COVER
COVER - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Feb. 26, 2024 | Jun. 30, 2023 | |
Entity Information [Line Items] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2023 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Transition Report | false | ||
Entity File Number | 001-40193 | ||
Entity Registrant Name | SOUNDHOUND AI, INC. | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 86-1286799 | ||
Entity Address, Address Line One | 5400 Betsy Ross Drive | ||
Entity Address, City or Town | Santa Clara | ||
Entity Address, State or Province | CA | ||
Entity Address, Postal Zip Code | 95054 | ||
City Area Code | 408 | ||
Local Phone Number | 441-3200 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
ICFR Auditor Attestation Flag | true | ||
Document Financial Statement Error Correction | true | ||
Document Financial Statement Restatement Recovery Analysis [Flag] | true | ||
Entity Shell Company | false | ||
Entity Public Float | $ 734.4 | ||
Documents Incorporated by Reference | The information required by Part III of this Annual Report, to the extent not set forth herein, is incorporated herein by reference from the registrant's definitive proxy statement relating to the Annual Meeting of Shareholders to be held in 2024, which definitive proxy statement shall be filed with the Securities and Exchange Commission within 120 days after the end of the fiscal year to which this Annual Report relates. | ||
Entity Central Index Key | 0001840856 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2023 | ||
Amendment Flag | false | ||
Class A Common Stock | |||
Entity Information [Line Items] | |||
Title of 12(b) Security | Class A Common stock, par value $0.0001 per share | ||
Trading Symbol | SOUN | ||
Security Exchange Name | NASDAQ | ||
Entity Common Stock, Shares Outstanding | 273,229,352 | ||
Common stock warrants | |||
Entity Information [Line Items] | |||
Title of 12(b) Security | Redeemable Warrants | ||
Trading Symbol | SOUNW | ||
Security Exchange Name | NASDAQ | ||
Class B Common Stock | |||
Entity Information [Line Items] | |||
Entity Common Stock, Shares Outstanding | 35,885,408 |
AUDIT INFORMATION
AUDIT INFORMATION | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Audit Information [Abstract] | |||
Auditor Name | PricewaterhouseCoopers LLP | Armanino LLP | Armanino LLP |
Auditor Location | San Francisco, California | San Jose, California | San Jose, California |
Auditor Firm ID | 238 | 32 | 32 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
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 |
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 | 0 | 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): | ||
Preferred stock value | 14,187 | 0 |
Additional paid-in capital | 606,135 | 466,857 |
Accumulated deficit | (592,379) | (503,442) |
Accumulated other comprehensive income | 199 | 0 |
Total stockholders’ equity (deficit) | 28,168 | (36,565) |
Total liabilities and stockholders’ equity (deficit) | 151,122 | 37,986 |
Class A Common Stock | ||
Stockholders’ equity (deficit): | ||
Common stock value | 22 | 16 |
Class B Common Stock | ||
Stockholders’ equity (deficit): | ||
Common stock value | $ 4 | $ 4 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parentheticals) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Allowances | $ 203 | $ 109 |
Preferred stock par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized (in shares) | 1,000,000 | 1,000,000 |
Preferred stock, shares issued (in shares) | 475,005 | 0 |
Preferred stock, shares outstanding (in shares) | 475,005 | 0 |
Liquidation Preference | $ 16,227 | $ 0 |
Total property and equipment, net | $ 1,515 | $ 3,447 |
Class A Common Stock | ||
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock authorized (in shares) | 455,000,000 | 455,000,000 |
Common stock, shares issued (in shares) | 216,943,349 | 160,297,664 |
Common stock, shares outstanding (in shares) | 216,943,349 | 160,297,664 |
Class B Common Stock | ||
Common stock authorized (in shares) | 44,000,000 | 44,000,000 |
Common stock, shares issued (in shares) | 37,485,408 | 39,735,408 |
Common stock, shares outstanding (in shares) | 37,485,408 | 39,735,408 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Income Statement [Abstract] | |||
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 | 0 | 0 |
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) | 0 | 0 |
Net loss attributable to SoundHound common shareholders | (91,711) | (116,713) | (79,540) |
Other comprehensive loss: | |||
Unrealized gains on investments | 199 | 0 | 1 |
Comprehensive loss | $ (91,512) | $ (116,713) | $ (79,539) |
Net loss per share: | |||
Basic (in dollars per share) | $ (0.40) | $ (0.74) | $ (1.18) |
Diluted (in dollars per share) | $ (0.40) | $ (0.74) | $ (1.18) |
Weighted-average common shares outstanding: | |||
Basic (in shares) | 229,264,904 | 157,317,695 | 67,255,538 |
Dilutive (in shares) | 229,264,904 | 157,317,695 | 67,255,538 |
CONSOLIDATED STATEMENTS OF REDE
CONSOLIDATED STATEMENTS OF REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ DEFICIT - USD ($) $ in Thousands | Total | As Previously Reported | Adjustments | Equity Line Of Credit Program | Class A Common Stock | Common Stock | Common Stock As Previously Reported | Common Stock Adjustments | Preferred Stock | Preferred Stock As Previously Reported | Preferred Stock Series A Conversion Of Convertible Preferred Stock | Additional Paid-in Capital | Additional Paid-in Capital As Previously Reported | Additional Paid-in Capital Conversion Of Convertible Preferred Stock | Additional Paid-in Capital Equity Line Of Credit Program | Additional Paid-in Capital Class A Common Stock | Accumulated Other Comprehensive Loss | Accumulated Other Comprehensive Loss As Previously Reported | Accumulated Deficit | Accumulated Deficit As Previously Reported | Class A Common Stock | Class A Common Stock Common Stock | Class A Common Stock Common Stock As Previously Reported | Class A Common Stock Common Stock Conversion Of Class B Common Stock | Class A Common Stock Common Stock Conversion Of Convertible Preferred Stock | Class A Common Stock Common Stock Equity Line Of Credit Program | Class A Common Stock Common Stock Class A Common Stock | Class B Common Stock | Class B Common Stock Common Stock | Class B Common Stock Common Stock As Previously Reported | Class B Common Stock Common Stock Conversion Of Class B Common Stock | Series A Preferred Stock |
Balance at the beginning (in shares) at Dec. 31, 2020 | 106,303,970 | 19,132,387 | 87,171,583 | |||||||||||||||||||||||||||||
Balance at the beginning at Dec. 31, 2020 | $ 273,687 | $ 273,687 | $ 0 | |||||||||||||||||||||||||||||
Increase (Decrease) in Temporary Equity [Roll Forward] | ||||||||||||||||||||||||||||||||
Issuance of redeemable convertible Series C preferred stock upon net exercise of Series C Warrants (in shares) | 645,356 | |||||||||||||||||||||||||||||||
Issuance of redeemable convertible Series C preferred stock upon net exercise of Series C Warrants | $ 5,816 | |||||||||||||||||||||||||||||||
Balance at the ending (in shares) at Dec. 31, 2021 | 106,949,326 | |||||||||||||||||||||||||||||||
Balance at the end at Dec. 31, 2021 | $ 279,503 | |||||||||||||||||||||||||||||||
Balance at the beginning (in shares) at Dec. 31, 2020 | 65,667,776 | 11,818,761 | 53,849,015 | 0 | 0 | 0 | 0 | |||||||||||||||||||||||||
Balance at the beginning at Dec. 31, 2020 | $ (276,353) | (276,353) | $ 1 | $ 1 | $ 0 | $ 0 | $ 0 | $ 30,836 | $ 30,836 | $ (1) | $ (1) | $ (307,189) | $ (307,189) | $ 0 | $ 0 | $ 0 | $ 0 | |||||||||||||||
Balance at the beginning (in shares) at Dec. 31, 2020 | 0 | 0 | ||||||||||||||||||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||||||||||||||||||
Issuance of common stock upon exercise of stock options (in Shares) | 2,590,780 | 2,590,780 | ||||||||||||||||||||||||||||||
Issuance of common stock upon exercise of stock options | $ 2,490 | $ 0 | 2,490 | |||||||||||||||||||||||||||||
Issuance of common stock warrants | 3,843 | 3,843 | ||||||||||||||||||||||||||||||
Other comprehensive gain, net of tax | 1 | 1 | ||||||||||||||||||||||||||||||
Stock-based compensation | 6,322 | 6,322 | ||||||||||||||||||||||||||||||
Net loss | (79,540) | (79,540) | ||||||||||||||||||||||||||||||
Balance at the end (in shares) at Dec. 31, 2021 | 68,258,556 | 0 | 0 | |||||||||||||||||||||||||||||
Balance at the end at Dec. 31, 2021 | $ (343,237) | $ 1 | $ 0 | 43,491 | 0 | (386,729) | $ 0 | $ 0 | ||||||||||||||||||||||||
Balance at the ending (in shares) at Dec. 31, 2021 | 0 | |||||||||||||||||||||||||||||||
Increase (Decrease) in Temporary Equity [Roll Forward] | ||||||||||||||||||||||||||||||||
Effect of reverse recapitalization, net of costs (in shares) | (106,949,326) | |||||||||||||||||||||||||||||||
Effect of reverse recapitalization, net of costs | $ (279,503) | |||||||||||||||||||||||||||||||
Balance at the ending (in shares) at Dec. 31, 2022 | 0 | |||||||||||||||||||||||||||||||
Balance at the end at Dec. 31, 2022 | $ 0 | |||||||||||||||||||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||||||||||||||||||
Issuance of common stock upon exercise of stock options (in Shares) | 3,595,706 | 2,582,535 | 1,013,171 | |||||||||||||||||||||||||||||
Issuance of common stock upon exercise of stock options | $ 2,840 | $ 1,320 | 2,840 | $ 1,320 | $ 0 | |||||||||||||||||||||||||||
Net exercise of outstanding warrants (in shares) | 673,416 | |||||||||||||||||||||||||||||||
Conversion of convertible note (in shares) | 2,046,827 | |||||||||||||||||||||||||||||||
Conversion of convertible note | 20,239 | $ 0 | 20,239 | |||||||||||||||||||||||||||||
Effect of reverse recapitalization, net of costs (in shares) | (73,561,334) | 140,114,060 | 40,396,600 | |||||||||||||||||||||||||||||
Effect of reverse recapitalization, net of costs | 279,503 | $ (1) | 0 | 279,486 | $ 14 | $ 4 | ||||||||||||||||||||||||||
PIPE financing (in shares) | 11,300,000 | |||||||||||||||||||||||||||||||
PIPE financing | 86,585 | 0 | 86,584 | $ 1 | ||||||||||||||||||||||||||||
Issuance of Class A common shares pursuant to the business combination (in shares) | 4,693,050 | |||||||||||||||||||||||||||||||
Issuance of Class A common shares pursuant to the Business Combination | 4,106 | 0 | 4,105 | $ 1 | ||||||||||||||||||||||||||||
Issuance of Class A common shares upon conversion of Class B common shares (in shares) | 661,192 | (661,192) | ||||||||||||||||||||||||||||||
Issuance of Class A common shares upon conversion of Class B common shares | 0 | |||||||||||||||||||||||||||||||
Issuance of Class A common shares upon vesting of restricted stock units | 2,516,191 | |||||||||||||||||||||||||||||||
Stock-based compensation | 28,792 | 28,792 | ||||||||||||||||||||||||||||||
Net loss | (116,713) | $ (115,373) | $ (1,340) | (116,713) | ||||||||||||||||||||||||||||
Balance at the end (in shares) at Dec. 31, 2022 | 0 | 160,297,664 | 160,297,664 | 39,735,408 | 39,735,408 | |||||||||||||||||||||||||||
Balance at the end at Dec. 31, 2022 | $ (36,565) | $ 0 | $ 0 | 466,857 | 0 | (503,442) | $ 16 | $ 4 | ||||||||||||||||||||||||
Balance at the ending (in shares) at Dec. 31, 2022 | 0 | 0 | ||||||||||||||||||||||||||||||
Balance at the ending (in shares) at Dec. 31, 2023 | 0 | |||||||||||||||||||||||||||||||
Balance at the end at Dec. 31, 2023 | $ 0 | |||||||||||||||||||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||||||||||||||||||
Common stock issued to initial stockholders (in shares) | 835,011 | 25,000,000 | ||||||||||||||||||||||||||||||
Common stock under sales agreement | 24,942 | $ 73,766 | $ 24,942 | $ 73,762 | $ 4 | |||||||||||||||||||||||||||
ELOC program fee settled in common stock (in shares) | 250,000 | |||||||||||||||||||||||||||||||
ELOC program fee settled in common stock | 915 | 915 | ||||||||||||||||||||||||||||||
Issuance of common stock under the Sales Agreement (in shares) | 5,805,995 | |||||||||||||||||||||||||||||||
Issuance of common stock under the Sales Agreement | $ 12,412 | 12,411 | $ 1 | |||||||||||||||||||||||||||||
Issuance of common stock upon exercise of stock options (in Shares) | 3,585,829 | 3,585,829 | ||||||||||||||||||||||||||||||
Issuance of common stock upon exercise of stock options | $ 8,506 | 8,506 | ||||||||||||||||||||||||||||||
Issuance of Class A common shares upon conversion of Class B common shares (in shares) | (360,006) | 2,250,000 | 11,597,654 | (2,250,000) | ||||||||||||||||||||||||||||
Issuance of Class A common shares upon conversion of Class B common shares | 0 | $ (10,755) | $ 10,754 | $ 1 | ||||||||||||||||||||||||||||
Issuance of Class A common shares upon vesting of restricted stock units | 7,678,184 | |||||||||||||||||||||||||||||||
Issuance of common stock warrants | 4,136 | 4,136 | ||||||||||||||||||||||||||||||
Issuance of ESPP (in shares) | 478,023 | |||||||||||||||||||||||||||||||
Issuances of ESPP | 863 | 863 | ||||||||||||||||||||||||||||||
Stock-based compensation | 27,931 | 27,931 | ||||||||||||||||||||||||||||||
Net loss | (88,937) | (88,937) | ||||||||||||||||||||||||||||||
Other comprehensive income | 199 | |||||||||||||||||||||||||||||||
Balance at the end (in shares) at Dec. 31, 2023 | 0 | 216,943,349 | 216,943,349 | 37,485,408 | 37,485,408 | |||||||||||||||||||||||||||
Balance at the end at Dec. 31, 2023 | $ 28,168 | $ 0 | $ 14,187 | $ 606,135 | $ 199 | $ (592,379) | $ 22 | $ 4 | ||||||||||||||||||||||||
Balance at the ending (in shares) at Dec. 31, 2023 | 475,005 | 475,005 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 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 | 0 |
Change in fair value of derivative and warrant liability | 0 | 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 | 0 | 0 |
Foreign currency gain/loss from remeasurement | 143 | ||
Deferred income taxes | 30 | 2,127 | 112 |
Other, net | 93 | 0 | 0 |
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) | 0 |
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 | 0 | 0 |
Proceeds from sales of common stock under the ELOC program, net of issuance cost | 71,615 | 0 | 0 |
Cash - PIPE Investment | 12,412 | 0 | 0 |
Proceeds from issuance of debt, net of issuance costs | 85,087 | 0 | 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 | 0 | 90,689 | 0 |
Payments on notes payable | (35,029) | (11,545) | 0 |
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) | 0 | 0 |
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 | 0 | 0 | 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 |
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 |
Debt discount through issuance of common stock warrants | 4,136 | 0 | 4,367 |
Issuance of common stock to settle commitment shares related to the ELOC program | 915 | ||
Conversion of convertible note into common stock pursuant to Business Combination | 0 | 20,239 | 0 |
Operating lease liabilities arising from obtaining right-of-use assets | 0 | 650 | 3,422 |
Operating lease liabilities and right-of-use assets through adoption of ASC 842 | 0 | 0 | 11,428 |
Issues of series C redeemable convertible preferred stock for exercise of warrants | 0 | 0 | 5,816 |
Property and equipment acquired under finance leases or debt | 0 | 0 | 584 |
Convertible preferred stock | |||
Conversion of redeemable convertible preferred stock to common stock pursuant to Business Combination | 10,755 | 0 | 0 |
Redeemable convertible preferred stock | |||
Conversion of redeemable convertible preferred stock to common stock pursuant to Business Combination | $ 0 | $ 279,503 | $ 0 |
ORGANIZATION
ORGANIZATION | 12 Months Ended |
Dec. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
ORGANIZATION | ORGANIZATION Nature of Operations SoundHound AI, Inc. (“we,” “us,” “our,” “SoundHound” or the “Company”) turns sound into understanding and actionable meaning. SoundHound’s technology applications enable humans to interact with the things around them in the same way they interact with each other: by speaking naturally to mobile phones, cars, televisions, music speakers, coffee machines, and every other part of the emerging “connected” world. SoundHound's voice AI platform enables product creators to develop their own voice interfaces with their customers. The SoundHound Chat AI voice assistant allows businesses and brands to provide a next-generation voice experience for their users, seamlessly integrating Generative AI and a mix of real-time information domains. Houndify is an open-access platform that allows developers to leverage SoundHound's Voice AI technology. We have developed a range of proprietary technologies on our voice AI platform, including Speech-to-Meaning, Deep Meaning Understanding, Collective AI, Dynamic Interaction and SoundHound Chat AI. The SoundHound music app allows customers to identify and play songs by singing or humming into the smartphone’s microphone, or by identifying the sound playing in the background from external sources. We also provide edge, cloud and hybrid connectivity solutions that allow brands to optimize their voice-enabled products and devices with options ranging from fully-embedded to exclusively cloud-connected. On April 26, 2022 (the “Closing Date”), pursuant to a merger agreement dated as of November 15, 2021 by and among Archimedes Tech SPAC Partners Co. (“ATSP”), ATSPC Merger Sub, Inc. and SoundHound, Inc. (“Legacy SoundHound”), the parties consummated the merger of ATSPC Merger Sub, Inc. with and into Legacy SoundHound, with Legacy SoundHound 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”). In connection with the closing (the “Closing”) of the Business Combination, Legacy SoundHound became a wholly owned subsidiary of ATSP and ATSP changed its name to SoundHound AI, Inc., and all of Legacy SoundHound common stock (“Legacy SoundHound Common Stock”) and Legacy SoundHound redeemable convertible preferred stock (“Legacy SoundHound Preferred Stock”) automatically converted into shares of the Company’s Class A common stock, par value of $0.0001 per share (the “Class A Common Stock”), and the Company’s Class B common stock, par value of $0.0001 per share (the “Class B Common Stock”, and collectively with the Class A Common Stock, the “Common Stock”). The Company’s Class A Common Stock and certain of the Company's warrants commenced trading on the Nasdaq Global Market (“Nasdaq”) under the symbols “SOUN” and “SOUNW,” respectively, on April 28, 2022. Refer to Note 3 for more information on the Business Combination. Legacy SoundHound was determined to be the accounting acquirer in the Business Combination based on the following facts: • Former Legacy SoundHound stockholders have a controlling voting interest in the Company; • The Company’s board of directors immediately after the closing of the Business Combination was comprised of five board members, primarily from the board of directors of Legacy SoundHound; and • Legacy SoundHound’s management continues to hold executive management roles for the Company following the Business Combination and are responsible for the day-to-day operations. Accordingly, for accounting purposes, the Business Combination was treated as the equivalent of Legacy SoundHound issuing stock for the net assets of ATSP, accompanied by a reverse recapitalization. The primary asset acquired from ATSP was related to the cash amounts that were assumed. Separately, the Company also assumed warrants that were deemed to be equity upon Closing of the Business Combination. No goodwill or other intangible assets were recorded as a result of the Business Combination. While ATSP was the legal acquirer in the Business Combination, because Legacy SoundHound was deemed the accounting acquirer, the historical financial statements of Legacy SoundHound became the historical financial statements of the combined company upon the consummation of the Business Combination. As a result, the financial statements included in this report reflect (i) the historical operating results of Legacy SoundHound prior to the Business Combination; (ii) the combined results of the Company and Legacy SoundHound following the Closing of the Business Combination; (iii) the assets and liabilities of Legacy SoundHound at their historical cost; and (iv) the Company’s equity structure for all periods presented. In accordance with guidance applicable to recapitalization transactions, the equity structure has been retroactively restated in all comparative periods up to the Closing Date, to reflect the number of shares of the Company’s Class A Common Stock and Class B Common Stock issued to Legacy SoundHound Common Stockholders and Legacy SoundHound Preferred Stockholders in connection with the Business Combination. As such, the shares and corresponding capital amounts and loss per share related to Legacy SoundHound Preferred Stock and Legacy SoundHound Common Stock prior to the Business Combination have been retroactively restated as shares reflecting the conversion ratio established in the Business Combination. Going Concern Since inception, the Company has generated recurring losses as well as negative operating cash flows and reported a net loss of $88.9 million for the year ended December 31, 2023. As of December 31, 2023, the Company had an accumulated deficit of $592.4 million. Management expects to continue to incur additional substantial losses in the foreseeable future. The Company has historically funded its operations primarily through equity or debt financings. Total unrestricted cash and cash equivalents on hand as of December 31, 2023 was $95.3 million. Although the Company has incurred recurring losses each year since its inception, the Company expects it will be able to fund its operations for at least the next twelve months. The Company may seek funding through additional debt or equity financing arrangements, implement incremental expense reduction measures or a combination thereof to continue financing its operations. Refer to Note 21 for information regarding the Company's equity financing activity subsequent to December 31, 2023. The Company's consolidated financial statements have been prepared assuming the Company will continue as a going concern, which contemplates, among other things, the realization of assets and satisfaction of liabilities in the normal course of business. Other Risk and Uncertainties Inflation has risen significantly worldwide and the United States has recently experienced historically high levels of inflation. This inflation and government efforts to combat inflation, such as recent and future significant increases to benchmark interest rates and other related monetary policies, have and could continue to increase market volatility and have an adverse effect on the domestic and international financial markets and general economic conditions. Additionally, U.S. and global markets are experiencing volatility and disruption following the escalation of geopolitical tensions and the start of the military conflict between Russia and Ukraine and the Israel-Hamas war. Although our business has not been materially impacted by the Russia-Ukraine conflict or the Israel-Hamas war, it is impossible to predict the extent to which our operations, or those of our customers’ suppliers and manufacturers, will be impacted in the short and long-term, or the ways in which the conflict may impact our business. The extent and duration of the military action, sanctions and resulting market disruptions are impossible to predict but could be substantial. |
BASIS OF PRESENTATION AND SUMMA
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2023 | |
Accounting Policies [Abstract] | |
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation and Significant Accounting Policies The accompanying consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (“SEC”) regarding annual financial reporting. Any reference in these notes to applicable accounting guidance is meant to refer to the authoritative U.S. GAAP included in the Accounting Standards Codification (“ASC”), and Accounting Standards Update (“ASU”) issued by the Financial Accounting Standards Board (“FASB”). Principles of Consolidation The Company’s consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. We consolidate any variable interest entity (“VIE”) where we have determined we are the primary beneficiary. The primary beneficiary is the entity which has both: (i) the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance; and (ii) the obligation to absorb losses or receive benefits of the entity that could potentially be significant to the VIE. Foreign Currency The functional currency of the Company and its subsidiaries is the U.S. dollar. Foreign currency denominated transactions are converted into U.S. dollars at the average rates of exchange prevailing during the period. Assets and liabilities denominated in foreign currency are remeasured into U.S. dollars at current exchange rates at the balance sheet date for monetary assets and liabilities and at historical exchange rates for non-monetary assets and liabilities. During the years ended December 31, 2023, 2022 and 2021, the Company recognized net losses/(gains) related to foreign currency transactions and remeasurements of $0.5 million, $0.7 million and $0.5 million, respectively, in the consolidated statements of operations as other expense, net. Use of Estimates The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and judgments that affect the amounts reported and disclosures in the consolidated financial statements and accompanying notes. Such estimates include revenue recognition, allowance for doubtful accounts, accrued liabilities, derivative and warrant liabilities, calculation of the incremental borrowing rate, financial instruments recorded at fair value on a recurring basis, valuation of deferred tax assets and uncertain tax positions and the fair value of common stock and other assumptions used to measure stock-based compensation expense. The Company bases its estimates on historical experience, the current economic environment, and on assumptions it believes are reasonable under the circumstances. The Company adjusts such estimates and assumptions when facts and circumstances dictate. Changes in those estimates resulting from changes in the economic environment will be reflected in the financial statements in future periods. Actual results could differ materially from those estimates. Accounts Receivable, Net Accounts receivable consist of current trade receivables due from customers recorded at invoiced amounts, net of allowance for doubtful accounts. Accounts receivable do not bear interest and the Company generally does not require collateral or other security in support of accounts receivable. When the Company records customer receivables and contract assets arising from revenue transactions, an allowance is recorded for credit losses for the current expected credit losses ("CECL") inherent in the asset over its expected life. The allowance for credit losses is a valuation account deducted from the amortized cost basis of the assets to present their net carrying value at the amount expected to be collected. Each period, the allowance for credit losses is adjusted through earnings to reflect expected credit losses over the remaining lives of the assets. The Company estimates expected credit losses based on relevant information about past events, including historical experience, payment terms, environmental and industry factors, and reasonable and supportable forecasts that affect the collectability of the reported amount. When measuring expected credit losses, we pool assets with similar country risk and credit risk characteristics. Changes in the relevant information may materially affect the estimates of expected credit losses. Property and Equipment, Net Property and equipment are stated at cost, less accumulated depreciation and amortization. Depreciation and amortization is provided using the straight-line method over the estimated useful lives of the respective assets. The estimated useful lives of the Company’s property and equipment are as follows: Computer equipment 3 – 4 years Software 3 years Furniture and fixtures 5 years Leasehold improvements Lesser of useful life or the term of the lease Maintenance and repairs that do not extend the life or improve the asset are expensed as incurred. Impairment of Long-Lived Assets The Company evaluates property and equipment for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. An impairment loss is recognized when the total of estimated undiscounted future cash flows expected to result from the use of the asset and its eventual disposition is less than its carrying amount. Impairment, if any, would be assessed using discounted cash flows or other appropriate measures of fair value. Through December 31, 2023, there have been no such impairments. Leases We determine if an arrangement is a lease at its inception. Operating lease liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. We generally use our incremental borrowing rate based on the information available at the lease commencement date in determining the present value of future payments, because the implicit rate of the lease is generally not known. Right-of-use ("ROU") assets related to our operating lease liabilities are measured at lease inception based on the initial measurement of the lease liability, plus any prepaid lease payments and less any lease incentives, as applicable. Our lease terms that are used in determining our operating lease liabilities at lease inception may include options to extend or terminate the leases when it is reasonably certain that we will exercise such options. We amortize our ROU assets as operating lease expense generally on a straight-line basis over the lease term and classify both the lease amortization and imputed interest as operating expenses. The Company has lease agreements with lease and nonlease components. The Company elected to not separate lease and nonlease components for its asset class of equipment. Segment Information The Company has determined that the Chief Executive Officer is its chief operating decision maker. The Company’s Chief Executive Officer reviews discrete financial information on a consolidated basis for purposes of allocating resources and evaluating financial performance. Accordingly, the Company has determined that it operates as a single reportable segment. Cash and Cash Equivalents The Company considers all highly liquid investments purchased with an original maturity of three months or less from the date of purchase to be cash equivalents. The Company’s cash equivalents consist of treasury bills and money market funds. The treasury bills are treated as available-for-sale securities. Cash equivalents are measured and reported at fair value using quoted prices in active markets for similar securities. The deposits exceed federally insured limits. Changes in fair value for cash equivalents classified as available for sale securities are recorded to other comprehensive loss. As of December 31, 2023, available-for-sale securities consisted of U.S. treasury bills and government bonds with original maturities of three months or less. As of December 31, 2022, the Company did not have any available-for-sale securities. Restricted Cash The Company’s restricted cash were established according to the requirements under the Credit Agreement (as defined in Note 9) and leases for the Company’s corporate headquarters, data center and sales office and are subject to certain restrictions. Restricted cash is classified as current or non-current on the consolidated balance sheets based on the expected duration of the restriction. Non-current restricted cash relates to interest that is required to be held in escrow in an amount equal to the minimum required balance defined in the Credit Agreement. Concentrations of Credit Risk and Other Risks and Uncertainties Financial instruments that potentially subject the Company to significant concentrations of credit risk consist principally of cash and cash equivalents, the balances of which frequently exceed federally insured limits. The Company regularly monitors its credit risk exposure and takes steps to mitigate the likelihood of these exposures resulting in actual loss. As of December 31, 2023, accounts receivable balances due from Customer A, C, and E accounted for 40%, 32% and 15% of the Company’s consolidated accounts receivable balance, respectively. As of December 31, 2022, accounts receivable balances due from Customer A and C accounted for 49% and 26% of the Company’s consolidated accounts receivable balance, respectively. As of December 31, 2023, unbilled receivables from Customer A, B, and C accounted for 59%, 16% and 11% of the Company’s consolidated unbilled receivables balance, respectively. As of December 31, 2022, unbilled receivables from Customer A, B, and C accounted for 31%, 19% and 28% of the Company’s consolidated unbilled receivables balance, respectively. For the year ended December 31, 2023, Customer A and B accounted for 49% and 13% of the revenue, respectively. For the year ended December 31, 2022, Customer A, C and D accounted for 42%, 13% and 12% of revenue, respectively. For the year ended December 31, 2021, Customer C, D and F accounted for 12%, 18% and 31% of revenue, respectively. Common Stock Offerings The Company enters into certain agreements to sell common stock with counterparties through the Equity Line of Credit ("ELOC") and the Sales Agreement (as defined in Note 13) to further support its growth strategy through initiatives such as accretive acquisitions and internal investments, to bolster working capital, and/or for general corporate purposes. The Company evaluates its common stock purchase agreements to determine whether they should be accounted for as derivatives with changes in fair value as other income (expense), net in the period in which they occur. Equity Issuance Costs The Company capitalizes certain legal, professional, accounting and other third-party fees that are directly associated with in-process equity-classified financings as deferred offering costs until such financings are consummated. After consummation of the financing, these costs are recorded as a reduction of the proceeds received from the equity financing. If a planned equity financing is abandoned, the deferred offering costs are expensed immediately as a charge to operating expenses in the consolidated statements of operations. Revenue Recognition The Company recognizes revenue under Accounting Standards Codification Topic 606 (“ASC 606”), Revenue from Contracts with Customers , when a customer obtains control of promised goods or services in an amount that reflects the consideration which the entity expects to receive in exchange for those goods or services. To determine revenue