tax at generally applicable U.S. federal income tax rates as if the non-U.S. Holder were
a U.S. resident. Any gains described in the first bullet point above of a non-U.S. Holder that is a foreign corporation may
also be subject to an additional “branch profits tax” at a 30% rate (or lower applicable treaty rate). Gain described in the
second bullet point above will generally be subject to a flat 30% U.S. federal income tax. Non-U.S. Holders are urged to consult
their tax advisors regarding possible eligibility for benefits under income tax treaties.
If the third bullet point above
applies to a non-U.S. Holder and applicable exceptions are not available, gain recognized by such holder on the sale, exchange or
other disposition of our Class A Common Stock or Warrants will be subject to tax at generally applicable U.S. federal income
tax rates. In addition, a buyer of our Class A Common Stock or Warrants from such holder may be required to withhold U.S. income
tax at a rate of 15% of the amount realized upon such disposition. We will be classified as a United States real property holding
corporation if the fair market value of our “United States real property interests” equals or exceeds 50% of the sum
of the fair market value of our worldwide real property interests plus our other assets used or held for use in a trade or business, as
determined for U.S. federal income tax purposes. We do not believe we currently are or will become a United States real property
holding corporation, however there can be no assurance in this regard. Non-U.S. Holders are urged to consult their tax advisors regarding
the application of these rules.
Possible Constructive Distributions
The terms of each warrant provide
for an adjustment to the number of shares of Class A Common Stock for which the warrant may be exercised or to the exercise price
of the warrant in certain events. An adjustment which has the effect of preventing dilution generally should not be a taxable event. Nevertheless,
a non-U.S. Holder of warrants would be treated as receiving a constructive distribution from us if, for example, the adjustment increases
the holder’s proportionate interest in our assets or earnings and profits (e.g., through an increase in the number of shares of
Class A Common Stock that would be obtained upon exercise) as a result of a distribution of cash to the holders of shares of our
Class A Common Stock which is taxable to such holders as a distribution. A non-U.S. Holder would be subject to U.S. federal
income tax withholding as described above under “Non-U.S. Holders — Taxation of Distributions”
under that section in the same manner as if such non-U.S. Holder received a cash distribution from us on Class A Common Stock
equal to the fair market value of such increased interest.
Foreign Account Tax Compliance Act
Provisions of the Code and
Treasury Regulations and administrative guidance promulgated thereunder commonly referred as the “Foreign Account Tax Compliance
Act” (“FATCA”) generally impose withholding at a rate of 30% in certain circumstances on dividends (including constructive
dividends) in respect of our securities which are held by or through certain foreign financial institutions (including investment funds),
unless any such institution (1) enters into, and complies with, an agreement with the IRS to report, on an annual basis, information
with respect to interests in, and accounts maintained by, the institution that are owned by certain U.S. persons and by certain non-U.S. entities
that are wholly or partially owned by U.S. persons and to withhold on certain payments, or (2) if required under an intergovernmental
agreement between the United States and an applicable foreign country, reports such information to its local tax authority, which
will exchange such information with the U.S. authorities. An intergovernmental agreement between the United States and an applicable
foreign country may modify these requirements. Accordingly, the entity through which our securities are held will affect the determination
of whether such withholding is required. Similarly, dividends in respect of our securities held by an investor that is a non-financial
non-U.S. entity that does not qualify under certain exceptions will generally be subject to withholding at a rate of 30%, unless
such entity either (1) certifies to us or the applicable withholding agent that such entity does not have any “substantial
United States owners” or (2) provides certain information regarding the entity’s “substantial United States
owners,” which will in turn be provided to the U.S. Department of Treasury. Withholding under FATCA was scheduled to apply
to payments of gross proceeds from the sale or other disposition of property that produces U.S.-source interest or dividends, however,
the IRS released proposed regulations that, if finalized in their proposed form, would eliminate the obligation to withhold on such gross
proceeds. Although these proposed Treasury Regulations are not final, taxpayers generally may rely on them until final Treasury Regulations
are issued. Prospective investors should consult their tax advisors regarding the possible implications of FATCA on their investment in
our securities.
