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Item 9A. Controls and Procedures

2024-03-01 compared with 2023-03-28 · 77 added, 527 removed, 93 unchanged (87% of the section changed)

1 unchanged sentence

Evaluation of Disclosure Controls and Procedures

As of the end of the period covered by this Annual Report on Form 10-K, we carried out an evaluation under the supervision and with the participation of our Disclosure Committee and our management, including our Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), of the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Exchange Act Rules 13a-15(e) and 15d-15(e).

Based on our management’s evaluation (with the participation of our CEO and CFO), as of the end of the period covered by this report, our CEO and CFO have concluded that our disclosure controls and procedures were effective as of December 31, 2022 to provide reasonable assurance that information required to be disclosed by us in reports that we file or submit under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in the SEC rules and forms and (ii) accumulated and communicated to our management, including our CEO and CFO as appropriate to allow timely decisions regarding required disclosure.

Our management, including our CEO and CFO, does not expect that our disclosure controls and procedures or our internal controls over financial reporting will prevent all errors and all fraud.

A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met.

Further, the design of a control system must reflect the fact that there are resource constraints and the benefits of controls must be considered relative to their costs.

Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within SoundHound have been detected.

Management performed, with the participation of the Chief Executive Officer (CEO) and the Chief Financial Officer (CFO), an evaluation of the effectiveness of the Company’s disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act as of the end of the period covered by this Annual Report.

Any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objective and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures were not effective as of December 31, 2023 due to the material weaknesses in its internal control over financial reporting described below.

However, after giving full consideration to the material weaknesses described below, and the additional analyses and other procedures management performed to ensure that its consolidated financial statements included in this Annual Report were prepared in accordance with U.S.

GAAP, the Company’s management has concluded that its consolidated financial statements present fairly, in all material respects, its financial position, results of operations and cash flows for the periods disclosed in conformity with U.S.

Management's Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) under the Securities Exchange Act of 1934, as amended).

Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934, as amended).

Our management assessed the effectiveness of our internal control over financial reporting as of December 31, 2023.

In making this assessment, our management used the criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

Based on the results of our evaluation, our management concluded that our internal control over financial reporting was effective as of December 31, 2022.

Armanino LLP, an independent registered public accounting firm, was not required to and has not issued a report concerning the effectiveness of our internal control over financial reporting as of December 31, 2022.

A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of a company’s annual or interim financial statements may not be prevented or detected on a timely basis.

The Company did not maintain an effective control environment as it lacked sufficient oversight of activities related to its internal control over financial reporting due to a lack of appropriate level of experience and training commensurate with its financial reporting requirements.

Further, due to rapid business growth, changes to existing controls or the implementation of new controls have not been sufficient to respond to changes to the risks of material misstatement to financial reporting, which resulted in the Company not designing and maintaining effective controls related to substantially all accounts and disclosures.

These material weaknesses contributed to the following additional material weaknesses as of December 31, 2023:

• The Company did not design and maintain effective controls to verify appropriate accounting for complex financing transactions.

• The Company did not design and maintain effective controls to verify appropriate segregation of duties, including assessment of incompatible duties, identification of instances where incompatible duties were assigned to an individual, and addressing conflicts on a timely basis.

• The Company did not design and maintain effective controls over certain information technology (IT) general controls over information systems that are relevant to the preparation of the Company’s financial statements.

Specifically, the Company did not design and maintain:

(i) user access controls to ensure appropriate segregation of duties and to adequately restrict user and privileged access to appropriate personnel;

(ii) program change management controls to ensure that program and data changes are identified, tested, authorized and implemented appropriately;

and (iii) computer operations controls to ensure that processing and transfer of data, and data backups and recovery are monitored.

The material weaknesses related to the control environment, risk assessment and complex financing transactions resulted in the revision of the consolidated financial statements as of and for the periods ended September 30, 2022, December 31, 2022, March 31, 2023, and June 30, 2023.

The material weaknesses related to segregation of duties and IT

general controls did not result in a misstatement to our annual or interim consolidated financial statements.

Additionally, the material weaknesses could result in misstatements to substantially all of our accounts and disclosures that would result in a material misstatement of the annual or interim consolidated financial statements that would not be prevented or detected.

Because of these material weaknesses, management concluded that the Company did not maintain effective internal control over financial reporting as of December 31, 2023.

The effectiveness of our internal control over financial reporting as of December 31, 2023 has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report which appears under Item 8.

Remediation Efforts for the Material Weaknesses

We are in the process of designing and implementing controls and taking other actions to remediate the material weaknesses described above.

Specifically, during the quarter ended December 31, 2023, we implemented measures designed to improve our internal control over financial reporting to remediate the material weaknesses, including the following:

• Engaged a third party to perform a risk assessment that includes the identification and walkthrough of key business processes and conducting design and operational control testing to address key risks.

• Completed a segregation of duties assessment identifying key conflicts and mitigating controls.

• Initiated the design and implementation of a Segregation of Duties automated tool for our Enterprise Resource Planning (ERP) system.

We also began the design and implementation of similar controls for the remaining financially relevant applications.

• Initiated the design and implementation of controls related to the review of Service Organization Control reports, which cover program change management and computer operations for many of the applications that we rely on for financial reporting.

• Developed policies and procedures for the quarterly user access review of all users with access to the financially relevant systems and then implemented the quarterly user access review for one design cycle.

• Initiated the design and implementation of the controls related to review and approval of complex financing transactions.

• Completed the implementation of an automated month and quarter-end accounting close workflow tool to facilitate the review and support of key financial close process controls.

The material weaknesses will not be considered remediated until management completes the design and implementation of the measures described above, the controls operate for a sufficient period of time, and management has concluded, through testing, that the controls are effective.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting identified in connection with the evaluation required by paragraph (d) of Exchange Act Rules 13a-15 or 15d-15 that occurred during our last fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

As described above in the section “Remediation Efforts for the Material Weaknesses,” there were changes in our internal control over financial reporting during the quarterly period ended December 31, 2023 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Other Information

Insider Trading Arrangements

During the fiscal quarter ended December 31, 2023, the following Section 16 officers and directors adopted, modified or terminated a “Rule 10b5-1 trading arrangement” (as defined in Item 408 of Regulation S-K of the Exchange Act):

Keyvan Mohajer , Chief Executive Officer and Director , adopted a new trading plan on December 12, 2023 (with the first trade under the new plan not to be made prior to March 12, 2024).

The trading plan will be effective until June 7, 2024 and provides for the sale of up to 1,800,000 shares of Dr.

Mohajer’s 15,439,064 shares of Class B common stock.

up to 833,435 shares of Class A common stock issuable upon exercise of outstanding options, and up to 355,000 shares of Class A common stock issuable upon vesting and settlement of certain RSUs and PSUs, provided that certain conditions are met.

Seyed Majid Emami , Chief Science Officer and Senior Vice President of Engineering , adopted a new trading plan on December 8, 2023 ( with the first trade under the new plan not to be made prior to March 8, 2024).

The trading plan will be effective until November 30, 2024 and provides for the sale of up to 1,950,000 shares of Dr.

Emami’s 18,033,756 shares of Class B common stock and up to 666,748 shares of Class A common stock issuable upon exercise of outstanding options, provided that certain conditions are met.

Hom , Chief Product Officer and Director , adopted a new trading plan on December 8, 2023 ( with the first trade under the new plan not to be made prior to March 8, 2024).

The trading plan will be effective until May 31, 2024 and provides for the sale of up to 2,000,000 shares of Mr.

Hom’s 4,012,588 shares of Class B common stock and up to 100,000 shares of Class A common stock issuable upon vesting and settlement of certain RSUs and PSUs, provided that certain conditions are met.