recognition for arrangements that an entity determines are within the scope of ASC 606, the Company performs the following five steps: (i) Identification of the contract(s) with a customer; (ii) Identification of the performance obligations in the contract; (iii) Determination of the transaction price, including the constraint on variable consideration; (iv) Allocation of the transaction price to the performance obligations in the contract; and (v) Recognition of revenue when, or as, performance obligations are satisfied. Contracts are accounted for when both parties have approved and committed to the contract, the rights of the parties and payment terms are identifiable, the contract has commercial substance and collectability of consideration is probable. Under ASC 606, assuming all other revenue recognition criteria have been met, the Company recognizes revenue for arrangements upon the transfer of control of the Company’s performance obligations to its customers. A performance obligation is a promise in a contract to transfer a distinct good or service to a customer and is the unit of account in ASC 606. Revenues are recognized when control of the promised goods or services are transferred to a customer in an amount that reflects the consideration that the Company expects to receive in exchange for those services. The Company elected the practical expedient to recognize the incremental costs of obtaining a contract including sales commissions as an expense when incurred if the amortization period of such incremental cost would otherwise have been one year or less. Sales commissions are included in sales and marketing expense in the consolidated statements of operations and comprehensive loss. Research and Development The Company’s research and development costs are expensed as incurred. These costs include salaries and other personnel related expenses, contractor fees, facility costs, supplies, and depreciation of equipment associated with the design and development of new products prior to the establishment of their technological feasibility. Warrants The Company determines whether to classify contracts, such as warrants, that may be settled in its own stock as equity of the entity or as a liability. An equity-linked financial instrument must be considered indexed to the Company’s own stock to qualify for equity classification. The Company classifies warrants as liabilities for any contracts that may require a transfer of assets. Warrants classified as liabilities are accounted for at fair value and remeasured at each reporting date until exercise, expiration or modification that results in equity classification. Any change in the fair value of the warrants is recognized as other income (expense), net in the consolidated statements of operations. Income Taxes The Company accounts for income taxes under the asset and liability method, whereby deferred tax assets and liabilities are determined based on the difference between the financial statement and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to affect taxable income. A valuation allowance is established when, in management’s estimate, it is more-likely-than-not that the deferred tax asset will not be realized. The Company adopted a more-likely-than-not threshold for financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. The Company records a liability for the difference between the benefit recognized and measured and the tax position taken or expected to be taken on the Company’s tax return. The Company classifies interest and penalties related to uncertain tax positions in income tax expense, if applicable. There has been no interest expense or penalties related to unrecognized tax benefits recorded through December 31, 2023. Stock-Based Compensation The Company measures and records the expense related to stock-based payment awards based on the fair value of those awards as determined on the date of grant. The Company recognizes stock-based compensation expense over the requisite service period of the individual grant, generally equal to the vesting period, and uses the straight-line method to recognize stock-based compensation, except for restricted stock unit awards (“RSUs”) with vesting conditions tied to certain performance criteria ("Performance-Based RSUs"). Stock-based compensation costs for Performance-Based RSUs are recognized on a graded-vesting basis over the vesting period based on the most probable outcome of the performance conditions. If the minimum performance targets are not met, no compensation cost is recognized and any recognized compensation cost is reversed, except for awards subject to a market condition, The Company accounts for forfeitures as they occur. The Company uses the Black-Scholes option-pricing model to determine the fair value of stock options and employee stock purchase plan ("ESPP") shares. The Black-Scholes option-pricing model requires the use of highly subjective and complex assumptions to determine the fair value of the awards, including the expected term of the award and the price volatility of the underlying stock. The Company calculates the fair value of the awards granted by using the Black-Scholes option-pricing model with the following assumptions: Expected Volatility — The Company estimates volatility for the awards by evaluating the average historical volatility of a peer group of companies for the period immediately preceding the award grant for a term that is approximately equal to the awards’ expected term. Expected Term — The expected term of the Company’s awards represents the period that the stock-based awards are expected to be outstanding. The Company has elected to use the midpoint between the stock options’ vesting term and contractual expiration period to compute the expected term, as the Company does not have sufficient historical information to develop reasonable expectations about future exercise patterns and post-vesting employment termination behavior. For the valuation of ESPP shares, the Company uses the period of time from the valuation date to the purchase date. Risk-Free Interest Rate — The risk-free interest rate is based on the implied yield currently available on U.S. Treasury zero-coupon issues with a term that is equal to the awards’ expected term at the grant date. Expected Dividend Yield — The Company has not declared or paid dividends to date and does not anticipate declaring dividends. As such, expected dividend yield is zero. Restricted Stock Units The Company issues RSUs to grantees as compensation for services. The fair value of the RSUs is determined at the grant date based on the fair value of the Company’s Class A Common Stock and for RSUs with service conditions only, is recognized straight-line over the service period. Stock-based compensation related to Performance-Based RSUs is recognized to the extent it is determined that performance is probable of being achieved. The Company issues RSUs with vesting conditions tied to certain market conditions (“Market-Based RSUs”). To derive the fair value of Market-Based RSUs, the Company applies a Monte Carlo simulation to determine the grant date fair value. Stock-based compensation related to Market-Based RSUs is recognized over the derived service period. Fair Value Measurements The Company defines fair value as the exchange price that would be received from an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the measurement date. The Company follows a three-level valuation hierarchy for disclosure of fair value measurements as follows: • Level 1 — Inputs are unadjusted quoted prices in active markets for identical assets or liabilities at the measurement date. • Level 2 — Inputs (other than quoted market prices included in Level 1) are either directly or indirectly observable for the asset or liability through correlation with market data at the measurement date and for the duration of the instrument’s anticipated life. • Level 3 — Inputs reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date. Consideration is given to the risk inherent in the valuation technique and the risk inherent in the inputs to the model. Preferred Stock The Company assesses its preferred stock instruments at issuance and each reporting period for classification and derivative features requiring bifurcation. The Company presents as temporary equity any stock which (i) the Company undertakes to redeem at a fixed or determinable price on the fixed or determinable date or dates; (ii) is redeemable at the option of the holders, or (iii) has conditions for redemption which are not solely within the control of the Company. For stock presented as temporary equity that is not currently redeemable, the Company assesses the probability of the event that would lead to redemption. If it is probable that the equity instrument will become redeemable, the Company accretes changes in the redemption value over the period from the date of issuance, or from the date that it becomes probable that the instrument will become redeemable, if later, to the earliest redemption date of the instrument using an appropriate methodology. If an equity instrument classified as temporary equity is not probable of redemption, subsequent adjustment of the amounts presented in temporary equity is unnecessary. Net Loss Per Share Basic net loss per share attributable to common stockholders is calculated by dividing the net loss attributable to common stockholders by the weighted-average number of shares of common stock outstanding during the period, without consideration for potentially dilutive securities. Diluted net loss per share attributable to common stockholders is computed by dividing the net loss attributable to common stockholders by the weighted-average number of common stock and potentially dilutive securities outstanding for the period. For purposes of the diluted net loss per share calculation, Series A Preferred Stock, stock options, ESPP shares, RSUs and warrants are considered to be potentially dilutive securities. See Note 14 for further information. Accordingly, in periods in which the Company reports a net loss, diluted net loss per share is the same as basic net loss per share, since dilutive common stock is not assumed to have been issued if their effect is anti-dilutive. The Company issued Series A Preferred Stock, which accrues cumulative dividends which are either paid in cash or compounding to the liquidation preference at the discretion of the board of directors. The Company accrues dividends as adjustments to net loss before net loss attributable to common stockholders. The Company applies the two-class method to calculate its basic and diluted net loss per share as the Company has issued shares that meet the definition of participating securities. The two-class method is an earnings allocation formula that treats a participating security as having rights to earnings that otherwise would have been available to common stockholders. The Company's participating securities contractually entitle the holders of such shares to participate in dividends, but do not contractually require the holders of such shares to participate in losses of the Company. Accordingly, in periods in which the Company reports a net loss, such losses are not allocated to such participating securities. Recent Accounting Pronouncements — Adopted The Company continually assess any ASUs or other new accounting pronouncements issued by the FASB to determine their applicability and impact. Where it is determined that a new accounting pronouncement will result in a change to the Company's financial reporting, the Company takes the appropriate steps to ensure that such changes are properly reflected in the consolidated financial statements or notes thereto. In June 2016, the FASB issued ASU 2016-13 to update the methodology used to measure current expected credit losses (“CECL”). This ASU applies to financial assets measured at amortized cost, including loans, held-to-maturity debt securities, net investments in leases, and trade accounts receivable as well as certain off-balance sheet credit exposures, such as loan commitments. This ASU replaces the current incurred loss impairment methodology with a methodology to reflect CECL and requires consideration of a broader range of reasonable and supportable information to explain credit loss estimates. The guidance must be adopted using a modified retrospective transition method through a cumulative-effect adjustment to retained earnings/(deficit) in the period of adoption. In November 2019, the FASB issued ASU 2019-10, Financial Instruments — Credit Losses (“Topic 326”), Targeted Transition Relief, which amends the transition guidance for ASU 2016-13. The ASU provides entities with the option to irrevocably elect the fair value option in Subtopic 825-10 on an instrument-by-instrument basis. ASU 2019-10 and ASU 2016-13 are effective for years beginning after December 15, 2022, with early adoption permitted. The Company adopted the standard on January 1, 2023. ASU 2016-13 did not result in any material impact on the Company's consolidated financial statements and related disclosures. Recent Accounting Pronouncements — Not Yet Adopted In November 2023, the Financial Accounting Standards Board issued Accounting Standards Update No. 2023-07, Segment Reporting, which expands annual and interim disclosure requirements for reportable segments, primarily through enhanced disclosures about significant segment expenses. The updated standard is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. The Company is currently evaluating the impact that the updated standard will have on the financial statement disclosures. In December 2023, the Financial Accounting Standards Board issued Accounting Standards Update No. 2023-09, which requires more detailed income tax disclosures. The guidance requires entities to disclose disaggregated information about their effective tax rate reconciliation as well as expanded information on income taxes paid by jurisdiction. The disclosure requirements will be applied on a prospective basis, with the option to apply them retrospectively. The standard is effective for fiscal years beginning after December 15, 2024, with early adoption permitted. The Company is currently evaluating the impact that the updated standard will have on the financial statement disclosures. |
BUSINESS COMBINATION
BUSINESS COMBINATION | 12 Months Ended |
Dec. 31, 2023 | |
Reverse Recapitalization [Abstract] | |
BUSINESS COMBINATION | BUSINESS COMBINATION As discussed in Note 1, on April 26, 2022, the Business Combination was consummated. Pursuant to the Company’s Second Amended and Restated Certificate of Incorporation (the “certificate of incorporation”), the Company is authorized to issue 500,000,000 shares of capital stock consisting of 455,000,000 shares of Class A Common Stock, 44,000,000 shares of Class B Common Stock, and 1,000,000 shares of preferred stock. All stock has a par value of $0.0001 per share. The holders of Class A Common Stock are entitled to one vote for each share of Class A Common Stock held and the holders of Class B Common Stock are entitled to ten votes per share on all matters submitted to stockholders for their vote or approval. The holders of Class A Common Stock and Class B Common Stock vote together as one class, other than on certain specific matters described in the Company's certificate of incorporation. The Business Combination was approved by ATSP’s stockholders at a special meeting thereof (the “Special Meeting”), held in lieu of the 2022 annual meeting of the Company’s stockholders. The Business Combination fulfilled the definition of an “initial business combination” as required by the ATSP’s Amended and Restated Certificate of Incorporation. This fulfillment resulted in ATSP ceasing to be a shell company upon the Closing. An aggregate of 12,767,950 shares of Class A Common Stock sold in ATSP’s initial public offering (the “public shares”) exercised their rights to redemption. The redemption right provided holders the right to have their public shares redeemed for a pro rata portion of the trust account holding the proceeds from ATSP’s initial public offering. The value of the shares is calculated as of two (2) business days prior to the date of the Special Meeting, which was $10.00 per share, or $127.7 million in the aggregate. As a result of the Business Combination, among other things (1) all outstanding shares of Legacy SoundHound Common Stock as of immediately prior to the Closing (including Legacy SoundHound Common Stock resulting from the Legacy SoundHound Preferred Stock Conversion), were exchanged at an conversion ratio of 5.5562 (the “Conversion Ratio”) for an aggregate of 140,114,060 shares of Class A Common Stock and 40,396,600 Class B Common Stock; (2) each outstanding warrant to purchase shares of Legacy SoundHound Common Stock automatically converted into a warrant to purchase, subject to substantially the same terms and conditions as were applicable under these warrants prior to the Effective Time, shares of Class A Common Stock, proportionately adjusted for the Conversion Ratio, with the per share exercise price equal to the exercise price prior to the Effective Time divided by the Conversion Ratio and were net exercised upon the Closing; (3) each outstanding option to purchase shares of Legacy SoundHound Common Stock converted into an option to purchase, subject to substantially the same terms and conditions as were applicable under these options prior to the Effective Time, shares of Class A Common Stock equal to the number of shares subject to such option prior to the Effective Time multiplied by the Conversion Ratio, with the per share exercise price equal to the exercise price prior to the Effective Time divided by the Conversion Ratio; (4) each Legacy SoundHound RSU converted into a restricted stock unit of SoundHound, subject to substantially the same terms and conditions as were applicable under the SoundHound RSU prior to the Closing. SoundHound RSU holders received the same consideration holders would have received if the SoundHound RSU was converted into Legacy SoundHound Common Stock immediately prior to the Effective Time. In connection with the Merger Agreement, ATSP entered into subscription agreements (collectively, the “Subscription Agreements”) with certain accredited investors (the “Subscribers”). Pursuant to the Subscription Agreements, 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 $113.0 million (the “PIPE Investment”). The PIPE shares are identical to the shares of Class A Common Stock that were held by the ATSP’s public stockholders at the time of the Closing, except that the PIPE Shares were not entitled to any redemption rights. The sale of PIPE Shares was consummated concurrently with the Closing. The Business Combination is accounted for as a reverse recapitalization in accordance with U.S. GAAP. Under this method of accounting, ATSP was treated as the “acquired” company for financial reporting purposes. The net assets of Legacy SoundHound were stated at historical cost, with no goodwill or other intangible assets recorded. In accounting for the Business Combination and after redemptions, net proceeds received by the Company totaled $90.7 million. The table below shows the total net proceeds from the Business Combination and the PIPE Investment (in thousands): Cash - ATSP trust and cash (net of redemption) $ 5,357 Cash - PIPE Investment 113,000 Less: transaction costs (27,668) Net proceeds from Business Combination and PIPE Investment $ 90,689 Relating to the consummation of the Business Combination, the Company incurred $27.7 million in total transaction costs consisting of direct legal, accounting and other fees. $4.1 million of Legacy SoundHound transaction costs specific and directly attributable to the Business Combination were initially capitalized as deferred offering costs and included in other non-current assets on the consolidated balance sheets. Total transaction expenses were recorded as an offset against proceeds received on the closing of the Business Combination, accounted for as additional paid-in capital. The amount recorded to additional paid-in-capital was comprised of $86.6 million net proceeds from the PIPE investment and $4.1 million after net redemptions of ATSP shareholders. The number of shares of common stock issued immediately following the consummation of the Business Combination was as follows: Class A Common Stock - conversion of Legacy SoundHound Common Stock and Legacy SoundHound Preferred Stock outstanding prior to Business Combination 140,114,060 Class B Common Stock - conversion of Legacy SoundHound Common Stock and Legacy SoundHound Preferred Stock outstanding prior to Business Combination 40,396,600 Class A Common Stock - PIPE Investment 11,300,000 Class A Common Stock - issuance to ATSP shareholders 532,050 Class A Common Stock - issuance to Legacy SoundHound founders and representatives 4,161,000 Total shares of common stock immediately after Business Combination 196,503,710 |
REVENUE RECOGNITION
REVENUE RECOGNITION | 12 Months Ended |
Dec. 31, 2023 | |
Revenue from Contract with Customer [Abstract] | |
REVENUE RECOGNITION | REVENUE RECOGNITION Revenue Recognition The Company recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Revenues are generally recognized upon the transfer of control of promised products or services provided to customers, reflecting the amount of consideration the Company expects to receive for those products or services. The Company’s arrangements with customers may contain multiple obligations. Individual services are accounted for separately if they are distinct — that is, if a service is separately identifiable from other items in the contract and a customer can benefit from it in its own or with other resources that are readily available to the customer. The Company derives its revenue primarily from the following performance obligations: (1) hosted services, (2) professional services, (3) monetization, and (4) licensing. Revenues are reported net of applicable sales and use taxes that are passed through to customers. The Company applies significant judgement in identifying and evaluating any terms and conditions in contracts which impact revenue recognition. The Company has the following performance obligations in contracts with customers: Hosted Services Hosted services, along with non-distinct customization, integration, maintenance and support professional services, allow customers to access the Houndify platform over the contract period without taking possession of the software. The contract terms of hosted services range from one year to twenty years. The Company has determined that the hosted services arrangements are a single performance obligation comprised of a series of distinct services, since each day of providing access to hosted services is substantially the same and the customer simultaneously receives and consumes the benefits as access is provided. These services are provided either on a usage basis (i.e., variable consideration) or on a fixed fee subscription basis. The Company recognizes revenue as each distinct service period is performed. Hosted services generally include up-front services to develop and/or customize the Houndify application to each customer’s specification. Judgement is required to determine whether these professional services are distinct from the hosted services. In making this determination, factors such as the degree of integration, the customers’ ability to start using the software prior to customization, and the availability of these services from other independent vendors are considered. In instances where the Company concluded that the up-front services are not distinct performance obligations, revenues for these activities are recognized over the period which the hosted services are provided and is included within hosted services revenue. Professional Services Revenues from distinct professional services, such as non-integrated development services, are either recognized over time based upon the progress towards completion of the project, or at a point in time at project completion. The Company assesses distinct professional services to determine whether the transfer of control is over-time or at a point in time. The Company considers three criteria in making their assessment including (1) the customer simultaneously receives and consumes the benefits; (2) the Company’s performance creates or enhances an asset that the customer controls as the asset is created or enhanced; or (3) the Company’s performance does not create an asset with an alternative use to the entity and the entity has an enforceable right to payment for performance completed to date. If none of the criteria are met, revenues are determined to be recognized at a point in time. For distinct professional services determined to be recognized over-time, measuring the stage of completion of a project requires significant judgement and estimates and is based on input and output measures. During the year ended December 31, 2023, $7.4 million of professional service revenue was recognized over time, with the remaining $0.9 million recognized at a point in time when the performance obligation was fulfilled and control of the service was transferred to the customer. During the year ended December 31, 2022, $2.2 million of professional service revenue was recognized over time, with the remaining $2.0 million recognized at a point in time when the performance obligation was fulfilled and control of the service was transferred to the customer. During the year ended December 31, 2021, $2.4 million of professional service revenue was recognized over time, with the remaining $4.7 million recognized at a point in time when the performance obligation was fulfilled and control of the service was transferred to the customer. Monetization Monetization revenues are primarily derived from advertising payments associated with ad impressions placed on the SoundHound music identification application. The Company derives an immaterial amount of revenue from sales commissions earned from song purchases facilitated by the SoundHound app and App store fees paid for ads-free downloads of the SoundHound music identification app. The amount of revenue is based on actual monetization generated or usage, which represent a variable consideration with constrained estimates. Therefore, the Company recognizes the related revenues at a point in time when advertisements are placed, when commissions are paid or when the SoundHound application is downloaded. The determination of whether revenue should be reported on a gross or net basis is based on an assessment of whether the Company is acting as a principal or an agent in the transaction. The Company has determined that it does not act as the principal in monetization arrangements because it does not control the transfer of the service and it does not set the price. Based on these factors, the Company reports revenue on a net basis. Licensing The Company licenses voice solutions that are embedded in customer's products. Licensing revenues are a distinct performance obligation that is recognized when control is transferred to the customer, which is at a point in time for non-customized solutions. For licenses with non-distinct customized solutions, revenues are recognized over time based on the progress towards completion of the customized solution. Revenues generated from licensing are based on royalty models with a combination of minimum guarantees and per unit pricing. Royalty periods are generally subsequent to when control of the license passes to the customer. The Company records licensing revenue as a usage-based royalty from customers’ usage of intellectual property in the same period in which the underlying sale occurs. For royalty arrangements that include fixed considerations related to a minimum guarantee from a customer, the fixed consideration allocated to the license is recognized when the control of the license passes to the customer. The Company provides assurance-type warranty services and to date, post-contract support has been an immaterial performance obligation within the context of the contract. When a contract has multiple performance obligations, the transaction price is allocated to each performance obligation based on its relative estimated standalone selling price (“SSP”). Judgments are required to determine the SSP for each distinct performance obligation. SSP is determined by maximizing observable inputs from pricing of standalone sales, when possible. Since prices vary from customer to customer based on customer relationship, volume discount and contract type, in instances where the SSP is not directly observable, the Company estimates SSP by considering the following factors: • Costs of developing and supplying each performance obligation; • Industry standards; • Major product groupings; and • Gross margin objectives and pricing practices, such as contractually stated prices, discounts offered and applicable price lists. These factors may vary over time, depending upon the unique facts and circumstances related to each deliverable. If the facts and circumstances underlying the factors considered change or should future facts and circumstances lead the Company to consider additional factors, the Company’s best estimate of SSP may also change. The Company's long-term contracts do not have significant financing components, as there is generally payment and performance in each year of the contract. The Company has elected the practical expedient to not adjust promised amounts of consideration for the effects of a significant financing component if the Company expects, at contract inception, that the period between when the Company transfers a promised good or service to a customer and when the customer pays for that good or service will be one year or less. If there is a period of one year or longer between the transfer of promised services and payment, it is generally for reasons other than financing, thus, the Company does not adjust the transaction price for financing components. For the years ended December 31, 2023, 2022 and 2021, revenue under each performance obligation was as follows (in thousands): Year Ended December 31, 2023 2022 2021 Licensing $ 18,600 $ 8,322 $ — Hosted services 18,364 17,743 12,764 Professional services 8,275 4,220 7,142 Monetization 634 844 1,291 Total $ 45,873 $ 31,129 $ 21,197 For the years ended December 31, 2023, 2022 and 2021, the disaggregated revenue by geographic location* was as follows (in thousands): Year Ended December 31, 2023 2022 2021 Korea $ 22,962 $ 14,530 $ 2,460 United States 6,769 3,344 4,030 Germany 5,950 4,134 7,526 France 4,090 4,023 2,616 Japan 3,707 3,866 3,797 Other 2,395 1,232 768 Total $ 45,873 $ 31,129 $ 21,197 *Revenue by geographic region is allocated to individual countries based on the billing location of the customer. The end customer location may be different than the customer's billing location. For the years ended December 31, 2023, 2022 and 2021, the disaggregated revenue by recognition pattern was as follows (in thousands): Year Ended December 31, 2023 2022 2021 Over time $ 25,757 $ 19,955 $ 15,210 Point-in-time 20,116 11,174 5,987 Total $ 45,873 $ 31,129 $ 21,197 The Company also disaggregates revenue by service type. This disaggregation consists of Product Royalties, Service Subscriptions and Monetization. Product Royalties revenues are derived from Houndified Products, which are voice-enabled tangible products across the automotive and consumer electronics industries. Revenues from Product Royalties are based on volume, usage, or life of the products, which are driven by number of devices, users, or unit of time. Service Subscription revenues are generated through Houndified Services, which include customer services, food ordering, content, appointments, and voice commerce. Subscription revenues are derived from monthly fees based on usage-based revenue, revenue per query or revenue per user. Both Houndified Products and Houndified Services may include professional services that develop and customize the Houndify platform to fit customers’ specific needs. Revenues from Monetization are generated from the SoundHound music identification app and are primarily attributable to user ad impression revenue. For the years ended December 31, 2023, 2022 and 2021, the disaggregated revenue by service type was as follows (in thousands): Year Ended December 31, 2023 2022 2021 Product royalties $ 43,299 $ 28,447 $ 18,356 Service subscriptions 1,940 1,838 1,550 Monetization 634 844 1,291 Total $ 45,873 $ 31,129 $ 21,197 Contract Balances The Company performs its obligations under a contract with a customer by providing access to software, licensing right to use software, or providing services in exchange for consideration from the customer. The timing of the Company’s performance often differs from the timing of the customer’s payment, which results in the recognition of a receivable, a contract asset or deferred revenue. As of December 31, 2021, accounts receivable, net of allowances, were $2.1 million, contract assets were $54 thousand and deferred revenue was $21.0 million. During the year ended December 31, 2022, $7.6 million of licensing revenue was recognized from the Company's Houndify Edge solution, which was delivered to a customer during the second half of 2022, related to minimum guarantee units to be utilized over the life of the contract and resulted in a corresponding increase in the contract assets balance. During the year ended December 31, 2023, the Company and the same customer modified the minimum guarantee units in an existing contract in the ordinary course of business. The Company accounted for a contract modification prospectively resulting in an increase to net revenue in the amount of $10.4 million during the year ended December 31, 2023, with corresponding increases in contract asset balances. Additionally, during the year ended December 31, 2023, the Company recognized $3.6 million of licensing revenue related to right-to-use licenses for a new contract in 2023, where delivery occurred and total consideration was fixed. The Company has not recorded any asset impairment charges related to contract assets during the periods presented in the consolidated financial statements. The balance of contract assets for the years ended December 31, 2023 and 2022 includes $5.1 million and $3.5 million, respectively, of unbilled receivables which represents amounts for which the Company has an unconditional right to bill the customer. Revenues recognized included in the balances of the deferred revenue at the beginning of the reporting period for the years ended December 31, 2023, 2022 and 2021 were $7.9 million, $6.4 million and $14.9 million, respectively. As of December 31, 2023, the aggregate amount of the transaction price allocated to the remaining performance obligations related to customer contracts that were unsatisfied or partially unsatisfied was $12.7 million. Given the applicable contract terms, $6.4 million is expected to be recognized as revenue within one year, $3.3 million is expected to be recognized between 2 to 5 years and the remainder of $3.0 million is expected to be recognized after 5 years. This amount does not include contracts to which the customer is not committed, contracts for which the Company recognizes revenue equal to the amount the Company has the right to invoice for services performed, or future sales-based or usage-based royalty payments in exchange for access to the Company’s hosted services. This amount is subject to change due to future revaluations of variable consideration, terminations, other contract modifications or currency adjustments. The estimated timing of the recognition of remaining unsatisfied performance obligations is subject to change and is affected by changes to scope, changes in timing of delivery of products and services, or contract modifications. Research and Development The Company’s research and development costs are expensed as incurred. These costs include salaries and other personnel related expenses, contractor fees, facility costs, supplies, and depreciation of equipment associated with the design and development of new software products prior to the establishment of technological feasibility. |
