EX-99.2 4 soun-20241022ex992financia.htm EX-99.2 Document

アメリアホールディングス社および子会社
連結簡易貸借対照表
（千ドル単位、株式データを除く）
（未確定）
6月30日12月31日
20242023
資産
流動資産:
現金及び現金同等物
$2,717$11,359
売掛金は、それぞれ1,200,000ドルと700,000ドルの貸倒引当金を差し引いた額です

11,08719,747
前払費用およびその他の流動資産

2,2491,244
その他の債権

2,9412,471
先渡手数料

1,1041,082
契約資産
 2,692 3,500
流動資産合計

22,79039,403
のれん資産は、それぞれ1億9700万ドルと1億2500万ドルの累積償却額を差し引いた金額です47,97155,099
のれん107,307107,307
非流動資産における繰延売上債務2,1642,580
その他の固定資産 3,432 3,506
総資産
$183,664$207,895
 

負債、償還可能な優先株式および株主資本不足
流動負債：
支払調整
$12,312$6,874
未払費用

11,73813,871
前受収益

26,79126,646
長期債務の流動部分

96,01488,708
関連会社に対する支払い義務

8581,395
コンティンジェントバリューライト負債

—9,667
その他の流動負債
 5,998 6,668
流動負債合計

153,711153,829
 
当座債務超過分の前受収益、純額1,100ドル5,72212,292
ワラントの負債5,4244,640
繰延税金負債12,37812,665
その他の長期負債 72 140
負債合計
 177,307 183,566
約束事項および不確定事項（注8）

优先股シリーズA-1、A-2、A-3およびA-4、1株当たり0.001ドルの割引；承認済みの株式数16,034,483株；
それぞれ11,546,221株および7,780,941株が発行されており発行済み株数。合算清算

2024年6月30日および2023年12月31日、それぞれ267.680ドルおよび251,900ドルの優先度

267,680251,900
株主の欠損金額:
AクラスおよびBクラス普通株式、1株当たり0.001ドルの割引；承認済みの株式数253,933,170株；100,000,000

6月30日および2023年12月31日時点の発行済み株式数

100100
累積赤字

(258,813)(225,770)
その他の総合損失
 (2,610) (1,901)
株主資本の赤字合計
 (261,323) (227,571)
負債総額、償還可能な優先株および株主資本の赤字
$183,664$207,895



アメリアホールディングス社および子会社
損益計算書および包括損益計算書の要約連結
営業活動によるキャッシュフロー：
（未確定）
6ヶ月間
6月30日、
20242023
売上高$45,332$46,812
66.8
売上原価（減価償却前のものを除く）

25,00428,086
研究開発

5,8936,598
営業・マーケティング

11,58712,135
一般管理費用

12,34214,161
減価償却費および償却費

 6,073 6,026
総費用及び経費

 60,899 67,006
営業損失

 (15,567) (20,194)
 
その他の収益（費用）純額：
その他の収益（費用）、純額

6,828(79)
利子費用

 (10,644) (10,139)
その他の収益（費用）合計、純
(3,816)(10,218)
 
所得税引当金前損失(19,383)(30,412)
法人税等課税当期純利益 (123) (231)
純損失

$(19,506)$(30,643)
 
その他の包括的損失:
為替差損益

 (709) (925)
総綜損益

$(20,215)$(31,568)






アメリアホールディングス社および子会社
可転換償還可能な優先株および株主資本の赤字の総括連結変動表
（千ドル単位、株式データを除く）
（未確定）
2023年6月30日終了6か月間
シニアシリーズA優先株
シリーズA-4の優先株クラスB普通株式資本剰余金の増加分
その他包括利益累積損失
累積赤字
株主資本の赤字合計
株式数量株式数量株式数量
2022年12月31日の残高
7,780,941$226,939—$—     100,000,000 $100$—$(1)$(134,379)$(134,280)
累積翻訳調整
———————(925)—(925)
优先股の割増—12,342——————(12,342)(12,342)
純損失
— —— —— — — — (30,643) (30,643)
2023年6月30日現在の残高
7,780,941 $239,281— $—100,000,000 $100 $— $(926) $(177,364) $(178,190)
2024年6月30日までの6か月間
シニアシリーズA優先株式
優先株式 - シリーズA-4クラスB普通株式資本剰余金の増加分
その他包括利益累積損失
累積赤字
株主資本の赤字合計
株式数量株式数量株式数量
2023年12月31日現在残高
7,780,941$251,900— $— 100,000,000$100$—$(1,901)$(225,770)$(227,571)
株式報酬認識支払い
——————202——202
优先股A系列股票的增值—13,739————(202)—(13,539)(13,739)
发行优先股以转换CVR
——3,765,2802,041——————
累積翻訳調整
———————(709)—(709)
純損失
— —— —— — — — (19,506) (19,506)
2024年6月30日時点の残高
7,780,941$265,6393,765,280$2,041     100,000,000 $100$—$(2,610)$(258,813)$(261,323)


.


アメリアホールディングス社および子会社
キャッシュフローの概要
営業活動によるキャッシュフロー：
（未確定）
半年間終了
6月30日
20242023
（千円単位）
純損失$(19,506)$(30,643)
営業活動からの純キャッシュ流入に調整するための調整：
減価償却費用
7227
償却された未払コミッション
47956
無形資産の摘早償却
6,0015,998
営業ROU資産の変動
148204
貸倒引当金
487—
債務発行コストの減価償却
1,9231,672
満期時に支払われる債務の種付け利息の発生債務
384378
CVRの支払い
—(3,576)
繰延税金資産(287)300
ワラントおよびCVR passivaの公正価値の変動
(6,841)1,896
他
(31)(44)
営業資産および負債の変動:
売掛金の純額
8,1735,367
その他の債権
(470)431
前払費用およびその他の資産
(1,079)(2,077)
先渡手数料
(85)(1,544)
契約資産
808(519)
支払調整
5,437(12,037)
未払費用
(2,133)(6,726)
関連会社に対する支払い義務
5372,483
オペレーティングリース債務
(152)(195)
前受収益
(6,425)(4,113)
その他の負債
(586)231
営業によるキャッシュフローの純流出
(13,146) (42,431)
投資活動により使用された現金流出額:
有形固定資産の購入
(15) (22)
投資活動によるキャッシュフローの純流出
(15) (22)
財務活動による営業活動からの資金提供:
債務からの受取り
5,000—
財務活動による純現金流入額
5,000 —
現金に対する為替レートの影響
(511) 1,084
現金及び現金同等物の純減少分
(8,642)(41,325)
期首の現金及び現金同等物11,359 63,641
期末の現金及び現金同等物$2,717 $22,316
キャッシュフロー情報の補足開示:


支払利息の現金
$7,299 $5,640
所得税支払
$180 $49
非現金方式による運営リース活動
$109 $—
CVR債務を清算するためのA-4シリーズ優先株の発行
$2,041$—
シニアシリーズA優先株の創債
$13,739$12,342
5
    
アメリアホールディングス社および子会社
コンデンスド連結財務諸表に関する注記
（未確定）
ビジネスおよび組織の性質に関する注意1
Amelia Holdings, Inc.および子会社（以下、Amelia Holdings、当社、または会社という）、は人工知能（AI）および自動化ソリューションと関連サービスの開発と提供に従事しており、日常業務を排除し、人間の才能を解放してイノベーションを通じた価値創造に集中することを目的としています。会社の本部はニューヨークにあり、現在、北アメリカ、ヨーロッパ、アジア太平洋地域で事業を展開しています。会社は、金融サービス、保険、ヘルスケアを含むさまざまな産業にサービスを提供するソフトウェア製品と関連サービスを提供しています。会社の焦点はソフトウェアベースの人工知能製品と関連サービスにあります。会社は2022年8月19日にデラウェア州で設立されました。
AIベースのデジタルリソースソリューションであるAmeliaは、テクノロジーサービスからビジネスワークフローセグメント（Business Process as a Service）までの一連のビジネスドメインを中心に構築されています。私たちのAIの機能は、教師ありおよび教師なしの機械学習、推論（最適な行動）、自動化活動のためのAmeliaの操作デザインに組み込まれています。人間が以前行っていたタスクを実行することで、Ameliaは物理的およびクラウドベースのテクノロジーインフラストラクチャ、アプリケーション、ワークフローにわたる「デジタル従業員」の設計図として機能します。Ameliaの製品とソリューションは、直接販売されるだけでなく、チャネルパートナーを通じても販売されています。
会社は、顧客がオンプレミスのソリューションを希望する場合、ソフトウェア・サービス（SaaS）として提供するか、永続ライセンスまたは期間限定ライセンスとして提供しています。アメリア・ソフトウェア製品に関しては、保守およびプロフェッショナルサービスも提供されています。製品ポートフォリオは以下の通りです:
•Amelia Conversational AI – software-based labor units charged per session or per user basis that encompass tasks, activities, and operational routines. This is the next evolution of the chatbot, virtual assistant and robotic process automation models. Amelia Conversational AI are software run-time tasks that span application and workflow function points.
•AIOps – Information Technology (“IT”) focused framework and AI-platform. AIOps is a machine learning, data capture, digital operating environment focused on analysis of IT systems and orchestration of multiple operations automations. These solutions are constructed with reference designs of IT service management platforms, IT workflow orchestration, AI, technology/infrastructure data and cloud operating systems.
•DigitalFirst – offering of human equivalent service for autonomous business workflows and content/data intelligence, executed by digital agents first backed by human capital solutions, from which the digital employees learn continually. The solution is structured by digital agents built for various verticals, and re-balances human and machine interfaces through the life of the product utilization.
The focus of our Amelia software, whether it be embedded within a customer offering, or delivered through our product offerings, is to serve what we believe is a future in which a considerable number of existing tasks are to be performed by intelligent machines and systems.
On June 30, 2023, the holders of common stock executed a call option on the Senior Series A Preferred Stock (see Note 11). An agreement on that date between common stockholder and the holder of Senior Series A Preferred stock established:
•There would be a period from the execution of the agreement, through March 31, 2024 within which to raise funds and complete a definitive agreement to affect the repurchase of Senior Series A Preferred Stock. If not completed, the effort would be deemed a Transaction Failure.
•取引失敗時、Senior Series A优先股の保有者であるBuildGroupは、再び最大4000万ドルのSeries A-3优先股を購入する権限が付与され、会社は90日間にわたってそのような优先股を発行する権限が付与される。

    
アメリアホールディングス社および子会社
コンデンスド連結財務諸表に関する注記
（未確定）
•交易の失敗が発生すると、シニアシリーズA優先株の過半数を保有する者は、自己の裁量で会社の売却を交渉し完了するドラッグアロングトリガーが発生します。
2024年3月31日、取引が失敗しました。
トランザクションの失敗は上記のドラッグアロングトリガーを引き起こしました。ドラッグアロングトリガーの後、会社は具体的な買収契約を締結し、SoundHound人工知能社によって取得されました。取引は2024年8月6日に完了しました。ノート12を参照)
重要な会計方針の要約
T会社は、2023年12月31日に終了する会社の年次財務諸表に含まれる重要な会計方針を記載したノート2-重要な会計方針の要約を開示しています。以下で開示されている重要な会計方針を除いて、2023年12月31日に終了する会社の年次財務諸表に含まれるノート2-重要な会計方針には、重大な変更はありません。
「Performance-Based Awards（成果に基づく受賞）」は、第7.7条に基づき、委員会によって設定されたパフォーマンス目標や他の事業目標の達成に依存して現金、株式またはその他の受賞を受け取るための受賞です。
未監査の中間連結財務諸表は、米国一般受入会計基準（「米国GAAP」）およびSECの中間財務報告に関する適用規則に従って作成されています。これらの注記における適用会計ガイダンスへの言及は、会計基準コーディケーション（「ASC」）に含まれる米国GAAPおよび米国財務会計基準委員会（「FASB」）が発行する会計基準更新（「ASU」）を指すものとします。2024年6月30日に終了した6か月間の業績は、2024年12月31日に終了する決算期や将来の中間期の業績を必ずしも示しているわけではありません。
添付の要約連結財務諸表には、Amelia Holdings, Inc.およびその完全子会社の勘定が含まれています。一部の前年の金額は、現在の年度の表示形式に適合するよう再分類されています。
会社は、収益と利益の減少を経験し、その期間は不明です。当社は、今後の1年間にわたる当社の流動性を評価する際に、これらの状況を考慮しました。流動性は、将来のキャッシュ要件を満たすための実体の能力を示すものであり、資産を維持し、運営資金を調達し、その他の一般的なキャッシュニーズを遂行するためのものです。当社の流動性は、一般的な経済、財務、競争およびその他の範囲外の要因によって影響を受けます。当社の流動性要件は、主に、債務サービスや労働費などの運営費に必要な資金です。当社は、一般にオペレーションからの現金提供によって流動性要件を満たします。また、当社は、様々なコストを削減することによって、運転費用を調達する能力を向上させるための措置を講じており、必要に応じて追加の措置を講じる準備ができています。
これらの財務諸表は、会社が存続するという前提で作成されており、将来予測可能で資産を実現し、負債を通常業務遂行の中で償還できるという意味で、引き続き種類を行うと仮定しています。 会社は過去に損失を出しており、営業活動からの現金流が運転費用やその他の現金費用を賄うには十分でないことが一貫しています。これらの要因は、会社が存続する能力について重大な疑念を投げかけます。 財務諸表には、記録された資産の回収と分類、または会社が存続できない場合に必要となる資産の金額または分類に関連する調整が含まれていません。 会社の種類の損失、減少する現金残高、資金調達の必要性に伴い、債務または株式を通じて資本を調達する潜在的な手段を模索する必要が生じました。 会社が追加資金を調達できない場合、流動性の不足が会社の将来の種類計画に重大な悪影響を及ぼす可能性があります。 会社は引き続き利用可能な資金調達を積極的に追求し、お客様と協力して将来の売上を伸ばし、コストを抑え続けるでしょう。 会社はその戦略の実珵性を信じていますが、そのような効果については保証できません。
見積もりの使用
米国会計基準に従った縮小連結財務諸表の作成には、経営陣が見積もり、判断、および前記の財務諸表および付随する注釈に記載される金額に影響を与える仮定を行う必要があります。
経営陣は、過去の経験やその他の要因、および現在の経済環境を含む、継続的な基礎で見積もりと仮定を評価しており、経営陣はそのような環境下で合理的と考えています。このような見積もりには、売上高の認識、延期された販売手数料の予想される利益期間などが含まれます。