There were no “non-Rule 10b5-1 trading arrangements” (as defined in Item 408 of Regulation S-K of the Exchange Act) adopted , modified or terminated during the fiscal quarter ended December 31, 2023 by our directors and Section 16 officers.

Each of the Rule 10b5-1 trading arrangements are in accordance with our Insider Trading Policy and actual sale transactions made pursuant to such trading arrangements will be disclosed publicly in Section 16 filings with the SEC in accordance with applicable securities laws, rules and regulations.

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

Not applicable.

The information required by Part III is omitted from this Annual Report in that we will file a definitive proxy statement pursuant to Regulation 14A with respect to our 2024 Annual Meeting (the "Proxy Statement") no later than 120 days after the end of the fiscal year covered by this Annual Report, and certain information included therein is incorporated herein by reference.

Only those sections of the Proxy Statement which specifically address the items set forth herein are incorporated by reference.

Directors, Executive Officers and Corporate Governance

Our executive officers and directors are listed below.

Name Age Position

Keyvan Mohajer 45 Director, Chief Executive Officer

James Hom 39 Director, Vice President of Products

Larry Marcus 57 Director

Diana Sroka 49 Director

Eric Ball 59 Director

Majid Emami 46 Vice President of Engineering

Timothy Stonehocker 42 Chief Technology Officer

Nitesh Sharan 48 Chief Financial Officer

Michael Zagorsek 48 Chief Operating Officer

Keyvan Mohajer.

Keyvan Mohajer has been our Chief Executive Officer and a member of the Board since the consummation of the Business Combination in April 2022.

Mohajer has served as SoundHound’s Chief Executive Officer and a member of the SoundHound board of directors (the “SoundHound Board”) since 2005, when he co-founded SoundHound.

Mohajer is a technical founder and visionary entrepreneur with over 20 years of experience scaling multiple companies.

Mohajer is a key contributor to SoundHound’s core technologies, with over 90 patents granted or pending.

Mohajer was named a “Top 40 Under 40” business leader by Silicon Valley Business Journal.

Mohajer received his Bachelor of Science degree in Electrical Engineering from the University of Toronto in 2000, his Master of Science from Stanford University in 2002 and his Ph.D.

in Electrical Engineering from Stanford University in 2007.

James Hom has been a member of the Board and Vice President of Products since the consummation of the Business Combination in April 2022.

Hom, one of SoundHound’s co-founders, has served as Vice President of Products and a member of the SoundHound Board since 2006.

As Vice President of Products, Mr.

Hom leads product development and advancement for the Houndify Voice AI platform and multiple business-to-consumer products.

Hom earned his Bachelor of Science Degree in Computer Science from Stanford University in 2005.

Larry Marcus.

Larry Marcus has been a member of the Board since the consummation of the Business Combination in April 2022.

Prior to that, Mr.

Marcus served as a member of the Legacy SoundHound Board since 2009.

He is a Co-founder and Managing Director of Marcy Venture Partners, a San Francisco-based venture capital firm investing in consumer, culture and positive impact businesses since February 2018.

Since June 2000, Mr.

Marcus has also been a Managing Director at Walden Venture Capital.

Previously, Mr.

Marcus was a digital media sell-side equity research analyst at Deutsche Bank Alex Brown from 1995 to 2000.

Marcus currently serves, and in the past has served, on the boards of directors of a number private companies, some of which have gone on to become public companies.

Marcus received his Bachelor of Arts in Political Economy of Industrial Societies in 1987 and his Master of Business Administration in 1993, both from the University of California, Berkeley.

We believe that Mr.

Marcus is well qualified to serve as a member of the Board because, as a member of the Legacy SoundHound Board, he has extensive knowledge of the Company’s business, and also because of this significant venture capital and finance experience.

Diana Sroka has been a member of the Board since the consummation of the Business Combination in April 2022.

Sroka joined HP Inc.

(“HP”) (f/k/a Hewlett-Packard Company) (NYSE:HPQ), a global technology company based in Palo Alto, California, and has held various leadership roles in finance and business functions within HP.

Since November 2020, Ms.

Sroka has served as the Global Head of Consumer Printer Services.

Prior to that, from March 2017 to November 2020, Ms.

Sroka served as HP’s Chief Executive Officer’s Chief of Staff, where she was responsible for regular review and approval of internal Sarbanes-Oxley Act controls related to matters managed by the Executive Leadership Team.

Prior to serving as Chief of Staff, Ms.

Sroka served as an Investor Relations Officer on HP’s Investor Relations team commencing in June 2014.

From November 2015 through March 2017, she served as HP’s Head of Investor Relations.

Prior to her employment at HP, Ms.

Sroka was a Business Planning Analyst for Visteon Corporation and a Product Engineer with Ford Motor Company.

Sroka earned her Bachelor of Science Degree in Mechanical

Engineering from Pennsylvania State University in 1995 and her Master of Business Administration Degree from the University of Michigan in 2000.

We believe that Ms.

Sroka is well qualified to serve as a member of the Board because she has extensive background in accounting, financial management and internal accounting controls.

Ball has been a member of our Board since our IPO in 2021.

Since 2016, Dr.

Ball has been the General Partner of Impact Venture Capital, a Silicon Valley based venture firm investing in early-stage applied-AI start-up companies.

From 2015 until 2016, Dr.

Ball served as the Chief Financial Officer for C3 AI, an enterprise AI software provider.

From 2005 to 2015, Dr.

Ball served as Senior Vice President and Treasurer for Oracle.

Prior to 2005, Dr.

Ball served in a variety of finance roles at Flextronics International, Cisco Systems, Avery Dennison, and AT&T.

Ball has served as the Chairman of the Board of CapConnect+, a start-up company that is focused on linking corporate bond issuers to their institutional buyers, since 2020.

Ball also served as an advisor to Kyriba, a private treasury management software provider from 2017 until November 2022.

Ball also served as a board member and Audit Chairman of Glu Mobile Inc, a developer and publisher of mobile games from 2013 until April 2021.

Ball received his Ph.D.

in management at the Drucker-Ito School of Claremont Graduate University.

Ball received his MBA in finance and MA in economics at the University of Rochester.

Ball graduated with honors from the University of Michigan with a Bachelor of Arts degree in Economics.

Ball is also the co-author of the book “Unlocking the Ivory Tower”.

We believe that Dr.

Ball is well-qualified to serve as a director of the company given his extensive finance, mergers and acquisition, investing and public company experience in the technology industry.

Majid Emami has been Vice President of Engineering of the Company since the consummation of the Business Combination in April 2022.

Emami is a co-founder of SoundHound and has served as Vice President of Engineering since 2006.

Emami leads SoundHound’s research and development efforts related to speech recognition and machine learning and holds 16 patents related to Voice AI technology.

Emami received a Bachelor of Science in Electrical Engineering in 2000 from the University of Toronto and a Masters and a Ph.D.

in Electrical Engineering, with a focus in wireless communications, in 2007, both from Stanford University.

Timothy Stonehocker.

Timothy Stonehocker has been Chief Technology Officer of the Company since the consummation of the Business Combination in April 2022.

Stonehocker has served as SoundHound’s Chief Technology Officer since 2010.

Stonehocker specializes in audio recognition algorithms, search technologies, and scalable systems, and has applied his experience to positions he has held since joining SoundHound in 2006, including as SoundHound’s Principal Search Architect before assuming his current role as Chief Technology Officer.

Prior to SoundHound, Mr.

Stonehocker worked on core order pipeline systems at Amazon, Inc.

in Seattle and was part of the team of engineers that relocated to Palo Alto in 2004 to form the Amazon, Inc.

subsidiary A9.com.

He earned his Bachelor of Science Degree with distinction in Computer Science in 2003 and his Master of Arts in Music in 2003, both from Stanford University.

Nitesh Sharan.

Nitesh Sharan has been Chief Financial Officer of the Company since the consummation of the Business Combination in April 2022.