Information Reporting and Backup Withholding
Information returns will
be filed with the IRS in connection with payments of dividends and the proceeds from a sale or other disposition of shares of Class A
Common Stock and Warrants. A non-U.S. Holder may have to comply with certification procedures to establish that it is not a United States
person in order to avoid information reporting and backup withholding requirements. The certification procedures required to claim a
reduced rate of withholding under a treaty generally will satisfy the certification requirements necessary to avoid the backup withholding
as well. Backup withholding is not an additional tax. The amount of any backup withholding from a payment to a non-U.S. Holder will
be allowed as a credit against such holder’s U.S. federal income tax liability and may entitle such holder to a refund, provided
that the required information is timely furnished to the IRS.
PLAN OF DISTRIBUTION
Resale by the Selling Securityholders
Each Selling Securityholder
of the securities and any of their pledgees, assignees and successors-in-interest may, from time to time, sell any or all of their securities
covered hereby on the Nasdaq Global Market or any other stock exchange, market or trading facility on which the securities are traded
or in private transactions. These sales may be at fixed or negotiated prices.
We will not receive any of
the proceeds from the sale of the securities by the Selling Securityholders. We will receive proceeds equal to the aggregate exercise
price from any exercises of the Warrants, assuming the exercise of the Warrants for cash.
Upon effectiveness of the
registration statement of which this prospectus forms a part, the securities beneficially owned by the Selling Securityholders covered
by this prospectus may be offered and sold from time to time by the Selling Securityholders, subject to any applicable lock up agreements
or other applicable restrictions. The term “Selling Securityholders” includes donees, pledgees, transferees or other successors
in interest selling securities received after the date of this prospectus from a Selling Securityholder as a gift, pledge, partnership
or limited liability company distribution or other transfer. The Selling Securityholders will act independently of us in making decisions
with respect to the timing, manner and size of each sale. Such sales may be made on one or more exchanges or in the over-the-counter market
or otherwise, at prices and under terms then prevailing or at prices related to the then current market price or in negotiated transactions.
Each Selling Securityholders reserves the right to accept and, together with its respective agents, to reject, any proposed purchase of
securities to be made directly or through agents. The Selling Securityholders and any of their permitted transferees may sell their securities
offered by this prospectus on any stock exchange, market or trading facility on which the securities are traded or in private transactions.
A Selling Securityholder may
use any one or more of the following methods when selling securities:
| ● | purchases by a broker-dealer as principal and resale by such
broker-dealer for its own account pursuant to this prospectus; |
| ● | ordinary brokerage transactions and transactions in which
the broker solicits purchasers; |
| ● | block trades in which the broker-dealer so engaged will attempt
to sell the shares as agent but may position and resell a portion of the block as principal to facilitate the transaction; |
| ● | an over-the-counter distribution in accordance
with the rules of the Nasdaq Stock Market; |
| ● | through trading plans entered into by a Selling Securityholder
pursuant to |
| ● | Rule 10b5-1 under the Exchange Act that are in
place at the time of an offering pursuant to this prospectus and any applicable prospectus supplement hereto that provide for periodic
sales of their securities on the basis of parameters described in such trading plans; |
| ● | distribution to employees, members, limited partners or stockholders
of the Selling Securityholders; |
| ● | through the writing or settlement of options or other hedging
transaction, whether through an options exchange or otherwise; |
| ● | by pledge to secured debts and other obligations; |
| ● | delayed delivery arrangements; |
| ● | to or through underwriters or agents; |
| ● | in “at the market” offerings, as defined in Rule 415
under the Securities Act, at negotiated prices, at prices prevailing at the time of sale or at prices related to such prevailing market
prices, including sales made directly on a national securities exchange or sales made through a market maker other than on an exchange
or other similar offerings through sales agents; |
| ● | in privately negotiated transactions; |
| ● | in options transactions; and |
| ● | through a combination of any of the above methods of sale,
as described below, or any other method permitted pursuant to applicable law. |
The Selling Securityholders
may also sell securities under Rule 144 or any other exemption from registration under the Securities Act of 1933, as amended
(the “Securities Act”), if available, rather than under this prospectus.
Further, a Selling Securityholder
that is an entity may elect to make an in-kind distribution of securities to its members, partners or stockholders pursuant
to the registration statement of which this prospectus is a part by delivering a prospectus with a plan of distribution.
To the extent required, this
prospectus may be amended or supplemented from time to time to describe a specific plan of distribution.
