Document

EX-99.3 5 soun-20241022ex993proforma.htm EX-99.3 Document

エキシビット99.3

修正済みコンデンス化された財務情報

サウンドハウンド人工知能株式会社（以下、「サウンドハウンド」または「会社」という）の未監査のプロフォーマ連結財務情報は、修正されたS-X規則第11条に準拠して作成され、サウンドハウンドとアメリアホールディングス株式会社（以下、「アメリア」または「ターゲット」という）の歴史的財務情報の結合を示し、買収の効果を与えるよう調整されています。サウンドハウンドの未監査のプロフォーマ連結財務情報は、サウンドハウンドが行ったもう1つの財務イベントに効果を与え、サウンドハウンドの歴史的財務情報にまだ反映されていないが、買収とは別の重要な取引と見なされます。

取得の説明

2024年8月6日（「取得日」）、サウンドハウンドは、サウンドハウンド、ファイヤーホースマージャーサブLLC（「買収者サブ」）、IPSoft Global Holdings, Inc.、およびBuildGroup, LLCの間で締結された株式購入契約（「購入契約」）の条件に従い、Ameliaの買収（「買収」）を完了しました。各IPSoft Global Holdings, Inc.およびBuildGroup LLCは、それぞれ「売り手」であり、合わせて「売り手」と表現されています。会社は、サウンドハウンドの特定普通株式を合計5,959,050株を売り手に発行しました（「前払い検討事項」）。購入契約の条件に従い、会社は売り手の補償義務を部分的に確保するために、前払い検討事項のうち2,149,530株をエスクローアカウントに預託しました（「エスクロー検討事項」）。さらに、会社は、買収の成立に伴う売り手の取引費用に関して840万ドルの現金を支払いました。買収の有効時に、各未決済のターゲット株式オプションは権利を有することなく期限切れとなり、取引権も権利を有することなく期限切れになり、取引権も権利を有することなく期限切れとなりました。前払い検討事項に加えて、会社は、2025年および2026会計年度に一定の売上目標の達成に基づいて、最大16,822,429株を売り手に発行することに同意しました。

その他の資金調達イベント

会社は、買収に関連して、ターゲットの修正された上位担保期日ローンを引き受けました（「修正期日ローン施設」）。修正条項に従い、2024年8月7日に現金で$70 millionを支払い、Outstanding principal balanceの一部を支払い、修正期限ローン施設に関連する一定の手数料を解決するために、2,943,917株を発行しました（「債務償却」および買収を合わせて、「取引」といいます）。残高の残高$39.7 millionは2026年6月30日（「満期日」）までの債務及び当該貸付についての利息の一部が現金で支払われることを選択制で、もしくはどれかの利息が種付けられ資本化され、ローン期間中に未払いの元金に加えられ、満期日に未払いの元金および償還された利息が支払われます。修正期限ローン施設はいつでも返済が可能であり、特定の将来の事象が発生した場合、適用プリペイメントプレミアムおよび脱退手数料とともに返済する必要があります。修正期限ローン施設は、現金で支払われる利息の部分に対する適用マージンである9.0％と、適用される利息の部分を支払うための追加の1.0％に等しい年率で利息を獲得します。債務不履行事象が発生すると、利息率は毎年追加の2.0％に自動的に増加し、修正期限ローン施設に関する未払いの元金および利息の全額または一部が直ちに期限満了および支払可能となる可能性があります。

その他の情報

未検査のプロフォーマ貸借対照表は、2024年6月30日に取引が発生したと仮定し、サウンドハウンドとアメリアの歴史的な貸借対照表を組み合わせ、その日付時点でのプロフォーマ効果を与えます。 2023年12月31日および2024年6月30日に終了した年の未検査のプロフォーマ簡易連結損益計算書は、取引が2023年1月1日に発生したと仮定し、サウンドハウンドとアメリアの歴史的な結果を組み合わせ、その時点でのプロフォーマ効果を与えます。

未監査の過去合併財務情報の調整を特定し、提供して、取引の理解を示すために、会計原則に準拠した関連情報を提供します。未監査の過去合併調整は、SoundHoundの未監査過去合併財務情報の公正な記載に必要であると経営陣に信じられています。

未監査のプロフォーマ集約された財務情報は、SoundHoundとAmeliaの歴史的な財務諸表から派生しており、以下の財務諸表および附属の注釈と併せて読まれるべきです:

•SoundHoundの2023年12月31日に終了した連結財務諸表は、2024年3月1日に証券取引委員会（"SEC"）に提出された10-kフォームの年次報告書に含まれており、参照のためにここに組み込まれています。

•2024年6月30日までのSoundHoundの未監査縮小連結財務諸表は、2024年8月9日にSECに提出された第10-Qフォームの四半期報告書に含まれており、かつここに言及されています。

•この監査されたアメリアの歴史的な決算連結財務諸表は、2023年12月31日に終了し、2024年10月22日にSECに提出された会社の8-K/A報告書の付表99.1として含まれており、この非監査されたプロフォーマ総合財務情報が付表として提出されている。

•Ameliaの2024年6月30日終了時点の歴史的な未監査の要約連結財務諸表は、2024年10月22日に米国証券取引委員会（SEC）へ提出された8-K/Aフォームに99.2展示物として含まれており、この未監査の前提合算要約連結財務情報も展示物として提出されています。