Sharan has served as the Chief Financial Officer at SoundHound since September 2021.

In this capacity, Mr.

Sharan oversees SoundHound’s accounting, financial planning, investor relations, treasury and capital planning functions.

Prior to joining SoundHound, between May 2016 and September 2021, Mr.

Sharan held several executive roles at Nike, Inc.

including Treasurer, Head of Investor Relations and Chief Financial Officer of Global Operations.

Prior to Nike Inc., Mr.

Sharan was the Vice President and Assistant Treasurer at Hewlett-Packard Inc., from June 2001 to April 2016, and was a Senior Consultant at Accenture plc from 1996 to 2000.

Sharan received a Bachelor of Science in Management from Case Western Reserve University in 1996 and a Master of Business of Administration from Northwestern University in 2001.

He is a CFA ® charterholder.

Michael Zagorsek.

Michael Zagorsek has been Chief Operating Officer of the Company since the consummation of the Business Combination in April 2022.

Zagorsek has served as SoundHound’s Chief Operating Officer since November 2020, where Mr.

Zagorsek is principally responsible for company operations, oversight of business workflow, company planning, reporting, goal-setting, and strategy.

Prior to assuming that role, Mr.

Zagorsek was SoundHound’s Vice President of Product Marketing, from July 2016 to November 2020, in which capacity he was responsible for SoundHound’s marketing activities, including demand generation, product marketing, content marketing, public relations and design.

Prior to SoundHound, Mr.

Zagorsek was the Head of Product Marketing for Core Products at Square, Inc.

from October 2014 to July 2016 and the Vice President of Product Marketing at Leap Motion Inc., from October 2012 to March 2014.

From 2007 to 2012, Mr.

Zagorsek was Director of Marketing Communications at Apple Inc., overseeing apple.com, email marketing, Apple Online Store and retail digital marketing communications.

Zagorsek received a Bachelor of Commerce from Carleton University in 1998 and a Masters of Arts in International Business from Bradford University in 1998.

Family Relationships

Kamyar Mohajer, the brother of the Company’s CEO, Keyvan Mohajer, is an employee of SoundHound and serves as the Company’s Vice President of Corporate Strategy and International Expansion.

Board of Directors

Director Independence

Nasdaq listing rules require that a majority of the board of directors of a company listed on Nasdaq be composed of “independent directors,” which is defined generally as a person other than an officer or employee of the company or its subsidiaries or any other individual having a relationship, which, in the opinion of the company’s board of directors, would interfere with the director’s exercise of independent judgment in carrying out the responsibilities of a director.

Our Board has determined that each of Dr.

Marcus and Ms.

Sroka, are independent directors under the Nasdaq listing rules and Rule 10A-3 of the Exchange Act.

In making these determinations, our Board considered the current and prior relationships that each non-employee director has with SoundHound and all other facts and circumstances our Board deemed relevant in determining independence, including the beneficial ownership of our common stock by each non-employee director, and the transactions involving them described in the section entitled “ Certain Relationships and Related Transactions .”

Board of Directors

Our Board has one class of directors, with each director being elected in each year and serving a one-year term.

Role of Board in Risk Oversight Process

We face a number of risks, including those described under the caption “Risk Factors” contained elsewhere in this Annual Report.

Our Board believes that risk management is an important part of establishing, updating and executing on our business strategy.

Our Board has oversight responsibility relating to risks that could affect the corporate strategy, business objectives, compliance, operations, and the financial condition and performance of our company.

Our Board focuses its oversight on the most significant risks facing us and on our processes to identify, prioritize, assess, manage and mitigate those risks.

Our Board receives regular reports from members of our senior management on areas of material risk to us, including strategic, operational, financial, legal and regulatory risks.

While our Board has an oversight role, management is principally tasked with direct responsibility for management and assessment of risks and the implementation of processes and controls to mitigate their effects on us.

Committees of the Board of Directors

The standing committees of our Board consist of an Audit Committee, a Compensation Committee, and a Nominating and Corporate Governance Committee.

The composition of each committee is set forth below.

Committee charters are available on our investor relations website at investors.soundhound.com .

Audit Committee

Our Audit Committee has been established in accordance with Section 3(a)(58)(A) of the Exchange Act and consists of Dr.

Marcus and Ms.

Sroka, each of whom is an independent director and is “financially literate” as defined under the Nasdaq listing standards.

Ball serves as chair of the Audit Committee.

Our Board has determined that Dr.

Ball, qualifies as an “audit committee financial expert,” as defined under rules and regulations of the SEC.

The audit committee’s duties are specified in our Audit Committee Charter.

Compensation Committee

Our Compensation Committee consists of Mr.

Marcus and Dr.

Ball, each of whom is an independent director under Nasdaq’s listing standards, and Mr.

Marcus serves as chair of the Compensation Committee.

The functions of the Compensation Committee are set forth in a Compensation Committee Charter.

Nominating and Corporate Governance Committee

Our Nominating and Corporate Governance Committee consists of Mr.

Marcus, and Dr.

Ball, each of whom is an independent director under Nasdaq’s listing standards.

Marcus serves as the chair of the Nominating and Corporate Governance Committee.

The Nominating and Corporate Governance Committee is responsible for overseeing the selection of persons to be nominated to serve on the Board.

The Nominating and Corporate Governance Committee considers persons identified by its members, management, shareholders, investment bankers and others.

The guidelines for selecting nominees, including nominees who will permit the Continuing Company to comply with applicable Nasdaq diversity standards, will be specified in the Nominating and Corporate Governance Committee Charter.

Code of Business Conduct and Ethics

We have adopted a new Code of Ethics for our directors, officers, employees and certain affiliates in accordance with applicable federal securities laws, a copy of which is available on our website at www.soundhound.com .

A printed copy of the Code of Ethics available to any stockholder who so requests.

Requests for a printed copy may be directed to:

5400 Betsy Ross Drive, Santa Clara, CA 95054 Attention:

Keyvan Mohajer.

If we amend or grant a waiver of one or more of the provisions of our Code of Business Conduct and Ethics, we intend to satisfy the requirements under Item 5.05 of Form 8-K regarding the disclosure of amendments to or waivers from provisions of our Code of Business Conduct and Ethics that apply to our principal executive officer, principal financial officer and principal accounting officer by posting the required information on our website at www.soundhound.com .

The information on this website is not part of this Annual Report.

Officer and Director Compensation

Our Board adopted a nonemployee director compensation program (the “Director Compensation Policy”).

The Director Compensation Policy is designed to align compensation with our business objectives and the creation of stockholder value, while enabling us to attract, retain, incentivize and reward non-employee directors who contribute to our long-term success.

The Director Compensation Policy provides for an annual cash retainer for all non-employee directors, in addition to equity grants determined by the compensation committee and reimbursement for reasonable expenses incurred in connection with attending Board and committee meetings.

Our Board expects to review non-employee director compensation periodically to ensure that non-employee director compensation remains competitive such that we are able to recruit and retain qualified directors.

Our policies with respect to the compensation of its executive officers are administered by our Board in consultation with its compensation committee.

We may also rely on data and analyses from third parties, such as compensation consultants, in connection with its compensation programs.

We intend to design and implement programs to provide for compensation that is sufficient to attract, motivate and retain executives and potentially other individuals and to establish an appropriate relationship between executive compensation and the creation of stockholder value.

The information required by this item will be included in the Proxy Statement.

Executive Compensation

To achieve the Company’s goals, we are in the process of designing a compensation and benefits program to attract, retain, incentivize and reward deeply talented and qualified executives who share its philosophy and desire to work towards achieving our goals.

We believe our compensation program should promote our success and align executive incentives with the long-term interests of our stockholders.

Legacy SoundHound’s compensation arrangements consisted principally of a base salary, an annual cash incentive bonus and equity compensation, as described below.