PROPERTY AND EQUIPMENT, NET
PROPERTY AND EQUIPMENT, NET | 12 Months Ended |
Dec. 31, 2023 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT, NET | PROPERTY AND EQUIPMENT, NET Property and equipment, net consisted of the following (in thousands): December 31, December 31, Computer equipment $ 19,278 $ 20,946 Software and voice recordings 9,714 9,420 Leasehold improvements 3,882 3,850 Furniture and fixtures 777 761 Total property and equipment, at cost 33,651 34,977 Less: accumulated depreciation and amortization (32,136) (31,530) Total property and equipment, net $ 1,515 $ 3,447 As of December 31, 2023 and 2022, property and equipment, net includes assets under finance lease obligations (see Note 15 for additional information) with an aggregate cost of approximately $0.5 million and $0.6 million, respectively and accumulated depreciation of approximately $0.1 million and $0.3 million, respectively. Depreciation and amortization expense in respect of capitalized property and equipment totaled approximately $2.3 million, $4.0 million and $5.5 million for the years ended December 31, 2023, 2022 and 2021, respectively. |
ACCRUED LIABILITIES
ACCRUED LIABILITIES | 12 Months Ended |
Dec. 31, 2023 | |
Other Liabilities Disclosure [Abstract] | |
ACCRUED LIABILITIES | ACCRUED LIABILITIES Accrued liabilities consisted of the following (in thousands): December 31, December 31, Accrued compensation expenses $ 6,961 $ 6,134 Accrued vendor payables 3,792 1,002 Accrued lender fees 2,603 — Accrued ELOC liability — 1,075 Accrued interest — 236 Other accrued liabilities 528 90 $ 13,884 $ 8,537 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Contracts In August 2021, the Company entered into an exclusive agreement with a cloud service provider to host its voice artificial intelligence platform pursuant to which the Company committed to pay a minimum of $98.0 million in cloud costs over a seven-year period subject to variable increases based on usage. Aggregate non-cancelable future minimum payments were as follows as of December 31, 2023 (in thousands): 2024 11,000 2025 14,000 2026 16,000 2027 24,000 2028 24,000 Total $ 89,000 Legal Proceedings From time to time, the Company may have certain contingent liabilities that arise in the ordinary course of its business activities. The Company accrues contingent liabilities when it is probable that future expenditures will be made, and such expenditures can be reasonably estimated. In the opinion of management, there are no pending claims for which the outcome is expected to result in a material adverse effect on the financial position, results of operations or cash flows of the Company. Other Matters The Company has not historically collected U.S. state or local sales and use tax, or other similar taxes, in any jurisdiction. On June 21, 2018, the U.S. Supreme Court decided, in South Dakota v. Wayfair, Inc. , that state and local jurisdiction may, in certain circumstances, enforce sales and use tax collection obligations on remote vendors that have no physical presence in such jurisdiction. A number of states have already begun, or have positioned themselves to begin, requiring sales and use tax collection from remote vendors. The details and effective dates of these collection requirements vary from state to state. The Company continues to analyze potential sales tax exposure using a state-by-state assessment. In accordance with ASC 450, Contingencies, the Company estimated and recorded a liability of $0.2 million and $1.1 million as of December 31, 2023 and 2022. |
WARRANTS
WARRANTS | 12 Months Ended |
Dec. 31, 2023 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
WARRANTS | WARRANTS Warrants Related to Convertible Notes and Note Payable In connection with the issuance of the Company’s 2021 note payable (“SVB March 2021 Note”) and 2021 convertible note (“SCI June 2021 Note”), the Company issued detachable warrants to purchase 708,808 and 354,404 shares of Legacy SoundHound common stock, respectively, with an exercise price of $3.67 per share to the lenders, which were immediately exercisable. On the Closing Date, all outstanding warrants issued in connection to the SVB March 2021 Note and the SCI June 2021 Note were fully net exercised by their respective lenders, leading to a net issuance of 673,416 shares of Class A Common Stock. In connection with the Credit Agreement (as defined in Note 9), on the Term Loan Closing Date the Company issued a warrant to purchase up to 3,301,536 shares of the Company's Class A common stock to the Agent (the "Term Loan Warrant"). The Term Loan 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 Term Loan Warrant will be automatically cashless exercised immediately prior to a change in control of the Company. On the Term Loan Closing Date, the Company allocated the gross proceeds and issuance costs between the Term Loan and the Term Loan Warrant based on their relative fair values, resulting in the initial recognition of the Term Loan Warrant at $4.1 million as additional paid-in-capital on the consolidated balance sheets. As of December 31, 2023, there were 3,301,536 warrants issued and outstanding in connection with the Credit Agreement. Warrants Related to the Business Combination Public Warrants Prior to the Business Combination, ATSP issued public warrants (“Public Warrants”). Each Public Warrant entitles the holder to the right to purchase one share of common stock at an exercise price of $11.50 per share. No fractional shares were issued upon exercise of the Public Warrants. The Company may redeem the outstanding warrants, for $0.01 per warrant, upon not less than 30 days’ prior written notice of redemption, if the reported last sale price of the common stock equals or exceeds $18.00 per share (as adjusted for stock dividends, sub-divisions, reorganizations, recapitalizations and the like) for any 20 trading days within a 30-trading day period commencing after the warrants become exercisable and ending on the third trading day before the Company sends the notice of redemption to the warrant holders. Upon issuance of a redemption notice by the Company, the warrant holders may, at any time after the redemption notice, exercise the Public Warrants for cash, or on a cashless basis. Subsequent to the closing of the Business Combination, the Company’s Public Warrants continue to be classified as equity instruments, as they are indexed to the Company’s stock. Private Warrants Prior to the Business Combination, ATSP issued private warrants (“Private Warrants”). The Private Warrants were initially issued in the same form as the Public Warrants with the exception that the Private Warrants: (i) would not be redeemable by the Company and (ii) may be exercised for cash or on a cashless basis, so long as they are held by the initial purchasers or any of their permitted transferees. If the Private Warrants are held by holders other than the initial purchasers or any of their permitted transferees, the Private Warrants will be redeemable by the Company and exercisable by the holders on the same basis as the Public Warrants. The Private Warrants were initially classified as derivative liability instruments as they met the definition of a derivative and were not considered indexed in the Company's own stock as the settlement value could be dependent on who held the Private Warrants at the time of exercise. Upon the Closing of the Business Combination, the Company modified its Private Warrants to be identical to its Public Warrants (collectively, "SPAC Warrants"). Therefore, the Private Warrants met requirements for classification as equity instruments, as they are indexed to the Company’s stock. As of December 31, 2023, there were 3,665,996 SPAC Warrants issued and outstanding. |
NOTE PAYABLE
NOTE PAYABLE | 12 Months Ended |
Dec. 31, 2023 | |
Debt Disclosure [Abstract] | |
NOTE PAYABLE | NOTE PAYABLE SNAP June 2020 Note In June 2020, the Company issued a promissory note (the “SNAP June 2020 Note”) to a Lender in exchange for $15.0 million in cash proceeds. The note had an annual interest rate of 5% and a maturity date of June 26, 2022, if not converted earlier pursuant to conversion terms and change in control events. The Company recognized total interest expense of $0.7 million associated with the SNAP June 2020 Note for the year ended December 31, 2022, out of which $0.4 million relates to amortization of the debt discount. The Company recognized total interest expense of $2.0 million associated with the SNAP June 2020 Note for the year ended December 31, 2021, out of which $1.3 million relates to amortization of the debt discount. The debt discount related to the SNAP June 2020 Note is amortized over the life of the instrument, beginning at note issuance and ending on April 26, 2022, the date on which the note was converted. The Company was amortizing the discounts on an effective interest basis over the period from issuance through the Early Maturity Date. The effective interest rate was 14.3% for the years ended December 31, 2022 and 2021. As a result of the Business Combination, on the Closing Date, the SNAP June 2020 Note conversion feature was triggered. As a result, on the Closing Date, all outstanding principal of $15.0 million and accrued interest of $1.4 million were converted into 2,046,827 shares of Class A Common Stock. In addition, the remaining debt discount of $0.2 million and related derivative liability with fair value of $4.1 million as of the Closing Date were extinguished. SVB March 2021 Note In March 2021, the Company entered into a loan and security agreement with a commercial bank to borrow $30.0 million. The loan bore interest at an annual rate equal to the greater of 9.00% or 5.75% above the Prime Rate. During the year ended December 31, 2023, the interest rate was 13.75%. Payments were interest-only for the first twelve months and are now principal and interest through maturity. The Company recorded interest expense in the consolidated statements of operations and comprehensive loss for the years ended December 31, 2023, 2022 and 2021 of $0.6 million, $2.8 million and $2.1 million respectively. The total amount of debt discount at issuance was $3.5 million. During the years ended December 31, 2023, 2022 and 2021, the Company recorded $16 thousand, $1.0 million and $2.4 million related to the amortization of the debt discount in interest expense, respectively. The Company was amortizing the discounts on an effective interest basis over the period from issuance through the Early Maturity Date. The effective interest rate was 13.4%, 14.9% and 20.9% for the year ended December 31, 2023, 2022 and 2021. Concurrently with the Company's entry into the Credit Agreement, the Company used a portion of the proceeds to prepay in full all outstanding obligations under, and terminated, the SVB March 2021 Note. In connection with the SVB March 2021 Note prepayment, the Company paid a total of $18.5 million on April 14, 2023, which consisted of (i) the remaining principal amount outstanding of $18.1 million, (ii) a prepayment premium of $0.3 million, (iii) accrued and unpaid interest of $0.1 million and (iv) a nominal amount for transaction expenses. The Company recorded a loss on debt extinguishment of $0.4 million related to the early repayment in interest expense in the consolidated statements of operations and comprehensive loss. SCI June 2021 Note In June 2021, the Company entered into a loan and security agreement with a lender to obtain credit extensions to the Company. Extensions were available in $5.0 million increments up to a total commitment amount of $15.0 million. The Company drew an initial $5.0 million on June 14, 2021 and the remaining $10.0 million on December 1, 2021. The loan bore interest at an annual rate equal to the greater of 9.00% or 5.75% above the Prime Rate. During the year ended December 31, 2023, the interest rate was 13.75%. Payments were interest-only for the first twelve months and are now principal and interest through maturity. The Company incurred and paid $0.5 million, $1.5 million and $0.3 million in interest expense in the consolidated statements of operations and comprehensive loss for the years ended December 31, 2023, 2022 and 2021 respectively. During the years ended December 31, 2023, 2022 and 2021, the Company recorded $31 thousand, $0.8 million and $1.0 million related to the amortization of the debt discounts in interest expense, respectively. The Company was amortizing the discounts on an effective interest basis over the period from issuance through the Early Maturity Date. The effective interest rate was 18.6%, 17.3% and 26.1% for the year ended December 31, 2023, 2022 and 2021. Concurrently with the Company’s entry into the Credit Agreement, the Company used a portion of the proceeds to prepay in full all outstanding obligations under, and terminated, the SCI June 2021 Note. In connection with the SCI June 2021 Note prepayment on April 14, 2023, the Company paid a total of approximately $11.7 million, which consisted of (i) the remaining principal amount outstanding of approximately $11.5 million, (ii) a prepayment premium of approximately $0.2 million and (iii) a nominal amount for transaction expenses. The Company recorded a loss on debt extinguishment of $0.4 million related to the early repayment in interest expense in the consolidated statements of operations and comprehensive loss for the year ended December 31, 2023. Term Loan 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 (the “Lenders”). The Credit Agreement provides for a term loan facility in an aggregate principal amount of up to $100.0 million (the “Term Loan”), the entirety of which was funded on the Term Loan Closing Date. The Credit Agreement also permits the Company to request additional commitments of up to $25.0 million in the aggregate, with funding of such commitments in the sole discretion of the Lenders, under certain circumstances and under the same terms as the Term Loan. On the Term Loan Closing Date, the Company also entered into that certain Guarantee and Collateral Agreement, dated as of April 14, 2023, by and among the Company, the other grantors named therein and the Agent (the “Guarantee and Collateral Agreement”). In addition, the Company is obligated to pay incremental lender fees, beginning on the Closing Date, equal to initially 3.5% of the principal amount of the Term Loans, decreasing to 2.5% after the 18-month anniversary, semi-annually (the “Lender Fees”) to provide a collateral protection insurance policy on behalf of the Lenders. The Lender Fees are effectively additional fees payable to the Lenders as the Lenders are the sole beneficiary of the insurance policy and is therefore being recognized as interest expense over the term of the Term Loan based on the effective interest method. The Company used the proceeds from the Term Loan to (i) repay outstanding amounts equal to approximately $30.0 million under the Company’s existing loan facilities, (ii) fund an escrow account on the Term Loan Closing Date in the name of the Agent for an amount equal to the first four interest payments, (iii) pay certain fees and expenses incurred in connection with entering into the Credit Agreement, and (iv) fund the Lender Fees, together with related taxes, with the remaining proceeds to be used to fund growth investments and for general corporate purposes as permitted under the Credit Agreement. The outstanding principal balance of the Term Loan bears interest at the applicable margin plus, at the Company’s election, either (i) the Term SOFR rate published by CME Group Benchmark Administration Limited for a one-month interest period plus 0.15% or (ii) the alternate base rate (“ABR”), which is a per annum rate equal to the greatest of (a) the Prime Rate (as defined in the Credit Agreement), (b) the NYFRB Rate (as defined in the Credit Agreement) plus 0.50% and (c) the Term SOFR rate plus 1.00%. The applicable margin under the Credit Agreement is 8.50% per annum with respect to SOFR loans, and 7.50% per annum with respect to ABR loans. As of December 31, 2023 , the contractual interest rate was approximately 14.0%. The Company was amortizing the discounts on an effective interest basis over the period from issuance through the Early Maturity Date. The effective interest rate was 25.18% for the year ended December 31, 2023. The Company incurred and paid $9.9 million in stated interest in the consolidated statements of operations and comprehensive loss for the year ended December 31, 2023. During the year ended December 31, 2023, the Company recorded $5.4 million in interest expense related to the debt discount. The remaining period over which the discount will be amortized is 3.33 years as of December 31, 2023. Subject to certain exceptions as set forth in the Credit Agreement, interest on the Term Loan is payable quarterly in arrears on the last business day of each fiscal quarter. The Term Loan is set to mature on April 14, 2027 (the “Maturity Date”). The Credit Agreement provides for no scheduled principal payments prior to the Maturity Date. The Term Loan is secured by substantially all of the assets of the Company and its subsidiaries and is guaranteed by the Company’s subsidiaries other than Excluded Subsidiaries. As set forth in more detail in the Credit Agreement, the Company is required to make mandatory prepayments on the Term Loan in the event of certain specified events, including in the event of certain capital raises by the Company and its subsidiaries. The Company may also elect to prepay amounts at any time. If the Term Loan is prepaid for any reason prior to the second anniversary of the Closing Date, in additional to principal and accrued interest, the Company will have to pay an amount equal to the discounted future interest payments from the date of redemption through the second anniversary of the Closing Date, calculated on the basis of the interest rate in effect on the redemption date and discounted based on the applicable rate for US treasury securities of equal tenor plus 50 basis points. Additionally, the Company will have to pay the excess of 14% of the Term Loans over the amount of the Lender Fees paid through the Redemption Date. The Credit Agreement also contains customary representations and warranties for a facility of this nature and affirmative and negative covenants. In particular, the Credit Agreement requires the Company to have liquidity at least equal to the Interest Escrow Required Amount (as defined in the Credit Agreement) as of the last day of each fiscal quarter. The Interest Escrow Required Amount as described in Note 2 is included in restricted cash equivalents, non-current, on the consolidated balance sheet as of December 31, 2023. In addition, the Credit Agreement limits the Company’s and its subsidiaries’ ability to incur indebtedness, make restricted payments, including cash dividends on its common stock, make certain investments, loans and advances, enter into mergers and acquisitions, sell, assign transfer or otherwise dispose of its assets, enter into transactions with its affiliates and engage in sale and leaseback transactions, among other restrictions. As of December 31, 2023, the Company was in compliance with all covenants prescribed in the Credit Agreement. The Credit Agreement includes customary events of default, including, but not limited to, nonpayment of principal or interest, breaches of representations and warranties, failure to perform or observe covenants, cross-defaults with certain other indebtedness, final judgments or orders, certain change of control events, and certain bankruptcy-related events or proceedings. Upon the occurrence of an event of default (subject to notice and grace periods), obligations under the Credit Agreement could be accelerated. The aggregate long-term debt maturities were as follows as of December 31, 2023 (in thousands): 2024 — 2025 — 2026 — 2027 100,000 Total 100,000 Less: unamortized discount (15,688) Long-term portion of debt $ 84,312 The following table summarizes the Company's debt balances as of December 31, 2023 and December 31, 2022 (in thousands): December 31, 2023 December 31, 2022 Term Loan $ 100,000 $ — SVB March 2021 Note — 22,050 SCI June 2021 Note — 12,979 Total debt $ 100,000 $ 35,029 Current portion of debt — (16,668) Unamortized discount and debt issuance costs (15,688) (62) Carrying value of long-term debt $ 84,312 $ 18,299 |
RESTRUCTURING
RESTRUCTURING | 12 Months Ended |
Dec. 31, 2023 | |
Restructuring and Related Activities [Abstract] | |
RESTRUCTURING | RESTRUCTURING In January 2023, the Company announced a restructuring plan (the “Restructuring Plan”) intended to reduce operating costs, improve operating margins, improve cash flows and accelerate the Company’s path to profitability. The Restructuring Plan included a reduction of the Company’s then-current workforce by approximately 40% or 180 positions globally. Costs associated with the Restructuring Plan consist of employee severance payments, employee benefits and share-based compensation. The costs associated with the Restructuring Plan were recorded to the restructuring expense line item within our consolidated statements of operations as incurred. During the year ended December 31, 2023, we recorded $4.6 million of restructuring expenses in connection with the Restructuring Plan, of which $1.4 million were cash payments. The Restructuring Plan was substantially complete as of December 31, 2023. |
FAIR VALUE MEASUREMENT
FAIR VALUE MEASUREMENT | 12 Months Ended |
Dec. 31, 2023 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENT | FAIR VALUE MEASUREMENT The following table presents the fair value of the Company's financial instruments that are measured or disclosed at fair value on a recurring basis (in thousands): December 31, 2023 Level 1 Level 2 Level 3 Assets: Cash equivalents: Treasury bills $ 35,961 $ — $ — Money market funds 54,542 $ — $ — Total assets $ 90,503 $ — $ — There were no financial instrument assets measured or disclosed at fair value on a recurring basis as of December 31, 2022. Equity Line of Credit Liabilities: Equity Line of Credit January 1, 2022 $ — Issuance of ELOC 1,075 December 31, 2022 1,075 Change in fair value 1,901 Settlements (2,976) December 31, 2023 $ — The Company estimated the Level 3 fair value of the liability related to the ELOC using contractual inputs of the commitment shares and reimbursement fees prior to the settlement. The Company determined that the ELOC was not indexed to the Company’s own common stock and, therefore, should be accounted for in accordance with ASC 815: Derivatives . Accordingly, the Company recorded a derivative liability with an initial fair value of $1.1 million based on the upfront commitment fee and the reimbursement amount to the investor as consideration for its irrevocable commitment to purchase up to 25,000,000 shares of the Company's common stock. Subsequent changes in the fair value of the derivative liability are dependent upon, among other things, changes in the closing share price of the Company’s common stock, the quantity and purchase price of shares purchased during the reporting period, the unused capacity under the ELOC as of the balance sheet date and the cost of raising other forms of capital. The Company adjusts the previous fair value estimate of the committed equity facility at each reporting period based on changes in the weighted average purchase price of shares purchased during the period, the unused capacity available under the ELOC, expected stock price volatility and other macroeconomic factors which impact the cost of raising comparable forms of capital. The changes in the fair value of the committed equity facility were an increase of $1.9 million for the year ended December 31, 2023, which is included in other (income) expense, net on the consolidated statements of operations and comprehensive income (loss). The fair value of the liability then is remeasured as of the settlement date equal to the difference between the volume weighted average price at a 3% discount compared to the fair value of the common stock. Series C Warrants (April 2013 and November 2013) In December 2021, the Series C Warrants were fully exercised. Immediately prior to their exercise, the Company revalued the warrants to their intrinsic value, resulting in a change in fair value of $3.8 million. This change in fair value was recorded as a component of other expense, net, in the accompanying consolidated statements of operations and comprehensive loss. The warrants were recorded as Series C Preferred Stock at their fair value of $5.8 million upon net share settlement. Derivative Liability (SNAP June 2020 Note) To determine the fair value of the embedded derivative associated with the SNAP June 2020 Note, the Company utilized the income approach model using the With and Without method. Using the With and Without method, the Company modeled expected cash flows to the noteholder under Next Equity Financing, Change in Control, SPAC/Private Investment in Public Equity, and IPO scenarios. The value of the embedded derivative was determined as the differential value from the perspective of the With and Without Method. The Company utilized the following assumptions at the valuation date: December 31, 2021 Probability of Next Equity Financing 3 % Probability of SPAC/PIPE 95 % Probability of IPO 2 % 100 % Weighted average term (years) 0.27 Weighted average discount rate 25 % The significant unobservable inputs used in the fair value measurement of the derivative liability are the remaining expected term, the discount rate, and the probability of financing for each scenario. Significant increases (decreases) in the term would result in significantly lower (higher) fair value measurements. Significant increases (decreases) in the discount rate would result in significantly lower (higher) fair value measurements. On April 26, 2022, the Closing of the Business Combination, the embedded derivative was valued at fair value which was equivalent to its intrinsic value. The embedded derivative had a fair value of $4.1 million. As the Closing of the Business Combination triggered the Conversion Feature contained within the SNAP June 2020 Note, therefore converting the note’s principal to equity, the embedded derivative associated with the note was extinguished. The Company recorded the remeasurement of derivative liabilities in other expense, net on the consolidated statements of operations and comprehensive loss. The fair value of the embedded derivative was recorded as additional paid-in capital The following table summarizes the fair value remeasurement of the embedded derivative for the years ended December 31, 2022 and 2021 (in thousands): Year Ended December 31, 2022 2021 Remeasurement of conversion feature — loss $ (606) $ (1,108) The following table sets forth a summary of changes in fair value of the Company’s derivative liability and warrant liability for which fair value was determined by Level 3 inputs: Derivative Liability Warrant Liability Balance as of December 31, 2020 $ 2,380 $ 2,004 Change in fair value $ 1,108 $ 3,812 Exercise of warrants $ — $ (5,816) Balance as of December 31, 2021 $ 3,488 $ — Change in fair value $ 606 $ — Extinguishment of embedded derivative upon conversion of convertible note $ (4,094) $ — Balance as of December 31, 2022 $ — $ — Term Loan and Term Loan Warrant The fair value of the Company's variable rate Term Loan approximates aggregate principal amount as the interest rate of the loan approximates market rates. The Company issued a Class A Common Stock warrant in connection with the Term Loan (see Note 8 for additional information). The warrant was recorded based on the allocation of its relative fair value of the debt proceeds of $4.1 million. The warrants were classified as equity instruments at inception with a corresponding discount recorded at issuance against the outstanding note payable in connection with the Term Loan. The common stock warrant is not subject to remeasurement at each subsequent balance sheet date due to its classification as an equity instrument as it is considered indexed to the Company’s stock. The Term Loan warrant expires in April 2033. The Company determined the fair value of the Term Loan common stock warrant at issuance using the Black-Scholes option-pricing model using the following assumptions: Expected dividend rate — % Risk-free interest rate 3.60 % Expected volatility 52 % Expected term (in years) 5 As of December 31, 2023, no warrants related to the Term Loan had been exercised. |
PREFERRED STOCK
PREFERRED STOCK | 12 Months Ended |
Dec. 31, 2023 | |
Equity [Abstract] | |
PREFERRED STOCK | PREFERRED STOCK Legacy SoundHound Preferred Stock Legacy SoundHound Preferred Stock was not mandatorily redeemable. Legacy SoundHound Preferred Stock was contingently redeemable upon a deemed liquidation event which the Company determined was not solely within its control as the Company determined that a deemed liquidation event can only occur with the approval of the board of directors and the preferred shareholders maintained control of the board of directors as of December 31, 2021 and through April 26, 2022, the effective date of the Business Combination, and thus has classified shares of Legacy SoundHound Preferred Stock as temporary equity. Since the occurrence of a deemed liquidation event was not probable, the carrying values of the shares of legacy SoundHound Preferred Stock were not being accreted to their redemption values. A summary of the Legacy SoundHound Preferred Stock authorized, issued and outstanding as of the date of the Business Combination is as follows : Shares Authorized Shares Issued Liquidation Preference Carrying Value Series A 19,106,048 19,106,048 $ 28,239 $ 4,967 Series B 33,702,134 33,702,134 66,360 11,038 Series C 5,687,525 5,687,525 38,163 11,837 Series C-1 4,436,090 4,436,090 89,298 16,061 Series D 20,258,299 20,258,299 527,992 85,648 Series D-1 8,418,535 8,418,535 277,812 49,957 Series D-2 8,418,530 8,418,530 277,811 49,949 Series D-3 6,922,165 6,922,165 276,887 50,046 Series D-3A 20,835,869 — — — 127,785,195 106,949,326 $ 1,582,562 $ 279,503 Upon the closing of the Business Combination, the outstanding shares of Series A, B, C, C-1, D, D-1, D-2, and D-3 preferred stock were converted into 106,949,326 shares of SoundHound AI Class A Common Stock at the exchange ratio of 1-for-1. Shares Authorized and Shares Issued above have been retroactively adjusted to reflect the exchange of 1 share of Legacy SoundHound stock into 5.5562 shares of the Company's Class A or Class B Common Stock. As a result of the conversion of the Legacy SoundHound redeemable convertible preferred stock, the Company reclassified the amount of redeemable convertible preferred stock to additional paid in capital. Upon the consummation of the Business Combination, the Company is authorized to issue 1,000,000 shares of preferred stock with a par value of $0.0001 per share. The number of authorized shares of preferred stock may also be increased or decreased by the affirmative vote of the holders of a majority of the voting power of all the then-outstanding shares of capital stock of the Company entitled to vote thereon, without a separate vote of the holders of preferred stock. Any new series of preferred stock may be designated, fixed and determined as provided by the Board without approval of the holders of common stock or preferred stock and the preferred stock holders may be granted such rights, powers (including voting powers) and preferences as determined by the Board in its sole discretion, including the right to elect one or more directors. Series A Convertible Preferred Stock On January 20, 2023, the Company entered into the Purchase Agreements with the Investors, pursuant to which the Company issued and sold to the Investors an aggregate of 835,011 shares of its newly designated Series A Convertible Preferred Stock for issuance price of $30.00 per share, raising an aggregate of approximately $25.0 million in cash proceeds. On January 20, 2023, the Company filed a Certificate of Designations of Preferences, Rights and Limitations of the Series A Preferred Stock with the Secretary of State of the State of Delaware (the "Certificate of Designations"), designating shares of Series A Preferred Stock. The shares of Series A Preferred Stock were issued and sold in a private placement exempt from the registration requirements of the Securities Act. 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. The holders of Series A Preferred Stock are entitled to cumulative dividends payable for such share at the rate of 14% per annum, compounding semi-annually to Liquidation Preference on January 1 and July 1 of each year. The Company may also elect to pay any dividend in cash in lieu of accretion to Liquidation Preference if permitted under the agreements and instruments governing its outstanding indebtedness at such time. After payment of the cumulative dividend, including by way of accretion to the Liquidation Preference, any additional dividends declared or paid shall be distributed among the holders of Preferred Stock and common stock then outstanding pro rata based on the number of shares of common stock then held by each holder (assuming conversion of all such Preferred Stock into common stock at the then-effective conversion price. Liquidation Preference The Liquidation Preference per share of Preferred Stock was initially equal to $30.00, the original issue price per share. On July 1, 2023, the Company's Series A Preferred Stock holders received dividends paid-in-kind as an increase in the Liquidation Preference, thereby increasing the Liquidation Preference per share to approximately $31.90 . Additionally, as of December 31, 2023 , the Series A Preferred Stock had accrued additional dividends since the last dividend payment date which has the effect of increasing the Liquidation Preference to approximately $34.16. Redemption The Series A Preferred Stock is not mandatorily redeemable. In the event of any voluntary or involuntary liquidation, dissolution or winding up of the Company or in the event of any Deemed Liquidation Event (as defined below), the holders of the Series A Preferred Stock will be entitled to receive, prior and in preference to any distribution of the proceeds of the transaction or any of the assets of the Company to holders of the common stock, an amount per share equal to the greater of (i) two and a half time (2.5x) the Liquidation Preference (including any accrued and unpaid dividends since the last dividend payment date) or (ii) the amount as would have been payable had the Series A Preferred Stock been converted into common stock. A Deemed Liquidation Event includes (i) a merger or acquisition of the Company in which 50% or less of the voting securities of the surviving entity are no longer held by the shareholders of the Company immediately prior to such transaction or (ii) a sale, lease, transfer, exclusive license, or other disposal of all or substantially all of the Company’s assets. If the Company is not liquidated within 90 days of a Deemed Liquidation Event, the holders of the Series A Preferred Stock will have the option to require the redemption of the Preferred Stock to the extent the Company has sufficient available proceeds to do so. The Company determined that a Deemed Liquidation Event can only occur with the approval of the board of directors, and therefore the exercise of this contingent redemption feature is within the control of the Company and the Investors are not in control of the Company. Therefore, the Series A Preferred Stock is not classified as redeemable equity within the Company’s consolidated balance sheet and consolidated statements of redeemable convertible preferred stock and stockholders’ equity (deficit). Conversion Each share of Series A Preferred Stock is convertible, at the option of the holder, into such number of shares of Class A Common Stock equal to the Liquidation Preference per share at the time of conversion divided by $1.00 (the “Conversion Price”). In addition, each share of Series A Preferred Stock will automatically convert into shares of Class A Common Stock at the Conversion Price on or after January 20, 2024 if and when the daily volume-weighted average closing price per share of Class A Common Stock is at least 2.5 times the Conversion Price for each of any 90 trading days during any 120 consecutive trading day period, which 120-trading day period may commence (but may not end) prior to January 20, 2024. During the year ended December 31, 2023, some Investors optionally converted 360,006 shares of Series A Preferred Stock into 11,597,656 shares of Class A Common Stock. The conversion was pursuant to the original terms of the agreement and therefore the carrying value of Series A Preferred Stock was converted into Class A Common Stock with no gain or loss upon conversion. Voting Rights The Investors do not have voting rights, except with respect to certain protective provisions and as required by the Delaware General Corporation Law. However, as long as the Series A Preferred Stock are outstanding, the Company may not take certain actions that may materially and adversely impact the powers, preferences, or rights of the Investors without the consent of at least a majority of the Investors. |