Broker-dealers engaged by
the Selling Securityholders may arrange for other brokers-dealers to participate in sales. Broker-dealers may receive commissions or discounts
from the Selling Securityholders (or, if any broker-dealer acts as agent for the purchaser of securities, from the purchaser) in amounts
to be negotiated, but, except as set forth in a supplement to this Prospectus, in the case of an agency transaction not in excess of a
customary brokerage commission in compliance with FINRA Rule 2121; and in the case of a principal transaction a markup or markdown
in compliance with FINRA Rule 2121.
In connection with the sale
of the securities or interests therein, the Selling Securityholders may enter into hedging transactions with broker-dealers or other financial
institutions, which may in turn engage in short sales of the securities in the course of hedging the positions they assume. The Selling
Securityholders may also sell securities short and deliver these securities to close out their short positions, or loan or pledge the
securities to broker-dealers that in turn may sell these securities. The Selling Securityholders may also enter into option or other transactions
with broker-dealers or other financial institutions or create one or more derivative securities which require the delivery to such broker-dealer
or other financial institution of securities offered by this prospectus, which securities such broker-dealer or other financial institution
may resell pursuant to this prospectus (as supplemented or amended to reflect such transaction).
The Selling Securityholders
and any broker-dealers or agents that are involved in selling the securities may be deemed to be “underwriters” within the
meaning of the Securities Act in connection with such sales. In such event, any commissions received by such broker-dealers or agents
and any profit on the resale of the securities purchased by them may be deemed to be underwriting commissions or discounts under the Securities
Act. Each Selling Securityholder has informed the Company that it does not have any written or oral agreement or understanding, directly
or indirectly, with any person to distribute the securities.
The Company is required to
pay certain fees and expenses incurred by the Company incident to the registration of the securities. The Company has agreed to indemnify
the Selling Securityholders against certain losses, claims, damages and liabilities, including liabilities under the Securities Act.
We agreed to keep this prospectus
effective until the earlier of (i) the date on which the securities may be resold by the Selling Securityholders without registration
and without regard to any volume or manner-of-sale limitations by reason of Rule 144, without the requirement for the Company to
be in compliance with the current public information under Rule 144 under the Securities Act or any other rule of similar effect
or (ii) all of the securities have been sold pursuant to this prospectus or Rule 144 under the Securities Act or any other rule
of similar effect. The resale securities will be sold only through registered or licensed brokers or dealers if required under applicable
state securities laws. In addition, in certain states, the resale securities covered hereby may not be sold unless they have been registered
or qualified for sale in the applicable state or an exemption from the registration or qualification requirement is available and is complied
with.
Under applicable rules and
regulations under the Exchange Act, any person engaged in the distribution of the resale securities may not simultaneously engage
in market making activities with respect to the common stock for the applicable restricted period, as defined in Regulation M, prior
to the commencement of the distribution. In addition, the Selling Securityholders will be subject to applicable provisions of the Exchange Act
and the rules and regulations thereunder, including Regulation M, which may limit the timing of purchases and sales of the common
stock by the Selling Securityholders or any other person. We will make copies of this prospectus available to the Selling Securityholders
and have informed them of the need to deliver a copy of this prospectus to each purchaser at or prior to the time of the sale (including
by compliance with Rule 172 under the Securities Act).
Primary Offering by the Company
A holder of Warrants may exercise
its Warrants in accordance with the Warrant Agreement on or before the expiration date set forth therein by surrendering, at the office
of the warrant agent, Continental Stock Transfer & Trust Company, the certificate evidencing such Warrant, with the form of election
to purchase set forth thereon, properly completed and duly executed, accompanied by full payment of the exercise price and any and all
applicable taxes due in connection with the exercise of the Warrant, subject to any applicable provisions relating to cashless exercises
in accordance with the Warrant Agreement.
LEGAL MATTERS
Ellenoff Grossman &
Schole LLP, New York, New York, is acting as counsel in connection with the registration of our securities under the Securities
Act, and as such, will pass upon the validity of the securities offered in this prospectus.
EXPERTS
The financial statements of
SoundHound, Inc. as of and for the years ended December 31, 2022 and 2021 included in this registration statement, of which
this prospectus forms a part, have been audited by Armanino LLP., independent registered public accounting firm, as set forth in their
report appearing elsewhere herein, and are included in reliance upon such report given on the authority of such firm as experts in auditing
and accounting in giving said report.