Legacy SoundHound’s board of directors (the “Legacy SoundHound Board”) had historically determined the compensation of Legacy SoundHound’s executive officers.

Subsequent to the Business Combination, our Board has determined the compensation of our executive officers.

For the year ended December 31, 2022, SoundHound AI’s named executive officers were Dr.

Keyvan Mohajer, Chief Executive Officer, Nitesh Sharan, Chief Financial Officer, and Zubin Irani, Chief Revenue Officer.

This section provides an overview of our executive compensation arrangements with our executive officers, including a narrative description of the material factors necessary to understand the information disclosed in the summary compensation table below.

This section may contain forward-looking statements that are based on our current plans,

considerations, expectations and determinations regarding future compensation programs.

See “New Employment Agreements with Named Executive Officers” below for information regarding our current compensation arrangements with named executive officers.

Summary Compensation Table for Fiscal Years 2021 and 2022

The following table sets forth information concerning the compensation of the named executive officers for the fiscal years ended December 31, 2021 and 2022.

Name and Position Fiscal Year Salary (1) ($)

Bonus ($) Stock Awards (2) ($)

Option Awards (3) ($)

All Other Compensation ($) Total ($)

Keyvan Mohajer, CEO 2021 260,000 — — — — 260,000

2022 381,042 — 10,054,500 — — 10,435,542

Nitesh Sharan, CFO 2021 83,333 (4)

— 952,070 — 1,110,403

2022 328,958 75,000 4,302,250 — — 4,706,208

Zubin Irani, CRO (6)

2021 81,167 75,000 — 634,713 — 790,880

2022 319,146 — 5,096,250 — — 5,415,396

(1) Includes a 15% reduction in salary beginning in December 2022.

(2) The amounts disclosed represent the aggregate grant date fair value of stock awards granted to our named executive officers during the fiscal year ended December 31, 2022 under our 2022 Incentive Plan, calculated in accordance with Financial Accounting Standards Board ASC Topic 718.

The assumptions used in calculating the grant date fair value of the stock awards are set forth in the notes to our audited financial statements included elsewhere in this Annual Report.

This amount includes performance based stock awards which are not anticipated to vest as of the date of this Annual Report.

This amount does not reflect the actual economic value that may be realized by the named executive officer.

(3) The amounts disclosed represent the aggregate grant date fair value of stock options granted to our named executive officers during the fiscal year ended December 31, 2021 under our 2016 Incentive Plan, calculated in accordance with Financial Accounting Standards Board ASC Topic 718.

The assumptions used in calculating the grant date fair value of the stock options are set forth in the notes to our audited financial statements included elsewhere in this Annual Report.

This amount does not reflect the actual economic value that may be realized by the named executive officer.

Sharan assumed responsibilities as Legacy SoundHound’s Chief Financial Officer in October 2021.

Pursuant to his offer letter, Mr.

Sharan’s annual salary was $300,000.

Sharan received a $75,000 sign-on/retention payment.

Irani’s employment status was changed to an advisor on February 3, 2023.

Narrative Disclosure to Summary Compensation Table

Agreements with the Company’s Named Executive Officers as of December 31, 2022

Our Chief Executive Officer was party to an employment Agreement with Legacy SoundHound and then SoundHound AI through June 2, 2022.

Our Chief Financial Officer and Chief Revenue Officer were parties to letter agreements with Legacy SoundHound and then SoundHound AI through June 2, 2022, provided that the letter agreement with Mr.

Zubin Irani, our Chief Revenue Officer was not effective until January 5, 2022.

New Employment Agreements with Named Executive Officers

On June 2, 2022, our Compensation Committee and full Board approved certain compensation adjustments for its named executive officers.

The Company also entered into new employment letter agreements with Dr.

Keyvan Mohajer, the Company’s Chief Executive Officer;

Nitesh Sharan, the Company’s Chief Financial Officer;

Zubin Irani, the Company’s Chief Revenue Officer, which replaced and superseded all prior employment agreements with such named executive officers.

In addition, the Board adopted and approved a Non-Employee Director Compensation Policy.

Employment Agreement with Keyvan Mohajer, Chief Executive Officer

Mohajer’s employment agreement (the “June 2022 CEO Employment Agreement”), Dr.

Mohajer receives a base salary of $450,000, effective retroactively as of May 1, 2022.

In addition, Dr.

Mohajer is eligible to earn an annual incentive bonus, with a target equal to 100% of his annual base salary as then in effect, with a maximum payout at 150% of

his annual base salary as then in effect.

The annual bonus will be determined by the Company in its sole discretion based upon achievement of performance objectives to be determined by the Company.

The June 2022 CEO Employment Agreement provides for the grant to Dr.

Mohajer of 720,000 restricted stock units (the “RSUs”) under the SoundHound AI, Inc.

2022 Incentive Award Plan (the “2022 Incentive Award Plan”), which grant became effective upon the filing of the Company’s Registration Statement on Form S-8 (the “Form S-8”) filed with the Securities and Exchange Commission (“SEC”) on July 20, 2022 to register shares under the 2022 Incentive Award Plan.

The RSUs have a 10-year term and 4-year vesting period, vesting in equal quarterly installments with vesting measured from the vesting commencement date of May 1, 2022, subject to continued employment with the Company through each vesting date.

In August 2022, Dr.

Mohajer was granted an additional 450,000 RSUs under the 2022 Incentive Award Plan.

The RSUs have a 10-year term and 3-year vesting period, vesting in equal monthly installments with vesting measured from the vesting commencement date of August 1, 2022, subject to continued employment with the Company through each vesting date.

Mohajer was also granted 480,000 RSUs that are subject to performance-based vesting (the “PSUs”) under the Incentive Award Plan, which grant became effective upon the filing of the Form S-8 with the SEC.

The PSUs have a four-year performance period and are subject to the following vesting schedule:

(i) 25% if the Company achieves $100 million of GAAP revenue in a trailing 12 months;

(ii) 25% if the Company is cash-flow positive in a trailing 12 months;

(iii) 25% if the Company’s stock price reaches a 90-day average of $15;

and (iv) 25% if the Company’s stock price reaches a 90-day average of $20.

In addition, Dr.

Mohajer is eligible to participate in the standard benefit plans offered to similarly situated employees by the Company from time to time.

The June 2022 CEO Employment Agreement provides for “at will employment,” and specifies certain compensation following termination of employment, including potential severance payments of three months of Dr.

Mohajer’s then current base salary and payment for three months of any COBRA premiums if Dr.

Mohajer’s employment is terminated by the Company without “Cause” (as defined in the Incentive Award Plan) or if the executive resigns his employment for “Good Reason” (as defined in the employment agreement).

If such a qualified termination occurs within three months prior to, or one year after, a Change in Control (as defined the Incentive Award Plan), the severance period is increased to 12 months of then current base salary and 12 months of COBRA premiums, and vesting will be accelerated for any stock options that have time-based vesting and for the RSUs.

The Company may accelerate the vesting of the PSUs in connection with the negotiation of any Change in Control transaction.

Any severance is subject to the executive timely delivering a release of claims in favor of the Company.

Mohajer has also entered into the Company’s standard form of confidential information and inventions assignment agreement.

Employment Agreement with Nitesh Sharan, Chief Financial Officer

Sharan’s employment agreement (the “June 2022 CFO Employment Agreement”), Mr.

Sharan receives a base salary of $350,000, effective retroactively as of May 1, 2022.

In addition, Mr.

Sharan is eligible to earn an annual incentive bonus, with a target equal to 60% of his annual base salary as then in effect, with a maximum payout at 150% of his annual base salary as then in effect.

The annual bonus will be determined by the Company in its sole discretion, based upon achievement of performance objectives to be determined by the Company.

The June 2022 CFO Employment Agreement provides for a grant to Mr.