    
アメリアホールディングス社および子会社
コンデンスド連結財務諸表に関する注記
（未確定）
未払負債の会計、期待損失の免除、買収した事業の取得価額の配分、無形資産やの商標に対する評価、および減価償却処理についての会計および税額と関連する評価引当金について会社は、事実や状況によってそのような見積もりや仮定を調整します。経済環境が継続的に変化することによって生じるそれらの見積もりの変更は、将来の期間の財務諸表に反映されます。将来の事象やその影響を正確に把握することはできないため、実際の結果はリスクや不確実性により、これらの見積もりや仮定と実質的に異なる可能性があります。
収益認識
会社は、アメリアおよびAIOpsプラットフォーム（以下、「アメリアソフトウェアプラットフォーム」という）へのアクセスの売上高を、サブスクリプションベースのソフトウェアのライセンス、サブスクリプションサービスへのアクセス、専門サービスの提供を通じて得ています。契約に基づき顧客に約束された製品およびサービスのコントロールが移転し、契約の下での義務の履行が満たされた時点で、ライセンスの販売、サブスクリプションサービスへのアクセスおよび専門サービスの販売に引き換えに支払う見込みのある金額に応じた売上高を認識しています。
売上高は、顧客から徴収された税金を差し引いた額で認識され、その後、政府機関（例：売上税その他間接税）に納付されます。
会社はASC 606の下で必要とされる5段階の方法論に基づいて売上高を認識します。 同社は、トピック606の範囲に含まれるライセンシング契約に参加し、これらの契約の下で、同社はその一部の薬物候補の権利を第三者にライセンス供与しています。これらの契約の条件には、返金不可能な事前ライセンス料金、開発、規制および商業的なマイルストーン支払い、およびライセンスされた製品の純売上高に対するロイヤルティが含まれます（いずれかが支払われる場合）。詳細については、Note 10を参照してください。（ASC 606）、これは顧客との契約を特定し、契約内の遂行義務を識別し、取引価格を決定し、識別された遂行義務に取引価格を割り当て、各遂行義務が満たされるとき（または随時）売上高を認識します。
会社は一般的に、主契約によって規定される受注書を通じて顧客と契約を結びます。契約が承認されたとき、ライセンス、サブスクリプション、またはプロフェッショナルサービスに関する各当事者の権利、これらの製品とサービスの支払条件が識別できる場合、顧客が支払能力と支払意向を持っていると判断され、契約が商業的な実質を有している場合、会社は顧客の支払能力と支払意向を判断する際に、顧客の支払履歴や、新規顧客の場合は信用、評判、及びその他の顧客に関する財務情報など、さまざまな要因に基づいて判断を行います。契約が締結された際に、会社は契約がより大きな取引の一部であるかどうか、他の契約とともに処理されるべきか、そして合算契約または単一契約が複数の履行義務を含んでいるかどうかを評価します。契約の変更は、契約の履行において日常的に発生します。契約は、契約仕様、要件、または期間の変更を考慮してしばしば変更されます。契約の変更が、単独の販売価格で価格設定された履行義務の追加をもたらす場合、または変更後のサービスが変更前に提供されたサービスとは異なる場合、その変更は別々に処理されます。変更後のサービスが区別できない場合、それらは既存の契約の一部として処理されます。
ライセンス
アメリアソフトウェアプラットフォームのライセンスに関連する売上高は、主に期間ライセンスであり、お客様にソフトウェア製品を一定期間使用する権利を提供します。お客様にライセンスが提供された時点で収益が認識され、ソフトウェアライセンスの管理権限がお客様に完全に移転した時点で認識されます。ライセンス売上高については、ライセンスの提供時または契約記念日ごとに年次請求書を送付しています。
定期購読
ソフトウェアプラットフォーム（SaaS取引）へのアクセスを提供するサブスクリプションサービスの売上高を生成し、顧客が重大なペナルティなしで基本ソフトウェアの所有権を持つ契約上の権利がないか、お客様が独自のハードウェアでソフトウェアを実行することが現実的ではないか、またはサードパーティとソフトウェアをホストする契約を結ぶことができない場合に関連します。 SaaS製品は製品へのアクセスを提供する待機義務であり、関連する売上高は契約期間全体にわたって均等に認識され、製品アクセスが顧客に提供され、サービスの管理が顧客に移転された日から開始されます。これらの契約については、サービス提供前に月次、年次、または一度の支払いを請求します。