WHERE YOU CAN FIND ADDITIONAL INFORMATION
We have filed with the SEC
a registration statement on Form S-3 under the Securities Act with respect to the securities offered in this prospectus. This prospectus,
which constitutes a part of the registration statement, does not contain all of the information set forth in the registration statement
and its exhibits and schedules, portions of which have been omitted as permitted by the rules and regulations of the SEC. For further
information about us and our securities, we refer you to the registration statement and to its exhibits and schedules. Statements in this
prospectus about the contents of any contract, agreement or other document are not necessarily complete and, in each instance, we refer
you to the copy of such contract, agreement or document filed as an exhibit to the registration statement, with each such statement being
qualified in all respects by reference to the document to which it refers.
You can read our SEC filings,
including the registration statement, over the Internet at the SEC’s website at www.sec.gov
We also file periodic reports,
proxy statements and other information with the SEC. These reports, proxy statements and other information will be available for
inspection and copying at the public reference room and website of the SEC referred to above. We also maintain a website at www.soundhound.com,
by which you may access these materials free of charge as soon as reasonably practicable after they are electronically filed with, or
furnished to, the SEC. The information that is contained on, or that may be accessed through, our website is not a part of this prospectus.
We have included our website in this prospectus solely as an inactive textual reference.
INCORPORATION OF DOCUMENTS BY REFERENCE
We are “incorporating
by reference” in this prospectus certain documents we file with the SEC, which means that we can disclose important information
to you by referring you to those documents. The information in the documents incorporated by reference is considered to be part of this
prospectus. Statements contained in documents that we file with the SEC and that are incorporated by reference in this prospectus will
automatically update and supersede information contained in this prospectus, including information in previously filed documents or reports
that have been incorporated by reference in this prospectus, to the extent the new information differs from or is inconsistent with the
old information. We have filed or may file the following documents with the SEC and they are incorporated herein by reference as of their
respective dates of filing.
| 1. | Our Annual Report
on Form 10-K for the year ended December 31, 2022, filed with the SEC on March 28, 2023;
and |
| | |
| 2. | Our Quarterly Report on Form 10-Q for the quarter
ended March 31, 2023, filed with the SEC on May 12, 2023; and |
All documents that we filed
with the SEC pursuant to Sections 13(a), 13(c), 14, and 15(d) of the Exchange Act subsequent to the date of this registration statement
and prior to the filing of a post-effective amendment to this registration statement that indicates that all securities offered under
this prospectus have been sold, or that deregisters all securities then remaining unsold, will be deemed to be incorporated in this registration
statement by reference and to be a part hereof from the date of filing of such documents.
Any statement contained in
a document incorporated or deemed to be incorporated by reference in this prospectus shall be deemed modified, superseded or replaced
for purposes of this prospectus to the extent that a statement contained in this prospectus, or in any subsequently filed document that
also is deemed to be incorporated by reference in this prospectus, modifies, supersedes or replaces such statement. Any statement so modified,
superseded or replaced shall not be deemed, except as so modified, superseded or replaced, to constitute a part of this prospectus. None
of the information that we disclose under Items 2.02 or 7.01 of any Current Report on Form 8-K or any corresponding information, either
furnished under Item 9.01 or included as an exhibit therein, that we may from time to time furnish to the SEC will be incorporated by
reference into, or otherwise included in, this prospectus, except as otherwise expressly set forth in the relevant document. Subject to
the foregoing, all information appearing in this prospectus is qualified in its entirety by the information appearing in the documents
incorporated by reference.
You may request, orally
or in writing, a copy of these documents, which will be provided to you at no cost (other than exhibits, unless such exhibits are specifically
incorporate by reference), by contacting General Counsel, c/o SoundHound AI, Inc., at 5400
Betsy Ross Drive, Santa Clara, CA 95054. Our telephone number is (408) 441-3200.
Information about us is also available at our website at www.soundhound.com.
However, the information in our website is not a part of this prospectus and is not incorporated by reference.
SOUNDHOUND
AI, INC.