Sharan of 300,000 RSUs under the 2022 Incentive Award Plan, which grant became effective upon the filing of the Form S-8 with the SEC.

The RSUs have a 10-year term and 4-year vesting period vesting in equal quarterly installments with vesting measured from the vesting commencement date of September 15, 2021, subject to continued employment with the Company through each vesting date.

In August 2022, Mr.

Sharan was granted an additional 225,000 RSUs under the 2022 Incentive Award Plan.

Sharan was also granted 200,000 PSUs under the 2022 Incentive Award Plan, which grant became effective upon the filing of the Form S-8 with the SEC.

The PSUs have a four-year performance period and are subject to the following vesting schedule:

(i) 25% if the Company achieves $100 million of GAAP revenue in a trailing 12 months;

25% if the Company is cash-flow positive in a trailing 12 months;

(iii) 25% if the Company’s stock price reaches a 90-day average of $15;

and (iv) 25% if the Company’s stock price reaches a 90-day average of $20.

In addition, Mr.

Sharan is eligible to participate in the standard benefit plans offered to similarly-situated employees by the Company from time to time.

The June 2022 CFO Employment Agreement provides for “at will employment,” and specifies certain compensation following termination of employment, including potential severance payments of three months of Mr.

Sharan’s then current base salary and payment for three months of any COBRA premiums if Mr.

Sharan’s employment is terminated by the Company without “Cause” (as defined in the Incentive Award Plan) or if the executive resigns his employment for “Good Reason” (as defined in the employment agreement).

The Company may accelerate the vesting of the PSUs in connection with the negotiation of any Change in Control transaction.

Any severance is subject to the executive timely delivering a release of claims in favor of the Company.

Sharan has also entered into the Company’s standard form of confidential information and inventions assignment agreement.

Agreement with Zubin Irani, Chief Revenue Officer

Zubin Irani, who commenced his service as Legacy SoundHound’s Chief Revenue Officer in January 2022, pursuant to the terms of an offer letter agreement dated September 14, 2021 (the “CRO Letter Agreement”).

Under the CRO letter agreement, Mr.

Irani was entitled to a base salary of $300,000 per year.

In connection with his engagement, during the 2021 fiscal year, Mr.

Irani received options to purchase 37,037 shares of Legacy SoundHound common stock, at an exercise price of $41.75 per share, pursuant to the 2016 Incentive Plan.

As of December 21, 2021, the options had a fair value of $634,180 (calculated in accordance with Financial Accounting Standards Board ASC Topic 718).

Irani’s employment agreement that was entered into in June 2022 (the “June 2022 CRO Employment Agreement”), Mr.

Irani received a base salary of $335,000, effective retroactively as of May 1, 2022.

In addition, Mr.

Irani was eligible to earn an annual incentive bonus, with a target equal to 100% of his annual base salary as then in effect, with a maximum payout at 200% of his annual base salary as then in effect.

The annual bonus was determined by the Company in its sole discretion, based upon achievement of performance objectives to be determined by the Company.

Under the CRO Letter Agreement, the Company agreed to recommend an award of 300,000 restricted stock units (“RSUs”) and 300,000 performance stock units (“PSUs”) on the listing date of a liquidity event (based on a converted cap table of 200 million shares).

The RSU and PSU grants were made pursuant to the SoundHound AI, Inc.

2022 Incentive Award Plan and were approved by the Board and awarded as of August 4, 2022.

In August 2022, Mr.

Irani was granted an additional 225,000 RSUs under the 2022 Incentive Award Plan.

With the exception of the August 2022 RSU grant, the Options, RSUs, and PSUs have a four-year time-based vesting schedule, with 3/48 th of the award vesting on each quarter following the CRO’s hire date, subject to Mr.

Irani’s continued employment through such dates.

Following a change in control (as defined in the CRO letter agreement), any unvested portion of the option or RSU awards shall accelerate if the CRO is terminated without cause or terminates due to a constructive termination (each as defined in the CRO letter agreement).

The PSUs are subject to additional GAAP revenue performance-based vesting conditions, with (a) 200,000 PSUs vesting, with respect to 50,000 PSUs each, upon the first achievement of (i) $30.0 million of GAAP revenue, (ii) $100.0 million or GAAP revenue exceeds the revenue target set by the Board for fiscal year 2023, (iii) $200.0 million or GAAP revenue exceeds the revenue target set by the Board for fiscal year 2024 and (iv) $300.0 million or GAAP revenue exceeds the revenue target set by the Board for fiscal year 2025 in a trailing 12 months during the four-year PSU period;

(b) 50,000 PSUs vesting upon the first achievement of the Class A Common Stock closing at a 90-day average closing price on the

Nasdaq Global Market of $15.00 or higher;

and (c) 50,000 PSUs vesting upon the first achievement of the Class A Common Stock closing at a 90-day average closing price on the Nasdaq Global Market of $20.00 or higher.

In addition, Mr.

Irani was eligible to participate in the standard benefit plans offered to similarly-situated employees by the Company from time to time.

The June 2022 CRO Employment Agreement provided for “at will employment,” and specifies certain compensation following termination of employment, including potential severance payments of three months of Mr.

Irani’s then current base salary and payment for three months of any COBRA premiums if Mr.

Irani’s employment is terminated by the Company without “Cause” (as defined in the Incentive Award Plan) or if the executive resigns his employment for “Good Reason” (as defined in the employment agreement).

The Company may accelerate the vesting of the PSUs in connection with the negotiation of any Change in Control transaction.

Any severance is subject to the executive timely delivering a release of claims in favor of the Company.

Irani has also entered into the Company’s standard form of confidential information and inventions assignment agreement.

Irani’s employment agreement was terminated on February 3, 2023 and Mr.

Irani became an advisor.

OUTSTANDING EQUITY AWARDS AT 2022 FISCAL YEAR END

The following table presents information regarding outstanding equity awards held by the Company’s Named Executive Officers as of December 31, 2022.

Option Awards

Name and Position Grant Date Vesting Start Date Number of Securities Underlying Unexercised Options Exercisable (#) Number of Securities Underlying Unexercised Options Unexercisable (#) Number of Securities Underlying Unexercised Unearned Options Unexercisable (#) Option Exercise Price

($) Option Expiration Date

Keyvan Mohajer, CEO 3/28/2017 3/28/2017 (1)

833,435 — — 2.18 3/28/2027

Nitesh Sharan, CFO 9/27/2021 9/15/2021 (2)

96,460 212,217 — 7.51 9/27/2031

Zubin Irani, CRO 9/27/2021 9/15/2021 (2)

64,310 141,477 — 7.51 9/27/2031

(1) The option award was fully vested from the grant date.

(2) The option award has a four-year vesting schedule, with 25% of the award vesting 12 months after Vesting Start Date and 3/48 th of the award vesting each quarter thereafter.

Restricted Stock Awards

Name and Position (a) Grant Date

(b) Number of Shares or Units of Stock That Have Not Vested

Equity Incentive Plan Awards:

Number of Unearned Shares, Units or Other Rights That Have Not Vested

(e) Equity Incentive Plan Awards:

Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested (1)

Keyvan Mohajer, CEO 6/02/2022 615,000 (2)

1,088,550 — —

6/02/2022 — — (3)

9/07/2022 400,000 (4)

Nitesh Sharan, CFO 6/02/2022 206,250 (2)

6/02/2022 — — (3)

9/07/2022 200,000 (4)

Zubin Irani, CRO 6/02/2022 206,250 (2)

6/02/2022 — — (3)

9/07/2022 200,000 (4)

(1) The dollar amounts shown in columns (d) and (f) are determined by multiplying the number of shares or units shown in column (c) or (e), as applicable, by $1.77, the closing price of our common stock on December 31, 2022.