COMMON STOCK
COMMON STOCK | 12 Months Ended |
Dec. 31, 2023 | |
Equity [Abstract] | |
COMMON STOCK | COMMON STOCK The Company had 250,030,433 shares of Legacy SoundHound common stock authorized for issuance prior to the closing of the Business Combination. On April 26, 2022, following the Business Combination and pursuant to the Company’s certificate of incorporation, the Company is authorized to issue 500,000,000 shares of capital stock, consisting of (a) 455,000,000 shares of Class A Common Stock with a par value of $0.0001 per share, (b) 44,000,000 shares of Class B Common Stock with a par value of $0.0001 per share, and (c) 1,000,000 shares of preferred stock with a par value of $0.0001 per share. The outstanding shares of the Company’s common stock are fully paid and non-assessable. As a result of the Business Combination, 73,561,334 shares of Legacy SoundHound common stock, along with 106,949,326 shares of Legacy SoundHound preferred stock, were converted into 180,510,660 shares of the Company’s common stock, consisting of 140,114,060 shares of Class A Common Stock and 40,396,600 shares of the Company’s Class B Common Stock. On all matters to be voted upon, subject to the rights of any holders of any series of preferred stock, holders of shares of Class A Common Stock and Class B Common Stock will vote together as a single class on all matters submitted to the stockholders for their vote or approval. Holders of Class A Common Stock are entitled to one vote per share on all matters submitted to the stockholders for their vote or approval. Holders of Class B Common Stock are entitled to ten votes per share on all matters submitted to stockholders for their vote or approval. Each share of Class B Common Stock shall automatically convert into one fully paid and nonassessable share of Class A Common Stock. Shares of Class B Common Stock will be convertible into shares of Class A Common Stock and will be automatically convert into shares of Class A Common Stock upon the occurrence of certain future events, generally including transfers, subject to limited excepts set forth in the amended charter. The conversion of Class B Common Stock to Class A Common Stock will have the effect, over time, of increasing the relative voting power of those holders of Class B Common Stock who retain their shares in the long term. As a result, it is possible that one or more of the persons or entities holding our Class B Common Stock could gain significant voting control as other holders of Class B Common Stock sell or otherwise convert their shares into Class A Common Stock. Equity Line of Credit ("ELOC") On August 16, 2022, the Company entered into a common stock purchase agreement (“Common Stock Purchase Agreement”) and related registration rights agreement (the “CFPI Registration Rights Agreement”) with CF Principal Investments LLC (the “Counterparty”). Pursuant to the Common Stock Purchase Agreement, the Company had the right, but not the obligation, to direct the Counterparty to purchase up to 25,000,000 shares of Class A Common Stock, subject to certain limitations and conditions as described below (the "ELOC Program") at a purchase price equal to 97% of the volume weighted average stock price for a given purchase date. In connection with the execution of the Common Stock Purchase Agreement and the side letter on February 14, 2023, the Company issued 250,000 shares of Common Stock (the “Initial Commitment Shares”) and additional cash commitment fee of $0.3 million. The Company controlled the timing and amount of any sales to the Counterparty, which depended on a variety of factors including, among other things, market conditions, the trading price of the Company’s common stock, and determinations by the Company as to appropriate sources of funding for its business and operations. However, the Counterparty’s obligation to purchase shares is subject to certain conditions, including the daily trading volume of the Company’s stock. In all instances, the Company may not sell shares of its common stock under the Purchase Agreement if it would result in the Counterparty and its affiliate beneficially owning more than 4.99% of its outstanding voting power or shares of common stock at any one point in time, or the aggregation number of shares of common stock would not exceed 39,365,804 shares of common stock representing 19.99% of the voting power or number of shares of common stock. The Company evaluated the Common Stock Purchase Agreement with the Counterparty and determined that it was not indexed to the Company’s own common stock and, therefore, should be accounted for as a derivative instrument at fair value with changes in fair value as other income (expense), net in the period in which they occur. Accordingly, the Company recorded a derivative liability with an initial fair value The Company recorded changes in the fair value of the derivative liability associated with the ELOC of $1.9 million and $1.1 million respectively, for the years ended December 31, 2023 and 2022 as other income (expense), net on its consolidated statements of operations and comprehensive loss. The Company incurred third-party costs of $0.2 million related to the execution of the Common Stock Purchase Agreement which were recorded as general and administrative expenses in the consolidated statements of operations and comprehensive loss for the year ended December 31, 2023. Refer to Note 2 for information on the fair value of the derivative liability. During the year ended, the Company sold the entirety of the 25,000,000 shares under the ELOC Program for aggregate proceeds of approximately $71.7 million, with the volume weighted average stock price of shares purchased by the Counterparty ranging from $1.75 to $4.26 per share. Sales Agreement On July 28, 2023, the Company entered into a Controlled Equity Offering Sales Agreement (the “Sales Agreement”) with Cantor Fitzgerald & Co., H.C. Wainwright & Co., LLC, and D.A. Davidson & Co. (each a “Sales Agent” and collectively, the “Sales Agents”), pursuant to which the Company may offer and sell up to $150.0 million of shares of our Class A common stock from time to time through or to the Sales Agents acting as agent or principal. Sales of our Class A common stock, if any, under the Sales Agreement will be made at market prices by any method that is deemed to be an “at the market offering” as defined in Rule 415 under the Securities Act. We will pay the Sales Agents commission for their services in acting as agent in the sale of our Class A common stock. The Sales Agents are entitled to aggregate compensation at a fixed commission rate of 2.5% of the gross sales price per share sold under the Sales Agreement. We have also agreed to reimburse the Sales Agents for certain specified expenses, including the reasonable and documented fees and disbursements of its legal counsel in an amount not to exceed $75 thousand in the aggregate in connection with the execution of the Sales Agreement. During the year ended December 31, 2023, the Company sold 5,805,995 shares of our common stock under the Sales Agreement, at a weighted-average price of $2.19 per share and raised $12.7 million of gross proceeds. The commissions and offering costs borne by the Company during the year were approximately $0.3 million. As of December 31, 2023, the Company has a remaining capacity to sell up to an additional $137.3 million of the Company's common stock under the Sales Agreement. |
STOCK INCENTIVE PLANS
STOCK INCENTIVE PLANS | 12 Months Ended |
Dec. 31, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
STOCK INCENTIVE PLANS | STOCK INCENTIVE PLANS In April 2016, we adopted the 2016 Equity Incentive Plan (the “2016 Plan”) as a successor and continuation of the 2006 Plan. Under the 2016 Plan, the Company was permitted to grant awards of stock options and RSUs, as well as stock appreciation rights and other stock awards. During the year ended December 31, 2021, the Company amended the 2016 Plan to increase the number of shares of common stock reserved for issuance by 6,667,478 to an aggregate of 48,347,329. As of the Closing Date of the Business Combination, the Company no longer has shares available for issuance under the 2016 Plan. The 2016 Plan provides for incentive stock options to be granted to employees at an exercise price not less than 100% of the fair value at the grant date as determined by the Board of Directors, unless the optionee is a 10% stockholder, in which case the option price will not be less than 110% of such fair market value. Options granted generally have a maximum term of 10 years from grant date, are exercisable upon vesting unless otherwise designated for early exercise by the Board of Directors at the time of grant, and generally vest over a four-year period, with a 25% cliff vesting after one year and then ratably on a monthly basis for the remaining three years. RSUs granted generally vest over a four-year period, with 25% cliff vesting after one year and then ratably on a quarterly basis for the remaining three years. On April 26, 2022, the stockholders of the Company approved the SoundHound AI, Inc. 2022 Incentive Award Plan (the “2022 Incentive Plan”) (collectively, with the 2006 Plan and the 2016 Plan, the “Plans”), which became effective upon the Closing. The Company initially reserved 19,650,371 shares of Class A Common Stock for the issuance of awards under the 2022 Incentive Plan (“Initial Limit”). The Initial Limit represents 10% of the aggregate number of shares of the Company’s common stock outstanding immediately after the Closing and is subject to increase each year over a ten-year period. The Incentive Award Plan provides for the grant of stock options, which may be ISOs or non-statutory stock options (“NSOs”), stock appreciation rights (“SARs”), restricted shares, restricted stock units and other stock or cash-based awards that the Incentive Award Plan Administrator determines are consistent with the purpose of the Incentive Award Plan and the interests of the Combined Company, or collectively, awards. As of December 31, 2023, the Company had 2,361,806 awards remaining for issuance under the 2022 Incentive Plan. On April 26, 2022, the stockholders of the Company approved the SoundHound AI, Inc. 2022 Employee Stock Purchase Plan (the “ESPP”), which became effective upon the Closing. An aggregate of 3,930,074 shares of the Company’s Class A Common Stock has been reserved for issuance or transfer pursuant to rights granted under the ESPP (“Aggregate Number”). The Aggregate Number represents 2% of the aggregate number of shares of the Company’s common stock outstanding immediately after the Closing and is subject to increase each year over a ten-year period. The ESPP provides eligible employees with an opportunity to purchase common stock from the Company at a discount through accumulated payroll deductions. The ESPP is being implemented through a series of offerings of purchase rights to eligible employees. Under the ESPP, the Company’s Board of Directors may specify offerings but generally provides for a duration of 27 months. The purchase price will be specified pursuant to the offering, but cannot, under the terms of the ESPP, be less than 85% of the lower of the fair market value per share of the Company’s common stock on either the offering date or on the purchase date. The ESPP also includes a six-month look-back provision for the purchase price if the stock price on the purchase date is less than the stock price on the offering date. The first offering period under the ESPP began on November 1, 2022. As of December 31, 2023, we had issued 478,023 shares pursuant to the ESPP. Option Activity Stock option activity under the Plans was as follows for the years ended December 31, 2023, 2022 and 2021: Number of Shares Weighted Average Exercise Price Weighted Average Aggregate Intrinsic Value (in Thousands) Outstanding, December 31, 2020 28,772,180 $ 2.38 Granted 6,303,953 7.22 Exercised (2,590,780) 0.96 9,667 Forfeited or cancelled (2,123,948) 3.13 Outstanding, December 31, 2021 30,361,405 $ 3.45 6.24 $ 168,705 Granted 391,619 6.17 Exercised (3,595,706) 1.16 22,534 Forfeited or cancelled (1,736,893) 4.63 Outstanding, December 31, 2022 25,420,425 3.74 6.32 1,448 Exercised (3,585,829) 2.37 — $ 5,207 Forfeited or cancelled (4,993,229) 5.24 — — Outstanding, December 31, 2023 16,841,367 $ 3.59 4.77 $ 1,392 Exercisable, December 31, 2023 15,084,586 3.26 4.45 1,392 Options exercised early are subject to the vesting provisions mentioned above, and any unvested shares are subject to repurchase at the original price upon termination of employment, death, or disability. There were no option exercises during the year ended December 31, 2023, 2022 and 2021 that were subject to repurchase. The weighted average grant date fair value per option granted was $3.11, during the year ended December 31, 2022 and $3.06 during the year ended December 31, 2021. There were no options granted during the year ended December 31, 2023. The total fair value of options vested was approximately $4.5 million, $9.9 million and $5.4 million during the years ended December 31, 2023, 2022 and 2021, respectively. The Company recorded stock-based compensation expense related to options of $4.0 million, $8.7 million and $6.3 million for the years ended December 31, 2023, 2022 and 2021. As of December 31, 2023, the unamortized expense related to outstanding options was $4.5 million. The weighted average remaining amortization period over which the balance as of December 31, 2023 is to be amortized is 1.51 years. For the purpose of determining the estimated fair value of share-based payment awards issued in the form of stock options, the Company uses the Black-Scholes option-pricing model. The assumptions under the Black-Scholes option-pricing model during the years ended December 31, 2022 and 2021 were as follows for option awards: 2022 2021 Dividend yield 0 % 0 % Expected volatility 51 % 42 % Expected term (years) 5.88 6.01 Risk free interest rate 2.58 % 1.14 % ESPP Activity For the purpose of determining the estimated fair value of ESPP shares, the Company uses the Black-Scholes option-pricing model. The assumptions under the Black-Scholes option-pricing model during the year ended December 31, 2023 and 2022 were as follows for ESPP awards: Year Ended Year Ended December 31, 2023 December 31, 2022 Dividend yield 0 % 0 % Expected volatility 56 % 77 % Expected term (years) 0.49 0.52 Risk free interest rate 5.26 % 4.53 % During the year ended December 31, 2023 , the Company reco rded $0.4 million of stoc k-based compensation related to its ESPP. There was $0.1 million of unrecognized stock-based compensation expense for the year ended December 31, 2023, related to the ESPP that is expected to be recognized over an average vesting period of 0.36 years . Restricted Stock Unit Activity The activity for nonvested Restricted Stock Units under the Plans was as follows for the year ended December 31, 2023, 2022 and 2021: Number of Shares Weighted Average Grant Date Fair Value Nonvested, December 31, 2021 — — Granted 20,416,417 4.26 Vested (2,516,191) 4.99 Forfeited (1,183,843) 4.46 Nonvested, December 31, 2022 16,716,383 4.14 Granted 11,158,301 2.38 Vested (7,678,184) 3.32 Forfeited (3,852,909) 3.90 Nonvested, December 31, 2023 16,343,591 3.39 The Company recorded stock-based compensation expense of $1.3 million related to Performance-Based RSUs during the year ended December 31, 2023. Unamortized expense related to Performance-Based RSUs was $6.6 million as of December 31, 2023. To derive the fair value of Market-Based RSUs, the Company applies a Monte Carlo simulation to determine the grant date fair value. The assumptions under the Monte Carlo simulation model and the calculated fair value of the Market-Based RSUs granted to employees during the year ended December 31, 2022 were as follows. The Company did not grant Market-Based RSUs during the year ended December 31, 2023. Year Ended December 31, Expected volatility 52 % Expected term (years) 4 Drift rate 2.9 % The Company recorded $1.5 million and $1.1 million in stock-based compensation expense related to Market-Based RSUs during the year ended December 31, 2023 and 2022. Unamortized expense related to Market-Based RSUs was $0.6 million as of December 31, 2023. There were no Market-Based RSU's granted during the year ended, December 31, 2023. During the year ended December 31, 2023 and 2022, the fair value of RSUs that vested was $25.5 million and $12.0 million. During the year ended December 31, 2023 and 2022 the Company recorded $20.4 million and $19.0 million of stock-based compensation related to RSUs. As of December 31, 2023 and the unamortized expense related to RSUs was $50.5 million. The weighted average remaining amortization period over which the balance as of December 31, 2023 is to be amortized is 2.32 years. Equity Award Modifications In connection with the Restructuring Plan (as defined in Note 10), the Company entered into severance arrangements with 166 affected employees. Pursuant to these arrangements, these employees received acceleration of vesting of RSUs and extensions of the post-termination exercise period of stock option awards. All award modifications related to restructuring activities were expensed in the year ended December 31, 2023. The total incremental compensation cost resulting from these modifications is $3.2 million. There were no significant modifications during the years ended December 31, 2022 and December 31, 2021. Compensation Costs The Company’s founders held 7,270,503 of Legacy SoundHound common stock pre-conversion prior to the Business Combination. The founders exchanged their shares for Legacy SoundHound Class B common stock immediately prior to the closing of the business combination. Upon the Business Combination, the founders exchanged their Legacy SoundHound Class B shares in exchange for 40,396,600 shares of Class B Common Stock according to the Conversion Ratio. As the Class B Common Stock shares have ten votes per share, the exchange resulted in incremental stock-based compensation expense of $1.0 million which is included in general and administrative expenses on the consolidated statements of operations and comprehensive loss for the year ended December 31, 2022. Stock-based compensation is classified in the following expense accounts on the consolidated statements of operations and comprehensive loss for the years ended December 31, 2023, 2022 and 2021 (in thousands): Year Ended December 31, 2023 2022 2021 Cost of revenue $ 412 $ 99 $ — Sales and marketing 3,601 2,794 509 Research and development 11,992 13,986 4,434 General and administrative 8,784 11,913 1,379 Restructuring costs 3,142 — — Total $ 27,931 $ 28,792 $ 6,322 |
LEASES
LEASES | 12 Months Ended |
Dec. 31, 2023 | |
Leases [Abstract] | |
LEASES | LEASES The Company leases certain facilities under non-cancelable operating leases that expire at various dates through 2030. Some leases include renewal options, which would permit extensions of the expiration dates at rates approximating fair market rental values. The Company also enters into certain finance leases for computer equipment. The finance leases are collateralized by the financed assets. Aggregate non-cancelable future minimum lease payments under operating and finance leases were as follows as of December 31, 2023 (in thousands): Operating Finance Year Ending December 31: 2024 $ 3,250 $ 122 2025 928 12 2026 471 — 2027 471 — 2028 471 — Thereafter 785 — Total 6,376 134 Less: imputed interest (650) (5) Present value of lease liabilities 5,726 129 Less: current portion (2,637) (121) Lease liabilities, net of current portion $ 3,089 $ 8 The components of lease cost were as follows during the years ended December 31, 2023, 2022 and 2021 (in thousands): Year Ended December 31, 2023 2022 2021 Operating lease cost $ 3,177 $ 3,423 $ 3,654 Short-term lease cost $ 1,298 $ 466 $ 524 Finance lease cost: Amortization of finance leased assets $ 161 $ 995 $ 2,575 Interest on lease liabilities $ 23 $ 79 $ 472 The table below presents additional information related to our leases as of December 31, 2023: Operating Finance Weighted average remaining lease term (years) 3.67 1.00 Weighted average discount rate 5.83 % 10.50 % The Company’s rent expense totaled approximately $5.3 million, $3.9 million and $4.2 million during the years ended December 31, 2023, 2022 and 2021, respectively. |
LEASES | LEASES The Company leases certain facilities under non-cancelable operating leases that expire at various dates through 2030. Some leases include renewal options, which would permit extensions of the expiration dates at rates approximating fair market rental values. The Company also enters into certain finance leases for computer equipment. The finance leases are collateralized by the financed assets. Aggregate non-cancelable future minimum lease payments under operating and finance leases were as follows as of December 31, 2023 (in thousands): Operating Finance Year Ending December 31: 2024 $ 3,250 $ 122 2025 928 12 2026 471 — 2027 471 — 2028 471 — Thereafter 785 — Total 6,376 134 Less: imputed interest (650) (5) Present value of lease liabilities 5,726 129 Less: current portion (2,637) (121) Lease liabilities, net of current portion $ 3,089 $ 8 The components of lease cost were as follows during the years ended December 31, 2023, 2022 and 2021 (in thousands): Year Ended December 31, 2023 2022 2021 Operating lease cost $ 3,177 $ 3,423 $ 3,654 Short-term lease cost $ 1,298 $ 466 $ 524 Finance lease cost: Amortization of finance leased assets $ 161 $ 995 $ 2,575 Interest on lease liabilities $ 23 $ 79 $ 472 The table below presents additional information related to our leases as of December 31, 2023: Operating Finance Weighted average remaining lease term (years) 3.67 1.00 Weighted average discount rate 5.83 % 10.50 % The Company’s rent expense totaled approximately $5.3 million, $3.9 million and $4.2 million during the years ended December 31, 2023, 2022 and 2021, respectively. |
OTHER INCOME (EXPENSE), NET
OTHER INCOME (EXPENSE), NET | 12 Months Ended |
Dec. 31, 2023 | |
Other Expenses [Abstract] | |
OTHER INCOME (EXPENSE), NET | 16. OTHER INCOME (EXPENSE), NET Other income (expense), net on the consolidated statements of operations and comprehensive loss is comprised of the following for the years ended December 31, 2023, 2022 and 2021 (in thousands): Year Ended December 31, 2023 2022 2021 Other income (expense), net: Interest income $ 2,866 $ 390 $ 7 Change in fair value of derivative and warrant liability — (606) (4,920) Loss on change in fair value of ELOC program (1,901) (1,075) — Other income (expense), net 190 32 (502) Total other income (expense), net $ 1,155 $ (1,259) $ (5,415) |
NET LOSS PER SHARE
NET LOSS PER SHARE | 12 Months Ended |
Dec. 31, 2023 | |
Earnings Per Share [Abstract] | |
NET LOSS PER SHARE | NET LOSS PER SHARE The following table presents the calculation of basic and diluted net loss per share attributable to common stockholders for the years ended December 31, 2023, 2022 and 2021: Year Ended December 31, 2023 2022 2021 Numerator: Net loss (in thousands) $ (88,937) $ (116,713) $ (79,540) Cumulative dividends attributable to Series A Preferred Stock (2,774) — — Net loss attributable to SoundHound common shareholders (in thousands) (91,711) (116,713) (79,540) Denominator: Weighted average shares outstanding – basic and dilutive 229,264,904 157,317,695 67,255,538 Basic and diluted net loss per share $ (0.40) $ (0.74) $ (1.18) For the years ended December 31, 2023, 2022 and 2021, the diluted net loss per share is equal to the basic earnings per share as the effect of potentially dilutive securities would have been antidilutive. The following table summarizes the outstanding shares of potentially dilutive securities that were excluded from the calculation of diluted earnings per share because their inclusion would have been anti-dilutive for the years ended December 31, 2023, 2022 and 2021: Year Ended December 31, 2023 2022 2021 Stock options 16,841,367 25,420,425 30,361,405 Restricted stock units 16,343,591 16,716,383 — Estimated ESPP stock units 299,116 476,636 — Common stock warrants 6,967,532 3,665,996 1,063,214 Redeemable convertible preferred stock — — 106,949,326 Series A Preferred Stock 16,226,645 — — Total 56,678,251 46,279,440 138,373,945 |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES The following is a geographical breakdown of income (loss) before income taxes: Year Ended December 31, 2023 2022 2021 Domestic $ (86,724) $ (116,964) $ (79,962) Foreign 1,701 3,140 878 $ (85,023) $ (113,824) $ (79,084) The provision for income taxes consisted of the following: Year Ended December 31, 2023 2022 2021 Current provision: Federal $ — $ — $ — State 3 7 5 Foreign 3,881 755 339 Total current provision $ 3,884 $ 762 $ 344 Deferred provision: Federal $ — $ — $ — State — — — Foreign 30 2,127 112 Total deferred provision $ 30 $ 2,127 $ 112 Total provision for income taxes $ 3,914 $ 2,889 $ 456 Effective income tax expense rate (4.6) % (2.5) % (0.6) % The Company has incurred net pre-tax losses in the United States only for all periods presented. The Company recorded an income tax expense of $3.9 million, $2.9 million, and $0.5 million for the years ended December 31, 2023, 2022, and 2021 respectively, which reflects withholding tax paid for sales to customers in foreign jurisdictions and income tax related to foreign subsidiaries. The provision for income taxes differed from the amount computed by applying the federal statutory rate to our income before income taxes as follows: Year Ended December 31, 2023 2022 2021 Federal statutory income tax rate 21.0 % 21.0 % 21.0 % Tax provision at statutory rate $ (17,855) $ (23,903) $ (16,608) State income tax rate 3 7 5 Foreign withholding and income tax 3,689 2,298 388 Foreign rate differential (136) (115) — Research and development credits (2,105) (1,731) (1,605) Change in valuation allowance 18,604 24,272 15,804 Stock based compensation 2,899 1,540 728 Permanent book tax differences 516 751 996 Other deferred adjustments (1,701) — — Other — (230) 748 $ 3,914 $ 2,889 $ 456 The components of our deferred tax assets and liabilities were as follows: Year Ended December 31, 2023 2022 Deferred tax assets: Net operating loss carryforwards $ 89,880 $ 79,060 Research and development credits 17,825 13,809 Property and equipment and intangible assets 227 178 Deferred revenue 767 1,612 Stock-based compensation 2,246 3,062 Operating lease liabilities 1,333 2,106 Section 174 research and development capitalization 21,186 13,319 Accruals and reserves 588 888 Other — 23 Total deferred tax assets 134,052 114,057 Valuation allowance (132,873) (112,204) Total deferred tax assets, net 1,179 1,853 Deferred tax liabilities: Right-of-use assets (1,168) (1,811) Total deferred tax liabilities (1,168) (1,811) Net deferred tax assets $ 11 $ 42 Recorded as: Non-current deferred tax assets $ 1,179 $ 55 Non-current deferred tax liabilities (included as a component of other non-current liabilities) (1,168) (13) Net deferred tax assets $ 11 $ 42 Based on available objective evidence, management believes it is more-likely-than-not that the domestic federal and state deferred tax assets; and excess Canadian SR&ED tax credits will not be fully realized due to the Company’s cumulative losses arising in the United States, and its inability to utilize excess tax credits in Canada. Accordingly, the Company has recorded a valuation allowance on deferred tax assets in excess of deferred tax liabilities against its federal and state deferred tax assets and excess Canadian SR&ED tax credits as of December 31, 2023, and 2022. The valuation allowance increased by $20.7 million from the year ended December 31, 2022 to December 31, 2023. The Company capitalized research and development expenditures incurred during the years ended December 31, 2023 and 2022, and amortizes such expenditures over 5 or 15 years, as applicable, pursuant to Section 174 of the Internal Revenue Code as required by the 2017 Tax Cuts and Jobs Act. The mandatory capitalization requirement did not have a material impact on our net deferred tax assets or cash tax liabilities. The Company has not provided U.S. income or foreign withholding taxes on the undistributed earnings of its foreign subsidiaries as of December 31, 2023 because it intends to indefinitely reinvest such earnings outside of the U.S. If these foreign earnings were to be repatriated in the future, the related U.S. tax liability will not be material. As of December 31, 2023, the Company had net operating loss carryforwards of $395.5 million of U.S. federal and $109.4 million of state net operating loss carryforwards available to reduce future taxable income. The federal and state net operating loss carryforwards will start to expire in 2025 and 2028, respectively, with the exception of $306.8 million federal net operating loss carryforwards and $5.6 million state net operating loss carryforwards, which can be carried forward indefinitely. The Company had federal and state research and development credit carryforwards of $14.4 million and $10.9 million, respectively, as of December 31, 2023. The federal credits will expire starting in 2029 if not utilized. The state credits can be carried forward indefinitely. The Company also had Canadian SR&ED tax credits of $1.7 million, which will expire starting in 2038 if not utilized. Under Sections 382 and 383 of the Internal Revenue Code of 1986 and similar state tax laws, utilization of net operating loss carryforwards and tax credits may be subject to annual limitations due to certain ownership changes. The Company’s net operating loss carryforwards and tax credits could expire before utilization if subject to annual limitations. The Company files U.S. federal income tax returns as well as income tax returns in many U.S. states and foreign jurisdictions. As of December 31, 2023, the tax years 2005 through the current period remain open to examination by the major jurisdictions in which the Company is subject to tax. Fiscal years outside the normal statute of limitation remain open to audit by tax authorities due to tax attributes generated in those early years, which have been carried forward and may be audited in subsequent years when utilized. Changes in gross unrecognized tax benefits during the periods presented were as follows (in thousands): Balance as of December 31, 2020 $ 4,301 Increase for tax positions of prior years 36 Increase for tax positions of current year 731 Balance as of December 31, 2021 $ 5,068 Increase for tax positions of prior years 0 Increase for tax positions of current year 1062 Balance as of December 31, 2022 6,130 Increase for tax positions of prior years 370 Increase for tax positions of current year 1,095 Balance as of December 31, 2023 $ 7,595 These unrecognized tax benefits, if recognized, would not affect the effective tax rate and would be offset by the reversal of related deferred tax assets which are subject to a full valuation allowance. As of December 31, 2023, the Company has not accrued any interest or penalties. The Company does not anticipate any significant change in the Company’s uncertain tax positions within 12 months of this date. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Dec. 31, 2023 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | RELATED PARTY TRANSACTIONS The Company entered into revenue contracts to perform professional services for certain companies who are also investors in the Company. As of June 30, 2022, these entities are no longer related parties. Below we provide our disclosures for transactions with the companies through June 30, 2022. During the year ended December 31, 2022 and 2021, we recognized revenue from the companies of $5.2 million and $7.0 million, respectively. On January 20, 2023, our Chief Financial Officer and one of our directors each entered into Purchase Agreements, purchasing 3,334 shares of Series A Preferred Stock each for a total purchase price of $100,000 each. |
REVISION OF PREVIOUSLY ISSUED F
REVISION OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS | 12 Months Ended |
Dec. 31, 2023 | |
Accounting Changes and Error Corrections [Abstract] | |
REVISION OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS | REVISION OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS During the period ended September 30, 2023, the Company identified immaterial prior period errors related to the following: 1) accounting for the ELOC as a derivative instrument; 2) classification of Lender Fees and allocation of the warrants in connection with the Term Loan; and 3) the incorrect recording of in-kind dividends associated with the Company’s Series A Preferred Stock. The identified errors were included in the Company's previously issued quarterly unaudited condensed consolidated financial statements for the three and six months ended June 30, 2023, the three months ended March 31, 2023 and annual consolidated financial statements as of and for the year ended December 31, 2022. In accordance with SEC Staff Accounting Bulletin No. 99, “Materiality,” and SEC Staff Accounting Bulletin No. 108, “Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements;” the Company evaluated the errors and determined that the related impacts were not material to its consolidated financial statements for the prior year periods when they occurred, but the Company determined it would be appropriate to correct the errors in the current period in the Company’s consolidated statements of operations and comprehensive loss, consolidated balance sheets, consolidated statements of cash flows or consolidated statements of redeemable convertible preferred stock and stockholders’ deficit for any periods impacted. The Company revised the previously issued condensed consolidated statements of operations and comprehensive loss, condensed consolidated balance sheets, condensed consolidated statements of cash flows and condensed consolidated statements of redeemable convertible preferred stock and stockholders’ deficit tables as of and for the three and six months ended June 30, 2023 and as of and for the three months ended March 31, 2023 as well as the previously issued consolidated statements of operations and comprehensive loss, consolidated balance sheets, consolidated statements of cash flows and consolidated statements of redeemable convertible preferred stock and stockholders’ deficit tables and as of and for the year ended December 31, 2022 to correct for such errors. All relevant prior period amounts affected by these revisions have been corrected in the notes in this Form 10-K. The following tables reflect the impact of these revisions on the Company’s unaudited condensed consolidated financial statements as of and for the three and six months ended June 30, 2023 ( dollars in thousands, except per share amounts ): June 30, 2023 Condensed Consolidated Balance Sheet As Previously Reported Adjustment As Revised Accrued liabilities $ 16,381 $ (2,872) $ 13,509 Total current liabilities 27,003 (2,872) 24,131 Notes payable, net of current portion 66,428 15,872 82,300 Other non-current liabilities 16,824 (12,821) 4,003 Total liabilities 118,789 179 118,968 Additional paid-in capital 564,197 3,597 567,794 Accumulated deficit (550,403) (3,776) (554,179) Total stockholders’ equity 38,789 (179) 38,610 Total liabilities and stockholders’ equity $ 157,578 $ — $ 157,578 Three Months Ended June 30, 2023 Condensed Consolidated Statements Of Operations And Comprehensive Loss As Previously Reported Adjustment As Revised General and administrative $ 6,377 $ 47 $ 6,424 Loss from operations (16,436) (47) (16,483) Other income (expense), net 493 (1,328) (835) Total other expense, net (5,079) (1,328) (6,407) Loss before provision for income taxes (21,515) (1,375) (22,890) Net loss (21,932) (1,375) (23,307) Less: accrual of Series A Preferred Stock paid-in-kind dividends — (877) (877) Net loss attributable to common stockholders $ (21,932) $ (2,252) $ (24,184) Net loss per share: Basic and diluted $ (0.10) $ (0.01) $ (0.11) Six Months Ended June 30, 2023 Condensed Consolidated Statements Of Operations And Comprehensive Loss As Previously Reported Adjustment As Revised General and administrative $ 13,502 $ 211 $ 13,713 Loss from operations (41,474) (211) (41,685) Other income (expense), net 587 (2,225) (1,638) Total other expense, net (6,081) (2,225) (8,306) Loss before provision for income taxes (47,555) (2,436) (49,991) Net loss (48,301) (2,436) (50,737) Less: accrual of Series A Preferred Stock paid-in-kind dividends — (1,559) (1,559) Net loss attributable to common stockholders $ (48,301) $ (3,995) $ (52,296) Net loss per share: Basic and diluted $ (0.23) $ (0.02) $ (0.25) Three Months Ended June 30, 2023 Condensed Consolidated Statement of Stockholders' Equity (Deficit) As Previously Reported Adjustment As Revised Additional paid-in capital $ 564,197 $ 3,597 $ 567,794 Accumulated deficit (550,403) (3,776) (554,179) Net loss $ (21,932) $ (1,375) $ (23,307) Six Months Ended June 30, 2023 Condensed Consolidated Statements of Cash Flows As Previously Reported Adjustment As Revised Net loss $ (48,301) $ (2,436) $ (50,737) Adjustments to reconcile net loss to net cash used in operating activities: Loss on change in fair value of ELOC program — 1,901 1,901 Changes in operating assets and liabilities Other non-current assets 628 (265) 363 Accrued liabilities 5,045 250 5,295 Net cash used in operating activities (33,651) (550) (34,201) Proceeds from sales of common stock under the ELOC program, net 70,905 550 71,455 Net cash provided by financing activities $ 154,008 $ 550 $ 154,558 Noncash financing activities: Accrued and unpaid debt issuance costs $ 16,461 $ (16,461) $ — Non-cash debt discount 4,315 (179) 4,136 Issuance of common stock to settle commitment shares related to the ELOC program $ — $ 915 $ 915 The following tables reflect the impact of these revisions on the Company’s unaudited condensed consolidated financial statements as of and for the three months ended March 31, 2023 ( dollars in thousands, except per share amounts ): March 31, 2023 Condensed Consolidated Balance Sheet As Previously Reported Adjustment As Revised Other non-current assets $ 2,074 $ (432) $ 1,642 Total assets 72,803 (432) 72,371 Additional paid-in capital 505,889 1,969 507,858 Accumulated deficit (528,471) (2,401) (530,872) Total stockholders’ deficit 2,382 (432) 1,950 Total liabilities and stockholders’ deficit $ 72,803 $ (432) $ 72,371 Three Months Ended March 31, 2023 Condensed Consolidated Statements Of Operations And Comprehensive Loss As Previously Reported Adjustment As Revised General and administrative $ 7,125 $ 165 $ 7,290 Loss from operations (25,038) (165) (25,203) Other income (expense), net 94 (896) (802) Total other expense, net (1,002) (896) (1,898) Loss before provision for income taxes (26,040) (1,061) (27,101) Net loss (26,369) (1,061) (27,430) Less: accrual of Series A Preferred Stock paid-in-kind dividends — (682) (682) Net loss attributable to common stockholders $ (26,369) $ (1,743) $ (28,112) Net loss per share: Basic and diluted $ (0.13) $ (0.01) $ (0.14) Three Months Ended March 31, 2023 Condensed Consolidated Statement of Stockholders' Equity (Deficit) As Previously Reported Adjustment As Revised Additional paid-in capital $ 505,889 $ 1,969 $ 507,858 Accumulated deficit (528,471) (2,401) (530,872) Net loss $ (26,369) $ (1,061) $ (27,430) Three Months Ended March 31, 2023 Condensed Consolidated Statements of Cash Flows As Previously Reported Adjustment As Revised Net loss $ (26,369) $ (1,061) $ (27,430) Adjustments to reconcile net loss to net cash used in operating activities: Loss on change in fair value of ELOC program — 571 571 Changes in operating assets and liabilities Other non-current assets 19 167 186 Accrued liabilities 4,306 250 4,556 Net cash used in operating activities (14,467) (73) (14,540) Payment of financing costs associated with ELOC program — (250) (250) Proceeds from sales of common stock under the ELOC program, net 28,360 323 28,683 Net cash provided by financing activities $ 51,568 $ 73 $ 51,641 Noncash financing activities: Issuance of common stock to settle commitment shares related to the ELOC program $ — $ 915 $ 915 The following tables reflect the impact of these revisions on the Company’s consolidated financial statements as of and for the year ended December 31, 2022 ( dollars in thousands, except per share amounts ): December 31, 2022 Consolidated Balance Sheet As Previously Reported Adjustment As Revised Other non-current assets $ 1,656 $ (265) $ 1,391 Total assets 38,251 (265) 37,986 Accrued liabilities 7,462 1,075 8,537 Total current liabilities 37,496 1,075 38,571 Additional paid-in capital 466,857 — 466,857 Accumulated deficit (502,102) (1,340) (503,442) Total stockholders’ deficit (35,225) (1,340) (36,565) Total liabilities and stockholders’ deficit $ 38,251 $ (265) $ 37,986 Year Ended December 31, 2022 Consolidated Statements Of Operations And Comprehensive Loss As Previously Reported Adjustment As Revised General and administrative $ 30,178 $ 265 $ 30,443 Loss from operations (105,407) (265) (105,672) Other income (expense), net (184) (1,075) (1,259) Total other expense, net (7,077) (1,075) (8,152) Loss before provision for income taxes (112,484) (1,340) (113,824) Net loss $ (115,373) $ (1,340) $ (116,713) Net loss per share: Basic and diluted $ (0.73) $ (0.01) $ (0.74) Year Ended December 31, 2022 Consolidated Statement of Stockholders' Equity (Deficit) As Previously Reported Adjustment As Revised Accumulated deficit $ (502,102) $ (1,340) $ (503,442) Net loss $ (115,373) $ (1,340) $ (116,713) Year Ended December 31, 2022 Consolidated Statements of Cash Flows As Previously Reported Adjustment As Revised Net loss $ (115,373) $ (1,340) $ (116,713) Adjustments to reconcile net loss to net cash used in operating activities: Loss on change in fair value of ELOC program — 1,075 1,075 Changes in operating assets and liabilities Other non-current assets (539) 265 (274) Net cash used in operating activities $ (94,019) $ — $ (94,019) |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2023 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | SUBSEQUENT EVENTS SYNQ3 Acquisition On January 3, 2024, the Company acquired all of the issued and outstanding equity of Sync3, Inc. ("SYNQ3"), a leading provider of voice AI and other technology solutions to the restaurant industry, for total consideration of approximately $5.0 million in cash, subject to customary net working capital adjustments, and 8,968,610 shares of the Company's Class A Common Stock. The Company has agreed to pay up to $4.0 million of additional consideration in cash and shares of Class A Common Stock to certain stockholders of SYNQ3 based on tiered annual revenue targets for each fiscal year 2024, 2025 and 2026, of which 20% is to be paid in cash and the remaining in the Company's Class A Common Stock. The stock consideration was based on a reference value of $2.23 per share upon the execution of the merger agreement dated December 6, 2023. In connection with closing, approximately $0.5 million of additional consideration in cash and 1,179,524 shares of Class A Common Stock are being withheld for a period of 15 months to partially secure the indemnification obligations of SYNQ3's stockholders under the merger agreement. Conversion of Preferred Stock Series A On January 12, 2024, one investor optionally converted 35,000 shares of preferred stock into 1,199,364 shares of Class A Common Stock. The conversion was pursuant to the original terms of the agreement and therefore the carrying value of Series A Preferred Stock was converted into Class A Common Stock with no gain or loss upon conversion. Sales Agreement Issuance In January and February 2024, the Company sold 34,578,019 shares of our common stock under the Sales Agreement, at an average price of $3.37 per share and raised $116.4 million of gross proceeds. The commissions and offering costs borne by the Company were approximately $2.9 million. Following this issuance, the Company has a remaining capacity to sell up to an additional $20.8 million of the Company's common stock under the Sales Agreement. |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2023 | Mar. 31, 2023 | Jun. 30, 2023 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Pay vs Performance Disclosure | ||||||
Net loss | $ (23,307) | $ (27,430) | $ (50,737) | $ (88,937) | $ (116,713) | $ (79,540) |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended | 12 Months Ended |
Dec. 31, 2023 shares | Dec. 31, 2023 shares | |
Trading Arrangements, by Individual | ||
Non-Rule 10b5-1 Arrangement Adopted | false | |
Rule 10b5-1 Arrangement Terminated | false | |
Non-Rule 10b5-1 Arrangement Terminated | false | |
Dr. Keyvan Mohajer [Member] | ||
Trading Arrangements, by Individual | ||
Material Terms of Trading Arrangement | Dr. Keyvan Mohajer, Chief Executive Officer and Director, adopted a new trading plan on December 12, 2023 (with the first trade under the new plan not to be made prior to March 12, 2024). The trading plan will be effective until June 7, 2024 and provides for the sale of up to 1,800,000 shares of Dr. Mohajer’s 15,439,064 shares of Class B common stock. up to 833,435 shares of Class A common stock issuable upon exercise of outstanding options, and up to 355,000 shares of Class A common stock issuable upon vesting and settlement of certain RSUs and PSUs, provided that certain conditions are met. | |
Name | Dr. Keyvan Mohajer | |
Title | Chief Executive Officer and Director | |
Rule 10b5-1 Arrangement Adopted | true | |
Adoption Date | December 12, 2023 | |
Arrangement Duration | 87 days | |
Dr. Seyed Majid Emami [Member] | ||
Trading Arrangements, by Individual | ||
Material Terms of Trading Arrangement | Dr. Seyed Majid Emami, Chief Science Officer and Senior Vice President of Engineering, adopted a new trading plan on December 8, 2023 ( with the first trade under the new plan not to be made prior to March 8, 2024). The trading plan will be effective until November 30, 2024 and provides for the sale of up to 1,950,000 shares of Dr. Emami’s 18,033,756 shares of Class B common stock and up to 666,748 shares of Class A common stock issuable upon exercise of outstanding options, provided that certain conditions are met. | |
Name | Dr. Seyed Majid Emami | |
Title | Chief Science Officer and Senior Vice President of Engineering | |
Rule 10b5-1 Arrangement Adopted | true | |
Adoption Date | December 8, 2023 | |
Arrangement Duration | 267 days | |
James M. Hom [Member] | ||
Trading Arrangements, by Individual | ||
Material Terms of Trading Arrangement | James M. Hom, Chief Product Officer and Director, adopted a new trading plan on December 8, 2023 ( with the first trade under the new plan not to be made prior to March 8, 2024). The trading plan will be effective until May 31, 2024 and provides for the sale of up to 2,000,000 shares of Mr. Hom’s 4,012,588 shares of Class B common stock and up to 100,000 shares of Class A common stock issuable upon vesting and settlement of certain RSUs and PSUs, provided that certain conditions are met. | |
Name | James M. Hom | |
Title | Chief Product Officer and Director | |
Rule 10b5-1 Arrangement Adopted | true | |
Adoption Date | December 8, 2023 | |
Arrangement Duration | 84 days | |
Dr. Keyvan Mohajer Trading Arrangement, Class B Common Stock [Member] | Dr. Keyvan Mohajer [Member] | ||
Trading Arrangements, by Individual | ||
Aggregate Available | 1,800,000 | 1,800,000 |
Dr. Keyvan Mohajer Trading Arrangement, Class A Common Stock Upon Exercise Of Options [Member] | Dr. Keyvan Mohajer [Member] | ||
Trading Arrangements, by Individual | ||
Aggregate Available | 833,435 | 833,435 |
Dr. Keyvan Mohajer Trading Arrangement, Class A Common Stock Upon Vesting And Settlement Of RSUs And PSUs [Member] | Dr. Keyvan Mohajer [Member] | ||
Trading Arrangements, by Individual | ||
Aggregate Available | 355,000 | 355,000 |
Dr. Seyed Majid Emami Trading Arrangement, Class B Common Stock [Member] | Dr. Seyed Majid Emami [Member] | ||
Trading Arrangements, by Individual | ||
Aggregate Available | 1,950,000 | 1,950,000 |
Dr. Seyed Majid Emami Trading Arrangement, Class B Common Stock Upon Exercise Of Options [Member] | Dr. Seyed Majid Emami [Member] | ||
Trading Arrangements, by Individual | ||
Aggregate Available | 666,748 | 666,748 |
James M. Hom Trading Arrangement, Class B Common Stock [Member] | James M. Hom [Member] | ||
Trading Arrangements, by Individual | ||
Aggregate Available | 2,000,000 | 2,000,000 |
James M. Hom Trading Arrangement, Class A Common Stock Upon Vesting And Settlement Of RSUs And PSUs [Member] | James M. Hom [Member] | ||
Trading Arrangements, by Individual | ||
Aggregate Available | 100,000 | 100,000 |
BASIS OF PRESENTATION AND SUM_2
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2023 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Significant Accounting Policies | Basis of Presentation and Significant Accounting Policies The accompanying consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (“SEC”) regarding annual financial reporting. Any reference in these notes to applicable accounting guidance is meant to refer to the authoritative U.S. GAAP included in the Accounting Standards Codification (“ASC”), and Accounting Standards Update (“ASU”) issued by the Financial Accounting Standards Board (“FASB”). |
Principles of Consolidation | Principles of Consolidation The Company’s consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. We consolidate any variable interest entity (“VIE”) where we have determined we are the primary beneficiary. The primary beneficiary is the entity which has both: (i) the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance; and (ii) the obligation to absorb losses or receive benefits of the entity that could potentially be significant to the VIE. |
Foreign Currency | Foreign Currency |
Use of Estimates | Use of Estimates The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and judgments that affect the amounts reported and disclosures in the consolidated financial statements and accompanying notes. Such estimates include revenue recognition, allowance for doubtful accounts, accrued liabilities, derivative and warrant liabilities, calculation of the incremental borrowing rate, financial instruments recorded at fair value on a recurring basis, valuation of deferred tax assets and uncertain tax positions and the fair value of common stock and other assumptions used to measure stock-based compensation expense. The Company bases its estimates on historical experience, the current economic environment, and on assumptions it believes are reasonable under the circumstances. The Company adjusts such estimates and assumptions when facts and circumstances dictate. Changes in those estimates resulting from changes in the economic environment will be reflected in the financial statements in future periods. Actual results could differ materially from those estimates. |
Accounts Receivable, Net | Accounts Receivable, Net Accounts receivable consist of current trade receivables due from customers recorded at invoiced amounts, net of allowance for doubtful accounts. Accounts receivable do not bear interest and the Company generally does not require collateral or other security in support of accounts receivable. When the Company records customer receivables and contract assets arising from revenue transactions, an allowance is recorded for credit losses for the current expected credit losses ("CECL") inherent in the asset over its expected life. The allowance for credit losses is a valuation account deducted from the amortized cost basis of the assets to present their net carrying value at the amount expected to be collected. Each period, the allowance for credit losses is adjusted through earnings to reflect expected credit losses over the remaining lives of the assets. The Company estimates expected credit losses based on relevant information about past events, including historical experience, payment terms, environmental and industry factors, and reasonable and supportable forecasts that affect the collectability of the reported amount. When measuring expected credit losses, we pool assets with similar country risk and credit risk characteristics. Changes in the relevant information may materially affect the estimates of expected credit losses. |
Property and Equipment, Net | Property and Equipment, Net Property and equipment are stated at cost, less accumulated depreciation and amortization. Depreciation and amortization is provided using the straight-line method over the estimated useful lives of the respective assets. The estimated useful lives of the Company’s property and equipment are as follows: Computer equipment 3 – 4 years Software 3 years Furniture and fixtures 5 years Leasehold improvements Lesser of useful life or the term of the lease Maintenance and repairs that do not extend the life or improve the asset are expensed as incurred. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets The Company evaluates property and equipment for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. An impairment loss is recognized when the total of estimated undiscounted future cash flows expected to result from the use of the asset and its eventual disposition is less than its carrying amount. Impairment, if any, would be assessed using discounted cash flows or other appropriate measures of fair value. Through December 31, 2023, there have been no such impairments. |
Leases | Leases We determine if an arrangement is a lease at its inception. Operating lease liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. We generally use our incremental borrowing rate based on the information available at the lease commencement date in determining the present value of future payments, because the implicit rate of the lease is generally not known. Right-of-use ("ROU") assets related to our operating lease liabilities are measured at lease inception based on the initial measurement of the lease liability, plus any prepaid lease payments and less any lease incentives, as applicable. Our lease terms that are used in determining our operating lease liabilities at lease inception may include options to extend or terminate the leases when it is reasonably certain that we will exercise such options. We amortize our ROU assets as operating lease expense generally on a straight-line basis over the lease term and classify both the lease amortization and imputed interest as operating expenses. The Company has lease agreements with lease and nonlease components. The Company elected to not separate lease and nonlease components for its asset class of equipment. |
Segment Information | Segment Information The Company has determined that the Chief Executive Officer is its chief operating decision maker. The Company’s Chief Executive Officer reviews discrete financial information on a consolidated basis for purposes of allocating resources and evaluating financial performance. Accordingly, the Company has determined that it operates as a single reportable segment. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all highly liquid investments purchased with an original maturity of three months or less from the date of purchase to be cash equivalents. The Company’s cash equivalents consist of treasury bills and money market funds. The treasury bills are treated as available-for-sale securities. Cash equivalents are measured and reported at fair value using quoted prices in active markets for similar securities. The deposits exceed federally insured limits. Changes in fair value for cash equivalents classified as available for sale securities are recorded to other comprehensive loss. As of December 31, 2023, available-for-sale securities consisted of U.S. treasury bills and government bonds with original maturities of three months or less. As of December 31, 2022, the Company did not have any available-for-sale securities. |
Restricted Cash Equivalents | Restricted Cash The Company’s restricted cash were established according to the requirements under the Credit Agreement (as defined in Note 9) and leases for the Company’s corporate headquarters, data center and sales office and are subject to certain restrictions. Restricted cash is classified as current or non-current on the consolidated balance sheets based on the expected duration of the restriction. Non-current restricted cash relates to interest that is required to be held in escrow in an amount equal to the minimum required balance defined in the Credit Agreement. |
Concentrations of Credit Risk and Other Risks and Uncertainties | Concentrations of Credit Risk and Other Risks and Uncertainties Financial instruments that potentially subject the Company to significant concentrations of credit risk consist principally of cash and cash equivalents, the balances of which frequently exceed federally insured limits. The Company regularly monitors its credit risk exposure and takes steps to mitigate the likelihood of these exposures resulting in actual loss. |
Common Stock Offerings | Common Stock Offerings |
Equity Issuance Costs | Equity Issuance Costs The Company capitalizes certain legal, professional, accounting and other third-party fees that are directly associated with in-process equity-classified financings as deferred offering costs until such financings are consummated. After consummation of the financing, these costs are recorded as a reduction of the proceeds received from the equity financing. If a planned equity financing is abandoned, the deferred offering costs are expensed immediately as a charge to operating expenses in the consolidated statements of operations. |
Revenue Recognition | Revenue Recognition The Company recognizes revenue under Accounting Standards Codification Topic 606 (“ASC 606”), Revenue from Contracts with Customers , when a customer obtains control of promised goods or services in an amount that reflects the consideration which the entity expects to receive in exchange for those goods or services. To determine revenue recognition for arrangements that an entity determines are within the scope of ASC 606, the Company performs the following five steps: (i) Identification of the contract(s) with a customer; (ii) Identification of the performance obligations in the contract; (iii) Determination of the transaction price, including the constraint on variable consideration; (iv) Allocation of the transaction price to the performance obligations in the contract; and (v) Recognition of revenue when, or as, performance obligations are satisfied. Contracts are accounted for when both parties have approved and committed to the contract, the rights of the parties and payment terms are identifiable, the contract has commercial substance and collectability of consideration is probable. Under ASC 606, assuming all other revenue recognition criteria have been met, the Company recognizes revenue for arrangements upon the transfer of control of the Company’s performance obligations to its customers. A performance obligation is a promise in a contract to transfer a distinct good or service to a customer and is the unit of account in ASC 606. Revenues are recognized when control of the promised goods or services are transferred to a customer in an amount that reflects the consideration that the Company expects to receive in exchange for those services. The Company elected the practical expedient to recognize the incremental costs of obtaining a contract including sales commissions as an expense when incurred if the amortization period of such incremental cost would otherwise have been one year or less. Sales commissions are included in sales and marketing expense in the consolidated statements of operations and comprehensive loss. |
Research and Development | Research and Development The Company’s research and development costs are expensed as incurred. These costs include salaries and other personnel related expenses, contractor fees, facility costs, supplies, and depreciation of equipment associated with the design and development of new products prior to the establishment of their technological feasibility. |
Warrants, Restricted Stock Units, and Preferred Stock | Warrants The Company determines whether to classify contracts, such as warrants, that may be settled in its own stock as equity of the entity or as a liability. An equity-linked financial instrument must be considered indexed to the Company’s own stock to qualify for equity classification. The Company classifies warrants as liabilities for any contracts that may require a transfer of assets. Warrants classified as liabilities are accounted for at fair value and remeasured at each reporting date until exercise, expiration or modification that results in equity classification. Any change in the fair value of the warrants is recognized as other income (expense), net in the consolidated statements of operations. Restricted Stock Units The Company issues RSUs to grantees as compensation for services. The fair value of the RSUs is determined at the grant date based on the fair value of the Company’s Class A Common Stock and for RSUs with service conditions only, is recognized straight-line over the service period. Stock-based compensation related to Performance-Based RSUs is recognized to the extent it is determined that performance is probable of being achieved. The Company issues RSUs with vesting conditions tied to certain market conditions (“Market-Based RSUs”). To derive the fair value of Market-Based RSUs, the Company applies a Monte Carlo simulation to determine the grant date fair value. Stock-based compensation related to Market-Based RSUs is recognized over the derived service period. Preferred Stock The Company assesses its preferred stock instruments at issuance and each reporting period for classification and derivative features requiring bifurcation. The Company presents as temporary equity any stock which (i) the Company undertakes to redeem at a fixed or determinable price on the fixed or determinable date or dates; (ii) is redeemable at the option of the holders, or (iii) has conditions for redemption which are not solely within the control of the Company. For stock presented as temporary equity that is not currently redeemable, the Company assesses the probability of the event that would lead to redemption. If it is probable that the equity instrument will become redeemable, the Company accretes changes in the redemption value over the period from the date of issuance, or from the date that it becomes probable that the instrument will become redeemable, if later, to the earliest redemption date of the instrument using an appropriate methodology. If an equity instrument classified as temporary equity is not probable of redemption, subsequent adjustment of the amounts presented in temporary equity is unnecessary. |
Income Taxes | Income Taxes The Company accounts for income taxes under the asset and liability method, whereby deferred tax assets and liabilities are determined based on the difference between the financial statement and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to affect taxable income. A valuation allowance is established when, in management’s estimate, it is more-likely-than-not that the deferred tax asset will not be realized. The Company adopted a more-likely-than-not threshold for financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. The Company records a liability for the difference between the benefit recognized and measured and the tax position taken or expected to be taken on the Company’s tax return. The Company classifies interest and penalties related to uncertain tax positions in income tax expense, if applicable. There has been no interest expense or penalties related to unrecognized tax benefits recorded through December 31, 2023. |
Stock-Based Compensation | Stock-Based Compensation The Company measures and records the expense related to stock-based payment awards based on the fair value of those awards as determined on the date of grant. The Company recognizes stock-based compensation expense over the requisite service period of the individual grant, generally equal to the vesting period, and uses the straight-line method to recognize stock-based compensation, except for restricted stock unit awards (“RSUs”) with vesting conditions tied to certain performance criteria ("Performance-Based RSUs"). Stock-based compensation costs for Performance-Based RSUs are recognized on a graded-vesting basis over the vesting period based on the most probable outcome of the performance conditions. If the minimum performance targets are not met, no compensation cost is recognized and any recognized compensation cost is reversed, except for awards subject to a market condition, The Company accounts for forfeitures as they occur. The Company uses the Black-Scholes option-pricing model to determine the fair value of stock options and employee stock purchase plan ("ESPP") shares. The Black-Scholes option-pricing model requires the use of highly subjective and complex assumptions to determine the fair value of the awards, including the expected term of the award and the price volatility of the underlying stock. The Company calculates the fair value of the awards granted by using the Black-Scholes option-pricing model with the following assumptions: Expected Volatility — The Company estimates volatility for the awards by evaluating the average historical volatility of a peer group of companies for the period immediately preceding the award grant for a term that is approximately equal to the awards’ expected term. Expected Term — The expected term of the Company’s awards represents the period that the stock-based awards are expected to be outstanding. The Company has elected to use the midpoint between the stock options’ vesting term and contractual expiration period to compute the expected term, as the Company does not have sufficient historical information to develop reasonable expectations about future exercise patterns and post-vesting employment termination behavior. For the valuation of ESPP shares, the Company uses the period of time from the valuation date to the purchase date. Risk-Free Interest Rate — The risk-free interest rate is based on the implied yield currently available on U.S. Treasury zero-coupon issues with a term that is equal to the awards’ expected term at the grant date. Expected Dividend Yield — The Company has not declared or paid dividends to date and does not anticipate declaring dividends. As such, expected dividend yield is zero. |
Fair Value Measurements | Fair Value Measurements The Company defines fair value as the exchange price that would be received from an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the measurement date. The Company follows a three-level valuation hierarchy for disclosure of fair value measurements as follows: • Level 1 — Inputs are unadjusted quoted prices in active markets for identical assets or liabilities at the measurement date. • Level 2 — Inputs (other than quoted market prices included in Level 1) are either directly or indirectly observable for the asset or liability through correlation with market data at the measurement date and for the duration of the instrument’s anticipated life. • Level 3 — Inputs reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date. Consideration is given to the risk inherent in the valuation technique and the risk inherent in the inputs to the model. |
Net Loss Per Share | Net Loss Per Share Basic net loss per share attributable to common stockholders is calculated by dividing the net loss attributable to common stockholders by the weighted-average number of shares of common stock outstanding during the period, without consideration for potentially dilutive securities. Diluted net loss per share attributable to common stockholders is computed by dividing the net loss attributable to common stockholders by the weighted-average number of common stock and potentially dilutive securities outstanding for the period. For purposes of the diluted net loss per share calculation, Series A Preferred Stock, stock options, ESPP shares, RSUs and warrants are considered to be potentially dilutive securities. See Note 14 for further information. Accordingly, in periods in which the Company reports a net loss, diluted net loss per share is the same as basic net loss per share, since dilutive common stock is not assumed to have been issued if their effect is anti-dilutive. The Company issued Series A Preferred Stock, which accrues cumulative dividends which are either paid in cash or compounding to the liquidation preference at the discretion of the board of directors. The Company accrues dividends as adjustments to net loss before net loss attributable to common stockholders. The Company applies the two-class method to calculate its basic and diluted net loss per share as the Company has issued shares that meet the definition of participating securities. The two-class method is an earnings allocation formula that treats a participating security as having rights to earnings that otherwise would have been available to common stockholders. The Company's participating securities contractually entitle the holders of such shares to participate in dividends, but do not contractually require the holders of such shares to participate in losses of the Company. Accordingly, in periods in which the Company reports a net loss, such losses are not allocated to such participating securities. |
Recent Accounting Pronouncement — Adopted | Recent Accounting Pronouncements — Adopted The Company continually assess any ASUs or other new accounting pronouncements issued by the FASB to determine their applicability and impact. Where it is determined that a new accounting pronouncement will result in a change to the Company's financial reporting, the Company takes the appropriate steps to ensure that such changes are properly reflected in the consolidated financial statements or notes thereto. In June 2016, the FASB issued ASU 2016-13 to update the methodology used to measure current expected credit losses (“CECL”). This ASU applies to financial assets measured at amortized cost, including loans, held-to-maturity debt securities, net investments in leases, and trade accounts receivable as well as certain off-balance sheet credit exposures, such as loan commitments. This ASU replaces the current incurred loss impairment methodology with a methodology to reflect CECL and requires consideration of a broader range of reasonable and supportable information to explain credit loss estimates. The guidance must be adopted using a modified retrospective transition method through a cumulative-effect adjustment to retained earnings/(deficit) in the period of adoption. In November 2019, the FASB issued ASU 2019-10, Financial Instruments — Credit Losses (“Topic 326”), Targeted Transition Relief, which amends the transition guidance for ASU 2016-13. The ASU provides entities with the option to irrevocably elect the fair value option in Subtopic 825-10 on an instrument-by-instrument basis. ASU 2019-10 and ASU 2016-13 are effective for years beginning after December 15, 2022, with early adoption permitted. The Company adopted the standard on January 1, 2023. ASU 2016-13 did not result in any material impact on the Company's consolidated financial statements and related disclosures. Recent Accounting Pronouncements — Not Yet Adopted In November 2023, the Financial Accounting Standards Board issued Accounting Standards Update No. 2023-07, Segment Reporting, which expands annual and interim disclosure requirements for reportable segments, primarily through enhanced disclosures about significant segment expenses. The updated standard is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. The Company is currently evaluating the impact that the updated standard will have on the financial statement disclosures. In December 2023, the Financial Accounting Standards Board issued Accounting Standards Update No. 2023-09, which requires more detailed income tax disclosures. The guidance requires entities to disclose disaggregated information about their effective tax rate reconciliation as well as expanded information on income taxes paid by jurisdiction. The disclosure requirements will be applied on a prospective basis, with the option to apply them retrospectively. The standard is effective for fiscal years beginning after December 15, 2024, with early adoption permitted. The Company is currently evaluating the impact that the updated standard will have on the financial statement disclosures. |
BASIS OF PRESENTATION AND SUM_3
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Accounting Policies [Abstract] | |
Schedule of Property and Equipment, Net | The estimated useful lives of the Company’s property and equipment are as follows: Computer equipment 3 – 4 years Software 3 years Furniture and fixtures 5 years Leasehold improvements Lesser of useful life or the term of the lease Property and equipment, net consisted of the following (in thousands): December 31, December 31, Computer equipment $ 19,278 $ 20,946 Software and voice recordings 9,714 9,420 Leasehold improvements 3,882 3,850 Furniture and fixtures 777 761 Total property and equipment, at cost 33,651 34,977 Less: accumulated depreciation and amortization (32,136) (31,530) Total property and equipment, net $ 1,515 $ 3,447 |
BUSINESS COMBINATION (Tables)
BUSINESS COMBINATION (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Reverse Recapitalization [Abstract] | |
Schedule of Reverse Recapitalization | The table below shows the total net proceeds from the Business Combination and the PIPE Investment (in thousands): Cash - ATSP trust and cash (net of redemption) $ 5,357 Cash - PIPE Investment 113,000 Less: transaction costs (27,668) Net proceeds from Business Combination and PIPE Investment $ 90,689 The number of shares of common stock issued immediately following the consummation of the Business Combination was as follows: Class A Common Stock - conversion of Legacy SoundHound Common Stock and Legacy SoundHound Preferred Stock outstanding prior to Business Combination 140,114,060 Class B Common Stock - conversion of Legacy SoundHound Common Stock and Legacy SoundHound Preferred Stock outstanding prior to Business Combination 40,396,600 Class A Common Stock - PIPE Investment 11,300,000 Class A Common Stock - issuance to ATSP shareholders 532,050 Class A Common Stock - issuance to Legacy SoundHound founders and representatives 4,161,000 Total shares of common stock immediately after Business Combination 196,503,710 |
REVENUE RECOGNITION (Tables)
REVENUE RECOGNITION (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Disaggregation of Revenue | For the years ended December 31, 2023, 2022 and 2021, revenue under each performance obligation was as follows (in thousands): Year Ended December 31, 2023 2022 2021 Licensing $ 18,600 $ 8,322 $ — Hosted services 18,364 17,743 12,764 Professional services 8,275 4,220 7,142 Monetization 634 844 1,291 Total $ 45,873 $ 31,129 $ 21,197 For the years ended December 31, 2023, 2022 and 2021, the disaggregated revenue by geographic location* was as follows (in thousands): Year Ended December 31, 2023 2022 2021 Korea $ 22,962 $ 14,530 $ 2,460 United States 6,769 3,344 4,030 Germany 5,950 4,134 7,526 France 4,090 4,023 2,616 Japan 3,707 3,866 3,797 Other 2,395 1,232 768 Total $ 45,873 $ 31,129 $ 21,197 *Revenue by geographic region is allocated to individual countries based on the billing location of the customer. The end customer location may be different than the customer's billing location. Year Ended December 31, 2023 2022 2021 Over time $ 25,757 $ 19,955 $ 15,210 Point-in-time 20,116 11,174 5,987 Total $ 45,873 $ 31,129 $ 21,197 Year Ended December 31, 2023 2022 2021 Product royalties $ 43,299 $ 28,447 $ 18,356 Service subscriptions 1,940 1,838 1,550 Monetization 634 844 1,291 Total $ 45,873 $ 31,129 $ 21,197 |
PROPERTY AND EQUIPMENT, NET (Ta
PROPERTY AND EQUIPMENT, NET (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment, Net | The estimated useful lives of the Company’s property and equipment are as follows: Computer equipment 3 – 4 years Software 3 years Furniture and fixtures 5 years Leasehold improvements Lesser of useful life or the term of the lease Property and equipment, net consisted of the following (in thousands): December 31, December 31, Computer equipment $ 19,278 $ 20,946 Software and voice recordings 9,714 9,420 Leasehold improvements 3,882 3,850 Furniture and fixtures 777 761 Total property and equipment, at cost 33,651 34,977 Less: accumulated depreciation and amortization (32,136) (31,530) Total property and equipment, net $ 1,515 $ 3,447 |
ACCRUED LIABILITIES (Tables)
ACCRUED LIABILITIES (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Other Liabilities Disclosure [Abstract] | |
Schedule of Accrued Liabilities | Accrued liabilities consisted of the following (in thousands): December 31, December 31, Accrued compensation expenses $ 6,961 $ 6,134 Accrued vendor payables 3,792 1,002 Accrued lender fees 2,603 — Accrued ELOC liability — 1,075 Accrued interest — 236 Other accrued liabilities 528 90 $ 13,884 $ 8,537 |
Commitment and Contingencies (T
Commitment and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Long-Term Purchase Commitment | Aggregate non-cancelable future minimum payments were as follows as of December 31, 2023 (in thousands): 2024 11,000 2025 14,000 2026 16,000 2027 24,000 2028 24,000 Total $ 89,000 |
NOTE PAYABLE (Tables)
NOTE PAYABLE (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Debt Disclosure [Abstract] | |
Schedule of Aggregate Maturities of Debt | The aggregate long-term debt maturities were as follows as of December 31, 2023 (in thousands): 2024 — 2025 — 2026 — 2027 100,000 Total 100,000 Less: unamortized discount (15,688) Long-term portion of debt $ 84,312 |
Schedule of Convertible Notes, Debt Balances | The following table summarizes the Company's debt balances as of December 31, 2023 and December 31, 2022 (in thousands): December 31, 2023 December 31, 2022 Term Loan $ 100,000 $ — SVB March 2021 Note — 22,050 SCI June 2021 Note — 12,979 Total debt $ 100,000 $ 35,029 Current portion of debt — (16,668) Unamortized discount and debt issuance costs (15,688) (62) Carrying value of long-term debt $ 84,312 $ 18,299 |
FAIR VALUE MEASUREMENT (Tables)
FAIR VALUE MEASUREMENT (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Fair Value Disclosures [Abstract] | |
Schedule of the Fair Value of the Company’s Financial Instruments | The following table presents the fair value of the Company's financial instruments that are measured or disclosed at fair value on a recurring basis (in thousands): December 31, 2023 Level 1 Level 2 Level 3 Assets: Cash equivalents: Treasury bills $ 35,961 $ — $ — Money market funds 54,542 $ — $ — Total assets $ 90,503 $ — $ — |
Schedule of Disclosed at Fair Value on a Recurring Basis | There were no financial instrument assets measured or disclosed at fair value on a recurring basis as of December 31, 2022. Equity Line of Credit Liabilities: Equity Line of Credit January 1, 2022 $ — Issuance of ELOC 1,075 December 31, 2022 1,075 Change in fair value 1,901 Settlements (2,976) December 31, 2023 $ — |
Schedule of Fair Value Measurement Inputs and Valuation Techniques | The Company utilized the following assumptions at the valuation date: December 31, 2021 Probability of Next Equity Financing 3 % Probability of SPAC/PIPE 95 % Probability of IPO 2 % 100 % Weighted average term (years) 0.27 Weighted average discount rate 25 % The Company determined the fair value of the Term Loan common stock warrant at issuance using the Black-Scholes option-pricing model using the following assumptions: Expected dividend rate — % Risk-free interest rate 3.60 % Expected volatility 52 % Expected term (in years) 5 As of December 31, 2023, no warrants related to the Term Loan had been exercised. |
Schedule of Fair Value Remeasurement | The following table summarizes the fair value remeasurement of the embedded derivative for the years ended December 31, 2022 and 2021 (in thousands): Year Ended December 31, 2022 2021 Remeasurement of conversion feature — loss $ (606) $ (1,108) |
Schedule of Derivative Liability and Warrant Liability | The following table sets forth a summary of changes in fair value of the Company’s derivative liability and warrant liability for which fair value was determined by Level 3 inputs: Derivative Liability Warrant Liability Balance as of December 31, 2020 $ 2,380 $ 2,004 Change in fair value $ 1,108 $ 3,812 Exercise of warrants $ — $ (5,816) Balance as of December 31, 2021 $ 3,488 $ — Change in fair value $ 606 $ — Extinguishment of embedded derivative upon conversion of convertible note $ (4,094) $ — Balance as of December 31, 2022 $ — $ — |
PREFERRED STOCK (Tables)
PREFERRED STOCK (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Equity [Abstract] | |
Schedule of Preferred Stock Authorized, Issued and Outstanding | A summary of the Legacy SoundHound Preferred Stock authorized, issued and outstanding as of the date of the Business Combination is as follows : Shares Authorized Shares Issued Liquidation Preference Carrying Value Series A 19,106,048 19,106,048 $ 28,239 $ 4,967 Series B 33,702,134 33,702,134 66,360 11,038 Series C 5,687,525 5,687,525 38,163 11,837 Series C-1 4,436,090 4,436,090 89,298 16,061 Series D 20,258,299 20,258,299 527,992 85,648 Series D-1 8,418,535 8,418,535 277,812 49,957 Series D-2 8,418,530 8,418,530 277,811 49,949 Series D-3 6,922,165 6,922,165 276,887 50,046 Series D-3A 20,835,869 — — — 127,785,195 106,949,326 $ 1,582,562 $ 279,503 |
STOCK INCENTIVE PLANS (Tables)
STOCK INCENTIVE PLANS (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Schedule of Stock Option Activity | Stock option activity under the Plans was as follows for the years ended December 31, 2023, 2022 and 2021: Number of Shares Weighted Average Exercise Price Weighted Average Aggregate Intrinsic Value (in Thousands) Outstanding, December 31, 2020 28,772,180 $ 2.38 Granted 6,303,953 7.22 Exercised (2,590,780) 0.96 9,667 Forfeited or cancelled (2,123,948) 3.13 Outstanding, December 31, 2021 30,361,405 $ 3.45 6.24 $ 168,705 Granted 391,619 6.17 Exercised (3,595,706) 1.16 22,534 Forfeited or cancelled (1,736,893) 4.63 Outstanding, December 31, 2022 25,420,425 3.74 6.32 1,448 Exercised (3,585,829) 2.37 — $ 5,207 Forfeited or cancelled (4,993,229) 5.24 — — Outstanding, December 31, 2023 16,841,367 $ 3.59 4.77 $ 1,392 Exercisable, December 31, 2023 15,084,586 3.26 4.45 1,392 |
Schedule of Share-Based Payment Award, Stock Options, Valuation Assumptions | The assumptions under the Black-Scholes option-pricing model during the years ended December 31, 2022 and 2021 were as follows for option awards: 2022 2021 Dividend yield 0 % 0 % Expected volatility 51 % 42 % Expected term (years) 5.88 6.01 Risk free interest rate 2.58 % 1.14 % Year Ended Year Ended December 31, 2023 December 31, 2022 Dividend yield 0 % 0 % Expected volatility 56 % 77 % Expected term (years) 0.49 0.52 Risk free interest rate 5.26 % 4.53 % Year Ended December 31, Expected volatility 52 % Expected term (years) 4 Drift rate 2.9 % |
Schedule of Nonvested Restricted Stock Units Activity | The activity for nonvested Restricted Stock Units under the Plans was as follows for the year ended December 31, 2023, 2022 and 2021: Number of Shares Weighted Average Grant Date Fair Value Nonvested, December 31, 2021 — — Granted 20,416,417 4.26 Vested (2,516,191) 4.99 Forfeited (1,183,843) 4.46 Nonvested, December 31, 2022 16,716,383 4.14 Granted 11,158,301 2.38 Vested (7,678,184) 3.32 Forfeited (3,852,909) 3.90 Nonvested, December 31, 2023 16,343,591 3.39 |
Schedule of Operations and Comprehensive Loss | Stock-based compensation is classified in the following expense accounts on the consolidated statements of operations and comprehensive loss for the years ended December 31, 2023, 2022 and 2021 (in thousands): Year Ended December 31, 2023 2022 2021 Cost of revenue $ 412 $ 99 $ — Sales and marketing 3,601 2,794 509 Research and development 11,992 13,986 4,434 General and administrative 8,784 11,913 1,379 Restructuring costs 3,142 — — Total $ 27,931 $ 28,792 $ 6,322 |
LEASES (Tables)
LEASES (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Leases [Abstract] | |
Schedule of Operating Lease, Liability | Aggregate non-cancelable future minimum lease payments under operating and finance leases were as follows as of December 31, 2023 (in thousands): Operating Finance Year Ending December 31: 2024 $ 3,250 $ 122 2025 928 12 2026 471 — 2027 471 — 2028 471 — Thereafter 785 — Total 6,376 134 Less: imputed interest (650) (5) Present value of lease liabilities 5,726 129 Less: current portion (2,637) (121) Lease liabilities, net of current portion $ 3,089 $ 8 |
Schedule of Finance Lease, Liability | Aggregate non-cancelable future minimum lease payments under operating and finance leases were as follows as of December 31, 2023 (in thousands): Operating Finance Year Ending December 31: 2024 $ 3,250 $ 122 2025 928 12 2026 471 — 2027 471 — 2028 471 — Thereafter 785 — Total 6,376 134 Less: imputed interest (650) (5) Present value of lease liabilities 5,726 129 Less: current portion (2,637) (121) Lease liabilities, net of current portion $ 3,089 $ 8 |
Schedule of Lease Cost | The components of lease cost were as follows during the years ended December 31, 2023, 2022 and 2021 (in thousands): Year Ended December 31, 2023 2022 2021 Operating lease cost $ 3,177 $ 3,423 $ 3,654 Short-term lease cost $ 1,298 $ 466 $ 524 Finance lease cost: Amortization of finance leased assets $ 161 $ 995 $ 2,575 Interest on lease liabilities $ 23 $ 79 $ 472 The table below presents additional information related to our leases as of December 31, 2023: Operating Finance Weighted average remaining lease term (years) 3.67 1.00 Weighted average discount rate 5.83 % 10.50 % |
OTHER INCOME (EXPENSE), NET (Ta
OTHER INCOME (EXPENSE), NET (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Other Expenses [Abstract] | |
Schedule of Other Income (Expense), Net | Other income (expense), net on the consolidated statements of operations and comprehensive loss is comprised of the following for the years ended December 31, 2023, 2022 and 2021 (in thousands): Year Ended December 31, 2023 2022 2021 Other income (expense), net: Interest income $ 2,866 $ 390 $ 7 Change in fair value of derivative and warrant liability — (606) (4,920) Loss on change in fair value of ELOC program (1,901) (1,075) — Other income (expense), net 190 32 (502) Total other income (expense), net $ 1,155 $ (1,259) $ (5,415) |
NET LOSS PER SHARE (Tables)
NET LOSS PER SHARE (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Earnings Per Share [Abstract] | |
Schedule of Calculation of Basic and Diluted Net Loss Per Share | The following table presents the calculation of basic and diluted net loss per share attributable to common stockholders for the years ended December 31, 2023, 2022 and 2021: Year Ended December 31, 2023 2022 2021 Numerator: Net loss (in thousands) $ (88,937) $ (116,713) $ (79,540) Cumulative dividends attributable to Series A Preferred Stock (2,774) — — Net loss attributable to SoundHound common shareholders (in thousands) (91,711) (116,713) (79,540) Denominator: Weighted average shares outstanding – basic and dilutive 229,264,904 157,317,695 67,255,538 Basic and diluted net loss per share $ (0.40) $ (0.74) $ (1.18) |
Schedule of Outstanding Shares of Potentially Dilutive Securities | The following table summarizes the outstanding shares of potentially dilutive securities that were excluded from the calculation of diluted earnings per share because their inclusion would have been anti-dilutive for the years ended December 31, 2023, 2022 and 2021: Year Ended December 31, 2023 2022 2021 Stock options 16,841,367 25,420,425 30,361,405 Restricted stock units 16,343,591 16,716,383 — Estimated ESPP stock units 299,116 476,636 — Common stock warrants 6,967,532 3,665,996 1,063,214 Redeemable convertible preferred stock — — 106,949,326 Series A Preferred Stock 16,226,645 — — Total 56,678,251 46,279,440 138,373,945 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
Schedule of Income Tax Provision | The following is a geographical breakdown of income (loss) before income taxes: Year Ended December 31, 2023 2022 2021 Domestic $ (86,724) $ (116,964) $ (79,962) Foreign 1,701 3,140 878 $ (85,023) $ (113,824) $ (79,084) The provision for income taxes consisted of the following: Year Ended December 31, 2023 2022 2021 Current provision: Federal $ — $ — $ — State 3 7 5 Foreign 3,881 755 339 Total current provision $ 3,884 $ 762 $ 344 Deferred provision: Federal $ — $ — $ — State — — — Foreign 30 2,127 112 Total deferred provision $ 30 $ 2,127 $ 112 Total provision for income taxes $ 3,914 $ 2,889 $ 456 Effective income tax expense rate (4.6) % (2.5) % (0.6) % |
Schedule of Effective Tax Rate | The provision for income taxes differed from the amount computed by applying the federal statutory rate to our income before income taxes as follows: Year Ended December 31, 2023 2022 2021 Federal statutory income tax rate 21.0 % 21.0 % 21.0 % Tax provision at statutory rate $ (17,855) $ (23,903) $ (16,608) State income tax rate 3 7 5 Foreign withholding and income tax 3,689 2,298 388 Foreign rate differential (136) (115) — Research and development credits (2,105) (1,731) (1,605) Change in valuation allowance 18,604 24,272 15,804 Stock based compensation 2,899 1,540 728 Permanent book tax differences 516 751 996 Other deferred adjustments (1,701) — — Other — (230) 748 $ 3,914 $ 2,889 $ 456 |
Schedule of Net Deferred Tax Assets | The components of our deferred tax assets and liabilities were as follows: Year Ended December 31, 2023 2022 Deferred tax assets: Net operating loss carryforwards $ 89,880 $ 79,060 Research and development credits 17,825 13,809 Property and equipment and intangible assets 227 178 Deferred revenue 767 1,612 Stock-based compensation 2,246 3,062 Operating lease liabilities 1,333 2,106 Section 174 research and development capitalization 21,186 13,319 Accruals and reserves 588 888 Other — 23 Total deferred tax assets 134,052 114,057 Valuation allowance (132,873) (112,204) Total deferred tax assets, net 1,179 1,853 Deferred tax liabilities: Right-of-use assets (1,168) (1,811) Total deferred tax liabilities (1,168) (1,811) Net deferred tax assets $ 11 $ 42 Recorded as: Non-current deferred tax assets $ 1,179 $ 55 Non-current deferred tax liabilities (included as a component of other non-current liabilities) (1,168) (13) Net deferred tax assets $ 11 $ 42 |
Schedule of Unrecognized Tax Benefits | Changes in gross unrecognized tax benefits during the periods presented were as follows (in thousands): Balance as of December 31, 2020 $ 4,301 Increase for tax positions of prior years 36 Increase for tax positions of current year 731 Balance as of December 31, 2021 $ 5,068 Increase for tax positions of prior years 0 Increase for tax positions of current year 1062 Balance as of December 31, 2022 6,130 Increase for tax positions of prior years 370 Increase for tax positions of current year 1,095 Balance as of December 31, 2023 $ 7,595 |
REVISION OF PREVIOUSLY ISSUED_2
REVISION OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Accounting Changes and Error Corrections [Abstract] | |
Schedule of Impact of revisions on the company’s financial statements | The following tables reflect the impact of these revisions on the Company’s unaudited condensed consolidated financial statements as of and for the three and six months ended June 30, 2023 ( dollars in thousands, except per share amounts ): June 30, 2023 Condensed Consolidated Balance Sheet As Previously Reported Adjustment As Revised Accrued liabilities $ 16,381 $ (2,872) $ 13,509 Total current liabilities 27,003 (2,872) 24,131 Notes payable, net of current portion 66,428 15,872 82,300 Other non-current liabilities 16,824 (12,821) 4,003 Total liabilities 118,789 179 118,968 Additional paid-in capital 564,197 3,597 567,794 Accumulated deficit (550,403) (3,776) (554,179) Total stockholders’ equity 38,789 (179) 38,610 Total liabilities and stockholders’ equity $ 157,578 $ — $ 157,578 Three Months Ended June 30, 2023 Condensed Consolidated Statements Of Operations And Comprehensive Loss As Previously Reported Adjustment As Revised General and administrative $ 6,377 $ 47 $ 6,424 Loss from operations (16,436) (47) (16,483) Other income (expense), net 493 (1,328) (835) Total other expense, net (5,079) (1,328) (6,407) Loss before provision for income taxes (21,515) (1,375) (22,890) Net loss (21,932) (1,375) (23,307) Less: accrual of Series A Preferred Stock paid-in-kind dividends — (877) (877) Net loss attributable to common stockholders $ (21,932) $ (2,252) $ (24,184) Net loss per share: Basic and diluted $ (0.10) $ (0.01) $ (0.11) Six Months Ended June 30, 2023 Condensed Consolidated Statements Of Operations And Comprehensive Loss As Previously Reported Adjustment As Revised General and administrative $ 13,502 $ 211 $ 13,713 Loss from operations (41,474) (211) (41,685) Other income (expense), net 587 (2,225) (1,638) Total other expense, net (6,081) (2,225) (8,306) Loss before provision for income taxes (47,555) (2,436) (49,991) Net loss (48,301) (2,436) (50,737) Less: accrual of Series A Preferred Stock paid-in-kind dividends — (1,559) (1,559) Net loss attributable to common stockholders $ (48,301) $ (3,995) $ (52,296) Net loss per share: Basic and diluted $ (0.23) $ (0.02) $ (0.25) Three Months Ended June 30, 2023 Condensed Consolidated Statement of Stockholders' Equity (Deficit) As Previously Reported Adjustment As Revised Additional paid-in capital $ 564,197 $ 3,597 $ 567,794 Accumulated deficit (550,403) (3,776) (554,179) Net loss $ (21,932) $ (1,375) $ (23,307) Six Months Ended June 30, 2023 Condensed Consolidated Statements of Cash Flows As Previously Reported Adjustment As Revised Net loss $ (48,301) $ (2,436) $ (50,737) Adjustments to reconcile net loss to net cash used in operating activities: Loss on change in fair value of ELOC program — 1,901 1,901 Changes in operating assets and liabilities Other non-current assets 628 (265) 363 Accrued liabilities 5,045 250 5,295 Net cash used in operating activities (33,651) (550) (34,201) Proceeds from sales of common stock under the ELOC program, net 70,905 550 71,455 Net cash provided by financing activities $ 154,008 $ 550 $ 154,558 Noncash financing activities: Accrued and unpaid debt issuance costs $ 16,461 $ (16,461) $ — Non-cash debt discount 4,315 (179) 4,136 Issuance of common stock to settle commitment shares related to the ELOC program $ — $ 915 $ 915 The following tables reflect the impact of these revisions on the Company’s unaudited condensed consolidated financial statements as of and for the three months ended March 31, 2023 ( dollars in thousands, except per share amounts ): March 31, 2023 Condensed Consolidated Balance Sheet As Previously Reported Adjustment As Revised Other non-current assets $ 2,074 $ (432) $ 1,642 Total assets 72,803 (432) 72,371 Additional paid-in capital 505,889 1,969 507,858 Accumulated deficit (528,471) (2,401) (530,872) Total stockholders’ deficit 2,382 (432) 1,950 Total liabilities and stockholders’ deficit $ 72,803 $ (432) $ 72,371 Three Months Ended March 31, 2023 Condensed Consolidated Statements Of Operations And Comprehensive Loss As Previously Reported Adjustment As Revised General and administrative $ 7,125 $ 165 $ 7,290 Loss from operations (25,038) (165) (25,203) Other income (expense), net 94 (896) (802) Total other expense, net (1,002) (896) (1,898) Loss before provision for income taxes (26,040) (1,061) (27,101) Net loss (26,369) (1,061) (27,430) Less: accrual of Series A Preferred Stock paid-in-kind dividends — (682) (682) Net loss attributable to common stockholders $ (26,369) $ (1,743) $ (28,112) Net loss per share: Basic and diluted $ (0.13) $ (0.01) $ (0.14) Three Months Ended March 31, 2023 Condensed Consolidated Statement of Stockholders' Equity (Deficit) As Previously Reported Adjustment As Revised Additional paid-in capital $ 505,889 $ 1,969 $ 507,858 Accumulated deficit (528,471) (2,401) (530,872) Net loss $ (26,369) $ (1,061) $ (27,430) Three Months Ended March 31, 2023 Condensed Consolidated Statements of Cash Flows As Previously Reported Adjustment As Revised Net loss $ (26,369) $ (1,061) $ (27,430) Adjustments to reconcile net loss to net cash used in operating activities: Loss on change in fair value of ELOC program — 571 571 Changes in operating assets and liabilities Other non-current assets 19 167 186 Accrued liabilities 4,306 250 4,556 Net cash used in operating activities (14,467) (73) (14,540) Payment of financing costs associated with ELOC program — (250) (250) Proceeds from sales of common stock under the ELOC program, net 28,360 323 28,683 Net cash provided by financing activities $ 51,568 $ 73 $ 51,641 Noncash financing activities: Issuance of common stock to settle commitment shares related to the ELOC program $ — $ 915 $ 915 The following tables reflect the impact of these revisions on the Company’s consolidated financial statements as of and for the year ended December 31, 2022 ( dollars in thousands, except per share amounts ): December 31, 2022 Consolidated Balance Sheet As Previously Reported Adjustment As Revised Other non-current assets $ 1,656 $ (265) $ 1,391 Total assets 38,251 (265) 37,986 Accrued liabilities 7,462 1,075 8,537 Total current liabilities 37,496 1,075 38,571 Additional paid-in capital 466,857 — 466,857 Accumulated deficit (502,102) (1,340) (503,442) Total stockholders’ deficit (35,225) (1,340) (36,565) Total liabilities and stockholders’ deficit $ 38,251 $ (265) $ 37,986 Year Ended December 31, 2022 Consolidated Statements Of Operations And Comprehensive Loss As Previously Reported Adjustment As Revised General and administrative $ 30,178 $ 265 $ 30,443 Loss from operations (105,407) (265) (105,672) Other income (expense), net (184) (1,075) (1,259) Total other expense, net (7,077) (1,075) (8,152) Loss before provision for income taxes (112,484) (1,340) (113,824) Net loss $ (115,373) $ (1,340) $ (116,713) Net loss per share: Basic and diluted $ (0.73) $ (0.01) $ (0.74) Year Ended December 31, 2022 Consolidated Statement of Stockholders' Equity (Deficit) As Previously Reported Adjustment As Revised Accumulated deficit $ (502,102) $ (1,340) $ (503,442) Net loss $ (115,373) $ (1,340) $ (116,713) Year Ended December 31, 2022 Consolidated Statements of Cash Flows As Previously Reported Adjustment As Revised Net loss $ (115,373) $ (1,340) $ (116,713) Adjustments to reconcile net loss to net cash used in operating activities: Loss on change in fair value of ELOC program — 1,075 1,075 Changes in operating assets and liabilities Other non-current assets (539) 265 (274) Net cash used in operating activities $ (94,019) $ — $ (94,019) |
ORGANIZATION (Details)
ORGANIZATION (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||
Jun. 30, 2023 | Mar. 31, 2023 | Jun. 30, 2023 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Apr. 26, 2022 | |
Organization [Line Items] | |||||||
Common stock, par value (in dollars per share) | $ 0.0001 | ||||||
Net loss | $ 23,307 | $ 27,430 | $ 50,737 | $ 88,937 | $ 116,713 | $ 79,540 | |
Accumulated deficit | $ 554,179 | $ 530,872 | $ 554,179 | 592,379 | 503,442 | ||
Cash and cash equivalents | $ 95,260 | $ 9,245 | $ 21,626 | ||||
Class A Common Stock | |||||||
Organization [Line Items] | |||||||
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 | 0.0001 | ||||
Class B Common Stock | |||||||
Organization [Line Items] | |||||||
Common stock, par value (in dollars per share) | $ 0.0001 |
BASIS OF PRESENTATION AND SUM_4
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Property, Plant and Equipment [Line Items] | |||
Losses related to foreign currency | $ 0.5 | $ 0.7 | $ 0.5 |
Customer A | Accounts Receivable | Customer Concentration Risk | |||
Property, Plant and Equipment [Line Items] | |||
Concentration risk, percentage | 40% | 49% | |
Customer A | Unbilled Receivables | Customer Concentration Risk | |||
Property, Plant and Equipment [Line Items] | |||
Concentration risk, percentage | 59% | 31% | |
Customer A | Revenue | Customer Concentration Risk | |||
Property, Plant and Equipment [Line Items] | |||
Concentration risk, percentage | 49% | 42% | |
Customer B | Unbilled Receivables | Customer Concentration Risk | |||
Property, Plant and Equipment [Line Items] | |||
Concentration risk, percentage | 16% | 19% | |
Customer B | Revenue | Customer Concentration Risk | |||
Property, Plant and Equipment [Line Items] | |||
Concentration risk, percentage | 13% | ||
Customer C | Accounts Receivable | Customer Concentration Risk | |||
Property, Plant and Equipment [Line Items] | |||
Concentration risk, percentage | 32% | 26% | |
Customer C | Unbilled Receivables | Customer Concentration Risk | |||
Property, Plant and Equipment [Line Items] | |||
Concentration risk, percentage | 11% | 28% | |
Customer C | Revenue | Customer Concentration Risk | |||
Property, Plant and Equipment [Line Items] | |||
Concentration risk, percentage | 13% | 12% | |
Customer D | Revenue | Customer Concentration Risk | |||
Property, Plant and Equipment [Line Items] | |||
Concentration risk, percentage | 12% | 18% | |
Customer E | Accounts Receivable | Customer Concentration Risk | |||
Property, Plant and Equipment [Line Items] | |||
Concentration risk, percentage | 15% | ||
Customer F | Revenue | Customer Concentration Risk | |||
Property, Plant and Equipment [Line Items] | |||
Concentration risk, percentage | 31% |
BASIS OF PRESENTATION AND SUM_5
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Schedule of Estimated Useful Lives Company' s Property and Equipment (Details) | Dec. 31, 2023 |
Computer equipment | Minimum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | 3 years |
Computer equipment | Maximum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | 4 years |
Software | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | 3 years |
Furniture and fixtures | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | 5 years |
BUSINESS COMBINATION - Narrativ
BUSINESS COMBINATION - Narratives (Details) $ / shares in Units, $ in Thousands | 12 Months Ended | ||||
Apr. 26, 2022 USD ($) votePerShare $ / shares shares | Dec. 31, 2023 USD ($) $ / shares shares | Dec. 31, 2022 USD ($) $ / shares shares | Dec. 31, 2021 USD ($) | Apr. 25, 2022 shares | |
Schedule of Reverse Recapitalization [Line Items] | |||||
Shares authorized (in shares) | 500,000,000 | ||||
Common stock authorized (in shares) | 250,030,433 | ||||
Preferred stock, shares authorized (in shares) | 1,000,000 | 1,000,000 | 1,000,000 | 127,785,195 | |
Common stock, par value (in dollars per share) | $ / shares | $ 0.0001 | ||||
Preferred stock par value (in dollars per share) | $ / shares | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||
Conversion of stock, share conversion rate (in shares) | 5.5562 | ||||
Net proceeds from Business Combination and PIPE Investment | $ | $ 90,689 | $ 0 | $ 90,689 | $ 0 | |
Transaction costs | $ | 27,668 | ||||
PIPE financing | $ | 86,600 | 86,585 | |||
Stock issued in acquisitions | $ | 4,100 | $ 4,106 | |||
Legacy Sound Hound | |||||
Schedule of Reverse Recapitalization [Line Items] | |||||
Transaction costs | $ | $ 4,100 | ||||
Class A Common Stock | |||||
Schedule of Reverse Recapitalization [Line Items] | |||||
Common stock authorized (in shares) | 455,000,000 | 455,000,000 | 455,000,000 | ||
Common stock, par value (in dollars per share) | $ / shares | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||
Number of votes per share | votePerShare | 1 | ||||
Sale of shares (in shares) | 11,300,000 | ||||
Consideration received on transaction | $ | $ 113,000 | ||||
Conversion of shares (in shares) | 140,114,060 | ||||
Class A Common Stock | IPO | Archimedes Tech SPAC Partners Co, ATSP | |||||
Schedule of Reverse Recapitalization [Line Items] | |||||
Sale of shares (in shares) | 12,767,950 | ||||
Per share price (in dollars per share) | $ / shares | $ 10 | ||||
Consideration received on transaction | $ | $ 127,700 | ||||
Class A Common Stock | Private Investment In Public Equity | |||||
Schedule of Reverse Recapitalization [Line Items] | |||||
Per share price (in dollars per share) | $ / shares | $ 10 | ||||
Class B Common Stock | |||||
Schedule of Reverse Recapitalization [Line Items] | |||||
Common stock authorized (in shares) | 44,000,000 | 44,000,000 | 44,000,000 | ||
Common stock, par value (in dollars per share) | $ / shares | $ 0.0001 | ||||
Number of votes per share | votePerShare | 10 | ||||
Conversion of shares (in shares) | 40,396,600 |
BUSINESS COMBINATION - Schedule
BUSINESS COMBINATION - Schedule of Total Net Proceeds from the Business Combination and the PIPE Investment (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Apr. 26, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Reverse Recapitalization [Abstract] | ||||
Cash - ATSP trust and cash (net of redemption) | $ 5,357 | |||
Cash - PIPE Investment | 113,000 | $ 12,412 | $ 0 | $ 0 |
Less: transaction costs | (27,668) | |||
Net proceeds from Business Combination and PIPE Investment | $ 90,689 | $ 0 | $ 90,689 | $ 0 |
BUSINESS COMBINATION - Schedu_2
BUSINESS COMBINATION - Schedule of Common Stock Issued for the Consummation of the Business Combination (Details) - shares | Apr. 26, 2022 | Dec. 31, 2023 | Dec. 31, 2022 |
Schedule of Reverse Recapitalization [Line Items] | |||
Common stock, shares outstanding (in shares) | 196,503,710 | ||
Class A Common Stock | |||
Schedule of Reverse Recapitalization [Line Items] | |||
Common stock issued to initial stockholders (in shares) | 11,300,000 | ||
Common stock, shares outstanding (in shares) | 216,943,349 | 160,297,664 | |
Class A Common Stock | Archimedes Tech SPAC Partners Co, ATSP | |||
Schedule of Reverse Recapitalization [Line Items] | |||
Issuance of Class A common shares pursuant to the business combination (in shares) | 532,050 | ||
Class A Common Stock | Legacy Founders | |||
Schedule of Reverse Recapitalization [Line Items] | |||
Issuance of Class A common shares pursuant to the business combination (in shares) | 4,161,000 | ||
Class A Common Stock | Legacy Sound Hound | |||
Schedule of Reverse Recapitalization [Line Items] | |||
Outstanding shares (in shares) | 140,114,060 | ||
Class B Common Stock | |||
Schedule of Reverse Recapitalization [Line Items] | |||
Common stock, shares outstanding (in shares) | 37,485,408 | 39,735,408 | |
Class B Common Stock | Legacy Sound Hound | |||
Schedule of Reverse Recapitalization [Line Items] | |||
Outstanding shares (in shares) | 40,396,600 |
REVENUE RECOGNITION- Narrative
REVENUE RECOGNITION- Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Disaggregation of Revenue [Line Items] | |||
Contract terms of hosted services range | Hosted services, along with non-distinct customization, integration, maintenance and support professional services, allow customers to access the Houndify platform over the contract period without taking possession of the software. The contract terms of hosted services range from one year to twenty years. | ||
Expected recognized revenue | $ 7,900 | $ 6,400 | $ 14,900 |
Accounts receivable, net of allowances | 4,050 | 3,414 | 2,100 |
Contract assets and unbilled revenue, net | 11,780 | 1,671 | 54 |
Deferred revenue | 21,000 | ||
Revenues | 45,873 | 31,129 | 21,197 |
Increase to contract asset balance upon modification of minimum guarantee units | 10,400 | ||
Unbilled receivables included in balance of contract assets | 5,100 | 3,500 | |
Revenue, remaining performance obligation, amount | 12,700 | ||
Houndify Edge Solution | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 7,600 | ||
Licensing | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 18,600 | 8,322 | 0 |
Revenue recognized for new contract | 3,600 | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-01-01 | |||
Disaggregation of Revenue [Line Items] | |||
Revenue, remaining performance obligation, amount | $ 6,400 | ||
Revenue, remaining performance obligation, expected timing of satisfaction, period | 1 year | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2025-01-01 | |||
Disaggregation of Revenue [Line Items] | |||
Revenue, remaining performance obligation, amount | $ 3,300 | ||
Revenue, remaining performance obligation, expected timing of satisfaction, period | 2 years | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2029-01-01 | |||
Disaggregation of Revenue [Line Items] | |||
Revenue, remaining performance obligation, amount | $ 3,000 | ||
Revenue, remaining performance obligation, expected timing of satisfaction, period | 5 years | ||
Over time | |||
Disaggregation of Revenue [Line Items] | |||
Expected recognized revenue | $ 7,400 | 2,200 | 2,400 |
Revenues | 25,757 | 19,955 | 15,210 |
Point-in-time | |||
Disaggregation of Revenue [Line Items] | |||
Expected recognized revenue | 900 | 2,000 | 4,700 |
Revenues | $ 20,116 | $ 11,174 | $ 5,987 |
REVENUE RECOGNITION (Details) -
REVENUE RECOGNITION (Details) - Schedule of Revenues Under Each Performance (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Disaggregation of Revenue [Line Items] | |||
Revenues | $ 45,873 | $ 31,129 | $ 21,197 |
Licensing | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 18,600 | 8,322 | 0 |
Hosted services | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 18,364 | 17,743 | 12,764 |
Professional services | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 8,275 | 4,220 | 7,142 |
Monetization | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | $ 634 | $ 844 | $ 1,291 |
REVENUE RECOGNITION (Details)_2
REVENUE RECOGNITION (Details) - Schedule of Disaggregates Revenue by Geographic Location (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Disaggregation of Revenue [Line Items] | |||
Revenues | $ 45,873 | $ 31,129 | $ 21,197 |
Korea | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 22,962 | 14,530 | 2,460 |
United States | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 6,769 | 3,344 | 4,030 |
Germany | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 5,950 | 4,134 | 7,526 |
France | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 4,090 | 4,023 | 2,616 |
Japan | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 3,707 | 3,866 | 3,797 |
Other | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | $ 2,395 | $ 1,232 | $ 768 |
REVENUE RECOGNITION (Details)_3
REVENUE RECOGNITION (Details) - Schedule of Revenue Recognition Pattern (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Disaggregation of Revenue [Line Items] | |||
Revenues | $ 45,873 | $ 31,129 | $ 21,197 |
Over time | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 25,757 | 19,955 | 15,210 |
Point-in-time | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | $ 20,116 | $ 11,174 | $ 5,987 |
REVENUE RECOGNITION (Details)_4
REVENUE RECOGNITION (Details) - Schedule of Service (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Disaggregation of Revenue [Line Items] | |||
Revenues | $ 45,873 | $ 31,129 | $ 21,197 |
Product royalties | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 43,299 | 28,447 | 18,356 |
Service subscriptions | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 1,940 | 1,838 | 1,550 |
Monetization | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | $ 634 | $ 844 | $ 1,291 |
PROPERTY AND EQUIPMENT, NET - S
PROPERTY AND EQUIPMENT, NET - Schedule of Property and Equipment, Net (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Property, Plant and Equipment [Line Items] | ||
Total property and equipment, at cost | $ 33,651 | $ 34,977 |
Less: accumulated depreciation and amortization | (32,136) | (31,530) |
Total property and equipment, net | 1,515 | 3,447 |
Computer equipment | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment, at cost | 19,278 | 20,946 |
Software and voice recordings | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment, at cost | 9,714 | 9,420 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment, at cost | 3,882 | 3,850 |
Furniture and fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment, at cost | $ 777 | $ 761 |
PROPERTY AND EQUIPMENT, NET- Na
PROPERTY AND EQUIPMENT, NET- Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Property, Plant and Equipment, Net [Abstract] | |||
Finance lease right of use asset | $ 0.5 | $ 0.6 | |
Accumulated depreciation | 0.1 | 0.3 | |
Depreciation and amortization expense | $ 2.3 | $ 4 | $ 5.5 |
ACCRUED LIABILITIES (Details)
ACCRUED LIABILITIES (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Jun. 30, 2023 | Dec. 31, 2022 |
Other Liabilities Disclosure [Abstract] | |||
Accrued compensation expenses | $ 6,961 | $ 6,134 | |
Accrued vendor payables | 3,792 | 1,002 | |
Accrued lender fees | 2,603 | 0 | |
Accrued ELOC liability | 0 | 1,075 | |
Accrued interest | 0 | 236 | |
Other accrued liabilities | 528 | 90 | |
Accrued liabilities | $ 13,884 | $ 13,509 | $ 8,537 |
COMMITMENTS AND CONTINGENCIES-
COMMITMENTS AND CONTINGENCIES- Narrative (Details) - USD ($) $ in Millions | 1 Months Ended | ||
Aug. 31, 2021 | Dec. 31, 2023 | Dec. 31, 2022 | |
Short-Term Debt [Line Items] | |||
Committed to pay a minimum cost | $ 98 | ||
Commitment period | 7 years | ||
Possible Sales Tax Liability | |||
Short-Term Debt [Line Items] | |||
Potential settlement accrued | $ 0.2 | $ 1.1 |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - Schedule of Aggregate Noncancelable Future Minimum Payments (Details) $ in Thousands | Dec. 31, 2023 USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2024 | $ 11,000 |
2025 | 14,000 |
2026 | 16,000 |
2027 | 24,000 |
2028 | 24,000 |
Total | $ 89,000 |
WARRANTS (Details)
WARRANTS (Details) - USD ($) $ / shares in Units, $ in Millions | Apr. 14, 2023 | Apr. 25, 2022 | Dec. 31, 2023 | Apr. 26, 2022 |
Term Loan Warrants | ||||
Class of Warrant or Right [Line Items] | ||||
Detachable warrant exercise price (in dollars per share) | $ 2.59 | |||
Warrants exercised (in shares) | 3,301,536 | 3,301,536 | ||
Anniversary term | 10 years | |||
Warrant fair value | $ 4.1 | |||
Private Warrants | ||||
Class of Warrant or Right [Line Items] | ||||
Warrant outstanding (in shares) | 3,665,996 | |||
Archimedes Tech SPAC Partners Co, ATSP | Public Warrants | ||||
Class of Warrant or Right [Line Items] | ||||
Detachable warrant exercise price (in dollars per share) | $ 11.50 | |||
Archimedes Tech SPAC Partners Co, ATSP | Public Warrants | Share Price Equal or Exceeds Eighteen Dollars | ||||
Class of Warrant or Right [Line Items] | ||||
Redemption price (in dollars per share) | $ 0.01 | |||
Redemption notice period | 30 days | |||
Trigger price (in dollars per share) | 18 | |||
Archimedes Tech SPAC Partners Co, ATSP | Public Warrants | Share Price Equal or Exceeds Eighteen Dollars | Minimum | ||||
Class of Warrant or Right [Line Items] | ||||
Number of consecutive trading days for determining share price | 20 days | |||
Archimedes Tech SPAC Partners Co, ATSP | Public Warrants | Share Price Equal or Exceeds Eighteen Dollars | Maximum | ||||
Class of Warrant or Right [Line Items] | ||||
Number of consecutive trading days for determining share price | 30 days | |||
Class A Common Stock | ||||
Class of Warrant or Right [Line Items] | ||||
Sale of public shares (in shares) | 673,416 | |||
SVB March 2021 Notes | ||||
Class of Warrant or Right [Line Items] | ||||
Issued detachable warrant (in shares) | 708,808 | |||
Detachable warrant exercise price (in dollars per share) | $ 3.67 | |||
SCI June 2021 | ||||
Class of Warrant or Right [Line Items] | ||||
Issued detachable warrant (in shares) | 354,404 | |||
Detachable warrant exercise price (in dollars per share) | $ 3.67 |
NOTE PAYABLE - Narratives (Deta
NOTE PAYABLE - Narratives (Details) - USD ($) | 1 Months Ended | 12 Months Ended | ||||||||||
Apr. 14, 2023 | Apr. 14, 2023 | Apr. 14, 2023 | Apr. 26, 2022 | Dec. 01, 2021 | Jun. 14, 2021 | Jun. 30, 2020 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | |
Debt Instrument [Line Items] | ||||||||||||
Conversion of convertible note into common stock pursuant to Business Combination | $ 0 | $ 20,239,000 | $ 0 | |||||||||
Interest expense | 17,570,000 | 6,893,000 | 8,342,000 | |||||||||
Loss on debt extinguishment | 837,000 | 0 | 0 | |||||||||
Cash paid for interest | 11,984,000 | $ 4,364,000 | 2,631,000 | |||||||||
Notes Payable, Other Payables | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Extinguishment of debt amount | $ 30,000,000 | |||||||||||
Common Stock | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Conversion of convertible note (in shares) | 2,046,827 | 2,046,827 | ||||||||||
SNAP June 2020 Note | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Aggregate proceeds | $ 15,000,000 | |||||||||||
Interest rate, stated percentage | 5% | |||||||||||
Total interest expense | $ 700,000 | 2,000,000 | ||||||||||
Amortization of the debt discount | $ 400,000 | $ 1,300,000 | ||||||||||
Debt instrument, effective percentage | 14.30% | 14.30% | ||||||||||
Conversion of convertible note into common stock pursuant to Business Combination | $ 15,000,000 | |||||||||||
Debt conversion, converted instrument, interest amount converted | 1,400,000 | |||||||||||
Write off of deferred debt issuance cost | 200,000 | |||||||||||
Writeoff of derivative liability | $ 4,100,000 | |||||||||||
SVB March 2021 Notes | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Total interest expense | 600,000 | $ 2,800,000 | $ 2,100,000 | |||||||||
Amortization of the debt discount | $ 16,000 | $ 1,000,000 | $ 2,400,000 | |||||||||
Debt instrument, effective percentage | 13.75% | |||||||||||
Borrowings | $ 30,000,000 | |||||||||||
Loan bears interest rate, percentage | 9% | |||||||||||
Prepayment premium | $ 3,500,000 | |||||||||||
Interest payable | 100,000 | $ 100,000 | $ 100,000 | |||||||||
Effective interest rate (percent) | 13.40% | 14.90% | 20.90% | |||||||||
Extinguishment of debt amount | 18,500,000 | |||||||||||
Repayments of debt | 18,100,000 | |||||||||||
Prepayment premium | 300,000 | 300,000 | 300,000 | |||||||||
Loss on debt extinguishment | 400,000 | |||||||||||
SVB March 2021 Notes | Prime Rate | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Loan bears interest rate, prime percentage | 5.75% | |||||||||||
SCI June 2021 Note | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Amortization of the debt discount | $ 31,000 | $ 800,000 | $ 1,000,000 | |||||||||
Loan bears interest rate, percentage | 9% | |||||||||||
Interest expense | $ 500,000 | $ 1,500,000 | $ 300,000 | |||||||||
Effective interest rate (percent) | 18.60% | 17.30% | 26.10% | |||||||||
Extinguishment of debt amount | 11,700,000 | |||||||||||
Repayments of debt | 11,500,000 | |||||||||||
Prepayment premium | $ 200,000 | $ 200,000 | $ 200,000 | |||||||||
Loss on debt extinguishment | $ 400,000 | |||||||||||
Incremental extension amount | $ 5,000,000 | |||||||||||
Maximum borrowing capacity | $ 15,000,000 | |||||||||||
Proceeds from lines of credit | $ 10,000,000 | $ 5,000,000 | ||||||||||
SCI June 2021 Note | Prime Rate | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Loan bears interest rate, prime percentage | 5.75% | |||||||||||
Term Loan | Secured Debt | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Additional required payment as a percentage of amounts in excess of cash premiums paid (percent) | 14% | 14% | 14% | |||||||||
Term Loan | Secured Debt | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Maximum borrowing capacity | $ 100,000,000 | $ 100,000,000 | $ 100,000,000 | |||||||||
Additional borrowing capacity | $ 25,000,000 | $ 25,000,000 | $ 25,000,000 | |||||||||
Term Loan | Secured Debt | Debt Instrument, Cash Premium Repayments, Period One | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Percentage of term loan required to be paid (percent) | 3.50% | 3.50% | 3.50% | |||||||||
Term Loan | Secured Debt | Debt Instrument, Cash Premium Repayments, Period Three | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Percentage of term loan required to be paid (percent) | 2.50% | 2.50% | 2.50% | |||||||||
Term Loan | Secured Overnight Financing Rate | Secured Debt | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Loan bears interest rate, prime percentage | 0.15% | 8.50% | ||||||||||
Term Loan | Fed Funds Effective Rate Overnight Index Swap Rate | Secured Debt | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Loan bears interest rate, prime percentage | 0.50% | |||||||||||
Term Loan | Adjustable Rate | Secured Debt | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Loan bears interest rate, prime percentage | 1% | |||||||||||
Term Loan | Alternate Base Rate | Secured Debt | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Loan bears interest rate, prime percentage | 7.50% | |||||||||||
Term Loan | US Treasury (UST) Interest Rate | Secured Debt | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Loan bears interest rate, prime percentage | 0.50% | |||||||||||
Notes Payable, Other Payables | Secured Debt | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Interest rate, stated percentage | 14% | |||||||||||
Total interest expense | $ 9,900,000 | |||||||||||
Debt instrument, effective percentage | 25.18% | |||||||||||
Cash paid for interest | $ 9,900,000 | |||||||||||
Amortization of debt discount | $ 5,400,000 | |||||||||||
Discount amortization period | 3 years 3 months 29 days |
NOTE PAYABLE - Schedule of Aggr
NOTE PAYABLE - Schedule of Aggregate Maturities of Debt (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Debt Disclosure [Abstract] | ||
2024 | $ 0 | |
2025 | 0 | |
2026 | 0 | |
2027 | 100,000 | |
Total | 100,000 | $ 35,029 |
Less: unamortized discount | (15,688) | $ (62) |
Long-term portion of debt | $ (84,312) |
NOTE PAYABLE - Schedule of Conv
NOTE PAYABLE - Schedule of Convertible Notes, Debt Balances (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Debt Instrument [Line Items] | ||
Total | $ 100,000 | $ 35,029 |
Current portion of debt | 0 | (16,668) |
Less: unamortized discount | (15,688) | (62) |
Carrying value of long-term debt | 84,312 | 18,299 |
SVB March 2021 Notes | Notes Payable, Other Payables | ||
Debt Instrument [Line Items] | ||
Total | 0 | 22,050 |
SCI June 2021 Note | Notes Payable, Other Payables | ||
Debt Instrument [Line Items] | ||
Total | 0 | 12,979 |
Secured Debt | Term Loan | ||
Debt Instrument [Line Items] | ||
Total | $ 100,000 | $ 0 |
RESTRUCTURING (Details)
RESTRUCTURING (Details) $ in Thousands | 1 Months Ended | 12 Months Ended | ||
Jan. 31, 2023 employee | Dec. 31, 2023 USD ($) | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | |
Restructuring and Related Activities [Abstract] | ||||
Reduction in workforce | 40% | |||
Number of positions eliminated (in employees) | employee | 180 | |||
Restructuring | $ 4,557 | $ 0 | $ 0 | |
Payments for restructuring | $ 1,400 |
FAIR VALUE MEASUREMENT - Schedu
FAIR VALUE MEASUREMENT - Schedule of Fair Value Assets Measured on a Recurring Basis (Details) - Fair Value, Recurring - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | $ 0 | |
Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | $ 90,503,000 | |
Level 1 | Treasury bills | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 35,961,000 | |
Level 1 | Money market funds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 54,542,000 | |
Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | 0 | |
Level 2 | Treasury bills | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 0 | |
Level 2 | Money market funds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 0 | |
Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | 0 | |
Level 3 | Treasury bills | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 0 | |
Level 3 | Money market funds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | $ 0 |
FAIR VALUE MEASUREMENT - Sche_2
FAIR VALUE MEASUREMENT - Schedule of Fair Value, Liabilities Measured on Recurring Basis (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||
Change in fair value | $ (606,000) | $ (1,108,000) | |
Fair Value, Recurring | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Fair value, asset measurement | 0 | ||
Fair Value, Recurring | Equity Line of Credit | |||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||
Liability, beginning balance | $ 1,075,000 | 0 | |
Issuance of ELOC | 1,075,000 | ||
Change in fair value | 1,901,000 | ||
Settlements | (2,976,000) | ||
Liability, ending balance | $ 0 | $ 1,075,000 | $ 0 |
FAIR VALUE MEASUREMENT - Narrat
FAIR VALUE MEASUREMENT - Narrative (Details) $ in Thousands | 1 Months Ended | 12 Months Ended | |||||
Dec. 31, 2021 USD ($) | Dec. 31, 2023 USD ($) | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Apr. 14, 2023 USD ($) | Aug. 16, 2022 shares | Apr. 26, 2022 USD ($) | |
Fair Value Disclosure, Asset and Liability, Not Measured at Fair Value [Line Items] | |||||||
Embedded derivative, fair value of embedded derivative liability | $ 4,100 | ||||||
Derivative, nonmonetary notional amount | shares | 25,000,000 | ||||||
Change in fair value | $ (606) | $ (1,108) | |||||
Change in fair value of derivative and warrant liability | $ 0 | $ 606 | $ 4,920 | ||||
Term Loan Warrants | |||||||
Fair Value Disclosure, Asset and Liability, Not Measured at Fair Value [Line Items] | |||||||
Warrant fair value | $ 4,100 | ||||||
Equity Line of Credit | Fair Value, Recurring | |||||||
Fair Value Disclosure, Asset and Liability, Not Measured at Fair Value [Line Items] | |||||||
Change in fair value | 1,901 | ||||||
Common Stock Purchase Agreement | |||||||
Fair Value Disclosure, Asset and Liability, Not Measured at Fair Value [Line Items] | |||||||
Embedded derivative, fair value of embedded derivative liability | 1,100 | ||||||
Series C | |||||||
Fair Value Disclosure, Asset and Liability, Not Measured at Fair Value [Line Items] | |||||||
Change in fair value of derivative and warrant liability | $ 3,800 | ||||||
Preferred stock fair value | $ 5,800 | ||||||
Level 3 | Weighted average discount rate | |||||||
Fair Value Disclosure, Asset and Liability, Not Measured at Fair Value [Line Items] | |||||||
Discount rate | 0.03 |
FAIR VALUE MEASUREMENT - Sche_3
FAIR VALUE MEASUREMENT - Schedule of Value of the Embedded Derivative Was Determined as the Differential Value From the Perspective of the With and Without Method (Details) | Dec. 31, 2021 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Derivative liability, measurement input | 1 |
Probability of Next Equity Financing | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Derivative liability, measurement input | 0.03 |
Probability of SPAC/PIPE | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Derivative liability, measurement input | 0.95 |
Probability of IPO | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Derivative liability, measurement input | 0.02 |
Weighted average term (years) | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Derivative liability, measurement input | 0.27 |
Weighted average discount rate | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Derivative liability, measurement input | 0.25 |
FAIR VALUE MEASUREMENT - Sche_4
FAIR VALUE MEASUREMENT - Schedule of Fair Value Remeasurement of the Embedded Derivative (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Fair Value Disclosures [Abstract] | ||
Fair value, liability, recurring basis, unobservable input reconciliation, gain (loss), statement of income or comprehensive income [Extensible Enumeration] | Other income (expense), net | Other income (expense), net |
Change in fair value | $ (606) | $ (1,108) |
Derivative liability, statement of financial position [Extensible Enumeration] | Additional paid-in capital |
FAIR VALUE MEASUREMENT - Sche_5
FAIR VALUE MEASUREMENT - Schedule of Changes in Fair value of the Company’s Derivative Liability (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Derivative Liability | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Balance at the beginning | $ 3,488 | $ 2,380 |
Change in fair value | 606 | 1,108 |
Exercise of warrants | 0 | |
Extinguishment of embedded derivative upon conversion of convertible note | (4,094) | |
Balance at the ending | 0 | 3,488 |
Warrant Liability | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Balance at the beginning | 0 | 2,004 |
Change in fair value | 0 | 3,812 |
Exercise of warrants | (5,816) | |
Extinguishment of embedded derivative upon conversion of convertible note | 0 | |
Balance at the ending | $ 0 | $ 0 |
FAIR VALUE MEASUREMENT - Sche_6
FAIR VALUE MEASUREMENT - Schedule of Term Loan Common Stock Warrant (Details) - Term Loan Warrant | Dec. 31, 2023 |
Expected dividend rate | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Warrants and rights outstanding, measurement input | 0 |
Risk-free interest rate | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Warrants and rights outstanding, measurement input | 0.0360 |
Expected volatility | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Warrants and rights outstanding, measurement input | 0.52 |
Expected term (in years) | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Warrants and rights outstanding, measurement input | 5 |
PREFERRED STOCK - Schedule of P
PREFERRED STOCK - Schedule of Preferred Stock Authorized, Issued and Outstanding (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 | Apr. 26, 2022 | Apr. 25, 2022 |
Stockholders' Equity [Line Items] | ||||
Preferred stock, shares authorized (in shares) | 1,000,000 | 1,000,000 | 1,000,000 | 127,785,195 |
Preferred stock, shares issued (in shares) | 475,005 | 0 | 106,949,326 | |
Liquidation Preference | $ 16,227 | $ 0 | $ 1,582,562 | |
Carrying Value | $ 279,503 | |||
Series A | ||||
Stockholders' Equity [Line Items] | ||||
Preferred stock, shares authorized (in shares) | 19,106,048 | |||
Preferred stock, shares issued (in shares) | 19,106,048 | |||
Liquidation Preference | $ 28,239 | |||
Carrying Value | $ 4,967 | |||
Series B | ||||
Stockholders' Equity [Line Items] | ||||
Preferred stock, shares authorized (in shares) | 33,702,134 | |||
Preferred stock, shares issued (in shares) | 33,702,134 | |||
Liquidation Preference | $ 66,360 | |||
Carrying Value | $ 11,038 | |||
Series C | ||||
Stockholders' Equity [Line Items] | ||||
Preferred stock, shares authorized (in shares) | 5,687,525 | |||
Preferred stock, shares issued (in shares) | 5,687,525 | |||
Liquidation Preference | $ 38,163 | |||
Carrying Value | $ 11,837 | |||
Series C-1 | ||||
Stockholders' Equity [Line Items] | ||||
Preferred stock, shares authorized (in shares) | 4,436,090 | |||
Preferred stock, shares issued (in shares) | 4,436,090 | |||
Liquidation Preference | $ 89,298 | |||
Carrying Value | $ 16,061 | |||
Series D | ||||
Stockholders' Equity [Line Items] | ||||
Preferred stock, shares authorized (in shares) | 20,258,299 | |||
Preferred stock, shares issued (in shares) | 20,258,299 | |||
Liquidation Preference | $ 527,992 | |||
Carrying Value | $ 85,648 | |||
Series D-1 | ||||
Stockholders' Equity [Line Items] | ||||
Preferred stock, shares authorized (in shares) | 8,418,535 | |||
Preferred stock, shares issued (in shares) | 8,418,535 | |||
Liquidation Preference | $ 277,812 | |||
Carrying Value | $ 49,957 | |||
Series D-2 | ||||
Stockholders' Equity [Line Items] | ||||
Preferred stock, shares authorized (in shares) | 8,418,530 | |||
Preferred stock, shares issued (in shares) | 8,418,530 | |||
Liquidation Preference | $ 277,811 | |||
Carrying Value | $ 49,949 | |||
Series D-3 | ||||
Stockholders' Equity [Line Items] | ||||
Preferred stock, shares authorized (in shares) | 6,922,165 | |||
Preferred stock, shares issued (in shares) | 6,922,165 | |||
Liquidation Preference | $ 276,887 | |||
Carrying Value | $ 50,046 | |||
Series D-3A | ||||
Stockholders' Equity [Line Items] | ||||
Preferred stock, shares authorized (in shares) | 20,835,869 | |||
Preferred stock, shares issued (in shares) | 0 | |||
Liquidation Preference | $ 0 | |||
Carrying Value | $ 0 |
PREFERRED STOCK - Narratives (D
PREFERRED STOCK - Narratives (Details) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||||
Jan. 20, 2023 USD ($) day $ / shares Rate shares | Apr. 26, 2022 USD ($) $ / shares shares | Sep. 30, 2023 USD ($) | Sep. 30, 2023 USD ($) | Dec. 31, 2023 $ / shares shares | Jul. 01, 2023 $ / shares | Dec. 31, 2022 $ / shares shares | Apr. 25, 2022 shares | |
Preferred Stock (Details) - Schedule of preferred stock authorized, issued and outstanding | ||||||||
Preferred stock, shares authorized (in shares) | 1,000,000 | 1,000,000 | 1,000,000 | 127,785,195 | ||||
Preferred stock par value (in dollars per share) | $ / shares | $ 0.0001 | $ 0.0001 | $ 0.0001 | |||||
Gain (loss) on stock conversion | $ | $ 0 | $ 0 | ||||||
Class A Common Stock | ||||||||
Preferred Stock (Details) - Schedule of preferred stock authorized, issued and outstanding | ||||||||
Shares issued upon conversion (in shares) | 106,949,326 | |||||||
Sale of shares (in shares) | 11,300,000 | |||||||
Consideration received on transaction | $ | $ 113,000,000 | |||||||
Conversion of shares (in shares) | 140,114,060 | |||||||
Series A | ||||||||
Preferred Stock (Details) - Schedule of preferred stock authorized, issued and outstanding | ||||||||
Preferred stock, shares authorized (in shares) | 19,106,048 | |||||||
Sale of shares (in shares) | 835,011 | |||||||
Consideration received on transaction | $ | $ 25,000,000 | |||||||
Liquidation preference, per share (in Dollars per share) | $ / shares | $ 34.16 | $ 31.90 | ||||||
Conversion price ratio | 250% | |||||||
Conversion price (in dollars per share) | $ / shares | $ 1 | |||||||
Conversion price window, number of trading days | day | 90 | |||||||
Conversion price window, consecutive number of trading days | day | 120 | |||||||
Converted shares (in shares) | 360,006 | |||||||
Conversion of shares (in shares) | 11,597,656 | |||||||
Preferred Stock | ||||||||
Preferred Stock (Details) - Schedule of preferred stock authorized, issued and outstanding | ||||||||
Per share price (in dollars per share) | $ / shares | $ 30 | |||||||
Preferred stock, liquidation preference annual increase (percent) | Rate | 14% | |||||||
Legacy Sound Hound | ||||||||
Preferred Stock (Details) - Schedule of preferred stock authorized, issued and outstanding | ||||||||
Shares issued upon conversion (in shares) | 5.5562 | |||||||
Legacy Sound Hound | Preferred Stock | ||||||||
Preferred Stock (Details) - Schedule of preferred stock authorized, issued and outstanding | ||||||||
Converted shares (in shares) | 106,949,326 |
COMMON STOCK (Details)
COMMON STOCK (Details) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||||||
Jul. 28, 2023 USD ($) | Feb. 14, 2023 USD ($) | Aug. 16, 2022 USD ($) Rate shares | Apr. 26, 2022 USD ($) votePerShare $ / shares shares | Mar. 31, 2023 USD ($) | Jun. 30, 2023 USD ($) | Dec. 31, 2023 USD ($) $ / shares shares | Dec. 31, 2022 USD ($) $ / shares shares | Dec. 31, 2021 USD ($) | Jan. 20, 2023 $ / shares | Apr. 25, 2022 shares | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||||||||
Common stock authorized (in shares) | 250,030,433 | ||||||||||
Shares authorized (in shares) | 500,000,000 | ||||||||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.0001 | ||||||||||
Preferred stock, shares authorized (in shares) | 1,000,000 | 1,000,000 | 1,000,000 | 127,785,195 | |||||||
Preferred stock par value (in dollars per share) | $ / shares | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||||||||
Derivative liability, statement of financial position [Extensible Enumeration] | Additional paid-in capital | ||||||||||
Loss on change in fair value of ELOC program | $ | $ 571 | $ 1,901 | $ 1,901 | $ 1,075 | $ 0 | ||||||
Proceeds from sales of common stock under the ELOC program, net of issuance cost | $ | 28,683 | $ 71,455 | 71,615 | 0 | 0 | ||||||
Proceeds from the issuance of common stock | $ | 9,369 | 4,160 | $ 2,490 | ||||||||
Commission and offering costs borne | $ | $ 250 | ||||||||||
Common Stock Purchase Agreement | |||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||||||||
Costs and fees incurred | $ | 200 | ||||||||||
Warrant liability | $ | $ 1,100 | ||||||||||
Loss on change in fair value of ELOC program | $ | $ 1,900 | $ 1,100 | |||||||||
Aggregate shares (in shares) | 25,000,000 | ||||||||||
Proceeds from sales of common stock under the ELOC program, net of issuance cost | $ | $ 71,700 | ||||||||||
Common Stock Purchase Agreement | Minimum | |||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||||||||
Per share price (in dollars per share) | $ / shares | $ 1.75 | ||||||||||
Common Stock Purchase Agreement | Maximum | |||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||||||||
Per share price (in dollars per share) | $ / shares | $ 4.26 | ||||||||||
Common Stock Purchase Agreement | CF Principal Investments | |||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||||||||
Beneficial ownership of voting power, up to (in percent) | 4.99% | ||||||||||
Aggregate number of shares not to be exceeded (in shares) | 39,365,804 | ||||||||||
Sale of stock, percentage of ownership after transaction (in percent) | 19.99% | ||||||||||
Class A Common Stock | |||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||||||||
Common stock authorized (in shares) | 455,000,000 | 455,000,000 | 455,000,000 | ||||||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||||||||
Conversion of shares (in shares) | 140,114,060 | ||||||||||
Number of votes per share | votePerShare | 1 | ||||||||||
Aggregate shares (in shares) | 11,300,000 | ||||||||||
Aggregate proceeds from sale of stock | $ | $ 113,000 | ||||||||||
Class A Common Stock | Common Stock Purchase Agreement | |||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||||||||
Purchase price as a percentage of the volume-weighted average price (in percent) | Rate | 97% | ||||||||||
Shares issued as consideration (in shares) | 250,000 | ||||||||||
Costs and fees incurred | $ | $ 300 | ||||||||||
Class A Common Stock | Controlled Equity Offering Sales Agreement | |||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||||||||
Aggregate shares (in shares) | 5,805,995 | ||||||||||
Per share price (in dollars per share) | $ / shares | $ 2.19 | ||||||||||
Common stock available for issuance (in shares) | $ | $ 150,000 | $ 137,300 | |||||||||
Fixed commission rate (in percent) | 0.025 | ||||||||||
Sales agent specified expenses | $ | $ 75 | ||||||||||
Proceeds from the issuance of common stock | $ | 12,700 | ||||||||||
Commission and offering costs borne | $ | $ 300 | ||||||||||
Class B Common Stock | |||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||||||||
Common stock authorized (in shares) | 44,000,000 | 44,000,000 | 44,000,000 | ||||||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.0001 | ||||||||||
Conversion of shares (in shares) | 40,396,600 | ||||||||||
Number of votes per share | votePerShare | 10 | ||||||||||
Common Stock | |||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||||||||
Converted shares (in shares) | 180,510,660 | ||||||||||
Common Stock | Legacy Sound Hound | |||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||||||||
Converted shares (in shares) | 73,561,334 | ||||||||||
Preferred Stock | |||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||||||||
Per share price (in dollars per share) | $ / shares | $ 30 | ||||||||||
Preferred Stock | Legacy Sound Hound | |||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||||||||
Converted shares (in shares) | 106,949,326 |
STOCK INCENTIVE PLANS - Narrati
STOCK INCENTIVE PLANS - Narrative (Details) $ / shares in Units, $ in Thousands | 12 Months Ended | |||||
Apr. 26, 2022 shares | Dec. 31, 2023 USD ($) employee Rate shares | Dec. 31, 2022 USD ($) $ / shares shares | Dec. 31, 2021 USD ($) $ / shares shares | Apr. 25, 2022 shares | Dec. 31, 2020 USD ($) | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||
Grants in period, weighted average grant date fair value (in dollars per share) | $ / shares | $ 3.11 | $ 3.06 | ||||
Granted (in shares) | shares | 0 | 391,619 | 6,303,953 | |||
Fair value of options vested | $ 4,500 | $ 9,900 | $ 5,400 | |||
Unamortized expense | $ 4,500 | |||||
Amortization period (years) | 1 year 6 months 3 days | |||||
Compensation expense | $ 27,931 | 28,792 | 6,322 | |||
RSU exercised value | 1,392 | |||||
RSU outstanding value | $ 1,392 | 1,448 | 168,705 | |||
Number of affected employees | employee | 166 | |||||
Modification incremental cost | $ 3,200 | |||||
Legacy Sound Hound | ||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||
Number of legacy shares held by founders (in shares) | shares | 7,270,503 | |||||
Class A Common Stock | ||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||
Conversion of shares (in shares) | shares | 140,114,060 | |||||
Class B Common Stock | ||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||
Conversion of shares (in shares) | shares | 40,396,600 | |||||
Vote per share | ten | |||||
Stock based compensation expense | 1,000 | |||||
Stock options | ||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||
Compensation expense | 4,000 | 8,700 | $ 6,300 | |||
Restricted Stock Units (RSUs) | ||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||
Fair value of options vested | 25,500 | 12,000 | ||||
Compensation expense | 20,400 | 19,000 | ||||
Unamortized expense | $ 50,500 | |||||
Amortization period (years) | 2 years 3 months 25 days | |||||
Performance Shares | ||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||
Compensation expense | $ 1,300 | |||||
Unamortized expense | 6,600 | |||||
Market Based RSUs | ||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||
Compensation expense | 1,500 | $ 1,100 | ||||
Unamortized expense | $ 600 | |||||
Employee Stock Purchase Plan Awards | ||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||
Amortization period (years) | 4 months 9 days | |||||
Compensation expense | $ 400 | |||||
Unrecognized expense | $ 100 | |||||
2016 Equity Incentive Plan | ||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||
Additional share authorized for issuance (in shares) | shares | 6,667,478 | |||||
Stock reserved for issuance (in shares) | shares | 48,347,329 | |||||
2016 Equity Incentive Plan | Stock options | ||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||
Shareholder percentage trigger (percent) | 10% | |||||
Contractual expirations (years) | 10 years | |||||
Vesting period (years) | 4 years | |||||
Vesting percentage ( percent) | Rate | 25% | |||||
2016 Equity Incentive Plan | Restricted Stock Units (RSUs) | ||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||
Vesting period (years) | 4 years | |||||
Vesting percentage ( percent) | Rate | 25% | |||||
2016 Equity Incentive Plan | Optionee Below Threshold | Stock options | ||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||
Employee exercise price as a percentage of fair value of stock price (percent) | 100% | |||||
2016 Equity Incentive Plan | Optionee Above Threshold | Stock options | ||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||
Employee exercise price as a percentage of fair value of stock price (percent) | 110% | |||||
2022 Incentive Plan | ||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||
Stock reserved for issuance (in shares) | shares | 3,930,074 | |||||
Aggregate share percentage | 2% | |||||
Period during which shares reserved for increase may be increased | 10 years | |||||
2022 Incentive Plan | Class A Common Stock | ||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||
Stock reserved for issuance (in shares) | shares | 19,650,371 | |||||
Percentage of initial limit | 10% | |||||
2022 Incentive Plan | Stock options | ||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||
Awards remaining for issuance shares (in shares) | shares | 2,361,806 | |||||
Period during which shares reserved for increase may be increased | 10 years | |||||
2022 Employee Stock Purchase Plan | ||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||
Percentage of fair market value | 85% | |||||
Stock issued ESPP (in shares) | shares | 478,023 |
STOCK INCENTIVE PLANS - Schedul
STOCK INCENTIVE PLANS - Schedule of stock option activity (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Number of Shares | ||||
Balance at the beginning (in shares) | 25,420,425 | 30,361,405 | 28,772,180 | |
Granted (in shares) | 0 | 391,619 | 6,303,953 | |
Exercised (in shares) | (3,585,829) | (3,595,706) | (2,590,780) | |
Forfeited or cancelled (in shares) | (4,993,229) | (1,736,893) | (2,123,948) | |
Balance at the end (in shares) | 16,841,367 | 25,420,425 | 30,361,405 | |
Exercisable at the end (in shares) | 15,084,586 | |||
Weighted Average Exercise Price | ||||
Balance outstanding at the beginning (in dollars per share) | $ 3.74 | $ 3.45 | $ 2.38 | |
Granted (in dollars per share) | 6.17 | 7.22 | ||
Exercised (in dollars per share) | 2.37 | 1.16 | 0.96 | |
Forfeited or cancelled (in dollars per share) | 5.24 | 4.63 | 3.13 | |
Balance outstanding at the end (in dollars per share) | 3.59 | $ 3.74 | $ 3.45 | |
Exercisable (in dollars per share) | $ 3.26 | |||
Weighted Average Exercise Price | ||||
Outstanding, weighted average remaining contractual life (years) | 4 years 9 months 7 days | 6 years 3 months 25 days | 6 years 2 months 26 days | |
Exercisable, Weighted average remaining contractual term (years) | 4 years 5 months 12 days | |||
Outstanding balance at the beginning, average intrinsic value | $ 1,392 | $ 1,448 | $ 168,705 | |
Exercised, average intrinsic value | 5,207 | 22,534 | 9,667 | |
Outstanding balance at the end, average intrinsic value | 1,392 | $ 1,448 | $ 168,705 | |
Options exercisable at the end, average intrinsic value | $ 1,392 |
STOCK INCENTIVE PLANS - Sched_2
STOCK INCENTIVE PLANS - Schedule of weighted average calculated fair value of the options granted to employees (Details) | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Stock options | |||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Dividend yield | 0% | 0% | |
Expected volatility | 51% | 42% | |
Expected term (years) | 5 years 10 months 17 days | 6 years 3 days | |
Risk free interest rate | 2.58% | 1.14% | |
Employee Stock Purchase Plan Awards | |||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Dividend yield | 0% | 0% | |
Expected volatility | 56% | 77% | |
Expected term (years) | 5 months 26 days | 6 months 7 days | |
Risk free interest rate | 5.26% | 4.53% |
STOCK INCENTIVE PLANS - Sched_3
STOCK INCENTIVE PLANS - Schedule of restricted stock unit activity (Details) - Restricted Stock Units (RSUs) - $ / shares | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Number of Shares | ||
Beginning balance (in shares) | 16,716,383 | 0 |
Granted (in shares) | 11,158,301 | 20,416,417 |
Vested (in shares) | (7,678,184) | (2,516,191) |
Forfeited (in shares) | (3,852,909) | (1,183,843) |
Ending balance (in shares) | 16,343,591 | 16,716,383 |
Weighted Average Grant Date Fair Value | ||
Beginning balance (in dollars per share) | $ 4.14 | $ 0 |
Granted (in dollars per share) | 2.38 | 4.26 |
Vested (in dollars per share) | 3.32 | 4.99 |
Forfeited (in dollars per share) | 3.90 | 4.46 |
Ending balance (in dollars per share) | $ 3.39 | $ 4.14 |
STOCK INCENTIVE PLANS - Sched_4
STOCK INCENTIVE PLANS - Schedule of assumptions under the Monte Carlo simulation model and the calculated fair value of the Market-Based RSUs granted to employees (Details) - Restricted Stock Units (RSUs) | 12 Months Ended |
Dec. 31, 2022 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
Expected volatility | 52% |
Expected term (years) | 4 years |
Drift rate | 2.90% |
STOCK INCENTIVE PLANS - Sched_5
STOCK INCENTIVE PLANS - Schedule of operations and comprehensive loss (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Compensation expense | $ 27,931 | $ 28,792 | $ 6,322 |
Cost of revenue | |||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Compensation expense | 412 | 99 | 0 |
Sales and marketing | |||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Compensation expense | 3,601 | 2,794 | 509 |
Research and development | |||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Compensation expense | 11,992 | 13,986 | 4,434 |
General and administrative | |||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Compensation expense | 8,784 | 11,913 | 1,379 |
Restructuring costs | |||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Compensation expense | $ 3,142 | $ 0 | $ 0 |
LEASES- Schedule of Aggregate N
LEASES- Schedule of Aggregate Noncancelable Future Minimum Lease Payments Under Operating and Finance Leases (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Operating Lease | ||
2024 | $ 3,250 | |
2025 | 928 | |
2026 | 471 | |
2027 | 471 | |
2028 | 471 | |
Thereafter | 785 | |
Total | 6,376 | |
Less: imputed interest | (650) | |
Present value of lease liabilities | 5,726 | |
Less: current portion | (2,637) | $ (3,282) |
Lease liabilities, net of current portion | 3,089 | 5,715 |
Finance Lease | ||
2024 | 122 | |
2025 | 12 | |
2026 | 0 | |
2027 | 0 | |
2028 | 0 | |
Thereafter | 0 | |
Total | 134 | |
Less: imputed interest | (5) | |
Present value of lease liabilities | 129 | |
Less: current portion | (121) | $ (160) |
Lease liabilities, net of current portion | $ 8 | |
Finance Lease, Liability, Noncurrent, Statement of Financial Position [Extensible Enumeration] | Other non-current liabilities |
LEASES - Schedule of Additional
LEASES - Schedule of Additional Information Related to the Company’s Lease (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Leases [Abstract] | |||
Operating lease cost | $ 3,177 | $ 3,423 | $ 3,654 |
Short-term lease cost | 1,298 | 466 | 524 |
Amortization of finance leased assets | 161 | 995 | 2,575 |
Interest on lease liabilities | $ 23 | $ 79 | $ 472 |
LEASES - Schedule of Weighted A
LEASES - Schedule of Weighted Average Remaining Lease Term and the Weighted Average Discount Rate (Details) | Dec. 31, 2023 |
Leases [Abstract] | |
Operating lease, weighted average remaining lease term (years) | 3 years 8 months 1 day |
Operating lease, weighted average discount rate (in percent) | 5.83% |
Finance leasing, weighted average remaining lease term (years) | 1 year |
Financing lease, weighted average discount rate (in percent) | 10.50% |
LEASES - Narrative (Details)
LEASES - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Leases [Abstract] | |||
Rent expenses | $ 5.3 | $ 3.9 | $ 4.2 |
OTHER INCOME (EXPENSE), NET (De
OTHER INCOME (EXPENSE), NET (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2023 | Mar. 31, 2023 | Jun. 30, 2023 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Other Expenses [Abstract] | ||||||
Interest income | $ 2,866 | $ 390 | $ 7 | |||
Change in fair value of derivative and warrant liability | 0 | (606) | (4,920) | |||
Loss on change in fair value of ELOC program | $ (571) | $ (1,901) | (1,901) | (1,075) | 0 | |
Other income (expense), net | 190 | 32 | (502) | |||
Total other income (expense), net | $ (835) | $ (802) | $ (1,638) | $ 1,155 | $ (1,259) | $ (5,415) |
NET LOSS PER SHARE - Schedule o
NET LOSS PER SHARE - Schedule of the Calculation of Basic and Diluted Net Loss Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2023 | Mar. 31, 2023 | Jun. 30, 2023 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Numerator: | ||||||
Net loss | $ (23,307) | $ (27,430) | $ (50,737) | $ (88,937) | $ (116,713) | $ (79,540) |
Cumulative dividends attributable to Series A Preferred Stock | (877) | (682) | (1,559) | (2,774) | 0 | 0 |
Net loss attributable to common stockholders | $ (24,184) | $ (28,112) | $ (52,296) | $ (91,711) | $ (116,713) | $ (79,540) |
Weighted-average common shares outstanding: | ||||||
Weighted-average shares outstanding - basic (in Shares) | 229,264,904 | 157,317,695 | 67,255,538 | |||
Weighted-average shares outstanding - diluted (in Shares) | 229,264,904 | 157,317,695 | 67,255,538 | |||
Earnings Per Share Reconciliation [Abstract] | ||||||
Basic net loss per share (in Dollars per share) | $ (0.11) | $ (0.14) | $ (0.25) | $ (0.40) | $ (0.74) | $ (1.18) |
Diluted net loss per share (in dollars per share) | $ (0.11) | $ (0.14) | $ (0.25) | $ (0.40) | $ (0.74) | $ (1.18) |
NET LOSS PER SHARE - Schedule_2
NET LOSS PER SHARE - Schedule of Outstanding Shares of Potentially Dilutive Securities (Details) - shares | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Total (in shares) | 56,678,251 | 46,279,440 | 138,373,945 |
Stock options | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Total (in shares) | 16,841,367 | 25,420,425 | 30,361,405 |
Restricted stock units | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Total (in shares) | 16,343,591 | 16,716,383 | 0 |
Estimated ESPP stock units | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Total (in shares) | 299,116 | 476,636 | 0 |
Common stock warrants | Common Stock | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Total (in shares) | 6,967,532 | 3,665,996 | 1,063,214 |
Redeemable convertible preferred stock | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Total (in shares) | 0 | 0 | 106,949,326 |
Series A Preferred Stock | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Total (in shares) | 16,226,645 | 0 | 0 |
INCOME TAXES - Schedule of Inco
INCOME TAXES - Schedule of Income (loss) Before Provision for Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2023 | Mar. 31, 2023 | Jun. 30, 2023 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | ||||||
Domestic | $ (86,724) | $ (116,964) | $ (79,962) | |||
Foreign | 1,701 | 3,140 | 878 | |||
Loss before provision for income taxes | $ (22,890) | $ (27,101) | $ (49,991) | (85,023) | (113,824) | (79,084) |
Current provision: | ||||||
Federal | 0 | 0 | 0 | |||
State | 3 | 7 | 5 | |||
Foreign | 3,881 | 755 | 339 | |||
Total current provision | 3,884 | 762 | 344 | |||
Deferred provision: | ||||||
Federal | 0 | 0 | 0 | |||
State | 0 | 0 | 0 | |||
Foreign | 30 | 2,127 | 112 | |||
Deferred income taxes | 30 | 2,127 | 112 | |||
Provision for income taxes | $ 3,914 | $ 2,889 | $ 456 | |||
Effective income tax expense rate | (4.60%) | (2.50%) | (0.60%) |
INCOME TAXES- Narratives (Detai
INCOME TAXES- Narratives (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Income Tax Contingency [Line Items] | |||
Income tax expense | $ 3,914,000 | $ 2,889,000 | $ 456,000 |
Change in the valuation allowance | 20,700,000 | $ 20,700,000 | |
Penalties and interest accrued | 0 | ||
Domestic Tax Authority | |||
Income Tax Contingency [Line Items] | |||
Operating loss carryforwards | 395,500,000 | ||
Operating loss carryforwards, not subject to expiration | 306,800,000 | ||
Domestic Tax Authority | Research Tax Credit Carryforward | |||
Income Tax Contingency [Line Items] | |||
Tax credit carryforward, amount | 14,400,000 | ||
State and Local Jurisdiction | |||
Income Tax Contingency [Line Items] | |||
Operating loss carryforwards | 109,400,000 | ||
Operating loss carryforwards, not subject to expiration | 5,600,000 | ||
State and Local Jurisdiction | Research Tax Credit Carryforward | |||
Income Tax Contingency [Line Items] | |||
Tax credit carryforward, amount | 10,900,000 | ||
Foreign Tax Authority | Research Tax Credit Carryforward | |||
Income Tax Contingency [Line Items] | |||
Tax credit carryforward, amount | $ 1,700,000 |
INCOME TAXES - Schedule of Effe
INCOME TAXES - Schedule of Effective Tax Rate (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |||
Federal statutory income tax rate | 21% | 21% | 21% |
Tax provision at statutory rate | $ (17,855) | $ (23,903) | $ (16,608) |
State income tax rate | 3 | 7 | 5 |
Foreign withholding and income tax | 3,689 | 2,298 | 388 |
Foreign rate differential | (136) | (115) | 0 |
Research and development credits | (2,105) | (1,731) | (1,605) |
Change in valuation allowance | 18,604 | 24,272 | 15,804 |
Stock based compensation | 2,899 | 1,540 | 728 |
Permanent book tax differences | 516 | 751 | 996 |
Other deferred adjustments | (1,701) | 0 | 0 |
Other | 0 | (230) | 748 |
Provision for income taxes | $ 3,914 | $ 2,889 | $ 456 |
INCOME TAXES- Schedule of Net D
INCOME TAXES- Schedule of Net Deferred Tax Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Deferred tax assets: | ||
Net operating loss carryforwards | $ 89,880 | $ 79,060 |
Research and development credits | 17,825 | 13,809 |
Property and equipment and intangible assets | 227 | 178 |
Deferred revenue | 767 | 1,612 |
Stock-based compensation | 2,246 | 3,062 |
Operating lease liabilities | 1,333 | 2,106 |
Section 174 research and development capitalization | 21,186 | 13,319 |
Accruals and reserves | 588 | 888 |
Other | 0 | 23 |
Total deferred tax assets | 134,052 | 114,057 |
Valuation allowance | (132,873) | (112,204) |
Total deferred tax assets, net | 1,179 | 1,853 |
Deferred tax liabilities: | ||
Right-of-use assets | (1,168) | (1,811) |
Total deferred tax liabilities | (1,168) | (1,811) |
Net deferred tax assets | 11 | 42 |
Non-current deferred tax assets | 1,179 | 55 |
Non-current deferred tax liabilities (included as a component of other non-current liabilities) | $ (1,168) | $ (13) |
INCOME TAXES - Schedule of Unre
INCOME TAXES - Schedule of Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | |||
Beginning balance | $ 6,130 | $ 5,068 | $ 4,301 |
Increase for tax positions of prior years | 370 | 0 | 36 |
Increase for tax positions of current year | 1,095 | 1,062 | 731 |
Ending balance | $ 7,595 | $ 6,130 | $ 5,068 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) - Related Party - USD ($) | 12 Months Ended | ||
Jan. 20, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Related Party Transaction [Line Items] | |||
Revenues | $ 5,200,000 | $ 7,000,000 | |
Chief Financial Officer | |||
Related Party Transaction [Line Items] | |||
Sale of shares (in shares) | 3,334 | ||
Payment of amount | $ 100,000 | ||
Director | |||
Related Party Transaction [Line Items] | |||
Sale of shares (in shares) | 3,334 | ||
Payment of amount | $ 100,000 |
REVISION OF PREVIOUSLY ISSUED_3
REVISION OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS - Schedule of balance Condensed Balance Sheet (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Jun. 30, 2023 | Mar. 31, 2023 | Dec. 31, 2022 |
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||
Other non-current assets | $ 577 | $ 1,642 | $ 1,391 | |
Total assets | 151,122 | 72,371 | 37,986 | |
Accrued liabilities | 13,884 | $ 13,509 | 8,537 | |
Total current liabilities | 24,223 | 24,131 | 38,571 | |
Notes payable, net of current portion | 82,300 | |||
Other non-current liabilities | 6,420 | 4,003 | 4,423 | |
Total liabilities | 122,954 | 118,968 | 74,551 | |
Additional paid-in capital | 606,135 | 567,794 | 507,858 | 466,857 |
Accumulated deficit | (592,379) | (554,179) | (530,872) | (503,442) |
Total stockholders’ equity (deficit) | 28,168 | 38,610 | 1,950 | (36,565) |
Total liabilities and stockholders’ equity (deficit) | $ 151,122 | 157,578 | 72,371 | 37,986 |
As Previously Reported | ||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||
Other non-current assets | 2,074 | 1,656 | ||
Total assets | 72,803 | 38,251 | ||
Accrued liabilities | 16,381 | 7,462 | ||
Total current liabilities | 27,003 | 37,496 | ||
Notes payable, net of current portion | 66,428 | |||
Other non-current liabilities | 16,824 | |||
Total liabilities | 118,789 | |||
Additional paid-in capital | 564,197 | 505,889 | 466,857 | |
Accumulated deficit | (550,403) | (528,471) | (502,102) | |
Total stockholders’ equity (deficit) | 38,789 | 2,382 | (35,225) | |
Total liabilities and stockholders’ equity (deficit) | 157,578 | 72,803 | 38,251 | |
Adjustments | ||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||
Other non-current assets | (432) | (265) | ||
Total assets | (432) | (265) | ||
Accrued liabilities | (2,872) | 1,075 | ||
Total current liabilities | (2,872) | 1,075 | ||
Notes payable, net of current portion | 15,872 | |||
Other non-current liabilities | (12,821) | |||
Total liabilities | 179 | |||
Additional paid-in capital | 3,597 | 1,969 | 0 | |
Accumulated deficit | (3,776) | (2,401) | (1,340) | |
Total stockholders’ equity (deficit) | (179) | (432) | (1,340) | |
Total liabilities and stockholders’ equity (deficit) | $ 0 | $ (432) | $ (265) |
REVISION OF PREVIOUSLY ISSUED_4
REVISION OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS - Schedule of Other Income (Expense), Net (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2023 | Mar. 31, 2023 | Jun. 30, 2023 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||||
General and administrative | $ 6,424 | $ 7,290 | $ 13,713 | $ 28,285 | $ 30,443 | $ 16,521 |
Loss from operations | (16,483) | (25,203) | (41,685) | (68,608) | (105,672) | (65,327) |
Other income (expense), net | (835) | (802) | (1,638) | 1,155 | (1,259) | (5,415) |
Total other expense, net | (6,407) | (1,898) | (8,306) | (16,415) | (8,152) | (13,757) |
Loss before provision for income taxes | (22,890) | (27,101) | (49,991) | (85,023) | (113,824) | (79,084) |
Net loss | (23,307) | (27,430) | (50,737) | (88,937) | (116,713) | (79,540) |
Less: accrual of Series A Preferred Stock paid-in-kind dividends | (877) | (682) | (1,559) | (2,774) | 0 | 0 |
Net loss attributable to SoundHound common shareholders | $ (24,184) | $ (28,112) | $ (52,296) | $ (91,711) | $ (116,713) | $ (79,540) |
Basic (in dollars per share) | $ (0.11) | $ (0.14) | $ (0.25) | $ (0.40) | $ (0.74) | $ (1.18) |
Diluted (in dollars per share) | $ (0.11) | $ (0.14) | $ (0.25) | $ (0.40) | $ (0.74) | $ (1.18) |
As Previously Reported | ||||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||||
General and administrative | $ 6,377 | $ 7,125 | $ 13,502 | $ 30,178 | ||
Loss from operations | (16,436) | (25,038) | (41,474) | (105,407) | ||
Other income (expense), net | 493 | 94 | 587 | (184) | ||
Total other expense, net | (5,079) | (1,002) | (6,081) | (7,077) | ||
Loss before provision for income taxes | (21,515) | (26,040) | (47,555) | (112,484) | ||
Net loss | (21,932) | (26,369) | (48,301) | $ (115,373) | ||
Less: accrual of Series A Preferred Stock paid-in-kind dividends | 0 | 0 | 0 | |||
Net loss attributable to SoundHound common shareholders | $ (21,932) | $ (26,369) | $ (48,301) | |||
Basic (in dollars per share) | $ (0.10) | $ (0.13) | $ (0.23) | $ (0.73) | ||
Diluted (in dollars per share) | $ (0.10) | $ (0.13) | $ (0.23) | $ (0.73) | ||
Adjustments | ||||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||||
General and administrative | $ 47 | $ 165 | $ 211 | $ 265 | ||
Loss from operations | (47) | (165) | (211) | (265) | ||
Other income (expense), net | (1,328) | (896) | (2,225) | (1,075) | ||
Total other expense, net | (1,328) | (896) | (2,225) | (1,075) | ||
Loss before provision for income taxes | (1,375) | (1,061) | (2,436) | (1,340) | ||
Net loss | (1,375) | (1,061) | (2,436) | $ (1,340) | ||
Less: accrual of Series A Preferred Stock paid-in-kind dividends | (877) | (682) | (1,559) | |||
Net loss attributable to SoundHound common shareholders | $ (2,252) | $ (1,743) | $ (3,995) | |||
Basic (in dollars per share) | $ (0.01) | $ (0.01) | $ (0.02) | $ (0.01) | ||
Diluted (in dollars per share) | $ (0.01) | $ (0.01) | $ (0.02) | $ (0.01) |
REVISION OF PREVIOUSLY ISSUED_5
REVISION OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS - Schedule of Stockholders Equity (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2023 | Mar. 31, 2023 | Jun. 30, 2023 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||||
Additional paid-in capital | $ 567,794 | $ 507,858 | $ 567,794 | $ 606,135 | $ 466,857 | |
Accumulated deficit | (554,179) | (530,872) | (554,179) | (592,379) | (503,442) | |
Net loss | (23,307) | (27,430) | (50,737) | $ (88,937) | (116,713) | $ (79,540) |
As Previously Reported | ||||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||||
Additional paid-in capital | 564,197 | 505,889 | 564,197 | 466,857 | ||
Accumulated deficit | (550,403) | (528,471) | (550,403) | (502,102) | ||
Net loss | (21,932) | (26,369) | (48,301) | (115,373) | ||
Adjustments | ||||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||||
Additional paid-in capital | 3,597 | 1,969 | 3,597 | 0 | ||
Accumulated deficit | (3,776) | (2,401) | (3,776) | (1,340) | ||
Net loss | $ (1,375) | $ (1,061) | $ (2,436) | $ (1,340) |
REVISION OF PREVIOUSLY ISSUED_6
REVISION OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS - Schedule of Cash Flow, Supplemental Disclosures (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2023 | Mar. 31, 2023 | Jun. 30, 2023 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||||
Net loss | $ (23,307) | $ (27,430) | $ (50,737) | $ (88,937) | $ (116,713) | $ (79,540) |
Loss on change in fair value of ELOC program | 571 | 1,901 | 1,901 | 1,075 | 0 | |
Other non-current assets | 186 | 363 | 671 | (274) | (1,470) | |
Accrued liabilities | 4,556 | 5,295 | 4,266 | 116 | 3,671 | |
Net cash used in operating activities | (14,540) | (34,201) | (68,265) | (94,019) | (66,177) | |
Payment of financing costs associated with ELOC program | (250) | |||||
Proceeds from sales of common stock under the ELOC program, net of issuance cost | 28,683 | 71,455 | 71,615 | 0 | 0 | |
Net cash provided by financing activities | 51,641 | 154,558 | 168,237 | 82,001 | 44,653 | |
Accrued and unpaid debt issuance costs | 0 | |||||
Non-cash debt discount | 4,136 | |||||
Issuance of common stock to settle commitment shares related to the ELOC program | 915 | 915 | $ 915 | |||
As Previously Reported | ||||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||||
Net loss | (21,932) | (26,369) | (48,301) | (115,373) | ||
Loss on change in fair value of ELOC program | 0 | 0 | 0 | |||
Other non-current assets | 19 | 628 | (539) | |||
Accrued liabilities | 4,306 | 5,045 | ||||
Net cash used in operating activities | (14,467) | (33,651) | (94,019) | |||
Payment of financing costs associated with ELOC program | 0 | |||||
Proceeds from sales of common stock under the ELOC program, net of issuance cost | 28,360 | 70,905 | ||||
Net cash provided by financing activities | 51,568 | 154,008 | ||||
Accrued and unpaid debt issuance costs | 16,461 | |||||
Non-cash debt discount | 4,315 | |||||
Issuance of common stock to settle commitment shares related to the ELOC program | 0 | 0 | ||||
Adjustments | ||||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||||
Net loss | $ (1,375) | (1,061) | (2,436) | (1,340) | ||
Loss on change in fair value of ELOC program | 571 | 1,901 | 1,075 | |||
Other non-current assets | 167 | (265) | 265 | |||
Accrued liabilities | 250 | 250 | ||||
Net cash used in operating activities | (73) | (550) | $ 0 | |||
Payment of financing costs associated with ELOC program | (250) | |||||
Proceeds from sales of common stock under the ELOC program, net of issuance cost | 323 | 550 | ||||
Net cash provided by financing activities | 73 | 550 | ||||
Accrued and unpaid debt issuance costs | (16,461) | |||||
Non-cash debt discount | (179) | |||||
Issuance of common stock to settle commitment shares related to the ELOC program | $ 915 | $ 915 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) - USD ($) $ / shares in Units, $ in Thousands | 2 Months Ended | 3 Months Ended | 12 Months Ended | |||||
Jan. 12, 2024 | Jan. 03, 2024 | Apr. 26, 2022 | Feb. 29, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Subsequent Event [Line Items] | ||||||||
Gross proceeds | $ 9,369 | $ 4,160 | $ 2,490 | |||||
Commission and offering costs borne | $ 250 | |||||||
Preferred Stock | ||||||||
Subsequent Event [Line Items] | ||||||||
Common stock issued to initial stockholders (in shares) | 835,011 | |||||||
Class A Common Stock | ||||||||
Subsequent Event [Line Items] | ||||||||
Conversion of shares (in shares) | 140,114,060 | |||||||
Common stock issued to initial stockholders (in shares) | 11,300,000 | |||||||
Subsequent Event | Preferred Stock | ||||||||
Subsequent Event [Line Items] | ||||||||
Converted shares (in shares) | 35,000 | |||||||
Subsequent Event | Class A Common Stock | ||||||||
Subsequent Event [Line Items] | ||||||||
Conversion of shares (in shares) | 1,199,364 | |||||||
Converted shares (in shares) | 35,000 | |||||||
Subsequent Event | Sales Agreement Issuance | Common Stock | ||||||||
Subsequent Event [Line Items] | ||||||||
Common stock issued to initial stockholders (in shares) | 34,578,019 | |||||||
Per share price (in dollars per share) | $ 3.37 | |||||||
Gross proceeds | $ 116,400 | |||||||
Commission and offering costs borne | 2,900 | |||||||
Remaining capacity available for issuance | $ 20,800 | |||||||
Subsequent Event | Synq3, Inc | ||||||||
Subsequent Event [Line Items] | ||||||||
Total consideration costs | $ 5,000 | |||||||
Stock consideration (in dollars per share) | $ 2.23 | |||||||
Aggregated consideration witheld | $ 500 | |||||||
Subsequent Event | Synq3, Inc | Class A Common Stock | ||||||||
Subsequent Event [Line Items] | ||||||||
Shares issued as consideration (in shares) | 8,968,610 | |||||||
Additional cash consideration | $ 4,000 | |||||||
Additional consideration to be made in shares (percent) | 20% | |||||||
Shares withheld to secure indemnification obligations (in shares) | 1,179,524 | |||||||
Subsequent Event | Synq3, Inc | Common Stock Purchase Agreement | ||||||||
Subsequent Event [Line Items] | ||||||||
Indemnification period | 15 months |