SOUNDHOUND AI, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share data)
June 30, 2024 | December 31, 2023 | ||||||||||
(Unaudited) | |||||||||||
ASSETS | |||||||||||
Current assets: | |||||||||||
Cash and cash equivalents | $ | 200,156 | $ | 95,260 | |||||||
Accounts receivable, net of allowances of $439 and $203 as of June 30, 2024 and December 31, 2023, respectively | 5,059 | 4,050 | |||||||||
Contract assets and unbilled receivable, net of allowance for credit losses of $108 and $17 of June 30, 2024 and December 31, 2023, respectively | 14,892 | 11,780 | |||||||||
Other current assets | 3,949 | 2,452 | |||||||||
Total current assets | 224,056 | 113,542 | |||||||||
Restricted cash equivalents, non-current | 811 | 13,775 | |||||||||
Right-of-use assets | 4,303 | 5,210 | |||||||||
Property and equipment, net | 1,296 | 1,515 | |||||||||
Goodwill | 6,039 | — | |||||||||
Intangible assets, net | 13,147 | — | |||||||||
Deferred tax asset | 10 | 11 | |||||||||
Contract assets and unbilled receivable, non-current, net of allowance for credit losses of $171 and $177 of June 30, 2024 and December 31, 2023, respectively | 15,518 | 16,492 | |||||||||
Other non-current assets | 1,494 | 577 | |||||||||
Total assets | $ | 266,674 | $ | 151,122 | |||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||||||
Current liabilities: | |||||||||||
Accounts payable | $ | 4,255 | $ | 1,653 | |||||||
Accrued liabilities | 13,147 | 13,884 | |||||||||
Operating lease liabilities | 2,285 | 2,637 | |||||||||
Finance lease liabilities | 63 | 121 | |||||||||
Income tax liability | 1,888 | 1,618 | |||||||||
Deferred revenue | 2,931 | 4,310 | |||||||||
Other current liabilities | 968 | — | |||||||||
Total current liabilities | 25,537 | 24,223 | |||||||||
Operating lease liabilities, net of current portion | 2,175 | 3,089 | |||||||||
Deferred revenue, net of current portion | 3,766 | 4,910 | |||||||||
Long-term debt | — | 84,312 | |||||||||
Contingent acquisition liabilities (Note 17) | 4,410 | — | |||||||||
Income tax liability, net of current portion | 2,275 | 2,453 | |||||||||
Other non-current liabilities | 4,570 | 3,967 | |||||||||
Total liabilities | 42,733 | 122,954 | |||||||||
Commitments and contingencies (Note 7) | |||||||||||
Stockholders’ equity: | |||||||||||
Series A Preferred Stock, $0.0001 par value; 1,000,000 shares authorized; 0 and 475,005 shares issued and outstanding, aggregate liquidation preference of $0 and $16,227 as of June 30, 2024 and December 31, 2023, respectively | — | 14,187 | |||||||||
Class A Common Stock, $0.0001 par value; 455,000,000 shares authorized; 315,153,605 and 216,943,349 shares issued and outstanding as of June 30, 2024 and December 31, 2023, respectively | 31 | 22 | |||||||||
Class B Common Stock, $0.0001 par value; 44,000,000 shares authorized; 32,735,408 and 37,485,408 shares issued and outstanding as of June 30, 2024 and December 31, 2023, respectively | 3 | 4 | |||||||||
Additional paid-in capital | 886,412 | 606,135 | |||||||||
Accumulated deficit | (662,710) | (592,379) | |||||||||
Accumulated other comprehensive income | 205 | 199 | |||||||||
Total stockholders’ equity | 223,941 | 28,168 | |||||||||
Total liabilities and stockholders’ equity | $ | 266,674 | $ | 151,122 |
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SOUNDHOUND AI, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(In thousands, except share and per share data)
(Unaudited)
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
2024 | 2023 | 2024 | 2023 | ||||||||||||||||||||
Revenues | $ | 13,462 | $ | 8,751 | $ | 25,056 | $ | 15,458 | |||||||||||||||
Operating expenses: | |||||||||||||||||||||||
Cost of revenues | 4,980 | 1,830 | 9,649 | 3,806 | |||||||||||||||||||
Sales and marketing | 5,655 | 5,078 | 11,197 | 9,953 | |||||||||||||||||||
Research and development | 15,738 | 11,736 | 30,616 | 25,920 | |||||||||||||||||||
General and administrative | 9,535 | 6,424 | 19,802 | 13,713 | |||||||||||||||||||
Change in fair value of contingent acquisition liabilities | (1,082) | — | 3,080 | — | |||||||||||||||||||
Amortization of intangible assets | 621 | — | 1,226 | — | |||||||||||||||||||
Restructuring | — | 166 | — | 3,751 | |||||||||||||||||||
Total operating expenses | 35,447 | 25,234 | 75,570 | 57,143 | |||||||||||||||||||
Loss from operations | (21,985) | (16,483) | (50,514) | (41,685) | |||||||||||||||||||
Other expense, net: | |||||||||||||||||||||||
Loss on early extinguishment of debt | (15,587) | (837) | (15,587) | (837) | |||||||||||||||||||
Interest expense | (4,086) | (4,735) | (9,750) | (5,831) | |||||||||||||||||||
Other income (expense), net | 4,974 | (835) | 6,453 | (1,638) | |||||||||||||||||||
Total other expense, net | (14,699) | (6,407) | (18,884) | (8,306) | |||||||||||||||||||
Loss before provision for income taxes | (36,684) | (22,890) | (69,398) | (49,991) | |||||||||||||||||||
Provision for income taxes | 638 | 417 | 933 | 746 | |||||||||||||||||||
Net loss | $ | (37,322) | $ | (23,307) | $ | (70,331) | $ | (50,737) | |||||||||||||||
Cumulative dividends attributable to Series A Preferred Stock | (73) | (877) | (416) | (1,559) | |||||||||||||||||||
Net loss attributable to SoundHound common shareholders | $ | (37,395) | $ | (24,184) | $ | (70,747) | $ | (52,296) | |||||||||||||||
Other comprehensive income: | |||||||||||||||||||||||
Unrealized gains on investments | (30) | 29 | 6 | — | |||||||||||||||||||
Comprehensive loss | $ | (37,425) | $ | (24,155) | $ | (70,741) | $ | (52,296) | |||||||||||||||
Net loss per share: | |||||||||||||||||||||||
Basic and diluted | $ | (0.11) | $ | (0.11) | $ | (0.23) | $ | (0.25) | |||||||||||||||
Weighted-average common shares outstanding: | |||||||||||||||||||||||
Basic and diluted | 331,830,608 | 220,772,111 | 309,213,583 | 212,970,561 |
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SOUNDHOUND AI, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Six Months Ended June 30, | |||||||||||
2024 | 2023 | ||||||||||
Cash flows used in operating activities: | |||||||||||
Net loss | $ | (70,331) | $ | (50,737) | |||||||
Adjustments to reconcile net loss to net cash used in operating activities: | |||||||||||
Depreciation and amortization | 2,750 | 1,411 | |||||||||
Stock-based compensation | 14,232 | 13,947 | |||||||||
Loss on change in fair value of ELOC program | — | 1,901 | |||||||||
Amortization of debt issuance cost | 1,524 | 1,607 | |||||||||
Non-cash lease amortization | 1,445 | 1,714 | |||||||||
Foreign currency gain/loss from remeasurement | (70) | — | |||||||||
Change in fair value of contingent acquisition liabilities | 3,080 | — | |||||||||
Loss on early extinguishment of debt | 15,587 | 837 | |||||||||
Deferred income taxes | (368) | — | |||||||||
Other, net | (891) | 82 | |||||||||
Changes in operating assets and liabilities: | |||||||||||
Accounts receivable, net | 211 | (177) | |||||||||
Other current assets | (1,426) | (634) | |||||||||
Contract assets | (2,267) | (2,080) | |||||||||
Other non-current assets | (842) | 363 | |||||||||
Accounts payable | 1,941 | (903) | |||||||||
Accrued liabilities | (625) | 5,295 | |||||||||
Operating lease liabilities | (1,720) | (1,910) | |||||||||
Deferred revenue | (2,523) | (4,625) | |||||||||
Other non-current liabilities | (147) | (292) | |||||||||
Net cash used in operating activities | (40,440) | (34,201) | |||||||||
Cash flows used in investing activities: | |||||||||||
Purchases of property and equipment | (335) | (293) | |||||||||
Payment related to acquisitions, net of cash acquired | (4,453) | — | |||||||||
Net cash used in investing activities | (4,788) | (293) | |||||||||
Cash flows provided by financing activities: | |||||||||||
Proceeds from the issuance of Series A Preferred Stock, net of issuance costs | — | 24,942 | |||||||||
Proceeds from sales of Class A common stock under the ELOC program, net of issuance costs | — | 71,455 | |||||||||
Proceeds from sales of Class A common stock under the Sales Agreement and Equity Distribution Agreement | 237,639 | — | |||||||||
Proceeds from exercise of stock options and employee stock purchase plan | 10,628 | 8,177 | |||||||||
Payment of financing costs associated with the Sales Agreement and Equity Distribution Agreement | (5,639) | — | |||||||||
Proceeds from the issuance of long-term debt, net of issuance costs | — | 85,087 | |||||||||
Payments on notes payable | (105,540) | (35,029) | |||||||||
Payments on finance leases | (58) | (74) | |||||||||
Net cash provided by financing activities | 137,030 | 154,558 | |||||||||
Effects of exchange rate changes on cash | 130 | — | |||||||||
Net change in cash, cash equivalents, and restricted cash equivalents | 91,932 | 120,064 | |||||||||
Cash, cash equivalents, and restricted cash equivalents, beginning of period | 109,035 | 9,475 | |||||||||
Cash, cash equivalents, and restricted cash equivalents, end of period | $ | 200,967 | $ | 129,539 |
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SOUNDHOUND AI, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS – Continued
(In thousands)
(Unaudited)
Reconciliation to amounts on the condensed consolidated balance sheets: | |||||||||||
Cash and cash equivalents | $ | 200,156 | $ | 115,764 | |||||||
Non-current portion of restricted cash equivalents | 811 | 13,775 | |||||||||
Total cash, cash equivalents, and restricted cash equivalents shown in the condensed consolidated statements of cash flows | $ | 200,967 | $ | 129,539 | |||||||
Supplemental disclosures of cash flow information: | |||||||||||
Cash paid for interest | $ | 3,541 | $ | 4,344 | |||||||
Cash paid for income taxes | $ | 1,274 | $ | 1,098 | |||||||
Noncash investing and financing activities: | |||||||||||
Conversion of Series A Preferred Stock to Class A common stock | $ | 14,187 | $ | — | |||||||
Issuance of Class A Common Stock to settle commitment shares related to the ELOC program | $ | — | $ | 915 | |||||||
Deferred offering costs reclassified to additional paid-in capital | $ | 147 | $ | 802 | |||||||
Unpaid financing costs in connection with the Equity Distribution Agreement | $ | 522 | $ | — | |||||||
Non-cash debt discount | $ | — | $ | 4,136 | |||||||
Property and equipment acquired under accrued liabilities | $ | 92 | $ | — | |||||||
Fair value of Class A common stock and deferred equity consideration issued for SYNQ3 acquisition | $ | 9,687 | $ | — | |||||||
Fair value of contingent earnout consideration under SYNQ3 acquisition | $ | 1,676 | $ | — | |||||||
Fair value of contingent holdback consideration under SYNQ3 acquisition | $ | 427 | $ | — | |||||||
Fair value of deferred cash consideration under other acquisition | $ | 195 | $ | — | |||||||
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