(2) The restricted stock award has a four-year vesting schedule, with 1/16 th of the award vesting each quarter after the vesting commencement date.

(3) Excludes PSUs with performance goals not currently expected to be achieved.

(4) The restricted stock award has a three-year vesting schedule, with 1/36 th of the award vesting each month after the vesting commencement date.

Director Compensation

On June 2, 2022, our Board adopted and approved a director compensation policy, which provides to each of the non-employee directors (i) an annual retainer of $32,000, payable quarterly (ii) additional annual cash retainers, payable quarterly, for committee service as follows:

(A) Chair of the Audit Committee:

(B) member of the Audit Committee:

(D) member of the Compensation Committee:

(E) Chair of the Nominating and Corporate Governance Committee:

and (F) member of the Nominating and Corporate Governance Committee:

(iii) an initial grant of restricted stock units having a grant day value of $380,000, although a director may elect to receive half of the initial grant in nonqualified stock options, which initial grant shall vest over three years;

(iv) an annual grant of restricted stock units having a grant day value of $165,000, which shall vest over four quarters;

and (iv) travel expense reimbursement.

In the event of a Change in Control (as defined in the Incentive Award Plan), any then-unvested initial grant or annual RSU grant will fully vest (and become exercisable, in the case of an option) as of immediately prior to the effective time of such transaction, subject to the outside director’s continuous board service through the effective date of such transaction.

The following table sets forth information regarding compensation earned by our non-employee directors for the year ended December 31, 2022.

Name Fees Earned or Paid in Cash

($) Stock Awards

($) Option Awards

($) All Other Compensation ($) Total

Eric Ball 47,325 355,000 190,000 — 592,325

Larry Marcus 48,000 545,000 — — 593,000

Diana Sroka 31,500 355,000 190,000 — 576,500

The information required by this item will be included in the Proxy Statement.

Security Ownership of Certain Beneficial Owner and Management and Related Stockholder Matters .

The following table sets forth information known to the Company regarding beneficial ownership of shares of the Company’s Class A Common Stock and Class B Common Stock as of March 23, 2023 by:

• each person known by the Company to be the beneficial owner of more than 5% of the Company’s outstanding Class A Common Stock and Class B Common Stock;

• each of the Company’s named executive officers and directors;

• all executive officers and directors as a group.

Beneficial ownership is determined according to the rules of the SEC, which generally provide that a person has beneficial ownership of a security if he, she or it possesses sole or shared voting or investment power over that security, including options, warrants and certain other derivative securities that are currently exercisable or will become exercisable within 60 days.

The percentage of beneficial ownership is based on 219,909,116 shares of Company common stock issued and outstanding as of March 23, 2023, which calculation includes (i) 180,173,708 shares of the Company’s Class A Common Stock and (ii) 39,735,408 shares of the Company’s Class B Common Stock.

Voting power represents the combined voting power of shares of Class A Common Stock and Class B Common Stock owned beneficially by such person.

On all matters to be voted upon, subject to the rights of any holders of any series of preferred stock, holders of shares of Class A Common Stock and Class B Common Stock will vote together as a single class on all matters submitted to the stockholders for their vote or approval.

Holders of Class A Common Stock are entitled to one vote per share on all matters submitted to the stockholders for their vote or approval.

Holders of Class B Common Stock are entitled to ten votes per share on all matters submitted to stockholders for their vote or approval.

In accordance with SEC rules, shares of our common stock which may be acquired upon exercise of stock options or warrants which are currently exercisable or which become exercisable within 60 days after March 23, 2023 are deemed beneficially owned by the holders of such options and warrants and are deemed outstanding for the purpose of computing the percentage of ownership of such person, but are not treated as outstanding for the purpose of computing the percentage of ownership of any other person.

Unless otherwise indicated, the business address of each of the entities, directors and executives in this table is 5400 Betsy Ross Drive, Santa Clara, CA 95054.

Unless otherwise indicated and subject to community property laws and similar laws, the Company believes that all parties named in the table below have sole voting and investment power with respect to all shares of common stock beneficially owned by them.

Beneficial Ownership Table

Name of Beneficial Owners Number of Shares of Class A Common Stock % Class Number of Shares of Class B Common Stock % Class % of Total Voting Power

Directors and Executive Officers

Keyvan Mohajer (1)

1,030,935 * 16,639,064 41.9 % 29.0 %

James Hom (2)

70,138 * 4,512,588 11.4 % 7.8 %

Larry Marcus (3)

825,104 * — — *

Diana Sroka (4)

66,343 * — — *

Eric Ball (5)

741,394 * — — *

Seyed Majid Emami (6)

736,886 * 18,583,756 46.8 % 32.3 %

Timothy Stonehocker (7)

1,658,774 * — — *

Nitesh Sharan (8)

349,884 * — — *

Michael Zagorsek (9)

1,061,677 * — — *

All directors and executive officers as a group (9 individuals) 6,541,135 3.6 % 39,735,408 100.0 % 69.9 %

Global Catalyst Partners III, L.P.

35,188,205 19.5 % — — 6.1 %

* Less than 1%.

(1) Includes 833,435 shares of Class A Common Stock that are issuable upon exercise of stock options which are currently exercisable and 55,000 shares of Class A Common Stock issuable upon vesting of outstanding RSUs that vest within 60 days of March 23, 2023.

(2) Includes 19,722 shares of Class A Common Stock issuable upon vesting of outstanding RSUs that vest within 60 days of March 23, 2023.

(3) Includes 29,258 shares of Class A Common Stock issuable upon vesting of outstanding RSUs that vest within 60 days of March 23, 2023 and 795,846 shares of Class A Common Stock held by Marcus Family Trust, dated 7/8/04, of which Larry Marcus is a co-trustee.

Marcus disclaims beneficial ownership of the shares held by the trust except to the extent of any pecuniary interest he may have therein.

Does not include securities held of record by Walden Sprout Opportunities Fund-A, LLC because Mr.

Marcus is one of three managing members of such fund, he is not deemed to be a beneficial owner of the securities held by such fund.

Marcus’s business address is 2105 Woodside Rd, Woodside, CA 94062.

(4) Includes 28,228 shares of Class A Common Stock that are issuable upon exercise of stock options which are exercisable within 60 days of March 23, 2023 and 17,239 shares of Class A Common Stock issuable upon vesting of outstanding RSUs that vest within 60 days of March 23, 2023.

(5) Includes 28,228 shares of Class A Common Stock that are issuable upon exercise of stock options which are exercisable within 60 days of March 23, 2023, 17,239 shares of Class A Common Stock issuable upon vesting of outstanding RSUs that vest within 60 days of March 23, 2023, 100,020 shares of Class A Common Stock issuable upon conversion of 3,334 shares of Series A Preferred Stock which are convertible within 60 days of March 23, 2023 and 580,250 shares of Class A Common Stock held of record by the Ball Axline Living Trust (dated July 22, 2014) of which Mr.

Ball is a joint trustee.

Ball disclaims beneficial ownership of the shares held by the trust except to the extent of any pecuniary interest he may have therein.

(6) Includes 666,748 shares of Class A Common Stock that are issuable upon exercise of stock options which are currently exercisable and 19,722 shares of Class A Common Stock issuable upon vesting of outstanding RSUs that vest within 60 days of March 23, 2023.

(7) Includes 750,964 shares of Class A Common Stock in exchange for securities pursuant to the Merger Agreement, 795,238 shares of Class A Common Stock that are issuable upon exercise of stock options that are currently exercisable or exercisable within 60 days of March 23, 2023 and 18,472 shares of Class A Common Stock issuable upon vesting of outstanding RSUs that vest within 60 days of March 23, 2023.