55,999,499 Shares of Class A Common
Stock
39,735,408 Shares of Class A Common Stock Underlying Shares of Class B Common Stock
174,750 Placement Warrants
3,457,996 Shares of Class A Common Stock Underlying Warrants
Prospectus
The date of this Prospectus is ,
2023
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 13. Other Expenses of Issuance and Distribution.
The Company is paying all
expenses of the offering. The following table sets forth all expenses to be paid by the registrant. All amounts shown are estimates except
for the registration fee.
| |
Amount | |
SEC registration fee | |
$ | 62,383 | * |
Legal fees and expenses | |
| 20,000 | |
Accounting fees and expenses | |
| 8,000 | |
Total | |
$ | 90,383 | |
Item 14. Indemnification of Directors and Officers.
As permitted by Section 102
of the Delaware General Corporation Law, we have adopted provisions in our Charter and our Bylaws that limit or eliminate the personal
liability of our directors for a breach of their fiduciary duty of care as a director. The duty of care generally requires that, when
acting on behalf of the corporation, directors exercise an informed business judgment based on all material information reasonably available
to them. Consequently, a director will not be personally liable to us or our stockholders for monetary damages for breach of fiduciary
duty as a director, except for liability for:
| ● | any breach of the director’s duty of loyalty to us
or our stockholders; |
| ● | any act or omission not in good faith or that involves intentional
misconduct or a knowing violation of law; |
| ● | any act related to unlawful stock repurchases, redemptions
or other distributions or payment of dividends; or |
| ● | any transaction from which the director derived an improper
personal benefit. |
These limitations of liability
do not affect the availability of equitable remedies such as injunctive relief or rescission. Our Charter also authorizes us to indemnify
our officers, directors and other agents to the fullest extent permitted under Delaware law.
As permitted by Section 145
of the Delaware General Corporation Law, our Bylaws provide that:
| ● | we may indemnify our directors, officers and employees to
the fullest extent permitted by the Delaware General Corporation Law, subject to limited exceptions; |
| ● | we may advance expenses to our directors, officers and employees
in connection with a legal proceeding to the fullest extent permitted by the Delaware General Corporation Law, subject to limited exceptions;
and |
| ● | the rights provided in our Bylaws are not exclusive. |
Our Charter and our Bylaws
provide for the indemnification provisions described above and elsewhere herein. We have entered or will enter into, and intend to continue
to enter into, separate indemnification agreements with our directors and certain of our officers that may be broader than the specific
indemnification provisions contained in the Delaware General Corporation Law. These indemnification agreements generally require us, among
other things, to indemnify our officers and directors against certain liabilities that may arise by reason of their status or service
as directors or officers, other than liabilities arising from willful misconduct. These indemnification agreements also generally require
us to advance any expenses incurred by the directors or officers as a result of any proceeding against them as to which they could be
indemnified. These indemnification provisions and the indemnification agreements may be sufficiently broad to permit indemnification of
our officers and directors for liabilities, including reimbursement of expenses incurred, arising under the Securities Act of 1933,
as amended, or the Securities Act.
The Company has purchased
and currently intends to maintain insurance on behalf of each and every person who is or was a director or officer of the Company against
any loss arising from any claim asserted against him or her and incurred by him or her in any such capacity, subject to certain exclusions.
Item 15. Recent Sales of Unregistered
Securities
During the past three years,
we sold the following shares of common stock without registration under the Securities Act: On January 4, 2021, we issued 2,875,000 shares
of common stock to Archimedes Tech SPAC Sponsors LLC, for $25,000 in cash, at a purchase price of approximately $0.009 per
share, in connection with our organization, that include up to 375,000 shares subject to forfeiture to the extent that the underwriters’
over-allotment option is not exercised in full or in part, so that the initial stockholders will own 20% (not including the private
placement shares and the 350,000 shares held by EarlyBirdCapital described below) of our issued and outstanding shares after this
offering. Such shares were issued in connection with our organization pursuant to the exemption from registration contained in Section 4(a)(2) of
the Securities Act as the shares were sold to an accredited investor. The shares issued were sold for an aggregate offering price of $25,000
at an average purchase price of approximately $0.009 per share.
On January 13, 2021,
we also issued an aggregate of 350,000 shares at $0.0001 per share to EarlyBirdCapital and its designees pursuant to the exemption
from registration contained in Section 4(a)(2) of the Securities Act as the shares were issued to accredited investors.
On March 15, 2021, simultaneously
with the consummation of the IPO, we completed the Private Placement of an aggregate of 390,000 Private Units to the Sponsor and
EarlyBirdCapital at a purchase price of $10.00 per Private Unit, generating gross proceeds to the Company of $3,900,000. On March 19,
2021, the underwriters partially exercised the over-allotment option to purchase 1,300,000 public units. Simultaneously with the exercise
of the over-allotment option, we completed the sale of an aggregate of 26,000 Private Units to the Sponsor and EarlyBirdCapital,
at a purchase price of $10.00 per Private Unit, generating gross proceeds to the Company of $260,000. These issuances were made pursuant
to the exemption from registration contained in Section 4(a)(2) of the Securities Act.
On April 26, 2022, we
consummated the sale of an aggregate of 11,300,000 PIPE Shares, for a purchase price of $10.00 per share and an aggregate purchase price
of $113,000,000. The PIPE Shares are identical to the shares of Class A Common Stock that were held by the Company’s public
stockholders at the time of the closing of our Business Combination, except that the PIPE Shares were not entitled to any redemption rights
and were not yet registered with the SEC. The PIPE Shares were not registered under the Securities Act in reliance on the exemption
from registration provided by Section 4(a)(2) of the Securities Act and/or Regulation D promulgated thereunder as a transaction
by an issuer not involving a public offering without any form of general solicitation or general advertising.
No underwriting discounts
or commissions were paid with respect to such sales.
On
or around January 20, 2023, the Company entered into Preferred Stock Purchase Agreements (the “PS Purchase Agreements”)
with certain investors (the “PS Investors”) pursuant to which the Company issued and sold to the PS Investors an aggregate
of 835,011 shares of its newly designated Series A Preferred Stock for an aggregate issue price of approximately $25.0 million.
The PS Purchase Agreements contain customary representations, warranties and covenants. The shares of Series A Preferred Stock were issued
and sold in a private placement exempt from the registration requirements of the Securities Act pursuant to Section 4(a)(2) therein. The
Company does not intend to register the shares of Series A Preferred Stock or the underlying common stock for resale under the Securities
Act.
On
April 14, 2023 (the “Term Loan Closing Date”), the “Company entered into a Senior Secured Term Loan Credit Agreement
(the “Credit Agreement”) with ACP Post Oak Credit II LLC, as Administrative Agent and Collateral Agent for the Lenders (the
“Agent”), and the lenders from time to time party thereto. In connection with the Credit Agreement, on the Term Loan Closing
Date the Company also issued a warrant to purchase up to 3,301,536 shares of Class A Common Stock to the Agent (the “ACP Warrant”).
The ACP Warrant has a per share exercise price of $2.59 and may be exercised, including on a cashless basis, by the holder at any time
prior to the 10-year anniversary of the issue date. The ACP Warrant will be automatically cashless exercised immediately prior to a change
in control of the Company. The Company issued and sold the ACP Warrant in reliance on the exemption from the registration requirements
of the Securities Act by virtue of Section 4(a)(2) thereof. In connection with its execution of the ACP Warrant, the Agent represented
to the Company that it is an “accredited investor” as defined in Regulation D under the Securities Act and that the Warrant,
and the shares of Class A Common Stock underlying the ACP Warrant, will be acquired solely for its own account and for investment purposes
and not with a view to future sale or distribution.
Item 16. Exhibits.
The following exhibits are
filed with this Registration Statement.
The agreements included or
incorporated by reference as exhibits to this registration statement contain representations and warranties by each of the parties to
the applicable agreement. These representations and warranties were made solely for the benefit of the other parties to the applicable
agreement and (i) were not intended to be treated as categorical statements of fact, but rather as a way of allocating the risk to one
of the parties if those statements prove to be inaccurate; (ii) may have been qualified in such agreement by disclosures that were made
to the other party in connection with the negotiation of the applicable agreement; (iii) may apply contract standards of “materiality”
that are different from “materiality” under the applicable securities laws; and (iv) were made only as of the date of the
applicable agreement or such other date or dates as may be specified in the agreement.
The undersigned registrant
acknowledges that, notwithstanding the inclusion of the foregoing cautionary statements, it is responsible for considering whether additional
specific disclosures of material information regarding material contractual provisions are required to make the statements in this registration
statement not misleading.
Exhibit
Number |
|
Description |
|
Incorporated by Reference |
Form |
|
Exhibit |
|
Filing Date |
2.1# |
|
Merger Agreement dated as of November 15, 2021 by and among Archimedes Tech SPAC Partners Co., ATSPC Merger Sub, Inc. and SoundHound, Inc. |
|
8-K |
|
2.1 |
|
November 16, 2021 |
3.1 |
|
Second Amended and Restated Certificate of Incorporation of SoundHound AI, Inc. |
|
8-K |
|
3.1 |
|
May 2, 2022 |
3.2 |
|
Amended and Restated Bylaws of SoundHound AI, Inc. |
|
8-K |
|
3.2 |
|
May 2, 2022 |
3.3 |
|
SoundHound AI, Inc. Certificate of Designations of Preferences, Rights and Limitations of Series A Convertible Preferred Stock. |
|
8-K |
|
3.1 |
|
January 24, 2023 |
4.1 |
|
Amended and Restated Warrant Agreement. |
|
8-K |
|
4.1 |
|
May 2, 2022 |
4.2 |
|
Form of Specimen Class A Common Stock Certificate |
|
S-1 |
|
4.2 |
|
May 16, 2022 |
4.3 |
|
Form of Specimen Warrant Certificate |
|
S-1 |
|
4.3 |
|
May 16, 2022 |
4.4 |
|
Amended and Restated Warrant Agreement. |
|
8-K |
|
4.1 |
|
May 2, 2022 |
5.1** |
|
Opinion of Ellenoff Grossman & Schole LLP |
|
S-1 |
|
5.1 |
|
November 9, 2022 |
10.1 |
|
Form of PIPE Subscription Agreement. |
|
8-K |
|
10.3 |
|
November 16, 2021 |
10.2 |
|
Form of Lock-Up Agreement. |
|
8-K |
|
10.4 |
|
November 16, 2021 |
10.3 |
|
Amended and Restated Registration Rights Agreement, dated April 26, 2022, by and between SoundHound AI, Inc. and certain stockholders of SoundHound AI, Inc. |
|
S-1 |
|
10.3 |
|
May 16, 2022 |
10.4 |
|
SoundHound AI, Inc. 2022 Incentive Award Plan. |
|
Proxy Statement |
|
Annex D |
|
April 8, 2022 |
10.5 |
|
SoundHound AI, Inc. 2022 Employee Stock Purchase Plan. |
|
Proxy Statement |
|
Annex E |
|
April 8, 2022 |
10.6 |
|
Form of Restricted Stock Unit Agreement. |
|
8-K |
|
10.8 |
|
May 2, 2022 |
10.7 |
|
Form of Stock Option Award Agreement. |
|
8-K |
|
10.9 |
|
May 2, 2022 |
10.8 |
|
Form of Indemnity Agreement. |
|
8-K |
|
10.10 |
|
May 2, 2022 |
10.9 |
|
Employment Agreement with Keyvan Mohajer, Chief Executive Officer, dated June 2, 2022 |
|
8-K |
|
10.1 |
|
June 8, 2022 |
10.10 |
|
Employment Agreement with Nitesh Sharan, Chief Financial Officer, dated June 2, 2022 |
|
8-K |
|
10.2 |
|
June 8, 2022 |
10.11 |
|
Employment Agreement with Timothy Stonehocker, Chief Technology Officer, dated June 2, 2022 |
|
8-K |
|
10.3 |
|
June 8, 2022 |
10.12 |
|
Non-Employee Director Compensation Policy |
|
8-K |
|
10.4 |
|
June 8, 2022 |
10.13 |
|
Common Stock Purchase Agreement, dated as of August 16, 2022, by and between SoundHound AI, Inc. and CF Principal Investments LLC |
|
8-K |
|
10.1 |
|
August 16, 2022 |
10.14 |
|
Registration Rights Agreement, dated as of August 16, 2022, by and between SoundHound AI, Inc. and CF Principal Investments LLC |
|
8-K |
|
10.2 |
|
August 16, 2022 |
10.15 |
|
Form of Amended and Restated Side Letter Agreement by and between SoundHound AI, Inc. and CF Principal Investments LLC. |
|
S-1 |
|
10.15 |
|
February 14, 2023 |
10.16 |
|
Form of Preferred Stock Purchase Agreement. |
|
8-K |
|
3.1 |
|
January 24, 2023 |
21.1 |
|
Subsidiaries of the Company. |
|
8-K |
|
21.1 |
|
May 2, 2022 |
23.1* |
|
Consent of Armanino LLP dated May 26, 2023. |
|
|
|
|
|
|
107** |
|
Calculation of Filing Fees Table |
|
|
|
|
|
|
* |
Filed or furnished herewith. |
# |
Management contract or compensatory plan or arrangement. |
Item 17. Undertakings.
The undersigned registrant
hereby undertakes:
(1) That, for the purpose
of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(2) To remove from registration
by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.
(3) That, for the purpose
of determining liability under the Securities Act of 1933 to any purchaser:
(i) If the registrant
is relying on Rule 430B:
(A) Each prospectus
filed by the registrant pursuant to Rule 424(b)(3) shall be deemed to be part of the registration statement as of the date the filed prospectus
was deemed part of and included in the registration statement; and
(B) Each prospectus
required to be filed pursuant to Rule 424(b)(2), (b)(5), or (b)(7) as part of a registration statement in reliance on Rule 430B relating
to an offering made pursuant to Rule 415(a)(1)(i), (vii), or (x) for the purpose of providing the information required by section 10(a)
of the Securities Act of 1933 shall be deemed to be part of and included in the registration statement as of the earlier of the date such
form of prospectus is first used after effectiveness or the date of the first contract of sale of securities in the offering described
in the prospectus. As provided in Rule 430B, for liability purposes of the issuer and any person that is at that date an underwriter,
such date shall be deemed to be a new effective date of the registration statement relating to the securities in the registration statement
to which that prospectus relates, and the offering of such securities at that time shall be deemed to be the initial bona fide offering
thereof. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement
or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the
registration statement will, as to a purchaser with a time of contract of sale prior to such effective date, supersede or modify any statement
that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately
prior to such effective date; or
(ii) If the registrant
is subject to Rule 430C, each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating to an offering, other
than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A, shall be deemed to be part
of and included in the registration statement as of the date it is first used after effectiveness. Provided, however, that no statement
made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed
incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser
with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the registration statement
or prospectus that was part of the registration statement or made in any such document immediately prior to such date of first use.
Insofar as indemnification
for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant
pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Securities Act of 1933 and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless
in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public policy as expressed in the Securities Act of 1933 and will be governed by
the final adjudication of such issue.
SIGNATURES
Pursuant to the requirements
of the Securities Act of 1933, as amended, the registrant has duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Santa Clara, State
of California, on this 26th day of May, 2023.
|
SOUNDHOUND AI, INC. |
|
|
|
By: |
/s/ Dr. Keyvan Mohajer |
|
|
Dr. Keyvan Mohajer |
|
|
Chief Executive Officer |
Pursuant to the requirements
of the Securities Act of 1933, as amended, this Registration Statement has been signed by the following persons in the capacities and
on the dates indicated.
Name |
|
Position |
|
Date |
|
|
|
|
|
/s/ Dr. Keyvan
Mohajer |
|
Chief Executive Officer
and Director |
|
May 26, 2023 |
Dr. Keyvan Mohajer |
|
(Principal Executive
Officer) |
|
|
|
|
|
|
|
/s/ Nitesh
Sharan |
|
Chief Financial Officer |
|
May 26, 2023 |
Nitesh Sharan |
|
(Principal Financial
and Accounting Officer) |
|
|
|
|
|
|
|
* |
|
Director |
|
May 26, 2023 |
James Hom |
|
|
|
|
|
|
|
|
|
* |
|
Director |
|
May 26, 2023 |
Dr. Eric Ball |
|
|
|
|
|
|
|
|
|
* |
|
Director |
|
May 26, 2023 |
Larry Marcus |
|
|
|
|
|
|
|
|
|
* |
|
Director |
|
May 26, 2023 |
Diana Sroka |
|
|
|
|
* By: |
/s/ Dr. Keyvan Mohajer |
|
Name: |
Dr. Keyvan Mohajer
Attorney-in-fact |
|
II-5
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