Exhibit 99.2
SOUNDHOUND AI, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share data)
December 31, 2023 | December 31, 2022 | |||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 95,260 | $ | 9,245 | ||||
Accounts receivable, net of allowances of $203 and $109 as of December 31, 2023 and 2022, respectively | 4,050 | 3,414 | ||||||
Prepaid expenses | 924 | 2,514 | ||||||
Contract assets and unbilled revenue, net | 11,780 | 1,671 | ||||||
Other current assets | 1,528 | 859 | ||||||
Total current assets | 113,542 | 17,703 | ||||||
Restricted cash equivalents, non-current | 13,775 | 230 | ||||||
Right-of-use assets | 5,210 | 8,119 | ||||||
Property and equipment, net | 1,515 | 3,447 | ||||||
Deferred tax asset | 11 | 55 | ||||||
Contract assets and unbilled revenue, non-current, net | 16,492 | 7,041 | ||||||
Other non-current assets | 577 | 1,391 | ||||||
Total assets | $ | 151,122 | $ | 37,986 | ||||
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 1,653 | $ | 2,798 | ||||
Accrued liabilities | 13,884 | 8,537 | ||||||
Operating lease liabilities | 2,637 | 3,282 | ||||||
Finance lease liabilities | 121 | 160 | ||||||
Income tax liability | 1,618 | 1,314 | ||||||
Deferred revenue | 4,310 | 5,812 | ||||||
Notes payable | — | 16,668 | ||||||
Total current liabilities | 24,223 | 38,571 | ||||||
Operating lease liabilities, net of current portion | 3,089 | 5,715 | ||||||
Deferred revenue, net of current portion | 4,910 | 7,543 | ||||||
Notes payable, net of current portion | 84,312 | 18,299 | ||||||
Other non-current liabilities | 6,420 | 4,423 | ||||||
Total liabilities | 122,954 | 74,551 | ||||||
Commitments and contingencies (Note 7) | ||||||||
Stockholders’ equity (deficit): | ||||||||
Series A Preferred Stock, $0.0001 par value; 1,000,000 shares authorized; 475,005 and 0 shares issued and outstanding, aggregate liquidation preference of $16,227 and $— as of December 31, 2023 and December 31, 2022, respectively | 14,187 | — | ||||||
Class A Common Stock, $0.0001 par value; 455,000,000 shares authorized; 216,943,349 and 160,297,664 shares issued and outstanding as of December 31, 2023 and 2022, respectively | 22 | 16 | ||||||
Class B Common Stock, $0.0001 par value; 44,000,000 shares authorized; 37,485,408 and 39,735,408 shares issued and outstanding as of December 31, 2023 and 2022, respectively | 4 | 4 | ||||||
Additional paid-in capital | 606,135 | 466,857 | ||||||
Accumulated deficit | (592,379 | ) | (503,442 | ) | ||||
Accumulated other comprehensive income | $ | 199 | — | |||||
Total stockholders’ equity (deficit) | 28,168 | (36,565 | ) | |||||
Total liabilities and stockholders’ equity (deficit) | $ | 151,122 | $ | 37,986 |
The accompanying notes are an integral part of these consolidated financial statements.
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SOUNDHOUND AI, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
AND COMPREHENSIVE LOSS
(In thousands, except share and per share data)
Year Ended December 31, | ||||||||||||
2023 | 2022 | 2021 | ||||||||||
Revenues | $ | 45,873 | $ | 31,129 | $ | 21,197 | ||||||
Operating expenses: | ||||||||||||
Cost of revenues | 11,307 | 9,599 | 6,585 | |||||||||
Sales and marketing | 18,893 | 20,367 | 4,240 | |||||||||
Research and development | 51,439 | 76,392 | 59,178 | |||||||||
General and administrative | 28,285 | 30,443 | 16,521 | |||||||||
Restructuring | 4,557 | — | — | |||||||||
Total operating expenses | 114,481 | 136,801 | 86,524 | |||||||||
Loss from operations | (68,608 | ) | (105,672 | ) | (65,327 | ) | ||||||
Other expense, net: | ||||||||||||
Interest expense | (17,570 | ) | (6,893 | ) | (8,342 | ) | ||||||
Other income (expense), net | 1,155 | (1,259 | ) | (5,415 | ) | |||||||
Total other expense, net | (16,415 | ) | (8,152 | ) | (13,757 | ) | ||||||
Loss before provision for income taxes | (85,023 | ) | (113,824 | ) | (79,084 | ) | ||||||
Provision for income taxes | 3,914 | 2,889 | 456 | |||||||||
Net loss | (88,937 | ) | (116,713 | ) | (79,540 | ) | ||||||
Cumulative dividends attributable to Series A Preferred Stock | (2,774 | ) | — | — | ||||||||
Net loss attributable to SoundHound common shareholders | (91,711 | ) | (116,713 | ) | (79,540 | ) | ||||||
Other comprehensive loss: | ||||||||||||
Unrealized gains on investments | 199 | — | 1 | |||||||||
Comprehensive loss | $ | (91,512 | ) | $ | (116,713 | ) | $ | (79,539 | ) | |||
Net loss per share: | ||||||||||||
Basic and diluted | $ | (0.40 | ) | $ | (0.74 | ) | $ | (1.18 | ) | |||
Weighted-average common shares outstanding: | ||||||||||||
Basic and diluted | 229,264,904 | 157,317,695 | 67,255,538 |
The accompanying notes are an integral part of these consolidated financial statements.
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SOUNDHOUND AI, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
Year Ended December 31, | ||||||||||||
2023 | 2022 | 2021 | ||||||||||
Cash flows from operating activities: | ||||||||||||
Net loss | $ | (88,937 | ) | $ | (116,713 | ) | $ | (79,540 | ) | |||
Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||||||
Depreciation and amortization | 2,313 | 4,037 | 5,502 | |||||||||
Stock-based compensation | 27,931 | 28,792 | 6,322 | |||||||||
Loss on change in fair value of ELOC program | 1,901 | 1,075 | — | |||||||||
Change in fair value of derivative and warrant liability | — | 606 | 4,920 | |||||||||
Amortization of debt issuance costs | 5,400 | 2,287 | 4,746 | |||||||||
Non-cash lease amortization | 3,346 | 3,189 | 3,586 | |||||||||
Loss on debt extinguishment | 837 | — | — | |||||||||
Foreign currency gain/loss from remeasurement | 143 | |||||||||||
Deferred income taxes | 30 | 2,127 | 112 | |||||||||
Other, net | 93 | — | — | |||||||||
Changes in operating assets and liabilities: | ||||||||||||
Accounts receivable, net | (627 | ) | (1,354 | ) | 1,515 | |||||||
Prepaid expenses | 1,590 | (1,238 | ) | (168 | ) | |||||||
Other current assets | (821 | ) | 299 | (917 | ) | |||||||
Contract assets | (19,578 | ) | (8,658 | ) | — | |||||||
Other non-current assets | 671 | (274 | ) | (1,470 | ) | |||||||
Accounts payable | (1,162 | ) | 302 | 424 | ||||||||
Accrued liabilities | 4,266 | 116 | 3,671 | |||||||||
Operating lease liabilities | (3,657 | ) | (3,912 | ) | (3,565 | ) | ||||||
Deferred revenue | (4,135 | ) | (7,646 | ) | (10,281 | ) | ||||||
Other liabilities | 2,131 | 2,946 | (1,034 | ) | ||||||||
Net cash used in operating activities | (68,265 | ) | (94,019 | ) | (66,177 | ) | ||||||
Cash flows from investing activities: | ||||||||||||
Purchases of property and equipment | (392 | ) | (1,329 | ) | (636 | ) | ||||||
Net cash used in investing activities | (392 | ) | (1,329 | ) | (636 | ) | ||||||
Cash flows from financing activities: | ||||||||||||
Proceeds from the issuance of Series A Preferred Stock, net of issuance costs | 24,942 | — | — | |||||||||
Proceeds from sales of common stock under the ELOC program, net of issuance cost | 71,615 | — | — | |||||||||
Proceeds from sales of common stock under the Sales Agreement | 12,412 | — | — | |||||||||
Proceeds from issuance of debt, net of issuance costs | 85,087 | — | 44,738 | |||||||||
Proceeds from the issuance of common stock | 9,369 | 4,160 | 2,490 | |||||||||
Proceeds from Business Combination and PIPE, net of transaction costs | — | 90,689 | — | |||||||||
Payments on notes payable | (35,029 | ) | (11,545 | ) | — | |||||||
Payments on finance leases | (159 | ) | (1,303 | ) | (2,575 | ) | ||||||
Net cash provided by financing activities | 168,237 | 82,001 | 44,653 | |||||||||
Effects of exchange rate changes on cash | (20 | ) | — | — | ||||||||
Net change in cash, cash equivalents, and restricted cash equivalents | 99,560 | (13,347 | ) | (22,160 | ) | |||||||
Cash, cash equivalents, and restricted cash equivalents, beginning of year | 9,475 | 22,822 | 44,982 | |||||||||
Cash, cash equivalents, and restricted cash equivalents, end of year | $ | 109,035 | $ | 9,475 | $ | 22,822 | ||||||
Reconciliation to amounts on the consolidated balance sheets: | ||||||||||||
Cash and cash equivalents | $ | 95,260 | $ | 9,245 | $ | 21,626 | ||||||
Current portion of restricted cash equivalents | — | — | 460 | |||||||||
Non-current portion of restricted cash equivalents | 13,775 | 230 | 736 | |||||||||
Total cash, cash equivalents, and restricted cash equivalents shown in the consolidated statements of cash flows | $ | 109,035 | $ | 9,475 | $ | 22,822 |
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SOUNDHOUND, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS — Continued
For the Year Ended December 31, 2023 and 2022
(In thousands)
Year Ended December 31, | ||||||||||||
2023 | 2022 | 2021 | ||||||||||
Supplemental disclosures of cash flow information: | ||||||||||||
Cash paid for interest | $ | 11,984 | $ | 4,364 | $ | 2,631 | ||||||
Cash paid for income taxes | $ | 2,356 | $ | 1,044 | $ | 263 | ||||||
Noncash investing and financing activities: | ||||||||||||
Conversion of convertible preferred stock to common stock | $ | 10,755 | $ | — | $ | — | ||||||
Debt discount through issuance of common stock warrants | $ | 4,136 | $ | — | $ | 4,367 | ||||||
Issuance of common stock to settle commitment shares related to the ELOC program | $ | 915 | ||||||||||
Conversion of redeemable convertible preferred stock to common stock pursuant to Business Combination | $ | — | $ | 279,503 | $ | — | ||||||
Conversion of convertible note into common stock pursuant to Business Combination | $ | — | $ | 20,239 | $ | — | ||||||
Operating lease liabilities arising from obtaining right-of-use assets | $ | — | $ | 650 | $ | 3,422 | ||||||
Operating lease liabilities and right-of-use assets through adoption of ASC 842 | $ | — | $ | — | $ | 11,428 | ||||||
Issues of series C redeemable convertible preferred stock for exercise of warrants | $ | — | $ | — | $ | 5,816 | ||||||
Property and equipment acquired under finance leases or debt | $ | — | $ | — | $ | 584 |
The accompanying notes are an integral part of these consolidated financial statements.
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