(8) Includes 128,614 shares of Class A Common Stock that are issuable upon exercise of stock options which are currently exercisable or exercisable within 60 days of March 23, 2023, 25,000 shares of Class A Common Stock issuable upon vesting of outstanding RSUs that vest within 60 days of March 23, 2023 and 100,020 shares of Class A Common Stock issuable upon conversion of 3,334 shares of Series A Preferred Stock which are convertible within 60 days of March 23, 2023.

(9) Consists of 972,927 shares of Class A Common Stock that are issuable upon exercise of stock options which are currently exercisable or exercisable within 60 days of March 23, 2023 and 25,000 shares of Class A Common Stock issuable upon vesting of outstanding RSUs that vest within 60 days of March 23, 2023.

(10) Based on Schedule 13D/A filed on May 13, 2022.

Global Catalyst Venture Management III, LLC (“GCVM, III”) is the General Partner of Global Catalyst Partners III, L.P.

None of the four managing members of GCVM III is deemed to have or share beneficial ownership with respect to such shares.

The business address of Global Catalyst Partners III, L.P.

is 309 Quinnhill Road, Los Altos, CA 94024.

Securities Authorized for Issuance under Equity Compensation Plans

The following table sets forth information as of December 31, 2022 relating to all our equity compensation plans:

Plan Category Number of Securities to be Issued Upon Exercise of Outstanding Options (in thousands) Weighted Average Exercise Price of Outstanding Options Number of Granted Restricted Stock Awards Outstanding (in thousands) Number of Securities Remaining Available for Future Issuance (in thousands)

Equity compensation plans approved by security holders 25,420 $ 3.74 16,716 4,570

Equity compensation plans not approved by security holders — $ — — —

Total 25,420 $ 3.74 16,716 4,570

Changes in Control

The Company knows of no arrangements resulting in a change in control of the Company.

No officer, director, promoter, or affiliate of the Company has, or proposes to have, any direct or indirect material interest in any asset proposed to be acquired by the Company through security holdings, contracts, options, or otherwise.

The information required by this item will be included in the Proxy Statement.

Certain Relationships and Related Transactions, and Director Independence

The following is a description of each transaction since January 1, 2021 and each currently proposed transaction in which:

• SoundHound has been or is to be a participant;

• the amount involved exceeded or exceeds the lesser of (a) $120,000 or (b) one percent of the average of Legacy SoundHound’s total assets at year-end for the fiscal years ended December 31, 2022 and 2021;

• any of SoundHound or Legacy SoundHound’s directors, executive officers or holders of more than 5% of its capital stock prior to the Business Combination, or any immediate family member of, or person sharing the household with, any of these individuals, had or will have a direct or indirect material interest.

Since January 1, 2021, in connection with the equity financing rounds in which SoundHound or Legacy SoundHound has engaged since that date, the following agreements have been entered into (all of which are with investors in such financings, including holders of more than 5% of SoundHound’s capital stock or Legacy SoundHound’s capital stock at the time of such agreements.

Amended and Restated Registration Rights Agreement

In connection with the Business Combination, certain holders of Legacy SoundHound’s capital stock entered into an amended and restated registration rights agreement prior to the consummation of the Business Combination with certain existing stockholders of ATSP with respect to the shares of Class A Common Stock they owned at the time of the consummation of the Business Combination, and with certain Legacy SoundHound stockholders.

The Amended and Restated Registration Rights Agreement requires the Company to, among other things, file a resale shelf registration statement on behalf of the stockholders no later than 60 days after consummation of the Business Combination.

The Amended and Restated Registration Rights Agreement also provides certain demand registration rights and piggyback registration rights to the stockholders, subject to underwriter cutbacks and issuer blackout periods.

The Company has agreed to pay certain fees and expenses relating to registrations under the Amended and Restated Registration Rights Agreement.

On November 10, 2022, the Registration Statement on Form S-1, initially filed with the SEC on May 16, 2022, was declared effective by the SEC, relating to the Company’s obligations under the Amended and Restated Registration Rights Agreement.

Legacy SoundHound’s Engagement of Guggenheim Securities

In February 2021, Legacy SoundHound entered into an engagement letter (the “Guggenheim Engagement Letter”) pursuant to which Legacy SoundHound engaged Guggenheim Securities to act as (a) Legacy SoundHound’s financial advisor in connection with the Business Combination and (b) Legacy SoundHound’s capital markets advisor with respect to the PIPE Investment.

Upon consummation of the Business Combination, Guggenheim Securities received certain agreed upon fees in consideration of its services pursuant to the Guggenheim Engagement Letter.

In addition, we have agreed to reimburse Guggenheim Securities for certain expenses and to indemnify Guggenheim Securities against certain liabilities arising out of its engagement.

The brother of Larry Marcus, one of the members of our Board, is a Senior Advisor to Guggenheim Securities, was a stockholder of Legacy SoundHound and a member of the Guggenheim Securities investment banking team engaged pursuant to the Guggenheim Engagement Letter.

Marcus’ brother was an advisor to Legacy SoundHound (in consideration for which advisory services he received, in 2011, options to purchase shares of Legacy SoundHound common stock.

In addition, Mr.

Marcus’ brother separately owns an indirect equity stake in SoundHound that represents, in aggregate with the shares of Class A Common Stock he holds after exercising the options, an equity interest of less than one half of 1% of the total outstanding capital stock of SoundHound.AI.

Marcus did not participate in Legacy SoundHound’s decision to engage Guggenheim Securities and disclosed the fact that his brother would be involved in the advisory services to be provided by Guggenheim Securities to Legacy SoundHound pursuant to the Guggenheim Engagement Letter in advance of the determination by the Legacy SoundHound Board to engage Guggenheim Securities.

As described elsewhere herein, on or around January 20, 2023, SoundHound entered into Preferred Stock Purchase Agreements with certain investors pursuant to which the Company issued and sold to the investors an aggregate of 835,011 shares of its newly designated Series A Preferred Stock for an aggregate issue price of approximately $25 million (see “Recent Developments” in the “Prospectus Summary” for more information regarding the Transaction).

Our Chief Financial Officer, Nitesh Sharan, and one of our directors, Eric Ball, each participated in the Transaction, purchasing 3,334 shares of Series A Preferred Stock each for $100,000 each.

Policies and Procedures for Related Party Transactions

In connection with the Business Combination, SoundHound has adopted a written related person transaction policy that sets forth the following policies and procedures for the identification, review, consideration and approval or ratification of related person transactions.

SoundHound’s policies and procedures are designed to minimize potential conflicts of interest arising from any dealings it may have with its affiliates and to provide appropriate procedures for the disclosure of any real or potential conflicts of interest that may exist from time to time.

A “Related Person Transaction” is a transaction, arrangement or relationship in which SoundHound or any of its subsidiaries was, is or will be a participant, the amount of which involved exceeds the lesser of $120,000 or one percent of the average of SoundHound’s total assets at year-end for the last two completed fiscal years, and in which any related person had, has or will have a direct or indirect material interest.

Transactions involving compensation for services provided to SoundHound as an employee or director are not covered by this policy.

A “Related Person” means:

• any person who is, or at any time during the applicable period was, one of SoundHound’s officers or one of the SoundHound’s directors;

• any person who is known by SoundHound to be the beneficial owner of more than five percent (5%) of its voting stock;

• any immediate family member of any of the foregoing persons, which means any child, stepchild, parent, stepparent, spouse, sibling, mother-in-law, father-in-law, daughter-in-law, brother-in-law or sister-in-law of a director, officer or a beneficial owner of more than five percent (5%) of its voting stock, and any person (other than a tenant or employee) sharing the household of such director, officer or beneficial owner of more than five percent (5%) of its voting stock;

• any firm, corporation or other entity in which any of the foregoing persons is a partner or principal or in a similar position or in which such person has a ten percent (10%) or greater beneficial ownership interest.