適性調整の根底にある仮定は、付属の注釈で説明されています。これらは、未監査の仮式包括連結財務情報と併せてご参照ください。取引会計調整は、入手可能な情報と、当社の経営陣が合理的と考える仮定に基づいています。このような調整は見積もりであり、実際の経験が期待から異なる場合があります。

取得はまだ最終決定されていないクロージング調整の対象です。したがって、プロフォーマ調整は予備的であり、SECの規定により非監査を要するプロフォーマ要約連結財務情報を提供する目的で作成されています。これらの予備的見積もりと最終的な取得会計との間には、重要な差異がある可能性があります。

SOUNDHOUND AI, INC.
未監査プロフォーマ簡易合算貸借対照表

2024年6月30日現在

営業活動によるキャッシュフロー：


					取引会計調整
	サウンドハウンド過去の		アメリアホールディングス歴史 - 再分類後調整（注2）		アメリア買収		負債の支払い		参考注記	合併前の

資産
流動資産:
現金及び現金同等物	$	200,156	$	2,717	$	(8,407)	$	(70,000)	4(a), 5(a)	$	124,466
売掛金の純額	5,059		10,520		—		—		-	15,579
契約資産および未請求売掛金の純額	14,892		3,259		—		—		-	18,151
その他の流動資産	3,949		6,294		(2,245)		—		4(b)	7,998
流動資産合計	224,056		22,790		(10,652)		(70,000)			166,194

非流動性制約付き現金当座預金	811		—		—		—		-	811
使用権資産	4,303		236		—		—		-	4,539
有形固定資産、正味額	1,296		370		—		—		-	1,666
のれん	6,039		107,307		(4,247)		—		4(c)	109,099
無形資産、純額	13,147		47,971		126,529		—		4(d)	187,647
逆強制法適用資産	10		—		—		—		-	10
契約資産および未請求の売掛金、非流動資産、純額	15,518		—		—		—		-	15,518
その他の固定資産	1,494		4,990		(2,163)		—		4(b)	5,549
					1,228				4(e)
総資産	$	266,674	$	183,664	$	110,695	$	(70,000)		$	491,033

負債および株主資本（赤字）
流動負債：
支払調整	$	4,255	$	12,312	$	—	$	—		$	16,567
未払費用	13,147		11,738		1,328		—		4(f)	30,799
					4,586				4(g)
オペレーティングリース債務	2,285		217		—		—		-	2,502
ファイナンスリース債務	63		36		—		—		-	99
所得税負債	1,888		5,770		200		—		4(e)	7,858
前払収益	2,931		26,791		—		—		-	29,722
長期借入金の短期部分	—		96,014		(26,014)		(70,000)		4(j), 5(a)	—
その他の流動負債	968		858		—		—		-	1,826
流動負債合計	25,537		153,736		(19,900)		(70,000)			89,373

現在の一部を除くオペレーティングリース債務	2,175		34		—		—		-	2,209
当座債務超過分の前受収益、純額1,100ドル	3,766		5,722		—		—		-	9,488
コンティンジェント買収債務	4,410		—		71,560		—		4(a)	75,970
法人税負債（現行部分相殺後）	2,275		—		—		—		-	2,275
繰延税金負債	—		12,353		(26)		—		4(h)	12,327
新規買債務	—		—		51,511		(11,817)		4(j)、5(b)	39,694
その他の長期負債	4,570		5,462		(5,424)		—		4(i)	4,608
負債合計	42,733		177,307		97,721		(81,817)			235,944
株主資本:
シリーズA優先株式	—		—		—		—		-	—
普通株式クラスA	31		—		1		—		4(a)、5(b)	32
クラスB普通株式	3		—		—		—		-	3
普通株式、Amelia	—		100		(100)		—		4(k)	—
优先股、Amelia	—		267,680		(267,680)		—		4(k)	—
追加の資本金	886,412		—		23,918		11,817		4(a)、5(b)	922,147
累積欠損	(662,710)		(258,813)		(4,408)		—		4(b)	(667,298)
					(4,247)				4(c)
					126,529				4(d)
					1,029				4(e)
					(1,328)				4(f)
					(4,586)				4(g)
					26				4(h)
					5,424				4(i)
					(25,497)				4(j)
					161,283				4(k)
累積その他の包括利益	205		(2,610)		2,610		—		4(k)	205
純資産合計	223,941		6,357		12,974		11,817			255,089
負債および純資産合計	$	266,674	$	183,664	$	110,695	$	(70,000)		$	491,033

未監査の簡易な合併財務諸表の注記をご覧ください。

SOUNDHOUND AI, INC.
未監査の合併プロフォーマ簡易損益計算書
2023年12月31日までの会計年度について

（千ドル、株および株当たりデータを除く）


					取引会計調整
	サウンドハウンド・ヒストリカル		アメリア・ホールディングスヒストリカル – 再分類後調整（注2）		アメリア買収		債務の償還		注釈参照	合併前の

収益	$	45,873	$	93,274	$	—	$			$	139,147
営業費用：					—		—
売上総利益	11,307		65,691		10,980		—		6(a)	87,978
営業・マーケティング	18,893		25,060		(388)		—		6(b)	43,565
研究開発	51,439		13,582		—		—			65,021
一般管理費用	28,285		29,129		14,321		—		6(c)	71,735
無形資産の摘早償却	—		3,205		11,915		—		6(a)	15,120
リストラ	4,557		—		—		—			4,557
営業費用合計	114,481		136,667		36,828		—			287,976
営業損失	(68,608)		(43,393)		(36,828)		—			(148,829)

その他の費用、純額：
利子費用	(17,570)		(16,782)		6,579		—		6(d)	(27,773)
その他の収益（費用）、純額	1,155		(5,759)		—		—			(4,604)
その他の純費用合計	(16,415)		(22,541)		6,579		—			(32,377)
所得税引当金前損失	(85,023)		(65,934)		(30,249)		—			(181,206)
所得税引当金	3,914		495		—		—			4,409
純損失	$	(88,937)	$	(66,429)	$	(30,249)	$	—		$	(185,615)
累積配当优先股に帰属する	(2,774)		—		—		—			(2,774)
SoundHound普通株主に帰属する純損失	$	(91,711)	$	(66,429)	$	(30,249)	$	—		$	(188,389)
加重平均発行済普通株式数（希薄化後含む）	229,264,904								6(e)	236,018,341
一株当たりの純損失（希薄化後含む）	$	(0.40)								$	(0.80)

財務諸表の監査されていないプロフォーマ段取り業務報告書注記を参照してください。

SOUNDHOUND AI, INC.
未監査営業総利益概要連結損益計算書
2024年6月30日までの6か月間

（千ドル、株および株当たりデータを除く）


					取引会計調整
	サウンドハウンド過去の		アメリアホールディングス歴史的 - 再分類後調整（注2）		アメリア買収		債務返済	Note Reference	合併前の

収益	$	25,056	$	45,332	$		$		$	70,388
営業費用：
売上総利益	9,649		29,404		5,490		—	6(f)	44,543
営業・マーケティング	11,197		11,587		(479)		—	6(g)	22,305
研究開発	30,616		5,893		—		—		36,509
一般管理費用	19,802		12,414		—		—		32,216
買収債務の公正価値変動	3,080		—		—		—		3,080
無形資産の摘早償却	1,226		1,601		5,959		—	6(f)	8,786
営業費用合計	75,570		60,899		10,970		—		147,439
営業損失	(50,514)		(15,567)		(10,970)		—		(77,051)

その他の費用、純額：
債務早期償還による損失	(15,587)		—		—		—		(15,587)
利子費用	(9,750)		(10,644)		4,740		—	6(h)	(15,654)
その他の収益（費用）、純額	6,453		6,828		—		—		13,281
その他の純損失合計	(18,884)		(3,816)		4,740		—		(17,960)
所得税引当金前損失	(69,398)		(19,383)		(6,230)		—		(95,011)
所得税引当金	933		123		—		—		1,056
純損失	$	(70,331)	$	(19,506)	$	(6,230)	$		$	(96,067)
シリーズA優先株に帰属する配当の累積額	(416)		—		—		—		(416)
SoundHound普通株主に帰属する純損失	$	(70,747)	$	(19,506)	$	(6,230)	$		$	(96,483)
希薄化後の加重平均普通株式発行株数（簡略・希薄）	309,213,583							6(i)	315,967,020
1株当たりの純損失（簡略・希薄）	$	(0.23)							$	(0.31)

未監査のプロフォーマ財務諸表の注記を参照してください。

未検査の過去形式結合財務情報への注記

（千ドル、株式および株式当たり金額を除く）

プレゼンテーションの基礎

未監査のプロフォーマ縮小連結財務情報は、修正されたRegulation S-Xの第11条に準拠して準備されており、監査されていないプロフォーマ縮小連結損益計算書は取引会計調整を反映しています。SoundHoundおよびAmeliaの歴史的金融情報は、取引に関連する取引会計調整をGAAPに従って反映するために、添付の注記に記載されている前提および調整に基づいて、未監査のプロフォーマ縮小連結財務情報で調整されています。

取得は、GAAPの下での会計取得方法に従ってビジネス組織として処理されます。この会計処理方法によると、SoundHoundは会計上の取得者であり、Ameliaは会計上の被取得者と見なされます。会計取得方法においては、ビジネス組織で取得される資産と負債は、取得日の正当価値で測定および認識されることが求められます。購入代金が取得された資産と負債の正当価値を上回る場合、その超過分は資産購買会計に配分されます。最終的な購入代金の割り当ては、取引会計調整で使用される予備の割り当てと実質的に異なる場合があり、最終的な割り当てには無形資産や資産処分に対する割当の変更が含まれる可能性があります。

未監査の修正されたプロフォーマ簡易合算財務情報には、アメリアの歴史的会計プレゼンテーションをサウンドハウンドの会計プレゼンテーションに整合させるための一部の再分類が含まれています。合併会社の実際の運営結果は、おそらくここに反映されているプロフォーマ金額とは異なる可能性があります。取引のすべての重要な影響を提示するための合理的な根拠を提供すると信じています。取締役会が利用可能であった情報に基づいて、修正されたプロフォーマ取引会計調整が、これらの仮定に効果を与え、未監査の修正されたプロフォーマ簡易合算財務情報に適切に適用されていると考えています。

未監査のプロフォーマ財務情報は、取得と関連取引に関連付けられる予想されるシナジー、運用効率、税金節約、コスト節約に影響を与えません。両社は引き続き損失を被り、歴史的累積損失の状況であり、両社は純拡大税資産に対する評価引当を設定しています。プロフォーマ調整の所得税の影響は、評価引当への対応する調整によって完全に相殺され、プロフォーマ概要複合損益計算書に純影響がなくなります。合併会社の法人税率は、法人統合後の事業活動、企業再編、利益の適用地域の混合に応じて、未監査のプロフォーマ財務諸表に示されているものと大きく異なる可能性があります。

ノート2：再分類調整

未監査のプロフォーマ財務情報の作成に使用された会計方針は、2023年12月31日をもって終了したSoundHoundの監査済みの年次財務諸表に示されているものです。SoundHoundの経営陣は現在、SoundHoundとAmeliaの間での重要な会計方針の違いを評価しています。SoundHoundの経営陣は、両社間の会計方針を網羅的に見直し、整合化された場合には重要となり得る会計方針の相違点を特定する可能性があります。

特定の再分類は、SoundHoundとAmeliaのプレゼンテーションを整合させるために、未監査のプロフォーマに包括された合同貸借対照表および未監査のプロフォーマに包括された連結損益計算書に反映されています。これらの再分類は、SoundHoundまたはAmeliaの以前に報告された総資産、総負債および株主資本、あるいは当期純利益に影響を与えません。未監査のプロフォーマに包括された合同財務情報は、この現在の報告書の日付時点で入手可能な情報の制約のため、AmeliaのプレゼンテーションをSoundHoundのものに整合させるために必要なすべての再分類を反映していないかもしれません。追加の再分類調整は、より多くの情報が入手可能になるにつれて識別されるかもしれません。

Refer to the table below for a summary of identified reclassification adjustments made to present Amelia’s consolidated balance sheet as of June 30, 2024 to conform presentation to that of SoundHound (in thousands):


Amelia Consolidated Balance Sheet Line Items	SoundHound Consolidated Balance Sheet Line Items	Amelia Historical Consolidated Balance Sheet		Reclassification		Note 2	Amelia Historical After Reclassification

Cash and cash equivalents	Cash and cash equivalents	$	2,717	$	—		$	2,717
Accounts receivable, net	Accounts receivable, net	11,087		(567)		(a)	10,520
Contract assets	Contract assets and unbilled receivable, net	2,692		567		(a)	3,259
Prepaid expenses and other current assets	Other current assets	2,249		2,941		(b)	6,294
-	-	—		1,104		(c)
Other receivables	-	2,941		(2,941)		(b)	—
Deferred sales commissions	-	1,104		(1,104)		(c)	—
-	Restricted cash equivalents, non-current	—		—			—
-	Right-of-use assets	—		236		(d)	236
-	Property and equipment, net	—		370		(d)	370
Goodwill	Goodwill	107,307		—			107,307
Intangibles, net	Intangible assets, net	47,971		—			47,971
-	Deferred tax asset	—		—			—
-	Contract assets and unbilled receivable, noncurrent, net	—		—			—
Deferred sales commissions, non-current	-	2,164		(2,164)		(e)	—
Other non-current assets	Other non-current assets	3,432		(606)		(d)	4,990
		—		2,164		(e)
Accounts payable	Accounts payable	12,312		—			12,312
Accrued expenses	Accrued liabilities	11,738		—			11,738
-	Operating lease liabilities	—		217		(f)	217
-	Finance lease liabilities	—		36		(f)	36
-	Income tax liability	—		5,770		(g)	5,770
Deferred revenues	Deferred revenue	26,791		—			26,791
Current portion of long-term debt	-	96,014		—			96,014
Due to related party	-	858		(858)		(h)	—
Other current liabilities	Other current liabilities	5,998		(253)		(f)	858
				(5,770)		(g)
				858		(h)
				25		(k)
-	Operating lease liabilities, net of current portion	—		34		(i)	34
Deferred revenue, net of current portion	Deferred revenue, net of current portion	5,722		—			5,722
Warrant liability	-	5,424		(5,424)		(j)	—
-	Contingent acquisition liabilities	—		—			—
Deferred tax liability	Deferred tax liability	12,378		(25)		(k)	12,353
-	Income tax liability, net of current portion	—		—			—
Other non-current liabilities	Other non-current liabilities	72		(34)		(i)	5,462
				5,424		(j)
Common stock	Common Stock, Amelia	100		—			100
Preferred stock	Preferred Stock, Amelia	267,680		—			267,680
-	Series A Preferred Stock	—		—			—
-	Class A Common Stock	—		—			—
-	Class B Common Stock	—		—			—
-	Additional paid-in capital	—		—			—
Accumulated deficit	Accumulated deficit	(258,813)		—			(258,813)
Accumulated other comprehensive (loss) gain	Accumulated other comprehensive income	(2,610)		—			(2,610)

(a)Reflects the reclassification of contract assets from accounts receivable, net.

(b)Reflects the reclassification of other receivables to other current assets.

(c)Reflects the reclassification of deferred sales commissions to other current assets.

(d)Reflects the reclassification of right-of-use assets and property and equipment from other non-current assets.

(e)Reflects the reclassification of deferred sales commissions, non-current to other non-current assets.

(f)Reflects the reclassification of operating lease liabilities and finance lease liabilities from other current liabilities.

(g)Reflects the reclassification of income tax liability from other current liabilities.

(h)Reflects the reclassification of due to related party to other current liabilities.

(i)Reflects the reclassification of non-current operating lease liabilities from other non-current liabilities.

(j)Reflects the reclassification of warrant liability to other non-current liabilities.

(k)Reflects the reclassification of deferred tax liability from other current liabilities.

Refer to the table below for a summary of identified reclassification adjustments made to present Amelia’s consolidated statement of operations for the year ended of December 31, 2023, to conform presentation to that of SoundHound (in thousands):


Amelia Consolidated Statement of Operations Line Items	SoundHound Consolidated Statement of Operations Line Items	Amelia Historical Consolidated Statement of Operations		Reclassification		Note 2	Amelia Historical After Reclassification

Revenue	Revenues	$	93,274	$	—		$	93,274
Cost of revenues (exclusive of depreciation and amortization)	Cost of revenues	56,891		8,800		(l)	65,691
Sales and marketing	Sales and marketing	25,060		—			25,060
Research and development	Research and development	13,582		—			13,582
General and administrative	General and administrative	29,039		90		(l)	29,129
Depreciation and amortization	-	12,095		(12,095)		(l)	—
-	Amortization of intangible assets	—		3,205		(l)	3,205
-	Restructuring	—		—			—
Interest expense, net	Interest expense	(16,782)		—			(16,782)
Other income (expense), net	Other income (expense), net	(5,759)		—			(5,759)
Income tax expense	Provision for income taxes	495		—			495
-	Cumulative dividends attributable to Series A Preferred Stock	—		—			—

(l)Reflects the reclassification of amortization of intangible assets to a separate line item, amortization of technology intangible assets to cost of revenues, and depreciation expense for property and equipment to general and administrative.

Refer to the table below for a summary of identified reclassification adjustments made to present Amelia’s consolidated statement of operations for the six months ended of June 30, 2024, to conform presentation to that of SoundHound (in thousands):


Amelia Consolidated Statement of Operations Line Items	SoundHound Consolidated Statement of Operations Line Items	Amelia Historical Consolidated Statement of Operations		Reclassification		Note 2	Amelia Historical After Reclassification

Revenue	Revenues	$	45,332	$	—		$	45,332
Cost of revenues (exclusive of depreciation and amortization)	Cost of revenues	25,004		4,400		(m)	29,004
Sales and marketing	Sales and marketing	11,587		—			11,587
Research and development	Research and development	5,893		—			5,893
General and administrative	General and administrative	12,342		72		(m)	12,414
-	Change in fair value of contingent acquisition liabilities	—		—			—
Depreciation and amortization	-	6,073		(6,073)		(m)	—
-	Amortization of intangible assets	—		1,601		(m)	1,601
-	Loss on early extinguishment of debt	—		—			—
Interest expense	Interest expense	(10,644)		—			(10,644)
Other income (expense), net	Other income (expense), net	6,828		—			6,828
Income tax expense	Provision for income taxes	123		—			123
-	Cumulative dividends attributable to Series A Preferred Stock	—		—			—

(m)Reflects the reclassification of amortization of intangible assets to a separate line item, amortization of technology intangible assets to cost of revenues, and depreciation expense for property and equipment to general and administrative.

Note 3: Preliminary Purchase Price Allocation

The preliminary purchase consideration of $103.9 million is allocated to Amelia’s tangible and intangible assets acquired and liabilities assumed based on preliminary estimated fair values. The fair value assessments are preliminary and are based upon available information and certain assumptions, which SoundHound believes are reasonable under the circumstances. Actual results may differ materially from the assumptions within the unaudited pro forma condensed combined financial statements.

For purposes of this unaudited pro forma condensed combined financial information, the preliminary calculation of the purchase consideration is as follows:


	(in thousands)
Equity consideration	$	15,291
Equity consideration in escrow	8,628
Cash consideration paid	8,407
Contingent earnout consideration	71,560
Total preliminary purchase consideration	$	103,886

As outlined in the Purchase Agreement, shares of SoundHound Class A common stock were issued in a private placement in exchange for Amelia’s equity held by the former stockholders as of the Acquisition Date. The fair value of the 3,809,520 shares issued as equity consideration and the 2,149,530 shares issued and held in escrow was determined by multiplying the total 5,959,050 shares issued by the closing price of the Company’s common stock as of the Acquisition Date, subject to a discount for lack of marketability.

The preliminary purchase consideration also includes $8.4 million of seller transaction expenses paid in connection with the closing of the Acquisition. The seller transaction expenses paid by the Company included certain change in control payments, contractual settlements, and professional, consulting, and legal fees incurred by Amelia and its former shareholders.

The Company also agreed to issue up to 16,822,429 shares of Class A common stock in additional consideration to the Sellers based on achievement of certain revenue targets in fiscal years 2025 (“First Earnout Period”) and 2026 (“Second Earnout Period”). During the First Earnout Period, if the Company’s total software revenue from the sale of Amelia’s products is between $55.0 million and $80.0 million, the base earnout payment will range from 5,607,476 shares to 11,214,953 shares of additional equity consideration. If the Company’s total software revenue from the sale of Amelia’s products is between $80.0 million and $100.0 million, the excess earnout payment will range from zero to 5,607,476 shares of additional equity consideration. If the Target does not earn the entire excess earnout payment of additional equity consideration during the First Earnout Period, the portion not earned may be earned in the Second Earnout Period subject to the same revenue metrics. The Earnout is accounted for as contingent consideration and will be accounted for as a liability, initially measured at fair value of $71.6 million with changes during each reporting period recognized in earnings. The fair value of the Earnout is based on a Monte Carlo simulation model, assessed as of the Acquisition Date.

For purposes of the unaudited pro forma condensed combined financial statements, the following table sets forth a preliminary allocation of the estimated purchase consideration:


	As of June 30, 2024
	(in thousands)

Total preliminary purchase consideration	$	103,886

Assets:
Cash and cash equivalents	2,717
Accounts receivable, net of allowances	10,520
Contract assets and unbilled receivables	3,259
Other current assets	4,050
Right-of-use assets	236
Property and equipment, net	370
Intangible assets	174,500
Other non-current assets	4,055
Total assets acquired	$	199,707

Liabilities:
Accounts payable	$	12,312
Accrued liabilities	13,998
Operating lease liabilities	251
Income tax liability	5,969
Deferred tax liability	12,327
Deferred revenue	32,513
Long-term debt	121,511
Total liabilities assumed	$	198,881
Preliminary fair value of net assets acquired	$	826
Estimated goodwill	$	103,060

The preliminary estimate of fair values of assets acquired and liabilities assumed have been determined by management of SoundHound using publicly available benchmarking information and other assumptions. The purchase price allocation is preliminary and subject to change, as additional information becomes available and as additional analyses are performed. The final allocation could be materially different from the preliminary allocation used herein and may include (i) changes in fair value and allocations to intangibles assets as well as goodwill, and (ii) other changes to certain assets and liabilities.

Note 4: Transaction Accounting Adjustments to Unaudited Pro Forma Condensed Combined Balance Sheet – Amelia Acquisition

The adjustments related to the acquisition of Amelia included in the unaudited pro forma condensed combined balance sheet as of June 30, 2024 are as follows:

(a)Reflects the total preliminary purchase consideration of $103.9 million, consisting of (i) the issuance of 3,809,520 shares of SoundHound Class A common stock with a fair value of $15.3 million as equity consideration, (ii) the issuance of 2,149,530 shares of SoundHound Class A common stock with a fair value of $8.6 million in escrow as of the Acquisition Date, (iii) the recognition of contingent consideration for the Earnout, which is initially measured at a fair value of $71.6 million, and (iv) the payment of seller transaction expenses of $8.4 million.

(b)Reflects preliminary purchase accounting adjustments to eliminate $2.2 million and $2.2 million from other current assets and other non-current assets, respectively, for deferred costs that were not assets as defined by ASC 805.

(c)Reflects the elimination of Amelia's historical goodwill and the recognition of the preliminary estimate of goodwill based on the preliminary purchase price allocation. The difference between the preliminary total merger consideration and preliminary identifiable net assets acquired is recorded as estimated goodwill. Goodwill recognized in the Acquisition is not expected to be deductible for tax purposes. Refer to Note 3 for further details related to the preliminary purchase price allocation.


	As of June 30, 2024
	(in thousands)
Estimated goodwill	$	103,060
Elimination of Amelia's historical goodwill	(107,307)
Net adjustment to goodwill	$	(4,247)

(d)Reflects the elimination of Amelia's historical intangible assets and the recognition of the preliminary estimated fair value of intangible assets acquired in the Acquisition. The amortization related to these identifiable intangible assets is reflected in the unaudited pro forma condensed combined statements of operations, as further described in Notes 6(a) and 6(f).


	As of June 30, 2024
	(in thousands)
Fair value of intangible assets acquired	$	174,500
Elimination of Amelia's historical intangible assets, net	(47,971)
Net adjustment to intangible assets, net	$	126,529

SoundHound determined a preliminary fair value estimate of intangible assets resulting from the preliminary fair value allocation of the purchase price. The intangible assets include the following:


	Fair value		Estimated useful life
Intangible assets acquired	(in thousands)		(in years)
Proprietary technology	$	98,900	5
Customer relationships	68,600		5
Trade names	7,000		5
Total fair value of intangible assets acquired	$	174,500

(e)Reflects the recognition of a $1.2 million indemnification asset, which represents the estimated fair value of shares as of the date of the closing expected to be returned to SoundHound from escrow for indemnified tax and specified matters pursuant to the contractual limitations of the Purchase Agreement, and an accrual of $0.2 million in income tax liability for indemnified tax matters assumed.

(f)Reflects the accrual of $1.3 million in accrued liabilities for estimated transaction costs incurred by Amelia subsequent to June 30, 2024, which is net of $8.4 million of seller transaction expenses paid by the Company as of the Acquisition Date.

(g)Reflects the accrual of $4.6 million in accrued liabilities for estimated transaction costs incurred by SoundHound subsequent to June 30, 2024.

(h)Reflects income tax-related adjustments. The adjustment to deferred tax liability of $0.03 million is associated with the incremental differences in the book and tax basis created from the preliminary purchase price allocation, primarily resulting from the preliminary fair value of intangible assets. SoundHound has made no adjustments to Amelia’s historical realizability of deferred tax assets and will continue to assess the realizability of such assets recognizing that realizability could change upon consolidation. This estimate of deferred taxes was determined based on SoundHound's expected ability to use Amelia's net operating loss carryforwards and other tax attributes in future periods as well as the excess of the fair values of the acquired assets and liabilities over the tax basis of the assets and liabilities to be acquired. In addition, under Sections 382 and 383 of the IRC, if a corporation undergoes an “ownership change,” generally defined as a greater than 50% change (by value) in its equity ownership over a three-year period, the corporation’s ability to use its pre-ownership change U.S. federal net operating loss carryforwards and other pre-ownership change U.S. federal tax attributes, such as research tax credits, to offset its post-ownership change income may be limited. We may experience ownership changes in the future because of subsequent shifts in our stock ownership. As a result, if we earn net taxable income, our ability to use our pre-ownership change net operating loss carryforwards and other tax attributes to offset U.S. federal and state taxable income may be subject to limitations, which could potentially result in increased future tax liability to us.

(i)Reflects the elimination of Amelia’s historical $5.4 million warrant liability from other non-current liabilities following their extinguishment as of the Acquisition Date.

(j)Reflects adjustments of $(26.0) million and $51.1 million to current portion of long-term debt and long-term debt, respectively, to adjust Amelia's historical balance to fair value the terms of the Amended Term Loan Facility. The remaining outstanding balance on the Amended Term Loan Facility has a maturity date of June 30, 2026.

(k)Reflects the elimination of Amelia’s equity (deficit) balances, including common stock of $0.1 million, preferred stock of $267.7 million, accumulated deficit of $161.3 million, and accumulated other comprehensive income of $2.6 million.

Note 5: Transaction Accounting Adjustments to Unaudited Pro Forma Condensed Combined Balance Sheet – Debt Paydown

The adjustments related to the Debt Paydown included in the unaudited pro forma condensed combined balance sheet as of June 30, 2024 are as follows:

(a)Reflects the paydown of $70.0 million on August 7, 2024, by the Company to repay a portion of the Amended Term Loan Facility.

(b)Reflects the issuance of 2,943,917 shares of SoundHound’s Class A common stock with a fair value of $11.8 million to the debtholders of the Amended Term Loan Facility as compensation in lieu of the associated exit fee and other related liabilities.

Note 6: Transaction Accounting Adjustments to the Unaudited Pro Forma Condensed Combined Statements of Operations – Amelia Acquisition

The adjustments related to the acquisition of Amelia included in the unaudited pro forma condensed combined statement of operations for the year ended December 31, 2023 are as follows:

(a)Reflects the elimination of Amelia historical amortization expense and the recognition of new amortization expense related to the acquired identifiable intangible assets based on their estimated fair value on the Acquisition Date. Amortization expense is calculated based on the estimated fair value of each of the identifiable intangible asset and the associated estimated useful lives.

SoundHound determined a preliminary fair value estimate of intangible assets based on a valuation conducted by a third-party valuation specialist. The acquired intangible assets have been amortized using a straight-line method based on their estimated useful lives as if the Acquisition had been completed on January 1, 2023. Refer to Note 4(d) for the corresponding pro forma adjusting entries to recognize the acquired intangible assets.


	For the year ended December 31, 2023		Estimated useful life
	(in thousands)		(in years)
Proprietary technology	$	19,780	5
Customer relationships	13,720		5
Trade names	1,400		5
Total amortization expense for acquired intangible assets	$	34,900


	For the year ended December 31, 2023
	(in thousands)
Amortization expense for acquired intangible assets (proprietary technology)	$	19,780
Eliminate historical Amelia intangible asset amortization expense	(8,800)
Net adjustment to cost of revenues	$	10,980


	For the year ended December 31, 2023
	(in thousands)
Amortization expense for acquired intangible assets (customer relationships and trade names)	$	15,120
Eliminate historical Amelia intangible asset amortization expense	(3,205)
Net adjustment to amortization of intangible assets	$	11,915

(b)Reflects the elimination of Amelia’s deferred commission amortization expense, related to the elimination in Note 4(b) above.

(c)Reflects the estimated incremental $4.0 million and $9.7 million of transaction costs incurred by SoundHound and Amelia, respectively, which are not yet reflected in the historical financial statements.

(d)Reflects the reduction of $6.6 million in historical Amelia interest expense related to the terms of the Amended Term Loan Facility.

(e)Reflects the pro forma basic and diluted net income per share attributable to the combined entity’s common stockholders presented in conformity with the two-class method required for participating securities as a result of the pro forma adjustments. The two-class method requires income available to common stockholders for the period to be allocated between shares of common stock and participating securities based on their respective rights to receive earnings as if all earnings for the period had been distributed. The shares issued and held in escrow are participating securities that contractually entitle the holders of such shares to participate in the combined entity’s earnings but do not contractually require the holders of such shares to participate in the combined entity’s losses.

The pro forma basic net income per share attributable to the combined entity’s common stockholders is calculated using the historical basic weighted average shares of SoundHound common stock outstanding, adjusted for the additional new shares of SoundHound Class A common stock issued to consummate the Acquisition, assuming the shares were issued and outstanding as of January 1, 2023. Pro forma diluted net income per share attributable to the combined entity’s common stockholders is calculated using the historical diluted weighted average shares of SoundHound Class A common stock outstanding, adjusted for the additional new shares of SoundHound common stock issued to consummate the Acquisition.

The pro forma weighted average shares outstanding used to calculate pro forma basic and diluted net income per share attributable to common stockholders excludes the 2,149,530 shares of SoundHound Class A common stock held in escrow as they are considered contingently returnable shares until the indemnifications subject to escrow have been resolved.


	For the year ended December 31, 2023
	(in thousands, except share and per share data)
Pro forma net loss attributable to stockholders, December 31, 2023	$	(188,389)
Weighted average shares outstanding - basic and diluted	236,018,341
Pro forma net loss per share - basic and diluted	$	(0.80)

Pro forma weighted average shares outstanding – Basic and diluted
SoundHound historical, December 31, 2023	229,264,904
Amelia Acquisition share consideration transferred (1)	3,809,520
Issuance of Class A common stock for Debt Paydown	2,943,917
Pro forma weighted average shares outstanding – Basic and diluted	236,018,341

(1)Amount excludes the 2,149,530 shares of SoundHound Class A common stock held in escrow as they are considered contingently returnable shares.

The adjustments related to the acquisition of Amelia included in the unaudited pro forma condensed combined statement of operations for the six months ended June 30, 2024 are as follows:

(f)Reflects the elimination of Amelia's historical amortization expense and the recognition of new amortization expense related to the acquired identifiable intangible assets based on the estimated fair value as of the Acquisition Date. Amortization expense is calculated based on the estimated fair value of each of the identifiable intangible asset and the associated estimated useful lives.

The acquired intangible assets have been amortized using a straight-line method based on their estimated useful lives as if the Acquisition had been completed on January 1, 2024. Refer to Note 4(d) for the corresponding pro forma adjusting entries to recognize the acquired intangible assets.


	For the six months ended June 30, 2024		Estimated useful life
	(in thousands)		(in years)
Proprietary technology	$	9,890	5
Customer relationships	6,860		5
Trade names	700		5
Total amortization expense for acquired intangible assets	$	17,450


	For the six months ended June 30, 2024
	(in thousands)
Amortization expense for acquired intangible assets (proprietary technology)	$	9,890
Eliminate historical Amelia intangible asset amortization expense	(4,400)
Net adjustment to cost of revenues	$	5,490


	For the six months ended June 30, 2024
	(in thousands)
Amortization expense for acquired intangible assets (customer relationships and trade names)	$	7,560
Eliminate historical Amelia intangible asset amortization expense	(1,601)
Net adjustment to amortization of intangible assets	$	5,959

(g)Reflects the elimination of Amelia’s deferred commission amortization expense, related to the elimination in Note 4(b) above.

(h)Reflects the reduction of $4.7 million in historical Amelia interest expense related to the terms of the Amended Term Loan Facility.

(i)Reflects the pro forma basic and diluted net income per share attributable to the combined entity’s common stockholders presented in conformity with the two-class method required for participating securities as a result of the pro forma adjustments. The two-class method requires income available to common stockholders for the period to be allocated between shares of common stock and participating securities based on their respective rights to receive earnings as if all earnings for the period had been distributed. The shares issued and held in escrow are participating securities that contractually entitle the holders of such shares to participate in the combined entity’s earnings but do not contractually require the holders of such shares to participate in the combined entity’s losses.

The pro forma basic net income per share attributable to the combined entity’s common stockholders is calculated using the historical basic weighted average shares of SoundHound common stock outstanding, adjusted for the additional new shares of SoundHound Class A common stock issued to consummate the Acquisition, assuming the shares were issued and outstanding as of January 1, 2024. Pro forma diluted net income per share attributable to the combined entity’s common stockholders is calculated using the historical diluted weighted average shares of SoundHound Class A common stock outstanding, adjusted for the additional new shares of SoundHound common stock issued to consummate the Acquisition.


	For the six months ended June 30, 2024
	(in thousands, except share and per share data)
Pro forma net loss attributable to stockholders, June 30, 2024	$	(96,483)
Weighted average shares outstanding - basic and diluted	315,967,020
Pro forma net loss per share - basic and diluted	$	(0.31)

Pro forma weighted average shares outstanding – Basic and diluted
SoundHound historical, June 30, 2024	309,213,583
Amelia Acquisition share consideration transferred (1)	3,809,520
Issuance of Class A common stock for Debt Paydown	2,943,917
Pro forma weighted average shares outstanding – Basic and diluted	315,967,020

(1)Amount excludes the 2,149,530 shares of SoundHound Class A common stock held in escrow as they are considered contingently returnable shares.