    
アメリアホールディングス社および子会社
コンデンスド連結財務諸表に関する注記
（未確定）
Subscription service revenue also includes ongoing customer support and maintenance, which are provided for license and SaaS arrangements and consists of technical support and the provision of unspecified updates and upgrades on a when-and-if-available basis. Ongoing customer support and maintenance represent stand-ready obligations for which revenue is recognized ratably over the term of the ongoing customer support and maintenance period. For ongoing customer support and maintenance services, we generally invoice customers annually in advance.
Professional Services and Other
Professional services and other revenue include revenue from our Managed Services which are delivered by software engineers utilizing our Amelia Software Platforms and are comprised of a series of distinct services that are substantially the same and that have the same pattern of transfer (i.e., distinct days of service). We invoice customers for Managed Services on a monthly or quarterly basis and recognize revenue ratably over the period services are provided.
Additionally, professional services consist of consulting services and implementation services sold in conjunction with licenses and subscription services. Professional services may also include testing/go-live support, development/deployment of use cases and training. These professional services are provided on either a time-and-material basis or as a fixed-price contract and revenue is recognized over time as the services are delivered.
Contract Assets and Liabilities
The timing of revenue recognition may differ from the timing of invoicing to customers, and these timing differences result in receivables, contract assets (unbilled revenue), or contract liabilities (deferred revenue) on the Company’s condensed consolidated balance sheets. The Company records receivables related to revenue when it has an unconditional right to invoice and receive payment from customers. The Company records unbilled revenue when revenue is recognized prior to invoicing and the Company does not have the unconditional right to invoice or performance risk remains with relation to satisfying the performance obligation.
Deferred revenue primarily consists of customer billings or payments received in advance of revenues being recognized from customer contracts, including non-cancellable and non-refundable committed funds and refundable customer deposits. Deferred revenue that is anticipated to be recognized during the succeeding twelve-month period is recorded as current deferred revenue and the remaining portion is recorded as non-current.
Operating Expenses
The Company’s operating expense categories include cost of revenues, research and development, sales and marketing, general and administrative and depreciation and amortization.
The Company’s cost of revenues are comprised of costs associated directly with Amelia’s revenue streams as described above. This primarily includes cost related to hosting for cloud-based services such as network management, and certain personnel-related expenses, including salaries, benefits and bonuses, that are directly related to these revenue streams.
Research and development activities consist of personnel-related expenses directly associated with development activities such as continued improvement and conceptualizing use cases, costs associated with technological supplies and data center capacity used for research and development purposes. The Company expenses research and development costs associated with the design and development of new products prior to the establishment of their technological feasibility in the periods in which they are incurred.
Sales and marketing activities are directed toward both the acquisition of new customers and increasing the Company’s business with existing customers. Sales and marketing activities are primarily comprised of personnel-related costs associated with sales and marketing staff, as well as commissions paid to sales employees.
General and administrative activities are comprised of professional fees, general corporate and facility costs and overhead, including personnel-related expenses for executive, finance legal and human resources activities.

    
AMELIA HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Depreciation and amortization include depreciation of the Company’s infrastructure and equipment and amortization of intangible assets.
Foreign Currency
The functional currency of each of the Company’s international subsidiaries is its local currency. Accounts of foreign operations are translated into U.S. dollars using exchange rates for assets and liabilities at the balance sheet date and average prevailing exchange rates for the period for revenue and expense accounts.
Adjustments resulting from translation are included in accumulated other comprehensive income (loss).
Realized and unrealized transaction gains and losses are included in our condensed consolidated statements of operations in the period in which they occur. The Company recognized net foreign currency gains (losses) of $0.4 million, and $(0.5) million for the six months ended June 30, 2024 and 2023, respectively.
Concentration of Credit Risk and Significant Customers
Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash and cash equivalents, and accounts receivable.
All the Company’s customers consist of corporate and governmental entities. A limited number of customers have accounted for a large part of the Company’s revenue and accounts receivable to date. The Company provides credit to its customers in the normal course of business and requires no collateral to secure accounts receivable.
As of June 30, 2024 and December 31, 2023, no customer accounted for more than 10% and one customer accounted for 11.6% of the Company’s accounts receivable, respectively. No single customer accounted for more than 10% of the Company’s revenue for the six months ended June 30, 2024 and 2023, respectively.
Recent Accounting Pronouncements – Not Yet Adopted
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.
NOTE 3. AMELIA BUSINESS COMBINATION
The Reorganization discussed in Note 1. Nature of Business and Organization was accounted for by Amelia Holdings in accordance with the acquisition method of accounting pursuant to ASC 805 as Amelia Holdings obtained a controlling financial interest in Amelia and Amelia constitutes a business with inputs, processes, and outputs. Topic 805 requires the Company to recognize acquired assets, including identifiable intangible assets and all assumed liabilities, at fair value on the acquisition date. Determining the fair value of assets acquired and liabilities assumed requires management’s judgment and often involves the use of significant estimates and assumptions, including assumptions with respect to future cash flows, discount rates and asset lives. The fair value of assets deemed acquired and liabilities assumed was determined based on assumptions that reasonable market participants would use in the principal (or most advantageous) market for the asset or liability. The excess of the fair value of purchase consideration over the values of these identifiable assets and liabilities is recorded as goodwill.
The Company is amortizing the acquired identifiable definite-lived intangible assets over their estimated useful lives from the acquisition date, which is consistent with the estimated useful life considerations used in determining their fair values. During the six months ended June 30, 2024 and 2023 the Company recorded approximately $6.1 million and $6.0 million of amortization expense on the acquired intangible assets, respectively. The estimated aggregate amortization expense for

    
AMELIA HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
each of the five succeeding fiscal years is approximately $11.9 million in each year. The weighted-average amortization period is approximately 5.7 years. The Amelia Business Combination did not result in a material step-up in the tax basis of any of the acquired assets (including Goodwill) for U.S. federal income tax purposes.
As part of the purchase consideration transferred, the Company entered into a Contingent Value Right (“CVR”) Agreement (“CVR Agreement”) with the Predecessor Parent with a stated value of $40.0 million. The stated value of the CVR is reduced by lease payments that the Company will make on behalf of the Predecessor Parent until the earlier of the date a Qualified Financing, as defined in the CVR Agreement, occurs, or June 30, 2023. The remaining stated value of the CVR after any lease payments will be satisfied as follows:
1)Cash payment to the Predecessor Parent upon receipt of proceeds from any Qualified Financing.
2)If a Qualified Financing does not occur, the Company will issue Series A-4 Preferred Stock on June 30, 2023, based on the remaining stated value divided by $9.69.
The Company determined that the fair value of the CVR issued as part of the overall purchase consideration was $10.6 million as of December 21, 2022.
On June 30, 2023, the Company separately modified the CVR Agreement with its Predecessor Parent. The significant modifications were as follows:
1)The CVR stated valued was increased by $3.6 million.
2)The Company extended the period of time in which it funded the lease payments on behalf of the Predecessor Parent through December 31, 2023. These lease payments reduced the amended CVR balance through December 31, 2023.
3)The original conversion date of the CVR to Series A-4 of June 30, 2023, was modified to set a termination date at the earlier of the CVR amount reducing to zero or the date on which the Company issues either a promissory note or Series A-4 Preferred Stock to settle the CVR. The issuance of Series A-4 Preferred Stock was to occur thirty days after a Transaction Failure as defined in the agreements.
4)The agreement regarding subleasing of floors was reduced from three floors to two floors as of January 1, 2024, however no sublease has been executed.
5)The agreement regarding subleasing of floors was reduced to zero should a successful financing be completed that fully redeems the Series A Preferred Stock.
6)The requirement to utilized funds from sale of Series A-3 Preferred Stock, if any, for the redemption of CVR balances was terminated.
As of June 30, 2024, the stated balance of the CVR is approximately $36.5 million as the Company continued to make lease payments on behalf of the Predecessor Parent through June 30, 2024. The CVR had a fair value of $2.0 million. On June 30, 2024, the CVR was converted to 3,765,280 shares of Series A-4 Preferred Stock, therefore terminating the CVR agreement. The fair value of the CVR was recorded as preferred stock upon settlement on the condensed consolidated balance sheet.
The Company elected to account for the CVR under the fair value option as it believes this election best reflects changes in fair value of consideration that is expected to be transferred. The fair value estimate is considered a Level 3 measurement. Changes in fair value are recognized through earnings within other income (expense), net on the condensed consolidated a statements of operations and comprehensive loss.
The following is a roll forward of the CVR measured at fair value on a recurring basis using unobservable inputs (Level 3).

    
AMELIA HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Balance at December 31, 2023$9,667
Change in fair value(7,627)
Settlement of CVR upon conversion to Preferred Stock Series A-4(2,041)
Balance at June 30, 2024$—
    
NOTE 4. REVENUE
Disaggregation of Revenue
The following table presents our revenues disaggregated in accordance with the timing of when performance obligations are satisfied:
Six Months Ended June 30,
20242023
Revenue recognized at a point in time:
License
$1,280$1,930
Revenue recognized over time:
Services and other
8,8389,087
Subscription
35,21435,795
Total revenue$45,332$46,812

Revenue by geographic region for periods presented are summarized below:
Six Months Ended June 30,
20242023
Revenue by region:
United States of America
$34,943$32,557
International
10,38914,255
Total revenue$45,332$46,812

Contract Asset and Liability Balances
Unbilled revenue totaled $2.7 million and $3.5 million as of June 30, 2024 and December 31, 2023, respectively, and were recorded within contract assets on the condensed consolidated balance sheets. There were no impairments to contract assets during the six months ended June 30, 2024 and 2023.
Deferred revenue balances were $32.5 million and $38.9 million (net of deferred interest on significant financing component), as of June 30, 2024 and December 31, 2023, respectively.
Revenues recognized included in the balances of the deferred revenue at the beginning of the reporting period for the six months ended June 30, 2024 and 2023 were $22.1 million and $19.1 million, respectively.


AMELIA HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
As of June 30, 2024, the aggregate amount of the transaction price allocated to the remaining performance obligations related to customer contracts that were unsatisfied or partially unsatisfied was $87.8 million. Given the applicable contract terms, $54 million is expected to be recognized as revenue within one year, $33.8 million is expected to be recognized between 2 to 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 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 the timing of delivery of products and services, or contract modifications.
Unbilled Receivables
Unbilled receivables are recorded when revenue recognized on a contract exceeds the billings to date for that contract and the right to consideration is unconditional when only passage of time is required before payment of that consideration is due. Unbilled receivables totaled $0.6 million and $2.1 million as of June 30, 2024 and December 31, 2023, respectively, and were recorded within contract assets on the condensed consolidated balance sheets.

5. DEBT AND CAPITAL LEASE OBLIGATIONS
The carrying amount of current and non-current debt, net of unamortized discounts, is as follows (in thousands):
June 30,
2024
December 31,
2023
Monroe Term Loan Facility, net of discounts$72,485$70,485
Monroe Delayed Draw Facility, net of discounts23,52917,384
Monroe Revolving Loan Facility—
839
Total debt obligations96,01488,708
Less: current portion of debt(96,014)(88,708)
Non-current portion of debt$—$—
As of June 30, 2024 and December 31, 2023, the Company’s condensed consolidated balance sheet has $20.9 million and $22.7 million, respectively, of unamortized debt issuance costs related to the Company’s debt facilities, which are presented as a direct reduction of the Company’s current and non-current debt, respectively, as discussed in the Monroe Credit Agreement section below.
The Company utilized its Delayed Draw Term Loan Facility through March 31, 2024 and drew down on the facility in the amount of $6.0 million.
Monroe Credit Agreement
On December 21, 2022, the Company entered into an agreement with Monroe Capital whereby Monroe Capital extended credit to the Company in the form of (a) a term loan in the aggregate principal amount of $75 million on the closing date (the “Term Loan Facility”), (b) a $25 million committed delayed draw term loan facility (the “Delayed Draw Term Loan Facility”) and (c) a $5 million committed revolving loan facility (the “Revolving Loan Facility”). The Term Loan Facility proceeds was funded on December 21, 2022. There were outstanding borrowings of $75.0 million, $19.0 million and $1.0 million on the Term Loan, Delayed Draw Term Loan Facility and Revolving Loan Facility, respectively, as of December 31, 2023. The Delayed Draw Term Loan has a termination date of June 21, 2024, to the extent any of the committed amounts remain undrawn. As of June 30, 2024, $6.0 million and $4.0 million of the Delayed Draw Term Loan and Revolving Loan Facility, respectively, remained undrawn. On June 30, 2024, and December 31, 2023, the future debt maturities are $90.8 million (inclusive of Exit Fees discussed below). All credit facilities under the Monroe Credit


AMELIA HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Agreement have a maturity date of December 21, 2027, unless the Preferred Shareholders exercise their redemption rights prior to that in which case all amounts would be fully due to Monroe Capital at that time, or we fail a covenant without a waiver.
The Term Loan Facility carries a variable interest rate based on the secured overnight financing rate (“SOFR”) administered by the Federal Reserve Bank of New York, an applicable margin and monthly periodic interest period adjustment, totaling a rate of 14.6% as of June 30, 2024 and December 31, 2023, respectively.
Lender fees and third-party debt issuance costs in the total amount of $7.6 million were incurred associated with execution of the Monroe Credit Agreement. The Company also will incur an Exit Fee of $15.7 million payable to Monroe Capital upon the earlier of maturity or such other date as the obligations under the credit agreement are paid in full. Additionally, Monroe Capital received at no charge warrants to acquire shares of the Company’s Series A-2 Preferred Stock at an amount equal to 7.5% percent of the Total Commitments. Each of the above amounts, $26.2 million in total, are collectively treated as capitalized debt issuance costs related to each of the credit facilities and therefore allocated between the Term Loan Facility, Delayed Draw Term Loan Facility, and Revolving Loan Facility based on the commitment amount of each facility relative to the total commitments of $105.0 million. The Company amortizes deferred financing costs using a method that approximates the effective interest method over the term of the related financing.
In addition to the interest rates set forth above, prior to the Conversion Date, each loan shall accrue interest at 1% per annum (the “PIK Rate”) and the amount accrued shall be paid in kind monthly in arrears on the last business day of each calendar month, beginning with the month ending December 31, 2022. Any interest that is paid in kind under this provision shall be capitalized and added to the outstanding principal amount of such. The Company accrued $1.2 million related to paid in kind interest as of June 30, 2024.
Amortization of debt issuance costs across all three credit facilities amounted to approximately $1.9 million and $1.7 million for the six months ended June 30, 2024 and 2023, respectively, and is reflected in the condensed consolidated statements of operations and comprehensive loss, together with interest expense. Interest expense recorded in the condensed consolidated statements of operations and comprehensive loss amounted to $7.6 million and $5.6 million for the six months ended June 30, 2024 and 2023, respectively, related to Monroe Credit Agreement.
The Borrower shall repay the principal amount of the Term Loan Facility on the last business day of each quarter, beginning with the first fiscal quarter ending after the Conversion Date, in an amount equal to the product of (A) the original funded principal amount and (B) 0.25%. The loans are subject to mandatory prepayment upon receipt of certain proceeds, or excess cash flows, as defined, after the Conversion Date.
Under the terms of the relevant financing agreements with Monroe, the Company has granted Monroe a security interest in substantially all assets of the Company. In addition, the Company has pledged 100% of the stock and/or equity interests of the following companies: Amelia Holding II LLC, Amelia Holding I LLC, Amelia US LLC, IPsoft Government Solutions, LLC, and Amelia NL BV.
The Monroe Credit Agreement also has an acceleration clause relating to a change in control in which the Preferred Stockholder would no longer exercise the same voting and other protective provisions as established as of December 21, 2022. In addition, if the Preferred Stockholder exercised its redemption rights under the Preferred Stock Agreement, as described in Note 11, all amounts due under the Monroe Credit Agreement (including the Exit Fee) would accelerate to Monroe Capital prior to any amounts due to the Preferred Stockholder as a result of exercising the redemption right.
Pursuant to the Monroe Credit Agreement, the Company agreed to certain restrictive covenants, including the following financial covenants:
Recurring Revenue Leverage Ratio
Prior to a conversion date, the Recurring Revenue Leverage Ratio, defined as the ratio of (a) Consolidated Total Debt to (b) Annualized Recurring Revenue as tested on a quarterly basis ranging from a ratio of 1.50 : 1.00 to 0.75 : 1.00 over the life of the debt facilities.


AMELIA HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Minimum Liquidity
Prior to a conversion date, the Monroe Credit Agreement does not permit liquidity at any time to be less than $15,000,000. Liquidity is defined in the agreement as the combination of cash and cash equivalents, and the accessible but unused portion of the Revolving Loan Facility.
Total Net Leverage Ratio
From and after the Conversion Date, the Total Net Leverage Ratio, defined as the ratio of (a) Consolidated Total Debt as of such date minus the aggregate amount of unrestricted cash and Cash Equivalents held as of date in such deposit or securities accounts subject to Control Agreements up to a maximum of $5,000,000 (subject to certain adjustments) to (b) Condensed Consolidated EBITDA on a quarterly basis ranging from a ratio of 7.00 : 1. 00 to 4.00 : 1.00 over the life of the debt facilities.
On June 27, 2024, Monroe Capital exercised its rights under the Monroe Credit Agreement to convert Amelia Holdings II, LLC, the legal borrower and direct subsidiary through which the Company manages all other subsidiaries, from a member managed company to a manager managed company, appointing an independent manager.
On July 8, 2024, Monroe Capital and the Company entered a forbearance agreement such that the financial covenants described above are temporarily suspended through August 15, 2024, and access and ability to draw on the Revolving Loan Facility was confirmed. As part of the agreement, the Company agreed that any draw on the Revolving Loan Facility result in pro-forma cash of no more than $1 million after utilization of the drawn funds. Following the expiration of the forbearance agreement the Company would not likely be in compliance of its covenants and as a result the Company has classified all outstanding debt under the Monroe Credit Agreement as current.
NOTE 6. RETIREMENT PLANS
The Company offers defined contribution plans to eligible employees. These plans are offered in the following jurisdictions: US, Australia, Canada, France, Germany, Japan, Netherlands, Norway, Slovakia, Spain, Sweden, and the UK. The Company has no additional liability beyond its contributions. The participants in the plan can direct their contributions to numerous investment options. The Company’s contribution cost for the six months ended June 30, 2024 and 2023 amounted to $0.6 million and $0.9 million, respectively, and is included within the condensed consolidated statements of operations and comprehensive loss.
The Company is statutorily required to provide post-employee benefits for eligible employees in India. The annual cost of these benefits is based upon a specific actuarial computation which is followed consistently. The overall financial impact to the Company’s financial position, operations, and cash flows of this plan is immaterial.
NOTE 7. INCOME TAXES
The tax expense and the effective tax rate were as follows (in thousands):

Six Months Ended June 30,
20242023
Loss before provision for income taxes$(19,383)$(30,412)
Income tax expense123231
Effective tax rate(0.63)%(0.76)%
The Company’s recorded effective tax rate differs from the U.S. statutory rate primarily due to an increase in the domestic valuation allowance caused by tax losses, foreign withholding taxes, foreign tax rate differentials from the U.S. domestic statutory tax rate and tax benefit resulting from acquisition.


AMELIA HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 8. COMMITMENTS AND CONTINGENCIES
Litigation and Legal Proceedings
The Company accrues contingent liabilities, including estimated legal costs, when the obligation is probable, and the amount is reasonably estimable. As facts concerning contingencies become known, the Company reassesses its position and makes appropriate adjustments to the condensed consolidated financial statements. Estimates that are particularly sensitive to future changes include those related to tax, legal and other regulatory matters, changes in interpretation and enforcement of international laws, and the impact of local economic conditions and practices, which are all subject to change as events evolve and as additional information becomes available during the administrative and litigation process.
As of June 30, 2024, the Company was involved in litigation arising in the normal course of business that is pending. The results of the proceedings are not expected to have a material adverse effect on the Company’s condensed consolidated financial position or results of operations and comprehensive loss. Actual outcomes of these legal and regulatory proceedings may differ materially from our current estimates. It is possible that resolution of one or more of the legal matters currently pending or threatened could result in losses material to our condensed consolidated results of operations, liquidity, or financial condition.
NOTE 9. RELATED-PARTY TRANSACTIONS
In connection with the Amelia Business Combination, the Successor and Predecessor entities entered into a transition service agreement to support the provision by the Successor entity of customer support services within the United Kingdom and Germany as well as certain administrative services related to the collection of trade receivables on behalf of the Predecessor entity. As of June 30, 2024 and December 31, 2023, $0.9 million and $1.4 million, respectively, was accrued related to these activities and is presented as due to related party on the condensed consolidated balance sheets.
Employee loans totaled $472 thousand as of June 30, 2024 and December 31, 2023, respectively, and were recorded as employee loans receivable on the condensed consolidated balance sheets.
NOTE 10. 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:

June 30, 2024
Level 1Level 2Level 3
Liabilities:
Warrant Liability
$—$—$5,424
Total liabilities
$—$—$5,424


AMELIA HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
December 31, 2023
Level 1Level 2Level 3
Assets:
Cash and cash equivalents:
Treasury bills$10,068$—$—
Total assets$10,068$—$—
Liabilities:
Contingent Value Right
$—$—$9,667
Warrant Liability
——4,640
Total liabilities
$—$—$14,307
NOTE 11. STOCKHOLDERS’ EQUITY
Authorized and issued capital of the Company consists of:
Common Stock
The Company is authorized to issue 253,933,170 shares of Common Stock, of which 153,933,170 shares have been designated Class A Common Stock, $0.001 par value per share, none of which are issued and outstanding as of June 30, 2024 and 2023.
On December 21, 2022, 100,000,000 shares have been designated Class B Common Stock, $0.001 par value per share, 100,000,000 shares of which are issued and outstanding on June 30, 2024 and December 31, 2023.
Shares of Class A Common Stock and Class B Common Stock have the same rights and powers, rank equally; provided that the voting, dividend and liquidation rights of the holders of the Common Stock are subject to and qualified by the rights, powers and preferences of the holders of the Preferred Stock, as described below.
Each share of Class B Common Stock shall be automatically, without further action by the holder thereof, converted into one (1) fully paid and non-assessable share of Class A Common Stock, upon (i) the occurrence of a transfer of such share of Class B Common Stock or (ii) an initial public offering (“IPO”).
As described in Note 1, the Common Stockholder has the right, but not the obligation, to redeem all shares of Senior Series A Preferred Stock held at a per share purchase price equal to the 175% of the applicable stated value then in effect with respect to such share of Series A Preferred Stock on the one-year anniversary of the issuance date (Common Stockholder Call Option). Pursuant to agreement the call option closing date shall occur no later than 90 days from the date of the call notice. The Common Stockholder exercised the call option at the one-year anniversary date and the closing failed to occur within the 90 day period and as such the call right of the Common Stockholder Call Option terminated on March 31, 2024.
Preferred Stock
The Company is authorized to issue 16,034,483 shares of Preferred Stock, of which 3,654,170 shares have been designated Series A-1 Preferred Stock, 4,126,771 shares have been designated Series A-2 Preferred Stock, 4,126,771 shares have been designated Series A-3 Preferred Stock (together, “Senior Series A Preferred Stock”) and 4,126,771 shares have been designated Series A-4 Preferred Stock, $0.001 par value per share. On December 21, 2022, 3,654,170 series A-1 Preferred Stock shares and 4,126,771 Series A-2 Preferred Stock shares were issued and are held by one shareholder (Build Group), which are outstanding at June 30, 2024 and December 31, 2023. There are no shares of A-3 Preferred Stock outstanding at June 30, 2024 and December 31, 2023. On June 30, 2024, the CVR was converted to 3,765,280 shares of Series A-4 Preferred Stock.


AMELIA HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

Preferred Stock shares are convertible into class A common shares at a conversion price equal to the stated value per share of Series A Preferred Stock (initial stated value of Series A Preferred Stock is $9.6928). The conversion price is subject to adjustment based on issuance of additional shares of Class A common stock for no consideration or consideration per share less than the applicable conversion price. The conversion price is also subject to adjustment for standard anti-dilution provisions, and potential adjustment based on an effective offering price underlying an initial public offering. The shares may become mandatorily convertible upon the closing of a qualified public offering.
The preferred stock do not have a mandatory redemption date and are assessed at issuance for classification and redemption 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, as described below.
The Senior Series A Preferred Stock has the right, but not the obligation, to put the Senior Series A Preferred Stock held back to the Company at a per share purchase price equal to the 175% of the applicable stated value then in effect with respect to such share of Senior Series A Preferred Stock on the one-year anniversary of the issuance date (initial redemption) or to put all shares of Senior Series A Preferred Stock held at a per share purchase price equal to the 300% of the applicable stated value then in effect with respect to such share of Senior Series A Preferred Stock beginning on the fourth anniversary of the issuance date (full redemption). The holders of the Series A Preferred Stock did not exercise their put option at the one-year anniversary date of the Series A Preferred Stock issuance date.
The redeemable convertible preferred stock is redeemable at the option of the holders or upon a deemed liquidation event which the Company determined is not solely within its control and thus has classified shares of redeemable convertible preferred stock as temporary equity until such time as the conditions are removed or lapse. When redemption is considered probable, the Company recognizes changes in the redemption value immediately as they occur and adjusts the carrying amount of the instrument to equal the redemption value at the end of each reporting period. For the period ended June 30, 2024, the Company recognized $13.7 million in accretion of preferred stock to redemption value within mezzanine equity on the consolidated balance sheet.
Pursuant to the election of the Senior Series A Preferred Stockholders to exercise either the initial or full redemption, the Common Stockholder has the right, but not the obligation, to redeem all shares of Senior Series A Preferred Stock held at a per share purchase price equal to the 175% of the applicable stated value then in effect with respect to such share of Series A Preferred Stock on the one-year anniversary of the issuance date (initial redemption) or to redeem all shares of Series A-1, A-2 or A-3 Preferred Stock held at a per share purchase price equal to the 300% of the applicable stated value then in effect with respect to such share of Series A Preferred Stock beginning on the fourth anniversary of the issuance date (full redemption).
The Series A-4 shares may be redeemed beginning on the fifteenth anniversary of their issuance date based on the original issuance price of those Series A-4 shares.
Dividends for Senior Series A Preferred Stock compound annually and accrue at the rate per annum of eleven percent (11%) of the stated value of such share then in effect. Dividends accrue daily and are cumulative. Dividends are automatically deemed to be paid in kind, and the stated value with respect to each share of Senior Series A Preferred Stock is correspondingly increased by the accruing dividend, on a daily basis, and will not be paid by the Company in cash or in Common Stock. For the six months ended June 30, 2024, the stated value of the Senior Series A Preferred Stock increased by $4.6 million because of the accruing dividend.
The holders of the Series A-4 Preferred Stock are entitled to receive, on a pari passu basis with the holders of the Common Stock, when, as, and if declared by the Board, out of any assets of the Corporation legally available therefore, such dividends as may be declared from time to time by the Board.


AMELIA HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

Voting Rights
Each holder of Class A Common Stock has the right to one (1) vote per share of Class A Common Stock held of record by such holder and each holder of Class B Common Stock has the right to ten (10) votes per share of Class B Common Stock held of record by such holder.
Each holder of outstanding shares of Senior Series A Preferred Stock is entitled to cast the number of votes equal to the number of whole shares of Class A Common Stock into which the shares of Senior Series A Preferred Stock held by such holder are convertible as of the record date for determining stockholders entitled to vote on such matter. Holders of Senior Series A Preferred Stock vote together with the holders of Common Stock as a single class and on an as converted to Class A Common Stock basis.
Each holder of outstanding shares of Series A-4 Preferred Stock shall have no voting right on any matter presented to the stockholders of the Company.
Right to Receive Liquidation Distribution
In the event of liquidation, dissolution or winding up of the Company, after the satisfaction of all amounts due under the Monroe Credit Agreement, holders of the Senior Series A Preferred Stock will be eligible for preferential payment out of the assets of the Company over the holders of the other share classes.
2024 Equity Incentive Plan
In January 2024, the Company instituted and adopted the 2024 Equity Incentive Plan (the 2024 Plan) whereby the Company may grant equity-based incentive awards to its employees, directors and consultants pursuant to the 2024 Plan. A total of 22,470,959 shares of the Company’s Class A Common Stock is reserved for sale and issuance under the 2024 Plan. In April 2024, pursuant to the 2024 Plan, the Company issued options to purchase 12,301,329 shares of the Common A shares of the Company with a strike price of $0.40 per share, and four-year vesting. The Company recorded $0.2 million in stock-based compensation expense for the six months ended June 30, 2024.
Common Stock Warrants
In connection with the conversion of the convertible promissory note to Series A-1 Preferred Stock and the purchase of Series A-2 Preferred Stock, the Company issued 8,804,870 of Common Stock warrants, $0.001 par value per share, which expire on December 31, 2032, to the Series A-1 Stockholder. The number of Common Stock warrants may increase by up 745,288 shares to 9,550,158 in total in the event that, and in proportion with, Series A-3 or Series A-4 Preferred Stock are subsequently issued. The Common Stock warrants each have an exercise price of $9.6928 per share, subject to certain adjustments, and may be exercised in whole or in part at any time prior to December 21, 2032, including on a cash or cashless exercise basis.
As of June 30, 2024, and there were 8,804,870 Common Stock warrants outstanding.
The Common Stock warrants are classified within warrant liabilities on the condensed consolidated balance sheet as of June 30, 2024 and were valued using an option pricing model. Changes in fair value are recognized through earnings within other income (expense), net on the condensed consolidated statements of operations and comprehensive loss.
The following is a roll forward of the Common Stock warrants measured at fair value on a recurring basis using unobservable inputs (Level 3):
Balance on December 31, 2023$1,057
Change in fair value(1,028)
Balance on June 30, 2024$29


AMELIA HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

The significant unobservable inputs used in the fair value measurement of the Common Stock warrants are the expected term and volatility rate. Significant increases (decreases) in the expected term would result in significantly lower (higher) fair value measurements. Significant increases (decreases) in the expected volatility would result in significantly higher (lower) fair value measurements.
As part of the Monroe Credit Agreement, Monroe received 812,458 Series A-2 Preferred Stock warrants having a ten-year term that expires on December 21, 2032. The number of Series A-2 Preferred Stock shares that may be issued upon exercise is subject to increase based on adjustment to reduce the exercise price per share. The exercise price is equal to the lower of (a) the initial stated value of Series A Preferred Stock of $9.6928 per share and (b) 80% of the lowest price per share at which (i) the preferred equity of the Company is sold in the Company’s most recent Equity Financing (as defined in the preferred warrant agreement) or (ii) the common stock of the Company is being purchased in an Acquisition (as defined in the preferred warrant agreement). The Series A-2 Preferred Stock Warrants may be exercised in whole or in part at any time prior to December 21, 2032, including on a cash or cashless exercise basis.
All Series A-2 Preferred Stock warrants remain unexercised and outstanding as of June 30, 2024, and there were 812,458 Preferred Stock warrants outstanding as of June 30, 2024.
The Series A-2 Preferred Stock warrants were valued using a Monte-Carlo valuation method and recorded as warrant liabilities on the condensed consolidated balance sheet. Changes in fair value are recognized through earnings within other income (expense), net on the condensed consolidated statements of operations and comprehensive loss.
The following is a roll forward of the Series A-2 Preferred Stock warrants measured at fair value on a recurring basis using unobservable inputs (Level 3):
Balance on December 31, 2023$3,583
Change in fair value1,812
Balance on June 30, 2024$5,395
The significant unobservable inputs used in the fair value measurement of the Preferred Stock warrants are the expected term and volatility rate. Significant increases (decreases) in the expected term would result in significantly lower (higher) fair value measurements. Significant increases (decreases) in the expected volatility would result in significantly higher (lower) fair value measurements.
NOTE 12. SUBSEQUENT EVENTS
In accordance with ASC 855, Subsequent Events, the Company evaluated subsequent events through October 22, 2024, the date these condensed consolidated financial statements were available to be issued.
On August 6, 2024, SoundHound AI, Inc. (“SoundHound”) completed its acquisition of all the issued and outstanding shares of the Company pursuant to the stock purchase agreement by and among SoundHound, IPSoft Global Holdings, Inc., and BuildGroup, LLC. As a result of the acquisition, awards granted under the 2024 Plan were cancelled in exchange for no consideration.
Concurrent with the acquisition, the Company entered into a Second Amendment to the Monroe Credit Agreement and SoundHound paid $70 million to retire a majority of the Monroe Term Loan leaving a remaining balance of $39.69 million with a maturity date of June 30, 2026.