Under the policy, if a transaction has been identified as a related person transaction, including any transaction that was not a related person transaction when originally consummated or any transaction that was not initially identified as a related person transaction prior to consummation, SoundHound’s management must present information regarding the related person transaction to the Company’s audit committee, or, if audit committee approval would be inappropriate, to another independent body of SoundHound’s Board of Directors, for review, consideration and approval or ratification.

The presentation must include a description of, among other things, the material facts, the interests, direct and indirect, of the related persons, the benefits to SoundHound of the transaction and whether the transaction is on terms that are comparable to the terms available to or from, as the case may be, an unrelated third party or to or from employees generally.

Under the policy, SoundHound will collect information that SoundHound deems reasonably necessary from each director, executive officer and, to the extent feasible, significant stockholder to enable SoundHound to identify any existing or potential related-person transactions and to effectuate the terms of the policy.

In addition, under SoundHound’s Code of Conduct, SoundHound’s employees and directors have an affirmative responsibility to disclose any transaction or relationship that reasonably could be expected to give rise to a conflict of interest.

In considering related person transactions, SoundHound’s audit committee, or other independent body of SoundHound’s Board of Directors, will take into account the relevant available facts and circumstances including, but not limited to:

• the risks, costs and benefits to SoundHound;

• the impact on a director’s independence in the event that the related person is a director, immediate family member of a director or an entity with which a director is affiliated;

• the availability of other sources for comparable services or products;

• the terms available to or from, as the case may be, unrelated third parties or to or from employees generally.

The policy requires that, in determining whether to approve, ratify or reject a related person transaction, SoundHound’s audit committee, or other independent body of SoundHound’s Board of Directors, must consider, in light of known circumstances, whether the transaction is in, or is not inconsistent with, SoundHound’s best interests and those of SoundHound’s stockholders, as SoundHound’s audit committee, or other independent body of SoundHound’s Board of Directors, determines in the good faith exercise of its discretion.

All of the transactions described in this section prior to the date of the Business Combination were entered into prior to the adoption of this policy.

Certain of the foregoing disclosures are summaries of certain provisions of our related party agreements, and are qualified in their entirety by reference to all of the provisions of such agreements.

Because these descriptions are only summaries of the applicable agreements, they do not necessarily contain all of the information that you may find useful.

Copies of certain of the agreements (or forms of the agreements) have been filed as exhibits to the registration statement of which this prospectus is a part, and are available electronically on the website of the SEC at www.sec.gov .

Director Independence

Our board of directors is responsible for determining the independence of our directors.

For purposes of determining director independence, our board of directors has applied the definitions set forth in NASDAQ Rule 5605(a)(2) and the related rules of the SEC.

Based upon its evaluation, our board of directors has affirmatively determined that the following directors meet the standards of independence:

Dr Eric Ball, Larry Marcus and Diana Sroka

The information required by this item will be included in the Proxy Statement.

Principal Accounting Fees and Services

Audit fees consist of fees billed for professional services rendered for the audit of our year-end financial statements, reviews of our quarterly financial statements and services that are normally provided by our independent registered public accounting firm in connection with statutory and regulatory filings.

The aggregate fees billed by Armanino LLP for audit fees, inclusive of required filings with the SEC for the years ended December 31, 2022 and 2021 totaled $1,092 thousand and $889 thousand, respectively.

Audit-Related Fees

Audit-related fees consist of fees billed for assurance and related services that are reasonably related to performance of the audit or review of our year-end financial statements and are not reported under “Audit Fees.” There were no audit-related fees billed by Armanino LLP for the years ended December 31, 2022 and 2021.

Tax fees consist of fees billed for professional services relating to tax compliance, tax planning and tax advice.

The aggregate fees billed by Armanino LLP for tax fees for the year ended December 31, 2022 totaled $114 thousand.

There were no tax fees billed by Armanino LLP for the year ended December 31, 2021.

All Other Fees

There were no other fees billed by Armanino LLP for the years ended December 31, 2022 and 2021.

Pre-Approval Policy

Since the formation of our audit committee, and on a going-forward basis, the audit committee has and will pre-approve all auditing services and permitted non-audit services to be performed for us by our auditors, including the fees and terms thereof (subject to the de minimis exceptions for non-audit services described in the Exchange Act which are approved by the audit committee prior to the completion of the audit).

The information required by this item will be included in the Proxy Statement.

Exhibits and Financial Statement Schedules

(a) The following documents are filed as a part of this Annual Report on Form 10-K:

Financial Statements :

See Index to Consolidated Financial Statements in Part II, Item 8 of this Form 10-K.

Financial Statement Schedules :

All schedules have been omitted as the requested information is not applicable or the information is presented in the consolidated financial statements or related notes included in this Form 10-K.

See Item 15(b) of this Form 10-K below.

(b) Exhibits.

Exhibit Number Description Incorporated by Reference

Form Exhibit Filing Date

2.1# Merger Agreement dated as of November 15, 2021 by and among Archimedes Tech SPAC Partners Co., ATSPC Merger Sub, Inc.

and SoundHound, Inc.

2.1+ Agreement and Plan of Merger, dated December 6 , 2023, by and among SoundHound AI , Inc.

, Black Knights Merger Sub I, Inc., a Delaware corporation, Black Knight Merger Sub II, LLC, a Delaware limited liability company and Syn q3, Inc.

8-K 2.1 12/07/23

14 unchanged sentences

8-K 4.1 05/02/22

4.5 Form of Class A Common Stock Purchase Warrant

10-Q 4.1 05/12/23

4.6 Description of Securities

10.1 Form of PIPE Subscription Agreement.

10-K 4.5 03/28/23

10.2 Form of Lock-Up Agreement.

8-K 10.4 11/16/21

10.3 Amended and Restated Registration Rights Agreement, dated April 26, 2022, by and between SoundHound AI, Inc.

and certain stockholders of SoundHound AI, Inc.

S-1 10.3 05/16/22

10.1# SoundHound AI, Inc.

18 unchanged sentences

8-K 10.4 06/08/22

10.13 Common Stock Purchase Agreement, dated as of August 16, 2022, by and between SoundHound AI, Inc.

and CF Principal Investments LLC.

8-K 10.1 08/16/22

10.14 Registration Rights Agreement, dated as of August 16, 2022, by and between SoundHound AI, Inc.

and CF Principal Investments LLC.

8-K 10.2 08/16/22

10.15 Form of Amended and Restated Side Letter Agreement by and between SoundHound AI, Inc.

and CF Principal Investments LLC.

S-1 10.15 02/14/23

10.10 Form of Preferred Stock Purchase Agreement.

8-K 10.1 01/24/23

10.11+ Senior Secured Term Loan Agreement

10-Q 10.1 05/12/23

10.12 Form of Controlled Equity Offering Sales Agreement

S-3 10.1 07/24/23

19.1* Insider Trading Policy

21.1 Subsidiaries of the Company.

8-K 21.1 05/02/22

23.2* Consent of Armanino LLP dated March 28, 2023.

23.1* Consent of PricewaterhouseCoopers

23.2* Consent of Armanino LLP

31.1* Certification of Principal Executive Officer Pursuant to Securities Exchange Act Rules 13a-14(a) and 15(d)-14(a), as adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

4 unchanged sentences

Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

99.1* Executive Compensation Clawback Policy

101.INS Inline XBRL Instance Document.

6 unchanged sentences

____________________________

* Filed or furnished herewith.

* Filed herewith.

** Furnished herewith.

+ The Company agrees to furnish supplementally to the SEC a copy of any omitted schedule or exhibit upon the request of the SEC in accordance with Item 601(b)(2) of Regulation S-K.

# Management contract or compensatory plan or arrangement.

** Previously filed.

Form 10-K Summary

1 unchanged sentence

SoundHound AI, Inc.

March 28, 2023 /s/ Dr.

March 1, 2024

Keyvan Mohajer

12 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures