What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2026-03-02 compared with 2025-03-11 · 639 added, 636 removed, 1218 unchanged (51% of the section changed)

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Report of Independent Registered Public Accounting Firm ( PricewaterhouseCoopers LLP , PCAOB ID:

Report of Independent Registered Public Accounting Firm ( Armanino LLP , PCAOB ID:

Consolidated Balance Sheets

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We have audited the accompanying consolidated balance sheets of SoundHound AI, Inc.

and its subsidiaries (the "Company") as of December 31, 2024 and 2023, and the related consolidated statements of operations and comprehensive loss, of redeemable convertible preferred stock and stockholders' equity (deficit) and of cash flows for the years then ended, including the related notes (collectively referred to as the "consolidated financial statements").

and its subsidiaries (the "Company") as of December 31, 2025 and 2024, and the related consolidated statements of operations and comprehensive loss, of redeemable convertible preferred stock and stockholders' equity (deficit) and of cash flows for each of the three years in the period ended December 31, 2025, including the related notes (collectively referred to as the "consolidated financial statements").

We also have audited the Company's internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America.

Also in our opinion, the Company did not maintain, in all material respects, effective internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO because material weaknesses in internal control over financial reporting existed as of that date related to the Company not designing and maintaining (i) an effective control environment due to insufficient oversight of activities related to internal control over financial reporting due to lack of an appropriate level of experience and training commensurate with the Company’s financial reporting requirements, (ii) effective controls to respond to changes to the risks of material misstatement to financial reporting which resulted in the Company, including the SYNQ3 and Amelia entities which were acquired during 2024, not designing and maintaining effective controls related to substantially all accounts and disclosures, (iii) effective controls to identify and appropriately account for certain non-routine, unusual or complex transactions, including accounting for complex financing transactions and acquisitions, (iv) effective controls to verify appropriate segregation of duties, including assessment of incompatible duties and addressing conflicts on a timely basis, and (v) effective controls over certain information technology general controls over information systems that are relevant to the preparation of the Company’s financial statements, including not maintaining user access controls, program change management controls, and computer operations controls.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025 in conformity with accounting principles generally accepted in the United States of America.

Also in our opinion, the Company did not maintain, in all material respects, effective internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO because material weaknesses in internal control over financial reporting existed as of that date as the Company did not (i) maintain an effective control environment as it lacked sufficient oversight of activities related to internal control over financial reporting due to a lack of an appropriate level of experience and training commensurate with the Company’s financial reporting requirements, (ii) design and maintain effective controls 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, (iii) design and maintain effective controls related to the identification of and accounting for certain non-routine, unusual or complex transactions, including accounting for complex financing transactions, and (iv) design and maintain effective controls to verify appropriate segregation of duties, identification of instances where incompatible duties were assigned to an individual, and addressing conflicts on a timely basis.

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

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Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding

the amounts and disclosures in the consolidated financial statements.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

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We believe that our audits provide a reasonable basis for our opinions.

As described in Management’s Report on Internal Control over Financial Reporting, management has excluded Interactions Corporation from its assessment of internal control over financial reporting as of December 31, 2025 because it was acquired by the Company in a purchase business combination during 2025.

We have also excluded Interactions Corporation from our audit of internal control over financial reporting.

Interactions Corporation is a wholly-owned subsidiary whose total assets and total revenues excluded from management’s assessment and our audit of internal control over financial reporting represent approximately 5% and 14%, respectively, of the related consolidated financial statement amounts as of and for the year ended December 31, 2025.

Definition and Limitations of Internal Control over Financial Reporting

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Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that (i) relate to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Revenue recognition

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Revenues are generally recognized upon the transfer of control of promised products or services provided to customers, reflecting the amount of consideration the Company expects to receive for those products or services.

Management applies significant judgment in identifying and evaluating terms and conditions in contracts which impact revenue recognition.

Management applies significant

judgment in identifying and evaluating terms and conditions in contracts which impact revenue recognition.

The Company’s consolidated revenues for the year ended December 31, 2025 were $168.9 million.

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(ii) obtaining an understanding of management’s process for identifying and evaluating terms and conditions in contracts, including evaluating management’s determination of the impact of those terms and conditions on revenue recognition;

(iii) testing, on a sample

basis, (a) the completeness and accuracy of management’s identification and evaluation of terms and conditions by examining contracts and (b) revenue transactions by obtaining and inspecting source documents, such as contracts, purchase orders, invoices, proof of delivery, and subsequent cash receipts;

(iii) testing, on a sample basis, (a) the completeness and accuracy of management’s identification and evaluation of terms and conditions by examining contracts and (b) revenue transactions by obtaining and inspecting source documents, such as contracts, purchase orders, invoices, proof of delivery, and subsequent cash receipts;

(iv) testing, on a sample basis, the timing of recognition of revenue transactions;

and (v) testing, on a sample basis, the determination of the standalone selling price of performance obligations and testing the completeness and accuracy of the underlying data used by management in determining standalone selling price of performance obligations.

Acquisition of Amelia Holdings, Inc.

– Valuation of Developed Technology and Customer Relationships

As described in Notes 2 and 3 to the consolidated financial statements, on August 6, 2024, the Company completed the acquisition of Amelia Holdings, Inc.

(Amelia) for total consideration of $98.6 million.

Of the acquired intangible assets, $98.9 million of developed technology and $68.6 million of customer relationships were recorded.

Fair value of the acquired intangible assets was determined using an income approach, specifically the multi-period excess earnings method or the with-and-without method, depending on the nature of the respective asset.

The significant judgments and assumptions used in valuing the developed technology include revenue growth rates, prospective financial information for cost of sales, research and development expenses and other operating expenses, the discount rate, the technological obsolescence rate, and contributory asset charges.

For customer relationships, the significant judgments and assumptions include the discount rate, revenue growth rates, and prospective financial information for cost of sales and fixed and variable operating expenses.

The principal considerations for our determination that performing procedures relating to the valuation of the developed technology and customer relationships acquired in the acquisition of Amelia are (i) the significant judgment by management when developing the fair value estimate of the developed technology and customer relationships acquired;

(ii) a high degree of auditor judgment, subjectivity and effort in performing procedures and evaluating management’s significant assumptions related to revenue growth rates, prospective financial information for cost of sales, research and development expenses and other operating expenses, the discount rate, the technological obsolescence rate, and contributory asset charges for developed technology, and the discount rate, revenue growth rates, and prospective financial information for cost of sales and fixed and variable operating expenses for customer relationships;

and (iii) the audit effort involved the use of professionals with specialized skill and knowledge.

As described in the “Opinions on the Financial Statements and Internal Control over Financial Reporting” section, material weaknesses were identified related to this matter.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements.

These procedures included, among others (i) evaluating and determining the nature and extent of audit procedures performed and evidence obtained that are responsive to the material weaknesses identified;

(ii) reading the purchase agreement;

(iii) testing management’s process for developing the fair value estimate of the developed technology and customer relationships acquired;

(iv) evaluating the appropriateness of the multi-period excess earnings and with-and-without methods used by management;

(v) testing the completeness and accuracy of the underlying data used in the multi-period excess earnings and with-and-without methods;

and (vi) evaluating the reasonableness of the significant assumptions used by management related to revenue growth rates, prospective financial information for cost of sales, research and development expenses and other operating expenses, the discount rate, the technological obsolescence rate, and contributory asset charges for developed technology, and the discount rate, revenue growth rates, and prospective financial information for cost of sales and fixed and variable operating expenses for customer relationships.

Evaluating management’s assumptions related to revenue growth rates, prospective financial information for cost of sales, fixed and variable operating expenses, research and development expenses and other operating expenses involved considering (i) the current and past performance of the Amelia business;

(ii) the consistency with external market and industry data;

and (iii) whether the assumptions were consistent with evidence obtained in other areas of the audit.

Professionals with specialized skill and knowledge were used to assist in evaluating (i) the appropriateness of the multi-period excess earnings and with-and-without methods;

and (ii) evaluating the reasonableness of the discount rate, the technological obsolescence rate, and contributory asset charges assumptions for developed technology and the discount rate assumption for customer relationships.

/s/ PricewaterhouseCoopers LLP

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We have served as the Company’s auditor since 2023.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and

Stockholders of SoundHound AI, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated statements of operations and comprehensive loss, of redeemable convertible preferred stock and stockholders’ deficit, and of cash flows of SoundHound AI, Inc.

(the "Company") for the year ended December 31, 2022, including the related notes (collectively, referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the results of operations and cash flows of the Company for the year ended December 31, 2022 in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company's management.

Our responsibility is to express an opinion on the Company's consolidated financial statements based on our audit.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud.

Our audit included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements.

Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that our audit provides a reasonable basis for our opinion.

/s/ Armanino LLP

San Jose, California

We have served as the Company's auditor since 2020.

In 2023, we became the predecessor auditor.

March 28, 2023, except for the effects of the tables reflecting the impact of the revisions as of and for the year ended December 31, 2022 discussed in Note 22 to the consolidated financial statements appearing under Item 8 of the Company’s 2023 Annual Report on Form 10-K, as to which the date is March 1, 2024, and except for the effects of segment reporting discussed in Note 21 to the consolidated financial statements appearing under Item 8 of the Company’s 2024 Annual Report on Form 10-K, as to which the date is March 11, 2025.

SOUNDHOUND AI, INC.

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Accounts receivable, net of allowances of $ 2,254 and $ 726 as of December 31, 2025 and 2024, respectively

32,336 23,159

Contract assets and unbilled revenue, net 38,189 26,645

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Deferred revenue 24,042 23,876

Contingent acquisition liabilities (Note 12) 4,400 —

Other current liabilities 1,604 7,319

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Deferred revenue, net of current portion 8,195 6,862

Long-term debt — 84,312

Contingent acquisition liabilities 286,898 —

Contingent acquisition liabilities, net of current portion (Note 12) 129,227 286,898

Income tax liability, net of current portion 2,254 3,075

Deferred tax liability 1,363 —

Other non-current liabilities 9,540 4,320

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1,000,000 shares authorized;

0 and 475,005 shares issued and outstanding, aggregate liquidation preference of $ — and $ 16,227 as of December 31, 2024 and December 31, 2023, respectively

0 and 0 shares issued and outstanding, aggregate liquidation preference of $ — and $ — as of December 31, 2025 and 2024, respectively

Class A Common Stock, $ 0.0001 par value;

455,000,000 shares authorized;

755,000,000 and 455,000,000 shares authorized;

390,070,691 and 361,096,457 shares issued and outstanding as of December 31, 2025 and 2024, respectively

Class B Common Stock, $ 0.0001 par value;

44,000,000 shares authorized;

44,000,000 shares authorized as of December 31, 2025 and 2024;

32,535,408 and 32,535,408 shares issued and outstanding as of December 31, 2025 and 2024, respectively

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Loss from operations ( 23,272 ) ( 341,353 ) ( 68,608 )

Other expense, net:

Other income (expense), net:

Loss on early extinguishment of debt — ( 15,629 ) ( 837 )

Interest expense ( 670 ) ( 12,168 ) ( 16,733 )

Other income (expense), net 9,222 1,155 ( 1,259 )

Total other expense, net ( 18,575 ) ( 16,415 ) ( 8,152 )

Other income, net 14,668 9,222 1,155

Total other income (expense), net 13,998 ( 18,575 ) ( 16,415 )

Loss before provision (benefit) for income taxes ( 9,274 ) ( 359,928 ) ( 85,023 )

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Cumulative dividends attributable to Series A Preferred Stock — ( 416 ) ( 2,774 )

Net loss attributable to SoundHound common shareholders ( 351,097 ) ( 91,711 ) ( 116,713 )

Net loss attributable to SoundHound common stockholders $ ( 14,006 ) $ ( 351,097 ) $ ( 91,711 )

Other comprehensive loss:

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Net loss per share:

Basic and diluted $ ( 1.04 ) $ ( 0.40 ) $ ( 0.74 )

Basic $ ( 0.03 ) $ ( 1.04 ) $ ( 0.40 )

Diluted $ ( 0.28 ) $ ( 1.04 ) $ ( 0.40 )

Weighted-average common shares outstanding:

Basic and diluted 338,462,574 229,264,904 157,317,695

Basic 405,421,412 338,462,574 229,264,904

Diluted 409,456,342 338,462,574 229,264,904

The accompanying notes are an integral part of these consolidated financial statements.

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(In thousands, except share and per share data)

Legacy SoundHound Redeemable Convertible

Preferred Stock Legacy SoundHound Common Stock Series A Preferred Stock Class A Common Stock Class B Common Stock Additional

Series A Preferred Stock Class A Common Stock Class B Common Stock Additional

Capital Accumulated

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Deficit Total

Shares Amount Shares Amount Shares Amount Shares Amount Shares Amount

Balances as of December 31, 2021 106,949,326 $ 279,503 68,258,556 $ 1 — $ — — $ — — $ — $ 43,491 $ — $ ( 386,729 ) $ ( 343,237 )

Issuance of common stock upon exercise of stock options — — 2,582,535 — — — — — — — 2,840 — — 2,840

Net exercise of outstanding warrants — — 673,416 — — — — — — — — — — —

Conversion of convertible note — — 2,046,827 — — — — — — — 20,239 — — 20,239

Effect of reverse recapitalization, net of costs (Note 3) ( 106,949,326 ) ( 279,503 ) ( 73,561,334 ) ( 1 ) — — 140,114,060 14 40,396,600 4 279,486 — — 279,503

PIPE financing — — — — — — 11,300,000 1 — — 86,584 — — 86,585

Issuance of Class A common shares pursuant to the Business Combination — — — — — — 4,693,050 1 — — 4,105 — — 4,106

Issuance of Class A common shares upon conversion of Class B common shares — — — — — — 661,192 — ( 661,192 ) — — — — —

Issuance of Class A common shares upon exercise of stock options — — — — — — 1,013,171 — — — 1,320 — — 1,320

Issuance of Class A common shares upon vesting of restricted stock units — — — — — — 2,516,191 — — — — — — —

Stock-based compensation — — — — — — — — — — 28,792 — — 28,792

Net loss — — — — — — — — — — — — ( 116,713 ) ( 116,713 )

Shares Amount Shares Amount Shares Amount

Balances as of December 31, 2022 — — 160,297,664 16 39,735,408 4 466,857 — ( 503,442 ) ( 36,565 )

Issuance of common stock under the ELOC program — — 25,000,000 4 — — 73,762 — — 73,766

SOUNDHOUND AI, INC.

CONSOLIDATED STATEMENTS OF REDEEMABLE CONVERTIBLE PREFERRED STOCK AND

STOCKHOLDERS’ EQUITY (DEFICIT)

(In thousands, except share and per share data)

Legacy SoundHound Redeemable Convertible

Preferred Stock Legacy SoundHound Common Stock Series A Preferred Stock Class A Common Stock Class B Common Stock Additional

Capital Accumulated

Comprehensive

Loss Accumulated

Deficit Total

Shares Amount Shares Amount Shares Amount Shares Amount Shares Amount

ELOC program fee settled in common stock — — 250,000 — — 915 — — 915

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Balances as of December 31, 2023 475,005 $ 14,187 216,943,349 $ 22 37,485,408 $ 4 $ 606,135 $ 199 $ ( 592,379 ) $ 28,168

SOUNDHOUND AI, INC.

CONSOLIDATED STATEMENTS OF REDEEMABLE CONVERTIBLE PREFERRED STOCK AND

STOCKHOLDERS’ EQUITY (DEFICIT)

(In thousands, except share and per share data)

Legacy SoundHound Redeemable Convertible

Preferred Stock Legacy SoundHound Common Stock Series A Preferred Stock Class A Common Stock Class B Common Stock Additional

Capital Accumulated

Comprehensive

Loss Accumulated

Deficit Total

Shares Amount Shares Amount Shares Amount Shares Amount Shares Amount

Issuance of Class A common stock under the Sales Agreement, Equity Distribution Agreement and Execute Equity Distribution Agreement, net of issuance costs — — 85,826,406 9 — — 396,685 — — 396,694

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Issuance of Class A common stock upon acquisition of Amelia — — 5,959,050 1 — — 23,919 — — 23,920

Issuance of Class A common stock to settle obligations under Amelia Debt — — 2,943,917 — — — 11,817 — — 11,817

Stock-based compensation — — — — — — 33,145 — — 33,145

Net loss — — — — — — — — ( 350,681 ) ( 350,681 )

Other comprehensive income — — — — — — — 6 6

Balances as of December 31, 2024 — $ — 361,096,457 $ 35 32,535,408 $ 3 $ 1,125,470 $ 205 $ ( 943,060 ) $ 182,653

Issuance of Class A common stock under the Second Equity Distribution Agreement, net of issuance costs — — 13,913,014 $ 2 — — 197,280 — — 197,282

SOUNDHOUND AI, INC.

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(In thousands, except share and per share data)

Legacy SoundHound Redeemable Convertible

Preferred Stock Legacy SoundHound Common Stock Series A Preferred Stock Class A Common Stock Class B Common Stock Additional

Series A Preferred Stock Class A Common Stock Class B Common Stock Additional

Capital Accumulated

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Deficit Total

Shares Amount Shares Amount Shares Amount Shares Amount Shares Amount

Issuance of Class A common stock to settle obligations under Amelia Debt — — — — — — 2,943,917 — — — 11,817 — — 11,817

Shares Amount Shares Amount Shares Amount Additional

Capital Accumulated

Comprehensive

Loss Accumulated

Deficit Total

Issuance of Class A common stock for equity incentive awards — — 14,578,879 $ — — — 10,835 — — 10,835

Issuance of Class A common stock in connection with the exercise of warrants — — 9,840 $ — — — 114 — — 114

Issuance of Class A common stock due to settlement of contingent holdback consideration in connection with SYNQ3 Acquisition — — 472,501 $ — — — 3,922 — — 3,922

Stock-based compensation — — — $ — — — 83,051 — — 83,051

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Loss on change in fair value of ELOC program — — 1,901

Change in fair value of derivative and warrant liability — — 606

Amortization of debt issuance cost — 1,621 5,400

Non-cash lease amortization 2,906 2,613 3,346

Loss on disposal of property and equipment 42 — —

Amortization of capitalized commissions 1,627 — —

Loss on early extinguishment of debt — 15,629 837

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Change in fair value of contingent acquisition liabilities ( 163,127 ) 222,670 —

Change in fair value of derivative ( 4,676 ) — —

Deferred income taxes 1,338 ( 12,183 ) 30

Other, net 1,951 ( 580 ) 93

Changes in operating assets and liabilities:

Changes in operating assets and liabilities, net of effects of acquisitions:

Accounts receivable, net ( 1,304 ) ( 10,264 ) ( 627 )

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Purchases of property and equipment ( 902 ) ( 640 ) ( 392 )

Capitalized software development costs ( 4,000 ) — —

Payment related to acquisitions, net of cash acquired ( 54,602 ) ( 11,732 ) —

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Proceeds from sales of Class A common stock under the ELOC program, net of issuance costs — — 71,615

Proceeds from sales of Class A common stock under the Sales Agreement, Equity Distribution Agreement and Execute Equity Distribution Agreement 407,270 12,412 —

Proceeds from sales of Class A common stock under the Sales Agreement, Equity Distribution Agreement, Execute Equity Distribution Agreement and Second Equity Distribution Agreement 201,522 407,270 12,412

Proceeds from exercise of stock options and employee stock purchase plan 10,835 29,685 —

Proceeds from warrants exercised 114 23 —

Payment of financing costs associated with the Sales Agreement, Equity Distribution Agreement and Execute Equity Distribution Agreement ( 10,357 ) — —

Payment of financing costs associated with the Sales Agreement, Equity Distribution Agreement, Execute Equity Distribution Agreement, and Second Equity Distribution Agreement ( 4,030 ) ( 10,357 ) —

Proceeds from the issuance of debt, net of issuance costs — — 85,087

Proceeds from the issuance of common stock — — 9,369

Proceeds from Business Combination and PIPE, net of transaction costs — — 90,689

Payments on notes payable ( 215,373 ) ( 35,029 ) ( 11,545 )

Payment to settle contingent holdback liabilities from SYNQ3 and other acquisitions ( 217 ) — —

Payments on Term Loan and Amelia Debt — ( 215,373 ) ( 35,029 )

Payment to settle contingent holdback liabilities from SYNQ3 acquisitions ( 198 ) ( 217 ) —

Payments on finance leases ( 169 ) ( 125 ) ( 159 )

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Cash, cash equivalents, and restricted cash equivalents, beginning of year 198,916 109,035 9,475

Cash, cash equivalents, and restricted cash equivalents, end of year $ 198,916 $ 109,035 $ 9,475

SOUNDHOUND, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS — Continued

For the Year Ended December 31, 2024 and 2023

(In thousands)

2025 2024 2023

Cash, cash equivalents, and restricted cash equivalents, end of year $ 249,166 $ 198,916 $ 109,035

Reconciliation to amounts on the consolidated balance sheets:

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Cash paid for interest $ 26 $ 6,337 $ 11,984

Cash paid for income taxes $ 2,717 $ 2,356 $ 1,044

Cash paid for income taxes, net of refunds $ 4,370 $ 2,717 $ 2,356

Noncash investing and financing activities:

Conversion of Series A Preferred Stock to Class A common stock $ — $ 14,187 $ 10,755

Debt discount through issuance of common stock warrants $ — $ 4,136 $ —

Issuance of Class A Common Stock to settle commitment shares related to the ELOC program $ — $ 915 $ —

Issuance of Class A Common Stock to settle obligations under Amelia Debt $ — $ 11,817 $ —

Issuance of Class A Common Stock to settle contingent holdback consideration of SYNQ3 acquisition $ 3,922 $ 189 $ —

Conversion of redeemable convertible preferred stock to common stock pursuant to Business Combination $ — $ — $ 279,503

Conversion of convertible note into common stock pursuant to Business Combination $ — $ — $ 20,239

Operating lease liabilities arising from obtaining right-of-use assets $ 1,559 $ — $ 650

Deferred offering costs reclassified to additional paid-in capital $ 210 $ 220 $ —

Purchases of property and equipment under accrued liabilities $ 163 $ — $ —

Operating lease liabilities arising from obtaining right-of-use assets $ 1,001 $ 1,559 $ —

Debt discount through issuance of common stock warrants $ — $ — $ 4,136

Issuance of Class A Common Stock to settle commitment shares related to the ELOC program $ — $ — $ 915

Fair value of Class A common stock and deferred equity consideration issued to acquire SYNQ3 and Amelia $ — $ 33,606 $ —

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Fair value of deferred cash consideration under other acquisition $ — $ 195 $ —

Fair value of deferred cash consideration under Interactions acquisition $ 1,150 $ — $ —

Fair value of contingent earnout consideration under Interactions acquisition $ 9,900 $ — $ —

Stock-based compensation included in capitalized software development costs $ 2,431 $ — $ —

The accompanying notes are an integral part of these consolidated financial statements.

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SoundHound also provides edge, cloud and hybrid (Edge+Cloud) connectivity solutions that allow brands to optimize their voice-enabled products and devices with options ranging from fully-embedded to exclusively cloud-connected.

On April 26, 2022 (the “Closing Date”), pursuant to a merger agreement dated as of November 15, 2021 by and among Archimedes Tech SPAC Partners Co.

(“ATSP”), ATSPC Merger Sub, Inc.

and SoundHound, Inc.

(“Legacy SoundHound”), the parties consummated the merger of ATSPC Merger Sub, Inc.

with and into Legacy SoundHound, with Legacy SoundHound continuing as the surviving corporation (the “Merger”), as well as the other transactions contemplated by the Merger Agreement (the Merger and such other transactions, the “Business Combination”).

In connection with the closing (the “Closing”) of the Business Combination, Legacy SoundHound became a wholly owned subsidiary of ATSP and ATSP changed its name to SoundHound AI, Inc., and all of Legacy SoundHound common stock (“Legacy SoundHound Common Stock”) and Legacy SoundHound redeemable convertible preferred stock (“Legacy SoundHound Preferred Stock”) automatically converted into shares of the Company’s Class A common stock, par value of $ 0.0001 per share (the “Class A Common Stock”), and the Company’s Class B common stock, par value of $ 0.0001 per share (the “Class B Common Stock”, and collectively with the Class A Common Stock, the “Common Stock”).

The Company’s Class A Common Stock and certain of the Company's warrants commenced trading on the Nasdaq Global Market (“Nasdaq”) under the symbols “SOUN” and “SOUNW,” respectively, on April 28, 2022.

Refer to Note 3 for more information on the Business Combination.

Legacy SoundHound was determined to be the accounting acquirer in the Business Combination based on the following facts:

• Former Legacy SoundHound stockholders have a controlling voting interest in the Company;

• The Company’s board of directors immediately after the closing of the Business Combination was comprised of five board members, primarily from the board of directors of Legacy SoundHound;

• Legacy SoundHound’s management continues to hold executive management roles for the Company following the Business Combination and are responsible for the day-to-day operations.

Accordingly, for accounting purposes, the Business Combination was treated as the equivalent of Legacy SoundHound issuing stock for the net assets of ATSP, accompanied by a reverse recapitalization.

The primary asset acquired from ATSP was related to the cash amounts that were assumed.

Separately, the Company also assumed warrants that were deemed to be equity upon Closing of the Business Combination.

No goodwill or other intangible assets were recorded as a result of the Business Combination.

While ATSP was the legal acquirer in the Business Combination, because Legacy SoundHound was deemed the accounting acquirer, the historical financial statements of Legacy SoundHound became the historical financial statements of the combined company upon the consummation of the Business Combination.

As a result, the financial

SOUNDHOUND AI, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

statements included in this report reflect (i) the historical operating results of Legacy SoundHound prior to the Business Combination;

(ii) the combined results of the Company and Legacy SoundHound following the Closing of the Business Combination;

(iii) the assets and liabilities of Legacy SoundHound at their historical cost;

and (iv) the Company’s equity structure for all periods presented.

In accordance with guidance applicable to recapitalization transactions, the equity structure has been retroactively restated in all comparative periods up to the Closing Date, to reflect the number of shares of the Company’s Class A Common Stock and Class B Common Stock issued to Legacy SoundHound Common Stockholders and Legacy SoundHound Preferred Stockholders in connection with the Business Combination.

As such, the shares and corresponding capital amounts and loss per share related to Legacy SoundHound Preferred Stock and Legacy SoundHound Common Stock prior to the Business Combination have been retroactively restated as shares reflecting the conversion ratio established in the Business Combination.

On April 26, 2022, a business combination was closed between SoundHound Inc (“Legacy SoundHound”), and Archimedes Tech SPAC Partners Co.

(“ATSP”), a special purpose acquisition company.

The combined company is called SoundHound AI, Inc.

and its Class A Common Stock and certain of its warrants commenced trading on the Nasdaq Global Market under the symbols “SOUN” and “SOUNW,” respectively, on April 28, 2022.

On January 3, 2024, the Company completed the acquisition of Synq3, Inc.

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("Amelia") in a cash and stock transaction.

On September 3, 2025, the Company completed the acquisition of Interactions Corporation ("Interactions") in a cash transaction.

Refer to Note 3 for additional information.

Going Concern

Since inception, the Company has generated recurring losses as well as negative operating cash flows and reported a net loss of $ 350.7 million for the year ended December 31, 2024.

Since inception, the Company has generated recurring losses as well as negative operating cash flows in the annual financial statements.

As of December 31, 2025, the Company had an accumulated deficit of $ 957.1 million.

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The Company may seek funding through additional debt or equity financing arrangements, implement incremental expense reduction measures or a combination thereof to continue financing its operations.

Refer to Note 23 for information regarding the Company's equity financing activity subsequent to December 31, 2024.

The Company's consolidated financial statements have been prepared assuming the Company will continue as a going concern, which contemplates, among other things, the realization of assets and satisfaction of liabilities in the normal course of business.

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GAAP included in the Accounting Standards Codification (“ASC”), and Accounting Standards Update (“ASU”) issued by the Financial Accounting Standards Board (“FASB”).

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Principles of Consolidation

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and (ii) the obligation to absorb losses or receive benefits of the entity that could potentially be significant to the VIE.

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Foreign Currency

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During the years ended December 31, 2025, 2024 and 2023, the Company recognized net losses related to foreign currency transactions and remeasurements of $ 0.8 million, $ 0.7 million and $ 0.5 million, respectively, in the consolidated statements of operations as other expense, net.

Reclassification

Certain accounts in the prior year consolidated financial statements were reclassified to conform with the current year presentation.

The reclassification had an immaterial impact on our consolidated balance sheets, consolidated statements of operations and comprehensive loss and consolidated statements of cash flows in the prior year period.

Use of Estimates

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GAAP requires management to make estimates and judgments that affect the amounts reported and disclosures in the consolidated financial statements and accompanying notes.

Such estimates include revenue recognition, allowance for credit losses, accrued liabilities, derivative and warrant liabilities, calculation of the incremental borrowing rate, financial instruments recorded at fair value on a recurring basis, the accounting for business combinations and allocating purchase price, valuation and estimating the useful life of identifiable intangible assets, probability of achievement of revenue estimates related to contingent earnout consideration and performance-based equity awards, valuation of deferred tax assets and uncertain tax positions and the fair value of common stock and other assumptions used to measure stock-based compensation expense.

In connection with the measurement period for the acquisition of SYNQ3 and Amelia, management revised certain significant estimates during the years ended December 31, 2024, which include, but are not limited to, the recognition and measurement of assumed contingent liabilities and deferred and contingent holdback consideration.

Such estimates include revenue recognition, allowance for credit losses, software development costs, accrued liabilities, derivative and warrant liabilities, calculation of the incremental borrowing rate, financial instruments recorded at fair value on a recurring basis, the accounting for business combinations and allocating purchase price, valuation and estimating the useful life of identifiable intangible assets, probability of achievement of revenue estimates related to contingent earnout consideration and performance-based equity awards, valuation of deferred tax assets and uncertain tax positions and the fair value of common stock and other assumptions used to measure stock-based compensation expense.

In connection with the measurement period for the acquisition of Amelia and Interactions, no significant estimates were changed during the years ended December 31, 2025 and 2024.

The Company bases its estimates on historical experience, the current economic environment, and on assumptions it believes are reasonable under the circumstances.

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Maintenance and repairs that do not extend the life or improve the asset are expensed as incurred.

Capitalized Software Development Costs

The Company capitalizes qualifying internal-use software development costs under Accounting Standards Codification Topic 350-40, Internal-use Software ("ASC 350-40").

The costs consist of personnel costs, including related benefits and stock-based compensation, and cloud costs that were incurred during the application development stage.

Capitalization of costs begins when two criteria are met:

(1) the preliminary project stage is completed, and (2) it is probable that the software will be completed and used for its intended function.

Capitalization ceases when the software is substantially complete and ready for its intended use, including the completion of all significant testing.

Costs related to preliminary project activities and post-implementation operating activities are expensed as incurred.

The Company also capitalizes qualifying software development costs under Accounting Standards Codification Topic 985-20, Costs of Software to be Sold, Leased or Marketed ("ASC 985-20").

All costs to establish technological feasibility are expensed as incurred.

Costs incurred subsequent to establishing technological feasibility are capitalized until the software product is available for general release to customers.

Capitalized software development costs under ASC 350-40 and ASC 985-20 are included in other non-current assets, net of amortization, on the consolidated balance sheets.

These costs are amortized over the estimated useful life of the software, which is estimated to be three years.

The amortization of capitalized software development costs is included in cost of revenue in the consolidated statement of operations and comprehensive loss.

Impairment of Long-Lived Assets

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Through December 31, 2025, there have been no such impairments.

We determine if an arrangement is a lease at its inception.

The Company evaluates if an arrangement is a lease at its inception.

Operating lease liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term.

We generally use our incremental borrowing rate based on the information available at the lease commencement date in determining the present value of future payments, because the implicit rate of the lease is generally not known.

The Company generally determines our incremental borrowing rate based on the information available at the lease commencement date in determining the present value of future payments, because the implicit rate of the lease is generally not known.

Right-of-use ("ROU") assets related to our operating lease liabilities are measured at lease inception based on the initial measurement of the lease liability, plus any prepaid lease payments and less any lease incentives, as applicable.

Our lease terms that are used in determining our operating lease liabilities at lease inception may include options to extend or terminate the leases when it is reasonably certain that we will exercise such options.

We amortize our ROU assets as operating lease expense generally on a straight-line basis over the lease term and classify both the lease amortization and imputed interest as operating expenses.

The lease terms that are used in determining our operating lease liabilities at lease inception may include options to extend or terminate the leases when it is reasonably certain that we will exercise such options.

The Company amortizes the ROU assets as operating lease expense generally on a straight-line basis over the lease term and classify both the lease

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amortization and imputed interest as operating expenses.

The Company has lease agreements with lease and non-lease components.

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As of December 31, 2025, and 2024, available-for-sale securities consisted of U.S.

treasury bills and government bonds with original maturities of three months or less.

As of December 31, 2022, the Company did not have any available-for-sale securities.

Treasury bills and investments in government money market funds.

The Company’s U.S.

Treasury bills and the underlying securities held by the government money market funds had weighted-average maturities of three months or less as of the reporting date.

Restricted Cash

The Company’s restricted cash were established according to the requirements under the Credit Agreement (as defined in Note 9) and leases for the Company’s corporate headquarters, data center and sales office and are subject to certain

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restrictions.

The Company’s restricted cash was established according to the requirements under various office lease agreements, which is held by lessors in the form of a deposit under the lease agreements.

Restricted cash is classified as current or non-current on the consolidated balance sheets based on the expected duration of the restriction.

Non-current restricted cash relates to interest that is required to be held in escrow in an amount equal to the minimum required balance defined in the Credit Agreement.

Segment Information

The Company has determined that the Chief Executive Officer is its chief operating decision maker.

The Company’s Chief Executive Officer reviews discrete financial information on a consolidated basis for purposes of allocating resources and evaluating financial performance.

Accordingly, the Company has determined that it operates as a single reportable segment.

Concentrations of Credit Risk and Other Risks and Uncertainties

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The Company regularly monitors its credit risk exposure and takes steps to mitigate the likelihood of these exposures resulting in actual loss.

As of December 31, 2024, accounts receivable balances due from Customer F accounted for 23 % of the Company’s consolidated accounts receivable balance.

As of December 31, 2023, accounts receivable balances due from Customer A, C and E accounted for 40 %, 32 % and 15 % of the Company’s consolidated accounts receivable balance, respectively.

As of December 31, 2024, unbilled receivables from Customer A and C accounted for 50 % and 24 % of the Company’s consolidated unbilled receivables balance, respectively.

As of December 31, 2023, unbilled receivables from Customer A, B, and C accounted for 59 %, 16 % and 11 % of the Company’s consolidated unbilled receivables balance, respectively.

For the year ended December 31, 2024, Customer A accounted for 14 % of revenue.

For the year ended December 31, 2023, Customer A and B accounted for 49 % and 13 % of revenue, respectively.

For the year ended December 31, 2022, Customer A, C and D accounted for 42 %, 13 %, and 12 % of revenue, respectively.

As of December 31, 2025, there was no customer that accounted for more than 10% of the Company’s consolidated accounts receivable balance.

As of December 31, 2024, accounts receivable balances due from Customer A accounted for 23 % of the Company’s consolidated accounts receivable balance, respectively.

As of December 31, 2025, unbilled receivables from Customer B, C, D, E and F accounted for 23 %, 17 %, 16 %, 14 %, and 13 % of the Company’s consolidated unbilled receivables balance, respectively.

As of December 31, 2024, unbilled receivables from Customer C and D accounted for 50 % and 24 % of the Company’s consolidated unbilled receivables balance, respectively.

For the year ended December 31, 2025, there was no customer that accounted for more than 10% of revenue.

For the year ended December 31, 2024, Customer C accounted for 14 % of revenue.

For the year ended December 31, 2023, Customer C and G accounted for 49 % and 13 % of revenue, respectively.

Common Stock Offerings

The Company has entered into certain agreements to sell common stock with counterparties including through the Equity Line of Credit ("ELOC") program and “at-the-market” offering programs pursuant to the Sales Agreement, Equity Distribution Agreement and Execute Equity Distribution Agreements (each as described in Note 14) to further support its growth strategy through initiatives such as accretive acquisitions and internal investments, to bolster working capital, and/or for general corporate purposes.

The Company evaluates its common stock purchase agreements to determine whether they should be accounted for as derivatives with changes in fair value as other income (expense), net in the period in which they occur.

The Company has entered into certain agreements to sell common stock with counterparties including through the Equity Line of Credit ("ELOC") program and “at-the-market” offering programs pursuant to the Sales Agreement, Equity Distribution Agreement, Execute Equity Distribution Agreements and Second Equity Distribution Agreement (each as described in Note 14) to further support its growth strategy through initiatives such as accretive acquisitions

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and internal investments, to bolster working capital, and/or for general corporate purposes.

The Company evaluates its common stock purchase agreements to determine whether they should be accounted for as derivatives with changes in fair value as other income, net in the period in which they occur.

Equity Issuance Costs

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(ii) Identification of the performance obligations in the contract;

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(iii) Determination of the transaction price, including the constraint on variable consideration;

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Revenues are recognized when control of the promised goods or services are transferred to a customer in an amount that reflects the consideration that the Company expects to receive in exchange for those services.

The Company capitalizes material sales commission expenses and associated payroll taxes paid to sales personnel that are incremental in obtaining a contract.

The Company elected the practical expedient to recognize the incremental costs of obtaining a contract including sales commissions as an expense when incurred if the amortization period of such incremental cost would otherwise have been one year or less.

Sales commissions are included in sales and marketing expense in the consolidated statements of operations and comprehensive loss.

Capitalized sales commissions are amortized over the period of benefit based on contract term, expected contract renewals and application useful life.

Costs to obtain a contract that will be amortized within the succeeding 12-month period are classified as current and included in other current assets on the consolidated balance sheets.

The remaining balance is classified as non-current and included in other assets on the consolidated balance sheets.

Amortization expense is included in sales and marketing expenses in the consolidated statements of operations and comprehensive loss.

Deferred commissions are periodically analyzed for impairment.

As of December 31, 2025 and December 31, 2024, the Company capitalized sales commissions expenses of $ 3.7 million and zero , respectively, which were classified as other current assets and other non-current assets on the consolidated balance sheet.

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Research and Development

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These costs include salaries and other personnel related expenses, contractor fees, facility costs, supplies, and depreciation of equipment associated with the design and development of new products prior to the establishment of their technological feasibility.

Advertising Expenses

Advertising expenses of $ 3.6 million, $ 2.8 million and $ 1.9 million incurred during the years ended December 31, 2025, 2024 and 2023, respectively, were expensed as incurred as a component of sales and marketing expenses on the consolidated statement of operations and comprehensive loss.

The Company determines whether to classify contracts, such as warrants, that may be settled in its own stock as equity of the entity or as a liability.

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Warrants classified as liabilities are accounted for at fair value and remeasured at each reporting date until exercise, expiration or modification that results in equity classification.

Any change in the fair value of the warrants is recognized as other income (expense), net in the consolidated statements of operations.

Any change in the fair value of the warrants is recognized as other income, net in the consolidated statements of operations.

The Company accounts for income taxes under the asset and liability method, whereby deferred tax assets and liabilities are determined based on the difference between the financial statement and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to affect taxable income.

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The Company measures and records the expense related to stock-based payment awards based on the fair value of those awards as determined on the date of grant.

The Company recognizes stock-based compensation expense over the

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requisite service period of the individual grant, generally equal to the vesting period, and uses the straight-line method to recognize stock-based compensation, except for restricted stock unit awards (“RSUs”) with vesting conditions tied to certain performance criteria ("Performance-Based RSUs").

The Company recognizes stock-based compensation expense over the requisite service period of the individual grant, generally equal to the vesting period, and uses the straight-line method to recognize stock-based compensation, except for restricted stock unit awards (“RSUs”) with vesting conditions tied to certain performance criteria ("Performance-Based RSUs").

Stock-based compensation costs for Performance-Based RSUs are recognized on a graded-vesting basis over the vesting period based on the most probable outcome of the performance conditions.

If the minimum performance targets are not met, no compensation cost is recognized and any recognized compensation cost is reversed, except for awards subject to a market condition, The Company accounts for forfeitures as they occur.

If the minimum performance targets are not met, no compensation cost is recognized and any recognized compensation cost is reversed, except for awards subject to a market condition.

The Company accounts for forfeitures as they occur.

The Company uses the Black-Scholes option-pricing model to determine the fair value of stock options and employee stock purchase plan ("ESPP") shares.

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Expected Volatility — The Company estimates volatility for the awards by evaluating the average historical volatility of a peer group of companies for the period immediately preceding the award grant for a term that is approximately equal to the awards’ expected term.

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Expected Term — The expected term of the Company’s awards represents the period that the stock-based awards are expected to be outstanding.

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• Level 2 — Inputs (other than quoted market prices included in Level 1) are either directly or indirectly observable for the asset or liability through correlation with market data at the measurement date and for the duration of the instrument’s anticipated life.

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• Level 3 — Inputs reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date.

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For stock presented as temporary equity that is not currently redeemable, the Company assesses the probability of the event that would lead to redemption.

If it is probable that the equity instrument will become redeemable, the Company accretes changes in the redemption value over the period from the date of issuance, or from the date that it becomes probable that the instrument will become redeemable, if later, to the earliest redemption date of the instrument using an appropriate methodology.

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instrument will become redeemable, if later, to the earliest redemption date of the instrument using an appropriate methodology.

If an equity instrument classified as temporary equity is not probable of redemption, subsequent adjustment of the amounts presented in temporary equity is unnecessary.

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Fair value of the acquired intangible assets was determined using an income approach, specifically the multi-period excess earnings method, relief-from-royalty method, or the with-and-without method, depending on the nature of the respective assets.

Management’s estimates of fair value are based upon assumptions believed to be reasonable, but the estimates and assumptions are inherently uncertain and subject to

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Management’s estimates of fair value are based upon assumptions believed to be reasonable, but the estimates and assumptions are inherently uncertain and subject to refinement.

The significant judgments and assumptions used in valuing the developed technology include revenue growth rates, prospective financial information for cost of sales, research and development expenses and, other operating expenses, the discount rate, the technological obsolescence rate, and contributory asset charges.

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Certain business combinations include contingent consideration arrangements, which are generally based on achievement of future financial performance or future events.

If it is determined the contingent consideration arrangement is not compensatory, the Company estimates fair value of contingent consideration payments as part of the initial purchase price and records the estimated fair value of contingent consideration as a liability in the consolidated balance sheet.

If it is determined the contingent consideration arrangement is not compensatory, the Company estimates fair value of contingent consideration payments as part of

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the initial purchase price and records the estimated fair value of contingent consideration as a liability in the consolidated balance sheet.

The Company reviews and assesses the estimated fair value of contingent consideration each reporting period, and the updated fair value could differ materially from the initial estimates.

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There were no intangible asset impairments in any of the periods presented.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Recent Accounting Pronouncements — Adopted

The Company continually assess any ASUs or other new accounting pronouncements issued by the FASB to determine their applicability and impact.

The Company continually assesses any ASUs or other new accounting pronouncements issued by the FASB to determine their applicability and impact.

Where it is determined that a new accounting pronouncement will result in a change to the Company's financial reporting, the Company takes the appropriate steps to ensure that such changes are properly reflected in the consolidated financial statements or notes thereto.

In November 2023, the FASB issued ASU 2023-07, "Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures," ("ASU 2023-07") which expands disclosures about a public business entity's reportable segments and provides for more detailed information about a reportable segment's expenses.

This guidance is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, and requires retrospective application to all prior periods presented in the financial statements.

Early adoption is permitted.

The Company adopted the standard during the year ended December 31, 2024.

See Note 21 to our consolidated financial statements included within this report for more information on the increased disclosure for the Company's single reportable segment.

Recent Accounting Pronouncements — Not Yet Adopted

In December 2023, the Financial Accounting Standards Board issued Accounting Standards Update No.

2023-09, which requires more detailed income tax disclosures.

In December 2023, the FASB issued Accounting Standards Update No.

2023-09, "Income Taxes (Topic 740):

Improvements to Income Taxes Disclosures" ("ASU 2023-09"), which requires more detailed income tax disclosures.

The guidance requires entities to disclose disaggregated information about their effective tax rate reconciliation as well as expanded information on income taxes paid by jurisdiction.

The disclosure requirements will be applied on a prospective basis, with the option to apply them retrospectively.

The disclosure requirements are applied on a prospective basis, with the option to apply them retrospectively.

The standard is effective for fiscal years beginning after December 15, 2024, with early adoption permitted.

The Company is currently evaluating the impact that the updated standard will have on the financial statement disclosures.

BUSINESS COMBINATIONS

As discussed in Note 1, on April 26, 2022, the Business Combination was consummated.

Pursuant to the Company’s Second Amended and Restated Certificate of Incorporation (the “certificate of incorporation”), the Company is authorized to issue 500,000,000 shares of capital stock consisting of 455,000,000 shares of Class A Common Stock, 44,000,000 shares of Class B Common Stock, and 1,000,000 shares of preferred stock.

All stock has a par value of $ 0.0001 per share.

The holders of Class A Common Stock are entitled to one vote for each share of Class A Common Stock held and the holders of Class B Common Stock are entitled to ten votes per share on all matters submitted to stockholders for their vote or approval.

The holders of Class A Common Stock and Class B Common Stock vote together as one class, other than on certain specific matters described in the Company's certificate of incorporation.

The Business Combination was approved by ATSP’s stockholders at a special meeting thereof (the “Special Meeting”), held in lieu of the 2022 annual meeting of the Company’s stockholders.

The Business Combination fulfilled the definition of an “initial business combination” as required by the ATSP’s Amended and Restated Certificate of Incorporation.

This fulfillment resulted in ATSP ceasing to be a shell company upon the Closing.

An aggregate of 12,767,950 shares of Class A Common Stock sold in ATSP’s initial public offering (the “public shares”) exercised their rights to redemption.

The redemption right provided holders the right to have their public shares redeemed for a pro rata portion of the trust account holding the proceeds from ATSP’s initial public offering.

The value of the shares is calculated as of two (2) business days prior to the date of the Special Meeting, which was $ 10.00 per share, or $ 127.7 million in the aggregate.

As a result of the Business Combination, among other things (1) all outstanding shares of Legacy SoundHound Common Stock as of immediately prior to the Closing (including Legacy SoundHound Common Stock resulting from the Legacy SoundHound Preferred Stock Conversion), were exchanged at an conversion ratio of 5.5562 (the “Conversion Ratio”) for an aggregate of 140,114,060 shares of Class A Common Stock and 40,396,600 Class B Common Stock;

(2) each outstanding warrant to purchase shares of Legacy SoundHound Common Stock automatically converted into a warrant to purchase, subject to substantially the same terms and conditions as were applicable under these warrants prior to the Effective Time, shares of Class A Common Stock, proportionately adjusted for the Conversion Ratio, with the per share exercise price equal to the exercise price prior to the Effective

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Time divided by the Conversion Ratio and were net exercised upon the Closing;

(3) each outstanding option to purchase shares of Legacy SoundHound Common Stock converted into an option to purchase, subject to substantially the same terms and conditions as were applicable under these options prior to the Effective Time, shares of Class A Common Stock equal to the number of shares subject to such option prior to the Effective Time multiplied by the Conversion Ratio, with the per share exercise price equal to the exercise price prior to the Effective Time divided by the Conversion Ratio;

(4) each Legacy SoundHound RSU converted into a restricted stock unit of SoundHound, subject to substantially the same terms and conditions as were applicable under the SoundHound RSU prior to the Closing.

SoundHound RSU holders received the same consideration holders would have received if the SoundHound RSU was converted into Legacy SoundHound Common Stock immediately prior to the Effective Time.

In connection with the Merger Agreement, ATSP entered into subscription agreements (collectively, the “Subscription Agreements”) with certain accredited investors (the “Subscribers”).

Pursuant to the Subscription Agreements, the Subscribers agreed to purchase, and ATSP agreed to sell to the Subscribers, an aggregate of 11,300,000 shares of Class A Common Stock (“PIPE Shares”), for a purchase price of $ 10.00 per share and an aggregate purchase price of $ 113.0 million (the “PIPE Investment”).

The PIPE shares are identical to the shares of Class A Common Stock that were held by the ATSP’s public stockholders at the time of the Closing, except that the PIPE Shares were not entitled to any redemption rights.

The sale of PIPE Shares was consummated concurrently with the Closing.

The Business Combination is accounted for as a reverse recapitalization in accordance with U.S.

Under this method of accounting, ATSP was treated as the “acquired” company for financial reporting purposes.

The net assets of Legacy SoundHound were stated at historical cost, with no goodwill or other intangible assets recorded.

In accounting for the Business Combination and after redemptions, net proceeds received by the Company totaled $ 90.7 million.

The table below shows the total net proceeds from the Business Combination and the PIPE Investment (in thousands):

Cash - ATSP trust and cash (net of redemption) $ 5,357

Cash - PIPE Investment 113,000

transaction costs ( 27,668 )

Net proceeds from Business Combination and PIPE Investment $ 90,689

Relating to the consummation of the Business Combination, the Company incurred $ 27.7 million in total transaction costs consisting of direct legal, accounting and other fees.

$ 4.1 million of Legacy SoundHound transaction costs specific and directly attributable to the Business Combination were initially capitalized as deferred offering costs and included in other non-current assets on the consolidated balance sheets.

Total transaction expenses were recorded as an offset against proceeds received on the closing of the Business Combination, accounted for as additional paid-in capital.

The amount recorded to additional paid-in-capital was comprised of $ 86.6 million net proceeds from the PIPE investment and $ 4.1 million after net redemptions of ATSP shareholders.

The number of shares of common stock issued immediately following the consummation of the Business Combination was as follows:

Class A Common Stock - conversion of Legacy SoundHound Common Stock and Legacy SoundHound Preferred Stock outstanding prior to Business Combination 140,114,060

Class B Common Stock - conversion of Legacy SoundHound Common Stock and Legacy SoundHound Preferred Stock outstanding prior to Business Combination 40,396,600

Class A Common Stock - PIPE Investment 11,300,000

Class A Common Stock - issuance to ATSP shareholders 532,050

Class A Common Stock - issuance to Legacy SoundHound founders and representatives 4,161,000

Total shares of common stock immediately after Business Combination 196,503,710

The Company adopted the standard retrospectively for the year ended December 31, 2025.

See Note 19 of our consolidated financial statements included within this report for additional details.

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Recent Accounting Pronouncements — Not Yet Adopted

In November 2024, the FASB issued Accounting Standards Update No.

The standard is intended to require more detailed disclosures about specified categories of expenses (including employee compensation, depreciation, and amortization) included in certain expense captions presented on the face of the income statement.

This ASU is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027.

Early adoption is permitted.

The amendments may be applied either prospectively to financial statements issued for reporting periods after the effective date of this ASU or retrospectively to all prior periods presented in the financial statements.

The Company is currently evaluating the impact that the updated standard will have on the financial statement disclosures.

In July 2025, the FASB issued Accounting Standards Update No.

The standard is intended to provide a practical expedient for all entities and an accounting policy election available to all entities other than public business entities related to the estimation of expected credit losses for current accounts receivable and current contract assets that arise from transactions accounted for under ASC 606.

This ASU is effective for fiscal years beginning after December 15, 2025, and interim periods within those fiscal years.

Early adoption is permitted.

The amendments should be applied prospectively to financial statements issued for reporting periods after the effective date of this ASU.

The Company is currently evaluating the impact that the updated standard will have on the financial statement disclosures.

In September 2025, the FASB issued Accounting Standards Update No.

The standard amends certain aspects of the accounting for and disclosure of internal-use software costs by increasing the operability of the recognition guidance considering different methods of software development under ASC 350-40.

This ASU is effective for fiscal years beginning after December 15, 2027, and interim periods within those fiscal years.

Early adoption is permitted.

The amendments can be applied prospectively, retrospectively, or with a modified transition approach to financial statements issued for reporting periods after the effective date of this ASU.

The Company is currently evaluating the impact that the updated standard will have on the financial statement disclosures.

BUSINESS COMBINATIONS

SYNQ3 Acquisition

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The fair value of the purchase consideration was $ 15.8 million.

The $ 0.5 million in cash and 1,179,514 shares of the Company's Class A Common Stock is being withheld for a period of 15 months (the "Holdback Amount").

The Company determined that there are two components to the Holdback Amount related to deferred consideration and contingent consideration, each comprised of cash and shares.

The deferred cash holdback consideration of $ 0.1 million and the deferred share holdback consideration of 361,145 shares of the Company's Class A Common Stock (collectively the "Deferred Consideration") were not recognized as of the SYNQ3 Acquisition Date as such amounts were offset by the indemnification obligations of SYNQ3's former stockholders.

The contingent cash and share holdback consideration to be issued is variable ("Contingent Holdback Consideration").

SYNQ3 Holdback

The $ 0.5 million in cash and 1,179,514 shares of the Company's Class A Common Stock were withheld for a period of 15 months (the "SYNQ3 Holdback Amount").

The Company determined that there are two components to the SYNQ3 Holdback Amount related to deferred consideration and contingent consideration, each comprised of cash and shares.

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the SYNQ3 Acquisition Date as such amounts were offset by the indemnification obligations of SYNQ3's former stockholders.

The contingent cash and share holdback consideration to be issued is variable ("Contingent SYNQ3 Holdback Consideration").

Final amounts to be issued will be reduced based upon future actions and settlements with third parties to resolve assumed contingent sales tax liabilities and certain other assumed contingent liabilities of SYNQ3 in connection with the SYNQ3 Acquisition.

The Company accounted for the Contingent Holdback Consideration as a liability on the consolidated balance sheet.

As of the SYNQ3 Acquisition Date, the Contingent Holdback Consideration was estimated to be $ 0.6 million in aggregate and to be settled in $ 0.1 million cash and the remainder in shares of the Company’s Class A Common Stock.

During the year ended December 31, 2024, the Company issued 38,277 shares of the Company’s Class A Common Stock and paid an immaterial amount in cash from the Contingent Holdback Consideration to SYNQ3's former stockholders as a result of the net working capital adjustments settled during the year.

The Contingent Holdback Consideration will be subsequently remeasured at each reporting date with changes in fair value recognized as a component of operating expense on the Company’s consolidated statement of operations and comprehensive loss.

See Note 12 to our consolidated financial statements included within this report for more information on the fair value measurement of shares associated with the holdback.

The Company accounted for the Contingent SYNQ3 Holdback Consideration as a liability on the consolidated balance sheet.

As of the SYNQ3 Acquisition Date, the Contingent SYNQ3 Holdback Consideration was estimated to be $ 0.6 million in aggregate and to be settled in $ 0.1 million cash and the remainder in shares of the Company’s Class A Common Stock.

During the year ended December 31, 2024, the Company issued 38,277 shares of the Company’s Class A Common Stock and paid an immaterial amount in cash from the Contingent SYNQ3 Holdback Consideration to SYNQ3's former stockholders as a result of the net working capital adjustments settled during the year.

The Contingent SYNQ3 Holdback Consideration will be subsequently remeasured at each reporting date with changes in fair value recognized as a component of operating expense on the Company’s consolidated statement of operations and comprehensive loss.

In April 2025, the Contingent SYNQ3 Holdback Consideration was settled by issuing 472,501 shares of the Company’s Class A Common Stock and paying $ 0.2 million in cash.

After the holdback settlement, any remaining indemnifications by the sellers to cover unsettled claims was offset against the Contingent SYNQ3 Earnout Consideration to the extent of its fair value as of December 31, 2025.

See Note 12 for more information on the fair value measurement of shares associated with the holdback.

Contingent SYNQ3 Earnout Consideration

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As of the SYNQ3 Acquisition Date, the Contingent SYNQ3 Earnout Consideration was estimated to be $ 1.7 million in aggregate and to be settled in $ 0.2 million cash and the remainder in shares of the Company’s Class A Common Stock.

See Note 12 to our consolidated financial statements included within this report for more information on the fair value measurement of Contingent SYNQ3 Earnout Consideration.

As of December 31, 2024, the 2024 revenue target was

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

not met but the Company assessed the 2025 and 2026 revenue target were probable of being met, and no earnout consideration was issued during the year ended December 31, 2024.

For the years ended December 31, 2025 and December 31, 2024, we recognized a gain of $ 6.9 million and a loss of $ 7.0 million, respectively, related to the Contingent SYNQ3 Earnout Consideration, reflected in the change in fair value of contingent acquisition liabilities in the consolidated statement of operations and comprehensive loss.

As of December 31, 2025, the 2024 revenue target was not met, but the 2025 revenue target was met and the related earnout consideration is expected to be settled in the first quarter of 2026.

The Company assessed the 2026 revenue target as probable of being met.

No earnout consideration was issued as of December 31, 2025.

Restricted stock awards

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The purchase price allocation was performed as of January 3, 2024 and allocated to the assets acquired and liabilities assumed based on their respective fair values, as follows (in thousands):

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

January 3, 2024

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The transaction is considered a non-taxable business combination, and goodwill is not deductible for tax purposes.

During the year ended December 31, 2024, the Company recorded measurement period adjustments to decrease the deferred revenue by $ 0.1 million as the revenue recognition criteria had been met at the acquisition date, to increase

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

the accrued liabilities by $ 1.8 million resulting from a pre-acquisition legal settlement, and to decrease the deferred tax liability assumed by $ 0.2 million.

Refer to Note 8 to these consolidated financial statements for more information on the legal proceedings.

These measurement period adjustments resulted in a decrease of $ 0.1 million in deferred cash consideration, $ 0.6 million in deferred equity consideration, and $ 0.4 million in contingent holdback consideration in accordance with the merger agreement.

As a result of the adjusted acquisition-date fair value of assets acquired and liabilities assumed, the Company recorded an increase of $ 0.2 million to the goodwill recognized.

The measurement period adjustments were recorded in the consolidated financial statements as of and for the year ended December 31, 2024 and were made to reflect facts and circumstances that existed as of the SYNQ3 Acquisition Date.

The purchase price allocation has been finalized as of December 31, 2024.

The purchase price allocation was finalized as of December 31, 2024.

The following table summarizes the fair values of the identifiable intangible assets acquired (in thousands):

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Conversation data 2.5 1,285

The Company incurred $ 2.1 million in acquisition related expenses, of which $ 1.0 million was incurred during the year ended December 31, 2024 and recorded as general and administration expenses in its consolidated statements of operations and comprehensive loss.

The Company incurred $ 2.2 million in acquisition related expenses, of which $ 0.1 million, $ 1.0 million, and $ 1.1 million were incurred during the years ended December 31, 2025, 2024 and 2023, respectively, and recorded as general and administration expenses in its consolidated statements of operations and comprehensive loss.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Amelia Acquisition

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The Company’s acquisition of Amelia is expected to strengthen SoundHound’s position in voice and conversational AI and allow the Company to enter new industries such as healthcare, insurance, financial services, energy and retail, expanding its market reach.

The total preliminary purchase consideration includes 3,809,520 shares of the Company's Class A Common Stock issued to the selling shareholders.

The total purchase consideration includes 3,809,520 shares of the Company's Class A Common Stock issued to the selling shareholders.

The Company also issued and deposited 2,149,530 shares of Class A Common Stock otherwise owed to the selling shareholders into an escrow account in order to partially secure the indemnification obligations of the selling shareholders to the Company under the purchase agreement (the “Escrow Consideration”).

The fair value of equity issued as part of the consideration paid was determined on the basis of the closing market price of the Company’s shares on the Amelia Acquisition Date, which also incorporated a discount for lack of marketability rates caused by the trading restrictions due to the fact that the shares were not registered at issuance for a six-month holding period.

The Company also paid $ 8.4 million of cash for seller transaction expenses in connection with the closing of the Amelia Acquisition.

The Company agreed to issue up to 16,822,429 shares to the

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

selling shareholders based on achievement of certain revenue targets in fiscal years 2025 and 2026 (the "Amelia Contingent Earnout Consideration).

The fair value of the preliminary purchase consideration was $ 98.6 million.

The Company agreed to issue up to 16,822,429 shares to the selling shareholders based on achievement of certain revenue targets in fiscal years 2025 and 2026 (the "Amelia Contingent Earnout Consideration).

The fair value of the purchase consideration was $ 98.6 million.

In connection with the Amelia Acquisition, the Company assumed the amended senior secured term loan facility from Amelia in an aggregate principal amount of $ 121.5 million (“Amelia Debt”).

See Note 10 to our consolidated financial statements included within this report for more information on the Amelia Debt.

On December 3, 2024, the Company entered into a letter agreement (the “Amelia Debt Payoff Letter”) to prepay in full all indebtedness and other amounts outstanding and owing under the Amelia Debt Credit Agreement and the Amelia Debt was repaid in full.

Escrow Consideration

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The Company concluded that this variability in settlement value is a derivative that is required to be remeasured to fair value due to changes in stock price.

This derivative did not have a material impact to the financial statements for the year ended December 31, 2024.

See Note 12 to our consolidated financial statements included within this report for more information on the fair value measurement of the derivative related to indemnification rights.

Upon the expiration of the escrow period, any remaining shares within the escrow account will be released to the selling shareholders.

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As of the Amelia Acquisition Date, the Contingent Amelia Earnout Consideration had an estimated fair value of $ 66.3 million.

For the year ended December 31, 2024, the Company recognized a $ 211.9 million loss related to the Contingent Amelia Earnout Consideration, reflected in the change in fair value of contingent acquisition liabilities in the consolidated statement of operations and comprehensive loss.

For the year ended December 31, 2025 and December 31, 2024, the Company recognized a gain of $ 157.6 million and a loss of $ 211.9 million, respectively, related to the Contingent Amelia Earnout Consideration, reflected in the change in fair value of contingent acquisition liabilities in the consolidated statement of operations and comprehensive loss.

See Note 12 to our consolidated financial statements included within this report for more information on the fair value measurement of Contingent Amelia Earnout Consideration.

As of December 31, 2024, the Company assessed the 2025 and 2026 revenue target were probable of being met.

Preliminary purchase price allocation

The preliminary purchase price allocation was performed as of August 6, 2024 and allocated to the assets acquired and liabilities assumed based on their respective fair values, as follows (in thousands):

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

December 31, 2025, the 2025 revenue target was met and the related earnout consideration is expected to be settled in the first quarter of 2026.

The Company assessed the 2026 revenue target as probable of being met.

Purchase price allocation

The purchase price allocation was performed as of August 6, 2024 and allocated to the assets acquired and liabilities assumed based on their respective fair values, as follows (in thousands):

August 6, 2024

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Total liabilities assumed 188,533

Fair value of identifiable net assets accquired $ 2,904

Fair value of identifiable net assets acquired $ 3,398

Goodwill acquired on acquisition $ 95,210

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Goodwill recognized includes synergies expected to be achieved from the operations of the combined company and intangible assets that do not qualify for separate recognition.

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The transaction is considered a non-taxable business combination, and goodwill is not deductible for tax purposes.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

During the year ended December 31, 2024, the Company recorded measurement period adjustments to increase the cash consideration by $ 12.8 thousand, to decrease the accounts receivable by $ 0.2 million, increase the accrued liabilities by $ 0.9 million due to additional payroll taxes identified, to decrease the non-current income tax liabilities by $ 1.8 million due to the change of pre-acquisition tax exposures subsequent to the acquisition.

As a result of the adjusted acquisition-date fair value of cash consideration, assets acquired and liabilities assumed, the Company recorded a decrease of $ 0.7 million to the goodwill recognized.

During the year ended December 31, 2025, the Company recorded measurement period adjustments to decrease the accrued liabilities by $ 0.1 million and other current liabilities by $ 0.4 million due to true-up of the accrued payroll taxes and sales taxes subsequent to the acquisition.

As a result of the adjusted acquisition-date fair value of liabilities assumed, the Company recorded a decrease of $ 0.5 million to the goodwill recognized.

The measurement period adjustments were recorded in the consolidated financial statements as of and for the year ended December 31, 2025 and were made to reflect facts and circumstances that existed as of the Amelia Acquisition Date.

In addition to the measurement period adjustments, the Company also recorded adjustments to correct certain errors in the preliminary purchase price allocation that existed as of the acquisition date during the year ended December 31, 2024, which decreased the contingent earnout consideration by $ 5.3 million, decreased the accounts payable by $ 3.7 million, decreased the accrued liabilities by $ 1.2 million, increased deferred revenue by $ 0.3 million and increased the deferred tax liabilities by $ 0.7 million.

As a result of the adjusted acquisition-date fair value of contingent earnout consideration recognized and liabilities assumed, the Company recorded a decrease of $ 9.3 million to the goodwill recognized.

The identified error related to the contingent earnout consideration had an immaterial impact to the change in fair value from the acquisition date through September 30, 2024, which would have been recorded in change in fair value of contingent acquisition liabilities in the consolidated statements of operations and comprehensive loss.

The preliminary purchase price allocation has not been finalized as of December 31, 2024 primarily due to the final assessment of the fair values of the intangible assets, contingent tax liability assumed, and fair value of the contingent earnout consideration.

The fair value estimates of assets acquired and liabilities assumed is pending the completion of various items, including obtaining further information regarding the identification and valuation of all assets acquired and liabilities assumed.

Any adjustments to the estimates of purchase price allocation will be made in the periods in which the adjustments are determined, and the cumulative effect of such adjustments will be calculated as if the adjustments had been completed as of the acquisition date.

The Company expects to finalize the purchase price allocation within 12 months from the Amelia Acquisition Date.

The following table summari zes the preliminary fair values of the identifiable intangible assets acquired (in thousands) :

Useful life Preliminary fair value

The purchase price allocation was finalized as of September 30, 2025.

The following table summari zes the fair values of the identifiable intangible assets acquired (in thousands) :

Useful life Fair value

Intangible Assets:

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Trade names 5.0 7,000

The Company incurred $ 5.8 million in acquisition related expenses, all of which was incurred during the year ended December 31, 2024 and recorded as general and administration expenses in its consolidated statements of operations and comprehensive loss.

The Company incurred $ 6.7 million in acquisition related expenses, of which $ 0.9 million and $ 5.8 million were incurred during the years ended December 31, 2025 and December 31, 2024, respectively, and recorded as general and administration expenses in its consolidated statements of operations and comprehensive loss.

Interactions Acquisition

On September 3, 2025 (the “Interactions Acquisition Date”), the Company acquired all of the issued and outstanding equity of Interactions Corporation (the “Interactions Acquisition”), a pioneer in AI for customer service and workflow orchestration.

This strategic deal is expected to strengthen and extend SoundHound’s growing leadership in Agentic AI and accelerate its market penetration in customer service across enterprise businesses.

The transaction also expands SoundHound’s customer portfolio across various industries, including global consumer icons, large technology device brands, insurers, automakers, and other preeminent Fortune 100 companies across industries.

The fair value of the preliminary purchase consideration was $76.1 million.

The preliminary purchase consideration includes $ 19.4 million of cash paid to the selling shareholders.

The Company also paid $ 4.1 million of cash for seller transaction expenses in connection with the closing of the Interactions Acquisition.

In connection with the Interactions Acquisition, the Company paid the debt held by Interactions (the “Interactions Debt”) on the Interactions Acquisition Date in an aggregate principal amount of $ 41.5 million as part of the purchase consideration under the merger agreement.

The Company has also withheld purchase consideration of $ 1.2 million in cash, subject to customary net working capital adjustments, to partially secure the indemnification obligations of Interactions' former stockholders under the merger agreement and agreed to pay up to $ 25.0 million in cash to certain former stockholders of Interactions based

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

upon the achievement of specified future milestones in fiscal years 2026 and 2027 (the "Contingent Interactions Earnout Consideration).

Interactions Holdback

As of the Interactions Acquisition Date, the $ 1.2 million in cash withheld (the "Deferred Interactions Holdback Consideration") consisted of two components, adjustment holdback consideration and indemnity holdback consideration.

The adjustment holdback consideration of $ 1.0 million was recorded within other current liabilities at fair value as of the Interactions Acquisition Date (the "Interactions Adjustment Holdback Consideration") and is estimated to be paid to Interactions' former stockholders for the settlement of net working capital adjustments after sellers finish the review of the closing statement submitted by the acquirer within 120 days subsequent to the Interactions Acquisition Date.

The indemnity holdback consideration of $ 0.2 million was recorded within other current liabilities, which was withheld for a period of 12 months subsequent to the Interactions Acquisition Date (the "Interactions Indemnity Holdback Consideration").

Payment will occur after the sellers complete their review of the closing statement which must be submitted by the acquirer within 120 days of the Interactions Acquisition Date.

Contingent Interactions Earnout Consideration

The Company also agreed to pay up to $ 25.0 million in cash to the selling shareholders based on achievement of certain annual revenue targets in fiscal years 2026 and 2027 and renewal or extension of an existing contract with a specific customer on or before March 31, 2026 (the "Contingent Interactions Earnout Consideration").

The Company accounted for the Contingent Interactions Earnout Consideration as a liability within contingent acquisition liabilities on the Company's consolidated balance sheets and will subsequently remeasure the liability at each reporting date with changes in fair value recognized as a component of operating expense in the Company’s consolidated statement of operations and comprehensive loss.

As of the Interactions Acquisition Date, the Contingent Interactions Earnout Consideration had an estimated fair value of $ 9.9 million .

For the year ended December 31, 2025, the Company recognized a loss of $ 1.3 million related to the Contingent Interactions Earnout Consideration, reflected in the change in fair value of contingent acquisition liabilities in the consolidated statement of operations and comprehensive loss.

As of December 31, 2025, the Company assessed the 2026 and 2027 revenue targets were probable of being met, and an existing contract with a specific customer was probable of being renewed or extended on or before March 31, 2026.

See Note 22 to our consolidated financial statements included within this report for more information on the cash paid

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

to settle a portion of the Contingent Interactions Earnout Consideration due to the renewal of an existing contract subsequent to December 31, 2025.

See Note 12 to our consolidated financial statements for more information on the fair value measurement of Interactions Holdback Amount and Contingent Interactions Earnout Consideration.

Preliminary purchase price allocation

The preliminary purchase price allocation was performed as of September 3, 2025 and allocated to the assets acquired and liabilities assumed based on their respective fair values, as follows (in thousands):

Cash paid $ 65,033

Deferred holdback consideration 1,150

Contingent earnout consideration 9,900

Purchase price 76,083

Assets acquired:

Cash and cash equivalents 10,431

Accounts receivable 8,626

Other current assets 1,519

Contract assets and unbilled receivable, current, net 3,586

Property and equipment 1,722

Right-of-use assets 659

Contract assets and unbilled receivable, non-current, net 3,081

Other assets 176

Intangible assets 39,500

Total identified assets acquired 69,300

Liabilities assumed:

Accounts payable 3,048

Accrued liabilities 3,508

Operating lease liability, current 241

Financing lease liability, current 298

Deferred revenue 4,155

Deferred revenue, non-current 2,300

Operating lease liability, non-current 478

Other liabilities, non-current 256

Total liabilities assumed 14,284

Fair value of identifiable net assets acquired $ 55,016

Goodwill acquired on acquisition $ 21,067

Goodwill recognized includes synergies expected to be achieved from the operations of the combined company and intangible assets that do not qualify for separate recognition.

Expected synergies include both increased revenue opportunities and the cost savings from the planned integration of platform infrastructure, facilities, personnel, and

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The transaction is considered a non-taxable business combination, and goodwill is not deductible for tax purposes.

The purchase accounting is not yet complete as of December 31, 2025 and as such, the final allocation among purchase consideration, intangible assets, net assets acquired and goodwill may be subject to change.

Any adjustments to the preliminary purchase price allocation will be made in the periods in which the adjustments are determined, and the cumulative effect of such adjustments will be calculated as if the adjustments had been completed as of the acquisition date.

The Company expects to finalize the purchase price allocation within 12 months from the acquisition date.

The following table summarizes the preliminary fair values of the identifiable intangible assets acquired (in thousands) :

Useful life Preliminary fair value

Intangible Assets:

(in years) at acquisition

Customer relationships 5.0 $ 26,700

Developed Technology 5.0 12,000

Trademark 2.0 800

The fair values of all intangible assets were estimated using the income approach.

Under the income approach, an intangible asset’s fair value is equal to the present value of future economic benefits to be derived from ownership of the asset.

Customer relationships was valued under the multi-period excess earnings method, which assumes that the value of intangible assets is equal to the present value of the incremental after-tax cash flows attributable specifically to the customer relationships.

Developed technology and trade names were valued under the relief from royalty method, which assumes value to the extent that the acquired company is relieved of the obligation to pay royalties for the benefits received from them.

The present value of projected cash flows included significant judgment and assumptions regarding (a) the projected revenues, attrition rate, and the discount rate for the certain customer contracts and related relationships, (b) the projected revenues, projected expenses, migration curve, contributory asset charges, and the discount rate for the developed technology, (c) the projected revenues, royalty rate, and the discount rate for the trade name.

The Company incurred $ 5.0 million in acquisition related expenses during the year ended December 31, 2025 and recorded as general and administration expenses in its consolidated statements of operations and comprehensive loss .

Unaudited pro forma financial information

The financial results of SYNQ3 and Amelia are included in these consolidated financial statements from the date of the acquisition.

The financial results of SYNQ3, Amelia and Interactions are included in these consolidated financial statements from the date of the acquisition.

SYNQ3 contributed revenue of $ 12.0 million and net loss of $ 7.5 million to the Company for the year ended December 31, 2024.

Amelia contributed revenue of $ 42.0 million and net loss of $ 8.5 million to the Company for the year ended December 31, 2024.

The following table includes unaudited pro forma financial information that presents combined results of the Company as if the business combinations were completed on January 1, 2023, the beginning of the comparable prior annual reporting period.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

December 31, 2024 December 31, 2023

Interactions contributed revenue of $ 23.1 million, and net income of $ 2.7 million to the Company for the year ended December 31, 2025.

The following table includes unaudited pro forma financial information that presents combined results of the Company as if the SYNQ3 and Amelia acquisitions were completed on January 1, 2023, and the Interactions acquisition was completed on January 1, 2024, the beginning of the comparable prior annual reporting period.

December 31, 2025 December 31, 2024 December 31, 2023

Revenue $ 211,701 $ 225,556 $ 153,586

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$ ( 8,624 ) $ ( 367,400 ) $ ( 158,339 )

The unaudited pro forma financial information includes the combined historical operating results of the Company, SYNQ3 and Amelia prior to the acquisitions, with adjustments to give effect for the acquisitions and related events.

Pro forma adjustments have been made to reflect the incremental intangible asset amortization to be incurred based on the fair values and useful lives of each identifiable intangible asset, incremental stock-based compensation related to inducement equity awards, incremental transaction costs related to the acquisitions, adjustments to interest expense related to previously outstanding debt held by the acquired entities, elimination of amortization expense related to previously recognized goodwill held by SYNQ3, and the related tax effects of pro forma adjustments for the period.

Given the paydown of Amelia Debt occurred in December 2024, which was shortly after the Amelia Acquisition Date, the interest expenses from Amelia Debt were excluded from the unaudited pro forma financial information.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The unaudited pro forma financial information includes the combined historical operating results of the Company, SYNQ3, Amelia and Interactions prior to the acquisition, with adjustments to give effect for the acquisitions and related events.

Pro forma adjustments have been made to reflect the incremental intangible asset amortization to be incurred based on the fair values and useful lives of each identifiable intangible asset, incremental stock-based compensation related to inducement equity awards, incremental transaction costs related to the acquisitions, adjustments to interest expense related to previously outstanding debt held by Amelia and Interactions, elimination of profit or loss from stock warrants issued by Interactions, reduction of interest income to reflect reduced average cash and equivalents after funding the Acquisitions with cash, removal of earnings attributable to non-controlling interest due to changes in Interactions ownership structure, and the related tax effects of pro forma adjustments for the period.

These unaudited pro forma results are presented for informational purposes only and are not necessarily indicative of what the actual results of operations of the combined company would have been if the acquisition had occurred at the beginning of the period presented, nor are they indicative of future results of operations.

The unaudited pro forma results are based on the preliminary purchase price allocation and will be updated to reflect the final amounts as the allocation is finalized during the measurement period.

Given the paydown of Amelia Debt occurred in December 2024, which was shortly after the acquisition dates, and the paydown of Interaction Debt occurred at the Interaction Acquisition Date, the interest expenses from Amelia Debt and Interaction Debt were excluded from the unaudited pro forma financial information.

The unaudited pro forma results are based on the preliminary purchase price allocation under Interactions Acquisition and will be updated to reflect the final amounts as the allocation is finalized during the measurement period.

The Company did not have any material nonrecurring pro forma adjustments directly attributable to the business combination included in the reported pro forma revenue and earnings.

Other Acquisition

On June 14, 2024, the Company completed an immaterial acquisition for total preliminary purchase consideration of $ 1.0 million.

As part of the acquisition, the Company acquired net assets of $ 2.2 million, including intangible assets of $ 2.6 million, and recognized a preliminary gain on bargain purchase of $ 1.2 million within other income (expense) , net in the consolidated statements of operations and comprehensive loss during the year ended December 31, 2024, resulting from a favorable fair value of identifiable net assets acquired at the date of acquisition as compared with the Company’s purchase price.

On June 14, 2024, the Company completed an immaterial acquisition for total purchase consideration of $ 1.0 million.

As part of the acquisition, the Company acquired net assets of $ 2.2 million, including intangible assets of $ 2.6 million, and recognized a gain on bargain purchase of $ 1.2 million within other income, net in the consolidated statements of operations and comprehensive loss during the quarter of the acquisition, resulting from a favorable fair value of identifiable net assets acquired at the date of acquisition as compared with the Company’s purchase price.

The Company was able to negotiate a bargain purchase price as a result of the recurring losses and pre-filing bankruptcy status of the selling entity.

The preliminary purchase price allocation has not been finalized as of December 31, 2024 primarily due to the final assessment of the fair values of the intangible assets.

The Company expects to finalize the purchase price allocation within 12 months from the acquisition date.

The following table s ummarizes the preliminary fair values of the identifiable intangible assets acquired (in thousands) :

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The purchase price allocation was finalized as of March 31, 2025.

The following table s ummarizes the fair values of the identifiable intangible assets acquired (in thousands) :

Useful life Fair value

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The financial results of the acquired entity are included in these consolidated financial statements from the date of the acquisition, and are immaterial.

The Company has not separately presented unaudited pro forma results of operations reflecting the acquisition or revenue and operating losses of the acquired entity for the period from acquisition date to December 31, 2024 as the impacts were not material to the consolidated financial statements.

The Company has not separately presented unaudited pro forma results of operations reflecting the acquisition as the impacts were not material to the consolidated financial statements.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

REVENUE RECOGNITION

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Revenues are reported net of applicable sales and use taxes that are passed through to customers.

The Company applies significant judgement in identifying and evaluating any terms and conditions in contracts which impact revenue recognition.

The Company applies significant judgment in identifying and evaluating any terms and conditions in contracts which impact revenue recognition.

The Company has the following performance obligations in contracts with customers:

Hosted Services

Hosted services, along with non-distinct customization, integration, maintenance and support professional services, allow customers to access the Houndify and Amelia Software Platform over the contract period without taking possession of the software.

Hosted services, along with non-distinct customization, integration, maintenance and support professional services, allow customers to access the Houndify.

Amelia Software Platform, and Virtual Assistance applications over the contract period without taking possession of the software.

The Company has determined that the hosted services arrangements are a single performance obligation comprised of a series of distinct services, since each day of providing access to hosted services is substantially the same and the customer simultaneously receives and consumes the benefits as access is provided.

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The Company recognizes revenue as each distinct service period is performed.

Hosted services may include up-front services to develop and/or customize the applications to each customer’s specification.

Judgement is required to determine whether these professional services are distinct from the hosted services.

In making this determination, factors such as the degree of integration, the customers’ ability to start using the software prior to customization, and the availability of these services from other independent vendors are considered.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

In instances where the Company concluded that the up-front services are not distinct performance obligations, revenues for these activities are recognized over the period which the hosted services are provided and is included within hosted services revenue.

All revenues derived as a result of the SYNQ3 Acquisition, and substantial revenues derived as a result of the Amelia Acquisition are categorized as hosted service revenue.

Hosted services may include implementation services to develop and/or customize the applications to each customer’s specification.

Judgment is required to determine whether these professional services are distinct from the hosted services.

In making this determination, factors such as the degree of integration, the significance of enhancement to existing functionality, the customers’ ability to start using the software prior to customization, the evaluation as to whether the services extend the economic life of the application, and the availability of these services from other independent vendors are considered.

In instances where the Company concluded that the implementation services are not distinct performance obligations, revenues for these activities are recognized over the period which the hosted services are expected to be provided and is included within hosted services revenue.

All revenues derived as a result of the SYNQ3 Acquisition, and substantial revenues derived as a result of the Amelia Acquisition and Interactions Acquisition are categorized as hosted services revenue.

Professional Services

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(2) the Company’s performance creates or enhances an asset that the customer controls as the asset is created or enhanced;

or (3) the Company’s performance does not create an asset with an alternative use to the entity and the entity has an enforceable right to payment for performance completed to date.

or (3) the Company’s performance does not create an asset with an alternative use to the entity and the entity has an enforceable right to payment for

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

performance completed to date.

If none of the criteria are met, revenues are determined to be recognized at a point in time.

For distinct professional services determined to be recognized over-time, measuring the stage of completion of a project requires significant judgement and estimates and is based on either input or output measures.

For distinct professional services determined to be recognized over-time, measuring the stage of completion of a project requires significant judgment and estimates and is based on either input or output measures.

During the year ended December 31, 2025, $ 14.7 million of professional service revenue was recognized over time, with the remaining $ 0.4 million recognized at a point in time when the performance obligation was fulfilled and control of the service was transferred to the customer.

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Based on these factors, the Company reports revenue on a net basis.

The Company licenses voice and Amelia's software solutions that are embedded in customer's products or services.

The Company licenses Amelia’s software solutions, Virtual Assistance applications, and other voice solutions that are embedded in customers’ products or services.

Licensing revenues are a distinct performance obligation that is recognized when control is transferred to the customer, which is at a point in time for non-customized solutions.

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Licenses may include post-contract support, which is a distinct performance obligation and revenue from post- contract support is recognized ratably over the licensing period.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

When a contract has multiple performance obligations, the transaction price is allocated to each performance obligation based on its relative estimated standalone selling price (“SSP”).

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• Gross margin objectives and pricing practices, such as contractually stated prices, discounts offered and applicable price lists.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

These factors may vary over time, depending upon the unique facts and circumstances related to each deliverable.

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France 7,307 8,756 4,090

Japan 3,908 3,707 3,866

Germany 360 196 5,950

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2025 2024 2023

Over time $ 67,789 $ 25,757 $ 19,955

Over time revenue $ 125,887 $ 67,789 $ 25,757

Point-in-time 43,033 16,904 20,116

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Revenues from Product Royalties are based on volume, usage, or life of the products, which are driven by number of devices, users, or unit of time.

Service Subscription revenues are generated through Houndified Services and Amelia services, which include customer services, food ordering, content, appointments and voice commerce, autonomous business workflows, and IT systems analysis.

Service Subscription revenues are generated through Houndified Services, Amelia services, and Virtual Assistance applications, which include customer services, food ordering, content, appointments and voice commerce, autonomous business workflows, and IT systems analysis.

Subscription revenues are derived from monthly fees based on fixed fees, usage-based revenue, revenue per query or revenue per user.

Houndified Products, Houndified Services, and Amelia services may include professional services that develop and customize the Houndify platform and Amelia Software Platform to fit customers’ specific needs, and any post-contract support for on-premise solutions.

Revenues from Monetization are generated from the SoundHound music identification app and are primarily attributable to user ad impression revenue.

Houndified Products, Houndified Services, Amelia services, and Virtual Assistance applications may include professional services that develop and customize the Houndify platform, Amelia Software Platform, and Virtual Assistance applications to fit customers’ specific needs,

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

and any post-contract support for on-premise solutions.

Revenues from Monetization are generated from the SoundHound music identification app and are primarily attributable to user ad impression revenue.

For the years ended December 31, 2025, 2024 and 2023, the disaggregated revenue by service type was as follows (in thousands):

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The timing of the Company’s performance often differs from the timing of the customer’s payment, which results in the recognition of a receivable, a contract asset or deferred revenue.

As of January 1, 2023, accounts receivable, net of allowances, was $ 3.4 million, contract assets, net of allowances, were $ 8.7 million and deferred revenue was $ 13.4 million.

As of January 1, 2024, accounts receivable, net of allowances, was $ 4.1 million, contract assets were $ 28.3 million and deferred revenue was $ 9.2 million.

The contract asset and unbilled accounts receivable, net as of December 31, 2025 and December 31, 2024 consists of the following (in thousands):

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2025 December 31,

Unbilled account receivables - current Contract assets and unbilled receivables, net of allowance for credit losses $ 13,441 $ 5,138

Contract assets - current Contract assets and unbilled receivables, net of allowance for credit losses 13,204 6,642

Unbilled account receivables - non-current Contract assets and unbilled receivables, non-current, net of allowance for credit losses 922 —

Contract assets - non-current Contract assets and unbilled receivables, non-current, net of allowance for credit losses 11,957 16,492

The Company has not recorded any asset impairment charges related to contract assets during the periods presented in the consolidated financial statements.

Unbilled account receivables - current Contract assets and unbilled receivables, net $ 17,728 $ 13,441

Contract assets - current Contract assets and unbilled receivables, net 20,461 13,204

Unbilled account receivables - non-current Contract assets and unbilled receivables, non-current, net 12,988 922

Contract assets - non-current Contract assets and unbilled receivables, non-current, net 16,918 11,957

The change in the Company's unbilled accounts receivable and contract assets during the current period was primarily the result of new contracts, customer invoicing, and the performance of the Company's contracts, respectively.

The Company has not recorded any specific asset impairment charges related to contract assets during the periods presented in the consolidated financial statements.

Revenues recognized included in the balances of the deferred revenue at the beginning of the reporting period for the years ended December 31, 2025, 2024 and 2023 were $ 24.1 million, $ 5.1 million and $ 7.9 million, respectively.

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This amount is subject to change due to future revaluations of variable consideration, terminations, other contract modifications or currency adjustments.

The estimated timing of the recognition of remaining unsatisfied performance obligations is subject to change and is affected by changes to scope, changes in timing of delivery of products and services, or contract modifications.

The estimated timing of the recognition of remaining unsatisfied performance

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

obligations is subject to change and is affected by changes to scope, changes in timing of delivery of products and services, or contract modifications.

GOODWILL AND INTANGIBLE ASSETS

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Balance as of December 31, 2024 $ 101,704

The Company has applied the acquisition method of accounting in accordance with ASC 805 and recognized assets acquired and liabilities assumed of SYNQ3 and Amelia at their fair value as of the date of acquisition, with the excess purchase consideration recorded to goodwill.

Acquisition of Interactions 21,067

Measurement period adjustment $ ( 494 )

Balance as of December 31, 2025 $ 122,277

The Company has applied the acquisition method of accounting in accordance with ASC 805 and recognized assets acquired and liabilities assumed of SYNQ3, Amelia, and Interactions at their fair value as of the date of acquisition, with the excess purchase consideration recorded to goodwill.

As the Company finalizes the estimation of the fair value of the assets acquired and liabilities assumed, additional adjustments to the amount of goodwill may be necessary.

Refer to Note 3 for further information on the measurement period adjustments of SYNQ3 and Amelia Acquisitions.

Refer to Note 3 for further information on the measurement period adjustments of Amelia Acquisition.

Intangible Assets

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Total $ 229,255 $ 47,860 $ 181,395

December 31, 2024

Gross Carrying Value Accumulated Amortization Net Carrying Value

Developed technology 3.0 - 7.0

$ 105,640 $ 7,696 $ 97,944

Customer relationships 3.0 - 7.0

74,360 5,322 69,038

Tradename 2.0 - 5.0

8,470 1,280 7,190

Conversation data 2.5 1,285 514 771

Total $ 189,755 $ 14,812 $ 174,943

Amortization expense of intangible assets was $ 33.0 million for the year ended December 31, 2025.

This expense was recorded as $ 17.2 million within cost of revenues for the year ended December 31, 2025.

Amortization expense of

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

intangible assets was $ 14.8 million for the year ended December 31, 2024.

This expense was recorded as $ 7.7 million within cost of revenues for the year ended December 31, 2024.

There was no amortization expense during the year ended December 31, 2023.

4 unchanged sentences

Total $ 181,395

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

PROPERTY AND EQUIPMENT, NET

PROPERTY AND EQUIPMENT, NET AND CAPITALIZED SOFTWARE DEVELOPMENT COST

Property and equipment, net consisted of the following (in thousands):

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Furniture and fixtures 962 1,154

Construction in progress 15 —

Total property and equipment, at cost 33,489 34,537

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Depreciation and amortization expense in respect of capitalized property and equipment totaled approximately $ 1.0 million, $ 1.2 million and $ 2.3 million for the years ended December 31, 2025, 2024 and 2023, respectively.

As of December 31, 2025 and 2024, capitalized software development costs were $ 6.4 million and zero , respectively, and are included in other non-current assets in the accompanying consolidated balance sheets.

Amortization expense for the years ended December 31, 2025, 2024 and 2023, was less than $ 0.1 million, zero and zero , respectively.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

ACCRUED LIABILITIES

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Accrued vendor payables 8,682 8,141

Accrued lender fees — 2,603

Accrued litigation liabilities 3,045 1,750

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Total $ 64,000

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Legal Proceedings

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The Company accrues contingent liabilities when it is probable that future expenditures will be made, and such expenditures can be reasonably estimated.

Prior to the SYNQ3 Acquisition, SYNQ3 filed a litigation against its landlord, TEBO in the United States District Court of Colorado, and TEBO counterclaimed in May 2022.

On June 2, 2022, the District Court entered a judgment that was in favor of SYNQ3.

TEBO filed the notice of appeal in July, 2023.

On June 27, 2024, the Colorado Court of Appeals reversed the judgment and remanded the case to the District Court to enter judgment in favor of TEBO on both SYNQ3’s claim and TEBO’s counterclaim and to conduct further proceedings as are necessary to determine the damages, attorney fees and costs, if any, to be awarded to TEBO.

On January 15, 2025, the Company entered a Settlement Agreement with TEBO.

The Settlement Agreement requires SYNQ3 to pay $ 1.8 million to TEBO in January 2025 to resolve all matters related to the litigation and dispute.

Therefore, the Company recorded a liability of $ 1.8 million under accrued liabilities as of December 31, 2024.

The Company's assessment may change over time as individual proceedings or claims progress.

VB Assets, LLC v.

On November 21, 2024, VB Assets, LLC, a non-practicing entity, filed a complaint against the Company in the United States District Court for the District of Delaware alleging patent infringement under 35 U.S.C.

The case is captioned as VB Assets, LLC v.

SoundHound AI, Inc., Case No.

1:24-cv-1279-MN.

In its complaint, VB Assets, LLC alleges the Company is infringing U.S.

8,073,681, 11,222,626, 8,886,536, 9,269,097, 9,502,025, and 11,087,38 5.

VB Assets, LLC subsequently amended its complaint adding allegations that the Company is also infringing U.S.

10,755,699, 10,297,249, and 7,818,176.

At the appropriate time, the Company will deny all infringement allegations and allege that VB Assets, LLC patents asserted against the Company are invalid and/or unenforceable.

The Company intends to vigorously defend itself in all respects.

As of December 31, 2025, no determination can be made as to the likelihood of a favorable or unfavorable outcome.

In accordance with ASC 450, Contingencies, no reasonably possible loss or range of loss can be estimated and accrued as of December 31, 2025.

Securities Litigation

On March 28, 2025, a class action complaint was filed in the United States District Court for the Northern District of California, captioned Liles v.

SoundHound AI, Inc., Case No.

3:25-cv-02915-RFL.

The complaint names as defendants the Company, its CEO Keyvan Mohajer, and its CFO Nitesh Sharan.

The complaint asserts, among other

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

things, claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, as amended.

Plaintiff seeks to represent a putative class of stockholders who purchased or otherwise acquired SoundHound securities between March 1, 2024 and March 11, 2025, both dates inclusive.

On July 14, 2025, Judge Rita Lin appointed the leading plaintiff in the litigation.

On July 25, 2025, a new Scheduling Order was entered.

On October 1, 2025, the Lead Plaintiff served their amended complaint.

The Company filed a motion to dismiss on December 12, 2025.

The Plaintiffs filed their opposition to the motion to dismiss on February 10, 2026.

The Company plans to file its reply on or before March 19, 2026.

The hearing is scheduled in April 2026.

The Company intends to vigorously defend the claims and believes the complaint lacks merit.

As of December 31, 2025, no determination can be made as to the likelihood of a favorable or unfavorable outcome.

In accordance with ASC 450, Contingencies, no reasonably possible loss or range of loss can be estimated and accrued as of December 31, 2025.

Derivative Actions

On April 8, 2025, a purported shareholder derivative complaint was filed in the United States District Court for the Northern District of California, captioned Bishop v.

Mohajer, Case No.

3:25-cv-03172-JD.

The complaint purports to assert claims on behalf of the Company against its directors, CEO, and CFO for breach of fiduciary duty, aiding and abetting breach of fiduciary duty, unjust enrichment, waste of corporate assets, and for contribution against Mr.

Mohajer and Mr.

Sharan under Sections 10(b) and 21D of the Securities Exchange Act of 1934.

On April 16, 2025, a similar purported shareholder derivative complaint was filed against the same defendants in the same forum, captioned Roy v.

Mohajer, Case No.

5:25-cv-03363-NC.

That complaint purports to assert claims on behalf of the Company against its directors, CEO, and CFO for breach of fiduciary duty, unjust enrichment, abuse of control, gross mismanagement, waste of corporate assets, and for contribution against Mr.

Mohajer and Mr.

Sharan under Sections 10(b) and 21D of the Securities Exchange Act of 1934.

All derivative actions have been stayed pending resolution of the Liles v.

SoundHound AI et al securities class action litigation.

As of December 31, 2025, no determination can be made as to the likelihood of a favorable or unfavorable outcome.

In accordance with ASC 450, Contingencies, no reasonably possible loss or range of loss can be estimated and accrued as of December 31, 2025.

Other Matters

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As of December 31, 2024, all of the Term Loan Warrants had been exercised and no Term Loan Warrants are outstanding.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Warrants Related to the Business Combination

Public Warrants

On April 26, 2022 (the "Closing"), pursuant to a merger agreement dated as of November 15, 2021 by and among Archimedes Tech SPAC Partners Co.

(“ATSP”), ATSPC Merger Sub, Inc.

and SoundHound, Inc.

(“Legacy SoundHound”), the parties consummated the merger of ATSPC Merger Sub, Inc.

On April 26, 2022 (the “ Closing ” ), pursuant to a merger agreement dated as of November 15, 2021 by and among ATSP, ATSPC Merger Sub, Inc.

and Legacy SoundHound, the parties consummated the merger of ATSPC Merger Sub, Inc.

with and into Legacy SoundHound, with Legacy SoundHound continuing as the surviving corporation, as well as the other transactions contemplated by the Merger Agreement (the merger and such other transactions collectively referred to the “ATSP Merger”).

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No fractional shares were issued upon exercise of the Public Warrants.

The Company may redeem the outstanding warrants, for $ 0.01 per warrant, upon not less than 30 days’ prior written notice of redemption, if the reported last sale price of the common stock equals or exceeds $ 18.00 per share (as adjusted for stock dividends, sub-divisions, reorganizations, recapitalizations and the like) for any 20 trading days within a 30 -trading day period commencing after the warrants become exercisable and ending on the third trading day before the Company sends the notice of redemption to the

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

warrant holders.

Upon issuance of a redemption notice by the Company, the warrant holders may, at any time after the redemption notice, exercise the Public Warrants for cash, or on a cashless basis.

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Therefore, the Private Warrants met requirements for classification as equity instruments, as they are indexed to the Company’s stock.

In December 2024, the Company issued 2,041 shares of the Company's Class A Common Stock resulting from the exercise of Public Warrants and Private Warrants that were outstanding and raised $ 23.5 thousand in cash proceeds.

As of December 31, 2024, there were 3,663,955 Public Warrants and Private Warrants issued and outstanding.

There was no exercise during the years ended December 31, 2023 and December 31, 2022.

SNAP June 2020 Note

In June 2020, the Company issued a promissory note (the “SNAP June 2020 Note”) to a Lender in exchange for $ 15.0 million in cash proceeds.

The note had an annual interest rate of 5 % and a maturity date of June 26, 2022, if not converted earlier pursuant to conversion terms and change in control events.

The Company recognized total interest expense of $ 0.7 million associated with the SNAP June 2020 Note for the year ended December 31, 2022, out of which $ 0.4 million relates to amortization of the debt discount.

The debt discount related to the SNAP June 2020 Note is amortized over the life of the instrument, beginning at note issuance and ending on April 26, 2022, the date on which the note was converted.

The Company was amortizing the discounts on an effective interest basis over the period from issuance through the Early Maturity Date.

The effective interest rate was 14.3 % for the year ended December 31, 2022.

As a result of the Business Combination, on the Closing Date, the SNAP June 2020 Note conversion feature was triggered.

As a result, on the Closing Date, all outstanding principal of $ 15.0 million and accrued interest of $ 1.4 million were converted into 2,046,827 shares of Class A Common Stock.

In addition, the remaining debt discount of $ 0.2 million and related derivative liability with fair value of $ 4.1 million as of the Closing Date were extinguished.

As of December 31, 2025 and December 31, 2024, there were 3,654,115 and 3,663,955 Public Warrants and Private Warrants issued and outstanding, respectively.

During the years ended December 31, 2025 and December 31, 2024, the Company issued 9,840 and 2,041 shares, respectively, of the Company's Class A Common Stock resulting from the exercise of Public Warrants and Private Warrants that were outstanding and raised $ 0.1 million and less than $ 0.1 million, respectively, in cash proceeds.

There was no exercise during the years ended December 31, 2023.

SVB March 2021 Note

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During the year ended December 31, 2023, the interest rate was 13.75 %.

Payments were interest-only for the first twelve months and are now principal and interest through maturity.

There was no interest expense recorded during the year ended December 31, 2024.

During the years ended December 31, 2023 and December 31, 2022, the Company

Payments were interest-only for the first

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

recorded $ 16.0 thousand and $ 1.0 million related to the amortization of the debt discount in interest expense, respectively.

twelve months and are now principal and interest through maturity.

During the year ended December 31, 2023, the Company recorded less than $ 0.1 million related to the amortization of the debt discount in interest expense.

Concurrently with the Company's entry into the Credit Agreement (as defined below), the Company used a portion of the proceeds to prepay in full all outstanding obligations under, and terminated, the SVB March 2021 Note.

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Payments were interest-only for the first twelve months and principal and interest through maturity.

There was no interest expense recorded during the year ended December 31, 2024.

During the years ended December 31, 2023 and December 31, 2022, the Company recorded $ 31 thousand and $ 0.8 million related to the amortization of the debt discounts in interest expense, respectively.

During the year ended December 31, 2023, the Company recorded less than $ 0.1 million related to the amortization of the debt discounts in interest expense.

Concurrently with the Company’s entry into the Credit Agreement (as defined below), the Company used a portion of the proceeds to prepay in full all outstanding obligations under, and terminated, the SCI June 2021 Note.

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The outstanding principal balance of the Term Loan bears interest at the applicable margin plus, at the Company’s election, either (i) the Term SOFR published by CME Group Benchmark Administration Limited for a one-month interest period plus 0.15 % or (ii) the alternate base rate (“ABR”), which is a per annum rate equal to the greatest of (a) the Prime Rate (as defined in the Credit Agreement), (b) the NYFRB Rate (as defined in the Credit Agreement) plus 0.50 % and (c) the Term SOFR plus 1.00 %.

The applicable margin under the Credit Agreement is 8.50 % per annum

The applicable margin under the Credit Agreement is 8.50 % per annum with respect to SOFR loans, and 7.50 % per annum with respect to ABR loans.

As of June 30, 2024, the contractual

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

with respect to SOFR loans, and 7.50 % per annum with respect to ABR loans.

As of June 30, 2024, the contractual interest rate was approximately 14.0 %.

interest rate was approximately 14.0 %.

The Company was amortizing th e discounts on an effective interest basis over the period from issuance through April 14, 2027 (the “Maturity Date”).

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On December 3, 2024 , the Company entered into a letter agreement (the “Amelia Debt Payoff Letter”) to prepay in full all indebtedness and other amounts outstanding and owing under the Amelia Debt Credit Agreement.

In connection with the Amelia Debt prepayment, the Company paid a total of $ 39.8 million on December 4, 2024, which consisted of the remaining principal amount outstanding of $ 39.8 million and transaction expenses of $ 42 thousand, resulting in a loss on debt extinguishment of $ 42 thousand.

The following table summarizes the Company’s debt balances as of December 31, 2024 and December 31, 2023 (in thousands):

2024 December 31, 2023

Term Loan $ — $ 100,000

Unamortized discount and debt issuance costs — ( 15,688 )

Carrying value of long-term debt $ — $ 84,312

In connection with the Amelia Debt prepayment, the Company paid a total of $ 39.8 million on December 4, 2024, which consisted of the remaining principal amount outstanding of $ 39.8 million and transaction expenses of an immaterial amount, resulting in a loss on debt extinguishment of an immaterial amount.

RESTRUCTURING

In January 2023, the Company announced a restructuring plan (the “Restructuring Plan”) intended to reduce operating costs, improve operating margins, improve cash flows and accelerate the Company’s path to profitability.

SOUNDHOUND AI, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Restructuring Plan included a reduction of the Company’s then-current workforce by approximately 40 % or 180 positions globally.

The Restructuring Plan included a reduction of the Company’s then-current workforce by approximately 40 % or 180 positions globally.

Costs associated with the Restructuring Plan consist of employee severance payments, employee benefits and share-based compensation.

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The Restructuring Plan was substantially complete as of December 31, 2023.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

FAIR VALUE MEASUREMENT

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Money market funds 21,334 $ — $ —

Other non-current assets

Derivative $ — $ — $ 4,786

Total assets $ 61,254 $ — $ —

Other current liabilities

Contingent holdback consideration

$ — $ — $ 4,076

Contingent acquisition liabilities

Contingent acquisition liabilities (Current)

Contingent earnout consideration $ — $ — $ 4,400

$ — $ — $ 286,898

Contingent acquisition liabilities (Non-current)

Contingent earnout consideration $ — $ — $ 129,227

Total liabilities $ — $ — $ 133,627

5 unchanged sentences

Total assets $ 169,837 $ — $ —

Other current liabilities

Contingent holdback consideration

$ — $ — $ 4,076

Contingent acquisition liabilities

Contingent earnout consideration

$ — $ — $ 286,898

Total liabilities $ — $ — $ 290,974

Equity Line of Credit

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Equity Line of Credit

January 1, 2022 $ —

Issuance of ELOC 1,075

December 31, 2022 1,075

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The fair value of the liability then is remeasured as of the settlement date equal to the difference between the volume weighted average price at a 3 % discount compared to the fair value of the common stock.

Derivative Liability (SNAP June 2020 Note)

To determine the fair value of the embedded derivative associated with the SNAP June 2020 Note, the Company utilized the income approach model using the With and Without method.

Using the With and Without method, the Company modeled expected cash flows to the noteholder under Next Equity Financing, Change in Control, SPAC/Private Investment in Public Equity, and IPO scenarios.

The value of the embedded derivative was determined as the differential value from the perspective of the With and Without Method.

The Company utilized the following assumptions at the valuation date:

December 31, 2021

Probability of Next Equity Financing 3 %

Probability of SPAC/PIPE 95 %

Probability of IPO 2 %

Weighted average term (years) 0.27

Weighted average discount rate 25 %

The significant unobservable inputs used in the fair value measurement of the derivative liability are the remaining expected term, the discount rate, and the probability of financing for each scenario.

Significant increases (decreases) in

SOUNDHOUND AI, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

the term would result in significantly lower (higher) fair value measurements.

Significant increases (decreases) in the discount rate would result in significantly lower (higher) fair value measurements.

On April 26, 2022, the Closing of the Business Combination, the embedded derivative was valued at fair value which was equivalent to its intrinsic value.

The embedded derivative had a fair value of $ 4.1 million.

As the Closing of the Business Combination triggered the Conversion Feature contained within the SNAP June 2020 Note, therefore converting the note’s principal to equity, the embedded derivative associated with the note was extinguished.

The Company recorded the remeasurement of derivative liabilities in other expense, net on the consolidated statements of operations and comprehensive loss.

The fair value of the embedded derivative was recorded as additional paid-in capital upon extinguishment on the consolidated balance sheet.

The following table summarizes the fair value remeasurement of the embedded derivative for the year ended December 31, 2022 (in thousands):

Year Ended December 31,

Remeasurement of conversion feature — loss $ ( 606 )

The following table sets forth a summary of changes in fair value of the Company’s derivative liability and warrant liability for which fair value was determined by Level 3 inputs:

Derivative Liability Warrant Liability

Balance as of December 31, 2021 $ 3,488 $ —

Change in fair value $ 606 $ —

Extinguishment of embedded derivative upon conversion of convertible note $ ( 4,094 ) $ —

Balance as of December 31, 2022 $ — $ —

Term Loan and Term Loan Warrant

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Escrow Consideration

The reconciliation of the Company's derivative measured at fair value on a recurring basis using unobservable inputs (Level 3) is as follows:

Balance as of December 31, 2024 $ 110

Change in the fair value of derivative 4,676

Balance as of December 31, 2025 $ 4,786

The Company accounted for the Escrow Consideration under Amelia acquisition as equity-classified shares issued as part of the consideration transferred.

Upon the settlement of any valid indemnification claims against the selling shareholders, the escrow agent will return a number of shares to the Company equal to the dollar value of the indemnified loss divided by the reference price of $ 5.35 as stipulated in the purchase agreement.

The Company concluded that this variability in settlement value is a derivative that is required to be remeasured to fair value due to changes in stock price.

During the year ended December 31, 2025, the Company recognized a gain of $ 4.7 million related to the change in fair value of derivative under other income in the consolidated statement of operations and comprehensive loss.

Contingent Acquisition Liabilities

Contingent Holdback Consideration

The reconciliation of the Company's Contingent Holdback Consideration measured at fair value, including the effect of measurement period adjustments, on a recurring basis using unobservable inputs (Level 3) is as follows:

The reconciliation of the Company's Contingent SYNQ3 Holdback Consideration measured at fair value, including the effect of measurement period adjustments, on a recurring basis using unobservable inputs (Level 3) is as follows:

Balance as of December 31, 2023 $ —

4 unchanged sentences

Balance as of December 31, 2024 4,076

Change in the fair value of liability 44

Settlement ( 4,120 )

Balance as of December 31, 2025 —

The fair value of the cash portion of the Contingent Holdback Consideration was estimated based upon the holdback period of 15 months, and discounted using the risk-free interest rate based on the U.S.

Treasury zero-coupon yield curve on the valuation date for a maturity similar to the 15 -month holdback period.

The fair value of the equity portion of the Contingent Holdback Consideration was estimated based upon the value of the Company’s Class A Common Stock price.

The fair value of the Contingent Holdback Consideration was initially measured on January 3, 2024, the date on which the Company completed the acquisition of SYNQ3.

For the year ended December 31, 2024, the Company recognized a loss of $ 3.7 million related to the Contingent Holdback Consideration.

The fair value of the equity portion of the Contingent SYNQ3 Holdback Consideration was estimated based upon the value of the Company’s Class A Common Stock price.

The fair value of the Contingent SYNQ3 Holdback Consideration was initially measured on January 3, 2024, the date on which the Company completed the acquisition of SYNQ3.

For the years ended December 31, 2025 and 2024, the Company recognized a loss of less than $ 0.1 million and a loss of $ 3.7 million related to the Contingent SYNQ3 Holdback Consideration, respectively.

The fair value of the Contingent Holdback Consideration has been estimated as of the Closing Date and December 31, 2024 under the following assumptions:

SOUNDHOUND AI, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

January 3, 2024 December 31, 2024

Risk-free interest rate 4.6 % 4.0 %

Holdback period

1.25 years 0.25 years

Holdback period 1.25 years 0.25 years

Contingent Earnout Consideration

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Balance as of December 31, 2024 286,898

*The Company's year-end stock price increase resulted in an increase in its fair value of contingent acquisition liabilities where future Contingent Earnout Consideration is marked-to-market on a quarterly basis, significantly impacting net loss and net loss per share during the year ended December 31, 2024.

Acquisition of Interactions 9,900

Change in the fair value of liability* ( 163,171 )

Balance as of December 31, 2025 133,627

*Changes in the Company's year-end stock price resulted in adjustments to the fair value of contingent acquisition liabilities where future Contingent Earnout Consideration is marked-to-market on a quarterly basis, significantly impacting net loss and net loss per share during the years ended December 31, 2025 and 2024.

The fluctuation is non-operating and non-cash in nature.

For the year ended December 31, 2024, the Company recognized a loss of $ 219.0 million related to the contingent earnout consideration, reflected in the change in fair value of contingent acquisition liabilities in the consolidated statement of operations and comprehensive loss.

SOUNDHOUND AI, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

For the years ended December 31, 2025 and 2024, the Company recognized a gain of $ 163.2 million and a loss of $ 219.0 million related to the contingent earnout consideration, respectively, reflected in the change in fair value of contingent acquisition liabilities in the consolidated statement of operations and comprehensive loss.

The Company utilizes a Monte Carlo simulation to value the contingent earnout consideration.

6 unchanged sentences

The dividend rate is based on the historical rate, which the Company anticipates to remain at zero .

The fair value of the Contingent SYNQ3 Earnout Consideration acquired from SYNQ3 Acquisition has been estimated as of the Closing Date and December 31, 2024, with the following assumptions for the unobservable inputs:

January 3, 2024 December 31, 2024

The fair value of the Contingent SYNQ3 Earnout Consideration acquired from the SYNQ3 Acquisition has been estimated as of the Closing Date, December 31, 2024, and December 31, 2025, with the following assumptions for the unobservable inputs:

January 3, 2024 December 31, 2024 December 31, 2025

Discount rate 12.6 % 12.9 % 13.1 %

12.6 % 12.9 %

Expected stock price volatility 115.3 % 130.0 % 115.0 %

115.3 % 130.0 %

Risk-free interest rate 4.2 % 4.2 % 3.5 %

Expected dividend yield 0.0 % 0.0 % 0.0 %

Expected life

0.5 - 2.5 years

Expected life 0.5 - 2.5 years

0.50 - 1.50 years

The fair value of the Contingent Amelia Earnout Consideration acquired from Amelia Acquisition has been estimated as of the Closing Date and December 31, 2024, with the following assumptions for the unobservable inputs:

August 6, 2024 December 31, 2024

SOUNDHOUND AI, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The fair value of the Contingent Amelia Earnout Consideration acquired from the Amelia Acquisition has been estimated as of the Closing Date, December 31, 2024, and December 31, 2025, with the following assumptions for the unobservable inputs:

August 6, 2024 December 31, 2024 December 31, 2025

Metric specific discount rate 8.0 % 9.5 % 8.5 %

7 unchanged sentences

1.0 - 2.0 years

The fair value of the Contingent Interactions Earnout Consideration acquired from the Interactions Acquisition has been estimated as of the Closing Date and December 31, 2025, with the following assumptions for the unobservable inputs:

September 3, 2025 December 31, 2025

Metric specific discount rate 8.0 % 8.0 %

Risk-free interest rate for target revenue 3.5 % 3.4 %

Expected metric volatility 15.0 % 20.0 %

Earnout payment discount rate 6.8 % 6.2 %

Expected life 1.3 - 2.3 years

1.0 - 2.0 years

There were no transfers of financial instruments between Level 1, Level 2 and Level 3 during the years ended December 31, 2025 and 2024.

PREFERRED STOCK

Legacy SoundHound Preferred Stock

Legacy SoundHound Preferred Stock was not mandatorily redeemable.

Legacy SoundHound Preferred Stock was contingently redeemable upon a deemed liquidation event which the Company determined was not solely within its control as the Company determined that a deemed liquidation event can only occur with the approval of the board of directors and the preferred shareholders maintained control of the board of directors as of December 31, 2021 and through April 26, 2022, the effective date of the Business Combination, and thus has classified shares of Legacy SoundHound Preferred Stock as temporary equity.

Since the occurrence of a deemed liquidation event was not

SOUNDHOUND AI, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

probable, the carrying values of the shares of legacy SoundHound Preferred Stock were not being accreted to their redemption values.

A summary of the Legacy SoundHound Preferred Stock authorized, issued and outstanding as of the date of the Business Combination is as follows:

Shares Authorized Shares Issued Liquidation Preference Carrying Value

Series A 19,106,048 19,106,048 $ 28,239 $ 4,967

Series B 33,702,134 33,702,134 66,360 11,038

Series C 5,687,525 5,687,525 38,163 11,837

Series C-1 4,436,090 4,436,090 89,298 16,061

Series D 20,258,299 20,258,299 527,992 85,648

Series D-1 8,418,535 8,418,535 277,812 49,957

Series D-2 8,418,530 8,418,530 277,811 49,949

Series D-3 6,922,165 6,922,165 276,887 50,046

Series D-3A 20,835,869 — — —

127,785,195 106,949,326 $ 1,582,562 $ 279,503

Upon the closing of the Business Combination, the outstanding shares of Series A, B, C, C-1, D, D-1, D-2, and D-3 preferred stock were converted into 106,949,326 shares of SoundHound AI Class A Common Stock at the exchange ratio of 1-for-1.

Shares Authorized and Shares Issued above have been retroactively adjusted to reflect the exchange of 1 share of Legacy SoundHound stock into 5.5562 shares of the Company's Class A or Class B Common Stock.

As a result of the conversion of the Legacy SoundHound redeemable convertible preferred stock, the Company reclassified the amount of redeemable convertible preferred stock to additional paid in capital.

Upon the consummation of the Business Combination, the Company is authorized to issue 1,000,000 shares of preferred stock with a par value of $ 0.0001 per share.

The number of authorized shares of preferred stock may also be increased or decreased by the affirmative vote of the holders of a majority of the voting power of all the then-outstanding shares of capital stock of the Company entitled to vote thereon, without a separate vote of the holders of preferred stock.

Any new series of preferred stock may be designated, fixed and determined as provided by the Board without approval of the holders of common stock or preferred stock and the preferred stock holders may be granted such rights, powers (including voting powers) and preferences as determined by the Board in its sole discretion, including the right to elect one or more directors.

Series A Preferred Stock

Between January 18, 2023 and January 20, 2023, the Company entered into Preferred Stock Purchase Agreements (the “Purchase Agreements”) with certain investors (the “Investors”), pursuant to which the Company issued and sold to the Investors an aggregate of 835,011 shares of its newly designated Series A Convertible Preferred Stock for issuance price of $ 30.00 per share, raising an aggregate of approximately $ 25.0 million in cash proceeds.

As of December 31, 2024, all the Series A Preferred Stock have been converted to Class A Common Stock.

As of December 31, 2025 and December 31, 2024, all the Series A Preferred Stock have been converted to Class A Common Stock.

Liquidation Preference

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On January 1, 2024, the Company's Series A Preferred Stock holders received their latest dividends paid-in-kind as an increase in Liquidation Preference, thereby increasing the Liquidation Preference per share to approximately $ 34.13 .

The Series A Preferred Stock is not mandatorily redeemable.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The Series A Preferred Stock is not mandatorily redeemable.

Each share of Series A Preferred Stock is convertible, at the option of the holder, into such number of shares of Class A Common Stock equal to the Liquidation Preference per share at the time of conversion divided by $ 1.00 (the “Conversion Price”).

In addition, each share of Series A Preferred Stock will automatically convert into shares of Class A Common Stock at the Conversion Price on or after January 20, 2024 if and when the daily volume-weighted average closing price per share of Class A Common Stock is at least 2.5 times the Conversion Price for each of any 90 trading days during any 120 consecutive trading day period, which 120 -trading day period may commence (but may not end) prior to January 20, 2024.

During the year ended December 31, 2024, the condition of automatic conversion was met and all the remaining Series A Preferred Stock were automatically converted.

As of December 31, 2024, the condition of automatic conversion was met and all the remaining Series A Preferred Stock were automatically converted.

During the year ended December 31, 2024, 475,005 shares of preferred stock were converted into 16,624,215 shares of Class A Common Stock.

The conversion was pursuant to the original terms of the agreement and therefore the carrying value of Series A Preferred Stock was converted into Class A Common Stock with no gain or loss upon conversion.

During the year ended December 31, 2023, some Investors optionally converted 353,338 shares of preferred stock into 11,375,090 shares of Class A Common Stock.

There were no conversions during the year ended December 31, 2025.

Voting Rights

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However, as long as the Series A Preferred Stock are outstanding, the Company may not take certain actions that may materially and adversely impact the powers, preferences, or rights of the Investors without the consent of at least a majority of the Investors.

The Company had 250,030,433 shares of Legacy SoundHound common stock authorized for issuance prior to the closing of the Business Combination.

On April 26, 2022, following the Business Combination and pursuant to the Company’s certificate of incorporation, the Company is authorized to issue 500,000,000 shares of capital stock, consisting of (a) 455,000,000 shares of Class A Common Stock with a par value of $ 0.0001 per share, (b) 44,000,000 shares of Class B Common Stock with a par value of $ 0.0001 per share, and (c) 1,000,000 shares of preferred stock with a par value of $ 0.0001 per share.

At the 2025 Annual Meeting of Stockholders held on May 23, 2025, the Company’s stockholders approved to increase the number of authorized shares of Class A Common Stock from 455,000,000 to 755,000,000 .

As of December 31, 2025, the Company is authorized to issue 800,000,000 shares of capital stock, consisting of (a) 755,000,000 shares of Class A Common Stock with a par value of $ 0.0001 per share, (b) 44,000,000 shares of Class B Common Stock with a par value of $ 0.0001 per share, and (c) 1,000,000 shares of preferred stock with a par value of $ 0.0001 per share.

The outstanding shares of the Company’s common stock are fully paid and non-assessable.

As a result of the Business Combination, 73,561,334 shares of Legacy SoundHound common stock, along with 106,949,326 shares of Legacy SoundHound preferred stock, were converted into 180,510,660 shares of the Company’s common stock, consisting of 140,114,060 shares of Class A Common Stock and 40,396,600 shares of the Company’s Class B Common Stock.

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

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

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

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

Each share of Class B Common Stock shall convert into one fully paid and nonassessable share of Class A Common Stock upon mandatory or optional conversion.

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The conversion of Class B Common Stock to Class A Common Stock will have the effect, over time, of increasing the relative voting power of those holders of Class B Common Stock who retain their shares in the long term.

As a result, it is possible that one or more of the persons or entities

SOUNDHOUND AI, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

holding our Class B Common Stock could gain significant voting control as other holders of Class B Common Stock sell or otherwise convert their shares into Class A Common Stock.

During the years ended December 31, 2024 and December 31, 2023, certain holders of Class B Common Stock optionally converted 4,950,000.00 and 2,250,000.00 shares, respectively, of Class B Common Stock into the same number of shares of Class A Common Stock.

As a result, it is possible that one or more of the persons or entities holding our Class B Common Stock could gain significant voting control as other holders of Class B Common Stock sell or otherwise convert their shares into Class A Common Stock.

During the year ended December 31, 2024, certain holders of Class B Common Stock optionally converted 4,950,000 shares of Class B Common Stock into the same number of shares of Class A Common Stock.

There was no conversion of Class B Common Stock during the year ended December 31, 2025.

Equity Line of Credit ("ELOC")

On August 16, 2022, the Company entered into a common stock purchase agreement (“Common Stock Purchase Agreement”) and related registration rights agreement (the “CFPI Registration Rights Agreement”) with CF Principal Investments LLC (the “Counterparty”).

Pursuant to the Common Stock Purchase Agreement, the Company had the right, but not the obligation, to direct the Counterparty to purchase up to 25,000,000 shares of Class A Common Stock, subject to certain limitations and conditions (the "ELOC Program") at a purchase price equal to 97 % of the volume weighted average stock price for a given purchase date.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

weighted average stock price for a given purchase date.

In connection with the execution of the Common Stock Purchase Agreement and the side letter on February 14, 2023, the Company issued 250,000 shares of Common Stock (the “Initial Commitment Shares”) and additional cash commitment fee of $ 0.3 million.

The Company recorded Common Stock Purchase Agreement as a derivative liability with an initial fair value of $ 1.1 million based on the upfront commitment fee in the form of proceeds from future issuance of commitment shares to the Counterparty plus certain fees and expenses as specified in the Purchase Agreement.

The Company recorded losses on changes in the fair value of the derivative liability associated with the ELOC Program of $ 1.9 million and $ 1.1 million respectively, for the years ended December 31, 2023 and 2022 as other income (expense), net on its consolidated statements of operations and comprehensive loss.

The Company recorded losses on changes in the fair value of the derivative liability associated with the ELOC Program of $ 1.9 million for the year ended December 31, 2023 as other income, net on its consolidated statements of operations and comprehensive loss.

The Company incurred third-party costs of $ 0.2 million related to the execution of the Common Stock Purchase Agreement which were recorded as general and administrative expenses in the consolidated statements of operations and comprehensive loss for the year ended December 31, 2023.

4 unchanged sentences

Davidson & Co.

(each a “Sales Agent” and collectively, the “Sales Agents”), pursuant to which the Company was able to offer and sell up to $ 150.0 million of shares of our Class A Common Stock from time to time through or to the Sales Agents acting as agent or principal.

(each a “Sales Agent” and collectively, the “Sales Agents”), pursuant to which the Company may offer and sell up to $ 150.0 million of shares of our Class A Common Stock from time to time through or to the Sales Agents acting as agent or principal.

Sales of our Class A Common Stock under the Sales Agreement were made at market prices by any method that is deemed to be an “at the market offering” as defined in Rule 415 under the Securities Act.

The Sales Agents were entitled to aggregate compensation at a fixed commission rate of 2.5 % of the gross sales price per share sold under the Sales Agreement.

We agreed to reimburse the Sales Agents for certain specified expenses, including the reasonable and documented fees and disbursements of its legal counsel in an amount of $ 75 thousand in the aggregate in connection with the execution of the Sales Agreement.

During the year ended December 31, 2024, the Company sold 37,907,219 shares of our Class A common stock under the Sales Agreement, at a weighted-average price of $ 3.62 per share and raised $ 137.3 million of gross proceeds, which resulted in complete utilization of the Sales Agreement.

We also agreed to reimburse the Sales Agents for certain specified expenses, including the reasonable and documented fees and disbursements of its legal counsel in an amount of $ 0.1 million in the aggregate in connection with the execution of the Sales Agreement.

As of December 31, 2024, the Company sold 37,907,219 shares of our Class A common stock under the Sales Agreement, at a weighted-average price of $ 3.62 per share and raised $ 137.3 million of gross proceeds, which resulted in complete utilization of the Sales Agreement.

After deducting approximately $ 3.4 million of commissions and offering costs incurred by the Company, the net proceeds from sales of Class A common stock was $ 133.8 million.

During the year ended December 31, 2023, the Company sold 5,805,995 shares of our common stock under the Sales Agreement, at a weighted-average price of $ 2.19 per share and raised $ 12.7 million of gross proceeds.

The commissions and offering costs borne by the Company during the year were approximately $ 0.3 million.

SOUNDHOUND AI, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

As of December 31, 2024, the Company had no remaining capacity to sell the Company's Class A common stock under the Sales Agreement.

Equity Distribution Agreement

1 unchanged sentence

and Ladenburg Thalmann & Co.

(the “Managers”) with respect to an at-the-market equity program under which the Company was able to offer and sell up to $ 150.0 million of shares of its Class A Common Stock from time to time through the Managers.

(the “Managers”) with respect to an at-the-market equity program.

Under this program, the Company was able to offer and sell up to $ 150.0 million of shares of its Class A Common Stock from time to time through the Managers.

Sales of Class A Common Stock under the Equity Distribution Agreement will be made at market prices by any method that is deemed to be an “at the market offering” as defined in Rule 415 under the Securities Act.

3 unchanged sentences

As of December 31, 2024, the Company had no remaining capacity to sell the Company's Class A common stock under the Equity Distribution Agreement.

SOUNDHOUND AI, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Execute Equity Distribution Agreement

1 unchanged sentence

Davidson & Co., H.C.

Wainwright & Co., LLC, and Joseph Gunnar & Co., LLC, (each, an “Agent,” and, collectively, the “Agents”) with respect to an at-the-market equity program under which the Company was able to offer and sell up to $ 120.0 million of shares of its Class A Common Stock from time to time through the Agents.

Wainwright & Co., LLC, and Joseph Gunnar & Co., LLC, (each, an “Agent,” and, collectively, the “Agents”) with respect to an at-the-market equity program.

Under this program, the Company was able to offer and sell up to $ 120.0 million of shares of its Class A Common Stock from time to time through the Agents.

Sales of Class A Common Stock under the Execute Equity Distribution Agreement were made at market prices by any method that is deemed to be an “at the market offering” as defined in Rule 415 under the Securities Act.

3 unchanged sentences

As of December 31, 2024, the Company had no remaining capacity to sell the Company's Class A common stock under the Execute Equity Distribution Agreement.

Second Equity Distribution Agreement

On January 24, 2025, the Company entered into the Second Equity Distribution Agreement with Cantor Fitzgerald & Co., Guggenheim Securities, LLC, Oppenheimer & Co.

Inc., Wedbush Securities Inc., Ladenburg Thalmann & Co.

and Northland Securities, Inc.

(each, an “Sales Manager,” and, collectively, the “Sales Managers”) with respect to an at-the-market equity program.

Under this program, the Company may offer and sell up to $ 250.0 million of shares of its Class A Common Stock from time to time through the Sales Managers.

Sales of our Class A Common Stock, if any, under the Second Equity Distribution Agreement will be made at market prices by any method that is deemed to be an “at the market offering” as defined in Rule 415 under the Securities Act.

The Sales Managers will be entitled to commission at a fixed rate of 2.0 % of the gross sales price per share for their services in acting as agent in the sale of the Company's Class A Common Stock.

During the year ended December 31, 2025, the Company sold 13,913,014 shares of its common stock under the Second Equity Distribution Agreement, at an average price of $ 14.48 per share and raised $ 201.5 million of gross proceeds, respectively.

The commissions and offering costs borne by us were approximately $ 4.0 million.

As of December 31, 2025, the Company had a remaining capacity to sell up to an additional $ 48.5 million of its common stock under the Second Equity Distribution Agreement.

STOCK INCENTIVE PLANS

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2022 Incentive Award Plan

The Company adopted the 2022 Incentive Award Plan (the “2022 Incentive Plan”), effective April 26, 2022.

The Company adopted the 2022 Incentive Award Plan (the “2022 Incentive Plan,” collectively, with the 2006 Plan and the 2016 Plan, the “Plans”), effective April 26, 2022.

The Company reserved 19,650,371 shares of Class A Common Stock for the issuance of awards under the 2022 Incentive Plan (“the Initial Limit”).

1 unchanged sentence

As of December 31, 2025, the Company had 9,967,757 shares remaining for issuance under the 2022 Incentive Plan.

2022 Employee Stock Purchase Plan

SOUNDHOUND AI, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

2022 Employee Stock Purchase Plan

The Company adopted the 2022 Employee Stock Purchase Plan (the “ESPP”) effective April 26, 2022, An aggregate of 3,930,074 shares of the Company’s Class A Common Stock has been reserved for issuance or transfer pursuant to rights granted under the ESPP (“Aggregate Number”).

10 unchanged sentences

The Company reserved 6,000,000 shares of Class A Common Stock for the issuance of awards under the 2024 Inducement Plan.

As of December 31, 2024 , 0 shares were issued under the 2024 Inducement Plan.

As of December 31, 2025 , 2,569,834 shares remaining for issuance under the 2024 Inducement Plan.

Stock Options Activity

4 unchanged sentences

Outstanding, December 31, 2022 25,420,425 $ 3.74 6.32 $ 1,448

Granted 391,619 6.17

Exercised ( 3,585,829 ) 2.37 5,207

12 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The weighted average grant date fair value per option granted was $ 3.11 during the year ended December 31, 2022.

There were no options granted during the years ended December 31, 2025, 2024, and 2023.

1 unchanged sentence

The Company recorded stock-based compensation expense related to options of $ 1.3 million, $ 3.0 million and $ 4.0 million for the years ended December 31, 2025, 2024 and 2023.

As of December 31, 2024, the total unrecognized stock-based compensation expense related to the unvested stock options was approximately $ 1.4 million, which we expect to recognize over a weighted-average period of 0.68 years.

As of December 31, 2025, the total unrecognized stock-based compensation expense related to the unvested stock options was less than $ 0.1 million, which we expect to recognize over a weighted-average period of 0.53 years.

For the purpose of determining the estimated fair value of share-based payment awards issued in the form of stock options, the Company uses the Black-Scholes option-pricing model.

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The Company assesses the probability of vesting of the above performance-based awards from the Retention Pool every reporting period.

As of December 31, 2024, performance level of 2024 revenue amount was not met and performance levels of 2025 and 2026 were probable of being met.

The Company also granted 1,952,000 RSUs that vest over a four-year requisite service period to SYNQ3 employees during the year ended December 31, 2024.

As of December 31, 2025, the 2024 performance target was not met, but the 2025 performance target was met.

The Company assessed the 2026 performance target as probable of being met.

The Company also granted 3,533,500 RSUs that vest over a four-year requisite service period to Amelia employees during the year ended December 31, 2025.

Additionally, the Company granted 10,045,389 RSUs to other employees of the Company during the year ended December 31, 2025.

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There were 50,000 Performance-Based RSUs granted during the year ended December 31, 2025.

The Company recorded $ 0.6 million, $ 1.5 million and $ 1.1 million in stock-based compensation expense related to Market-Based RSUs during the year ended December 31, 2024, 2023 and 2022, respectively.

As of December 31, 2024, the total unrecognized stock-based compensation expense related to the unvested Market-Based RSUs was approximately $ 10.7 thousand.

The Company recorded less than $ 0.1 million, $ 0.6 million and $ 1.5 million in stock-based compensation expense related to Market-Based RSUs during the year ended December 31, 2025, 2024 and 2023, respectively.

As of December 31, 2025, there was no unrecognized stock-based compensation expense related to the unvested Market-Based RSUs.

To derive the fair value of Market-Based RSUs, the Company applies a Monte Carlo simulation to determine the grant date fair value.

The assumptions under the Monte Carlo simulation model and the calculated fair value of the Market-Based RSUs granted to employees during the year ended December 31, 2022 were as follows.

The Company did not grant Market-Based RSUs during the years ended December 31, 2025, 2024, and 2023.

Expected volatility 52 %

Expected term (years) 4

Drift rate 2.9 %

During the years ended December 31, 2025, 2024 and 2023, the fair value of RSUs that vested was $ 66.1 million, $ 24.1 million, and $ 25.5 million.

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Restricted Stock Awards Activity

In connection with the SYNQ3 Acquisition, a total of 2,033,156 unvested restricted Class A Common Stock shares ("RSAs") were issued, 25 % of which are subject to service conditions that vest at the end of each of the upcoming three fiscal years in three tranches, and 75 % of which is subject to both service and performance-based vesting conditions in three tranches.

As of December 31, 2025, 465,349 RSAs were vested and 508,289 RSAs were forfeited as a result of the targets not met or not probable of being met.

The performance level for each of the fiscal years 2024, 2025 and 2026 is based on tiered annual revenue targets, subject to a floor of $ 9.0 million, $ 21.0 million and $ 30.0 million, respectively, with vesting ranging from 50 % to 100 % of the RSAs granted depending on the level of achievement of the specified revenue target in each year.

SOUNDHOUND AI, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

In connection with the SYNQ3 Acquisition, a total of 2,033,156 unvested restricted Class A Common Stock shares ("RSAs") were issued, 25 % of which are subject to service conditions that vest at the end of each of the upcoming three fiscal years in 3 tranches, and 75 % of which is subject to both service and performance-based vesting conditions in three tranches.

The Company assesses the probability of vesting of the above performance-based awards every reporting period.

As of December 31, 2024, the performance level of the 2024 revenue amount was not met and performance levels of 2025 and 2026 were probable of being met.

As of December 31, 2025, the 2024 performance target was not met, but the 2025 performance target was met.

The Company assessed the 2026 performance target as probable of being met.

The activity for unvested Restricted Stock Awards was as follows for the year ended December 31, 2025:

4 unchanged sentences

Unvested, December 31, 2024 1,863,726 1.98

The Company recorded stock-based compensation expense of $ 0.8 million related to RSAs during the year ended December 31, 2024.

Vested ( 295,919 ) 1.98

Forfeited ( 508,289 ) 1.98

Unvested, December 31, 2025 1,059,518 1.98

The Company recorded stock-based compensation expense of $ 5.7 million and $ 0.8 million related to RSAs during the years ended December 31, 2025 and 2024, respectively.

As of December 31, 2025, the total unrecognized stock-based compensation expense related to the unvested RSAs subject to service-based vesting condit ion and unvested RSAs subject to performance-based vesting condition was approximately $ 0.1 million and $ 0.3 million, r espectively, over a weighted average period of 1.00 years.

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Risk free interest rate 3.74 % 4.40 % 5.26 %

During the years ended December 31, 2024 and 2023, the Company reco rded $ 0.5 million and $ 0.4 million of stoc k-based compensation related to its ESPP.

There was $ 0.4 million of unrecognized stock-based compensation expense

SOUNDHOUND AI, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

for the year ended December 31, 2024, related to the ESPP that is expected to be recognized over an average vesting period of 0.36 years.

During the years ended December 31, 2025, 2024 and 2023, the Company reco rded $ 1.4 million, $ 0.5 million and $ 0.4 million of stoc k-based compensation related to its ESPP.

There was $ 0.6 million of unrecognized stock-based compensation expense for the year ended December 31, 2025, related to the ESPP that is expected to be recognized over an average vesting period of 0.36 years.

Equity Award Modifications

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Pursuant to these arrangements, these employees received acceleration of vesting of RSUs and extensions of the post-termination exercise period of stock option awards.

All award modifications related to restructuring activities were expensed in the year ended December 31, 2023.

All award modifications related

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

to restructuring activities were expensed in the year ended December 31, 2023.

The total incremental compensation cost resulting from these modifications is $ 3.2 million.

1 unchanged sentence

Stock-Based Compensation

The Company’s founders held 7,270,503 of Legacy SoundHound common stock pre-conversion prior to the Business Combination.

The founders exchanged their shares for Legacy SoundHound Class B common stock immediately prior to the closing of the business combination.

Upon the Business Combination, the founders exchanged their Legacy SoundHound Class B shares in exchange for 40,396,600 shares of Class B Common Stock according to the Conversion Ratio.

As the Class B Common Stock shares have ten votes per share, the exchange resulted in incremental stock-based compensation expense of $ 1.0 million which is included in general and administrative expenses on the consolidated statements of operations and comprehensive loss for the year ended December 31, 2022.

Stock-based compensation is classified in the following expense accounts on the consolidated statements of operations and comprehensive loss for the years ended December 31, 2025, 2024 and 2023 (in thousands):

1 unchanged sentence

2025 2024 2023

Cost of revenue $ 458 $ 412 $ 99

Cost of revenues $ 8,899 $ 458 $ 412

Sales and marketing 15,990 4,818 3,601

2 unchanged sentences

Restructuring costs — — 3,142

Capitalized software development costs ( 2,431 ) — —

Total $ 80,620 $ 33,145 $ 27,931

3 unchanged sentences

The finance leases are collateralized by the financed assets.

SOUNDHOUND AI, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Aggregate non-cancelable future minimum lease payments under operating and finance leases were as follows as of December 31, 2025 (in thousands):

7 unchanged sentences

current portion ( 1,812 ) ( 332 )

immaterial difference $ 18 $ —

Lease liabilities, net of current portion $ 2,069 $ 146

SOUNDHOUND AI, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The components of lease cost were as follows during the years ended December 31, 2025, 2024 and 2023 (in thousands):

11 unchanged sentences

The Company’s rent expense totaled approximately $ 4.0 million, $ 4.5 million and $ 5.3 million during the years ended December 31, 2025, 2024 and 2023, respectively.

SOUNDHOUND AI, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

OTHER INCOME (EXPENSE), NET

Other income (expense), net on the consolidated statements of operations and comprehensive loss is comprised of the following for the years ended December 31, 2024, 2023 and 2022 (in thousands):

OTHER INCOME, NET

Other income, net on the consolidated statements of operations and comprehensive loss is comprised of the following for the years ended December 31, 2025, 2024 and 2023 (in thousands):

Year Ended December 31,

2025 2024 2023

Other income (expense), net:

Other income, net:

Interest income $ 9,799 $ 8,370 $ 2,866

Change in fair value of derivative and warrant liability — — ( 606 )

Change in fair value of derivative 4,676 — —

Loss on change in fair value of ELOC program — — ( 1,901 )

1 unchanged sentence

Other income (expense), net 193 ( 371 ) 190

Total other income (expense), net $ 9,222 $ 1,155 $ ( 1,259 )

Total other income, net $ 14,668 $ 9,222 $ 1,155

SOUNDHOUND AI, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NET LOSS PER SHARE

2 unchanged sentences

2025 2024 2023

Net loss (in thousands) $ ( 350,681 ) $ ( 88,937 ) $ ( 116,713 )

Net loss $ ( 14,006 ) $ ( 350,681 ) $ ( 88,937 )

Cumulative dividends attributable to Series A Preferred Stock — ( 416 ) ( 2,774 )

Net loss attributable to SoundHound common shareholders (in thousands) ( 351,097 ) ( 91,711 ) ( 116,713 )

Weighted average shares outstanding – basic and dilutive 338,462,574 229,264,904 157,317,695

Basic and diluted net loss per share $ ( 1.04 ) $ ( 0.40 ) $ ( 0.74 )

Net loss attributable to common stockholders - basic $ ( 14,006 ) $ ( 351,097 ) $ ( 91,711 )

Net loss $ ( 14,006 ) $ ( 350,681 ) $ ( 88,937 )

Effect of potentially dilutive equivalent shares to net loss ( 99,512 ) — —

Cumulative dividends attributable to Series A Preferred Stock — ( 416 ) ( 2,774 )

Net loss attributable to common stockholders - diluted $ ( 113,518 ) $ ( 351,097 ) $ ( 91,711 )

Weighted average shares outstanding – basic 405,421,412 338,462,574 229,264,904

Effect of potentially dilutive equivalent shares 4,034,930 — —

Weighted average shares outstanding – diluted 409,456,342 338,462,574 229,264,904

Basic net loss per share $ ( 0.03 ) $ ( 1.04 ) $ ( 0.40 )

Diluted net loss per share $ ( 0.28 ) $ ( 1.04 ) $ ( 0.40 )

For the years ended December 31, 2024 and 2023, the diluted net loss per share is equal to the basic earnings per share as the effect of potentially dilutive securities would have been antidilutive.

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Stock-based awards 20,336,025 24,918,197 33,484,074

Unvested restricted share awards 551,229 338,859 —

Common stock warrants 3,654,115 3,663,955 6,967,532

Contingently issuable shares 119,096 — —

Series A Preferred Stock — — 16,226,645

Unvested restricted share awards 338,859 — —

Total 24,660,465 28,921,011 56,678,251

SOUNDHOUND AI, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The table above does not include:

(i) 4,342,570 , zero , and zero shares of unvested stock-based awards and restricted stock awards, respectively, and (ii) 18,257,365 .

zero and zero shares of contingently issuable earnout shares, respectively;

(i) 1,755,078 , 4,342,570 , and zero shares of unvested stock-based awards and restricted stock awards, respectively, and (ii) 6,085,802 , 18,257,365 and zero shares of contingently issuable earnout shares, respectively;

outstanding as of December 31, 2025, 2024 and 2023, as these awards are subject to performance conditions that were not met as of those dates.

The table also excludes 274,191 , zero , and zero shares associated with the Contingent Holdback Consideration in connection with the SYNQ3 Acquisition, respectively, as these shares are subject to contingencies that were not met as of December 31, 2024, 2023 and 2022.

The table also excludes 274,191 and zero shares associated with the Contingent SYNQ3 Holdback Consideration in connection with the SYNQ3 Acquisition, respectively, as these shares are subject to contingencies that were not met as of December 31, 2024 and 2023.

SOUNDHOUND AI, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The shares issued and held in escrow for the Amelia Acquisition 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 weighted average shares outstanding used to calculate basic and diluted net income per share attributable to common stockholders excludes the 2,149,530 shares of the Company's Class A Common Stock held in escrow as they are considered contingently returnable shares until the indemnifications subject to escrow have been resolved.

The following is a geographical breakdown of income (loss) before income taxes:

The weighted average shares outstanding used to calculate basic net loss per share attributable to common stockholders for the years ended December 31, 2025 and 2024 excludes the 1,918,969 and 2,149,530 shares, respectively, of the Company's Class A Common Stock held in escrow as they are considered contingently returnable shares until the indemnifications subject to escrow have been resolved.

The following is a geographical breakdown of income (loss) before income taxes (in thousands):

Year Ended December 31,

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$ ( 9,274 ) $ ( 359,928 ) $ ( 85,023 )

The provision (benefit) for income taxes consisted of the following:

The provision (benefit) for income taxes consisted of the following (in thousands):

Year Ended December 31,

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Total provision (benefit) for income taxes $ 4,732 $ ( 9,247 ) $ 3,914

Effective income tax expense rate 2.6 % ( 4.6 ) % ( 2.5 ) %

Effective tax rate ( 51.0 ) % 2.6 % ( 4.6 ) %

The Company has incurred net pre-tax losses in the United States only for all periods presented.

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The 2023 and 2025 tax expense relates to withholding tax paid for sales to customers in foreign jurisdictions and income tax related to foreign subsidiaries.

The following table is a reconciliation of the U.S.

federal statutory tax rate of 21% to the Company’s effective tax rate and the provision for (benefit from) income taxes for the years ended December 31, 2025, 2024, and 2023 after adoption of ASU 2023-09 (in thousands):

SOUNDHOUND AI, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The provision (benefit) for income taxes differed from the amount computed by applying the federal statutory rate to our income before income taxes as follows:

Year Ended December 31,

2025 2024 2023

Federal statutory income tax rate 21.0 % 21.0 % 21.0 %

Tax provision at statutory rate $ ( 75,585 ) $ ( 17,855 ) $ ( 23,903 )

State income tax rate 2 3 7

Benefits from acquisition ( 12,189 ) — —

Foreign withholding and income tax 2,561 3,689 2,298

Foreign rate differential ( 338 ) ( 136 ) ( 115 )

Research and development credits ( 4,888 ) ( 2,105 ) ( 1,731 )

Change in valuation allowance 39,083 18,604 24,272

Total % Total % Total %

Tax at the U.S.

federal statutory rate ( 1,948 ) 21.0 % ( 75,585 ) 21.0 % ( 17,855 ) 21.0 %

State and local income taxes, net of federal income tax effects — — % 2 — % 3 — %

Foreign tax effects:

Withholding tax 1,600 ( 17.3 ) % 1,851 ( 0.5 ) % 3,689 ( 4.3 ) %

Other ( 4 ) — % ( 4 ) — % ( 7 ) — %

Other 485 ( 5.2 ) % ( 84 ) — % ( 21 ) — %

Withholding tax 1,121 ( 12.1 ) % 501 ( 0.1 ) % — — %

Other ( 62 ) 0.7 % ( 1 ) — % — — %

Unrealized FX gain/loss 565 ( 6.1 ) % — — % — — %

Other ( 308 ) 3.3 % ( 24 ) — % — — %

Other foreign jurisdictions 81 ( 0.9 ) % ( 16 ) — % ( 108 ) 0.1 %

Research & development tax credits ( 4,061 ) 43.8 % ( 4,881 ) 1.4 % ( 2,302 ) 2.7 %

Changes in valuation allowance 43,550 ( 469.6 ) % 39,083 ( 10.9 ) % 18,604 ( 21.9 ) %

Nontaxable or nondeductible items:

Stock based compensation ( 12,233 ) 131.9 % ( 15,224 ) 4.2 % 2,289 ( 2.7 ) %

Permanent book tax differences* 1,180 246 751

162(m) disallowance 8,461 ( 91.2 ) % 9,457 ( 2.6 ) % 270 ( 0.3 ) %

Change in fair value of contingent acquisition liabilities ( 34,257 ) 369.4 % 46,761 ( 13.0 ) % — — %

Other deferred adjustments ( 67 ) ( 1,701 ) —

Withholding tax deduction ( 348 ) 3.8 % ( 441 ) 0.1 % ( 775 ) 0.9 %

Transaction costs 590 ( 6.4 ) % 1,451 ( 0.4 ) % ( 733 ) 0.9 %

Remeasurement gain/loss ( 968 ) 10.4 % 11 — % — — %

Other 80 ( 0.9 ) % 159 — % 799 ( 0.9 ) %

$ ( 9,247 ) $ 3,914 $ 2,889

*The 2023 amounts have been conformed to the 2024 presentation.

Changes in unrecognized tax benefits 8 ( 0.1 ) % ( 7 ) — % 197 ( 0.2 ) %

Other adjustments:

Acquisition 2,158 ( 23.3 ) % ( 12,189 ) 3.4 % — — %

Other deferred adjustments 222 ( 2.4 ) % ( 67 ) — % ( 136 ) 0.2 %

Effective tax rate $ 4,732 ( 51.0 ) % $ ( 9,247 ) 2.6 % $ 3,914 ( 4.6 ) %

SOUNDHOUND AI, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The components of our deferred tax assets and liabilities were as follows:

The components of our deferred tax assets and liabilities were as follows (in thousands):

Year Ended December 31,

4 unchanged sentences

Deferred revenue 4,873 5,260

Intangible assets* — 4

Interest expense 3,485 5,484

11 unchanged sentences

Net deferred tax assets $ ( 1,334 ) $ 4

*The 2023 amounts have been conformed to the 2024 presentation.

Based on available objective evidence, management believes it is more-likely-than-not that the domestic federal and state deferred tax assets;

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federal and $ 379.7 million of state net operating loss carryforwards available to reduce future taxable income.

The federal and state net operating loss carryforwards will start to expire in 2025 and 2028, respectively, with the exception of $ 403.3 million federal net operating loss carryforwards and $ 11.0 million state net operating loss carryforwards, which can be carried forward indefinitely.

The federal and state net operating loss carryforwards will start to expire in 2026 with the exception of $ 691.0 million federal net operating loss carryforwards and $ 18.5 million state net operating loss carryforwards, which can be carried forward indefinitely.

The Company had federal and state research and development credit carryforwards of $ 27.2 million and $ 15.4 million, respectively, as of December 31, 2025.

2 unchanged sentences

The Company also had Canadian SR&ED tax credits of $ 1.9 million, which will expire starting in 2039 if not utilized.

SOUNDHOUND AI, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Under Sections 382 and 383 of the Internal Revenue Code of 1986 and similar state tax laws, utilization of net operating loss carryforwards and tax credits may be subject to annual limitations due to certain ownership changes.

The Company’s net operating loss carryforwards and tax credits could expire before utilization if subject to annual limitations.

SOUNDHOUND AI, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The Company files U.S.

9 unchanged sentences

Increase for tax positions of prior years

Decrease for tax positions of prior years ( 4 )

Increase for tax positions of current year 2,784

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As of December 31, 2025, the Company has accrued $ 0.1 million interest and penalties related to unrecognized tax benefits.

The Company does not anticipate any significant change in the Company’s uncertain tax positions within 12 months of this date.

On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted in the United States.

Included in this legislation are provisions that allow for the immediate expensing of domestic United States research and development expenses and acceleration of tax deductions for qualified capital expenditures acquired and placed into service after January 19, 2025, and other changes to the U.S.

taxation of profits derived from foreign operations.

The legislation has multiple effective dates, with various effective dates between 2025 and 2027.

The Company evaluated the OBBBA and included its impact within our consolidated financial statements.

The Company will continue to assess the full impact of these legislative changes as additional guidance becomes available.

The amount of cash paid for income taxes, net of refunds, is as follows (in thousands):

SOUNDHOUND AI, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Year Ended December 31,

2025 2024 2023

federal $ — $ — $ —

State and local — 15 3

South Korea $ 2,262 $ 1,628 $ 1,694

Peru 712 523 —

Netherlands 687 — —

Germany * * 404

India * 332 —

France * * 226

Japan — 140 *

Other 709 79 29

Total foreign $ 4,370 $ 2,702 $ 2,353

Total income taxes paid, net of refunds $ 4,370 $ 2,717 $ 2,356

*Income taxes paid, net of refunds do not meet the disaggregation threshold in years 2025, 2024 and 2023.

Such amounts are not presented as comparative disclosures because such disclosures are not required.

RELATED PARTY TRANSACTIONS

The Company entered into revenue contracts to perform professional services for certain companies who are also investors in the Company.

As of June 30, 2022, these entities are no longer related parties.

Below we provide our disclosures for transactions with the companies through June 30, 2022.

During the year ended December 31, 2022, we recognized revenue from the companies of $ 5.2 million.

On January 20, 2023, our Chief Financial Officer and one of our directors each entered into Purchase Agreements, purchasing 3,334 shares of Series A Preferred Stock each for a total purchase price of $ 100,000 each.

On January 24, 2025, the Company entered into an Equity Distribution Agreement with Guggenheim Securities, LLC and other Sales Managers with respect to an at-the-market equity program.

Under this program, the Company may offer and sell up to $ 250.0 million of shares of its Class A Common Stock from time to time through the Sales Managers.

Refer to Note 14 to the consolidated financial statements for more information.

The brother of one of our Board of Directors is a Senior Advisor to Guggenheim Securities, LLC and a member of the Guggenheim Securities investment banking team.

Our board member did not participate in the Company’s decision to engage Guggenheim Securities, LLC to sell the Company's Class A Common Stock under at-the-market equity program and disclosed the fact that his brother would be involved in the services to be provided by Guggenheim Securities, LLC to the Company in advance of the determination by the Company to engage Guggenheim Securities, LLC.

During the year ended December 31, 2025, the Company paid commissions of $ 0.4 million to Guggenheim Securities, LLC for the Class A Common Stock sold through it as a Sales Manager.

SEGMENT INFORMATION

3 unchanged sentences

The CODM compares net loss from budget to actual result to assess segment performance and adjust resource allocations as necessary.

In accordance with the adoption of ASU 2023-07 in 2024, the Company determined to disclose personnel costs which requires retrospective application to all prior periods presented in the financial statements.

The personnel-related costs

SOUNDHOUND AI, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

are the significant segment expenses included in the net loss that are regularly provided to the CODM.

The personnel-related costs are the significant segment expenses included in the net loss that are regularly provided to the CODM.

Personnel-related costs were $ 204.4 million , $ 114.1 million and $ 73.1 million , respectively, and represented 63.4 % , 60.5 % and 66.5 % , respectively, of total operating expenses during the years ended December 31, 2025, 2024, and 2023 .

REVISION OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS

During the period ended September 30, 2023, the Company identified immaterial prior period errors related to the following:

1) accounting for the ELOC as a derivative instrument;

2) classification of Lender Fees and allocation of the warrants in connection with the Term Loan;

and 3) the incorrect recording of in-kind dividends associated with the Company’s Series A Preferred Stock.

The identified errors were included in the Company's previously issued annual consolidated financial statements as of and for the year ended December 31, 2022.

In accordance with SEC Staff Accounting Bulletin No.

99, “Materiality,” and SEC Staff Accounting Bulletin No.

108, “Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements;” the Company evaluated the errors and determined that the related impacts were not material to its consolidated financial statements for the prior year periods when they occurred, but the Company determined it would be appropriate to correct the errors in the current period in the Company’s consolidated statements of operations and comprehensive loss, consolidated balance sheets, consolidated statements of cash flows or consolidated statements of redeemable convertible preferred stock and stockholders’ deficit for any periods impacted.

The Company revised the previously issued consolidated statements of operations and comprehensive loss and consolidated statements of cash flows, and consolidated statements of redeemable convertible preferred stock and stockholders’ deficit tables as of and for the year ended December 31, 2022 to correct for such errors.

All relevant prior period amounts affected by these revisions have been corrected in the notes in this Form 10-K.

The following tables reflect the impact of these revisions on the Company’s consolidated financial statements as of and for the year ended December 31, 2022 ( dollars in thousands, except per share amounts ):

Year Ended December 31, 2022

Consolidated Statements of Operations And Comprehensive Loss As Previously Reported Adjustment As Revised

General and administrative $ 30,178 $ 265 $ 30,443

Loss from operations ( 105,407 ) ( 265 ) ( 105,672 )

Other income (expense), net ( 184 ) ( 1,075 ) ( 1,259 )

Total other expense, net ( 7,077 ) ( 1,075 ) ( 8,152 )

Loss before provision for income taxes ( 112,484 ) ( 1,340 ) ( 113,824 )

Net loss $ ( 115,373 ) $ ( 1,340 ) $ ( 116,713 )

Net loss per share:

Basic and diluted $ ( 0.73 ) $ ( 0.01 ) $ ( 0.74 )

Year Ended December 31, 2022

Consolidated Statement of Stockholders' Equity (Deficit) As Previously Reported Adjustment As Revised

Accumulated deficit $ ( 502,102 ) $ ( 1,340 ) $ ( 503,442 )

SOUNDHOUND AI, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Year Ended December 31, 2022

Consolidated Statements of Cash Flows As Previously Reported Adjustment As Revised

Net loss $ ( 115,373 ) $ ( 1,340 ) $ ( 116,713 )

Adjustments to reconcile net loss to net cash used in operating activities:

Loss on change in fair value of ELOC program — 1,075 1,075

Changes in operating assets and liabilities

Other non-current assets ( 539 ) 265 ( 274 )

Net cash used in operating activities $ ( 94,019 ) $ — $ ( 94,019 )

SUBSEQUENT EVENTS

On January 24, 2025, the Company entered into an Equity Distribution Agreement (the "Second Equity Distribution Agreement") with Cantor Fitzgerald & Co., Guggenheim Securities, LLC, Oppenheimer & Co.

Inc., Wedbush Securities Inc., Ladenburg Thalmann & Co.

and Northland Securities, Inc.

with respect to an at-the-market equity program under which the Company may offer and sell up to $ 250.0 million of shares of its Class A Common Stock from time to time through the Sales Managers.

The Sales Managers will be entitled to commission at a fixed rate of 2.0 % of the gross sales price per share for their services in acting as agent in the sale of the Company's Class A Common Stock.

In January and February 2025, the Company sold 4,248,900 shares of our common stock under the Second Equity Distribution Agreement, at an average price of $ 15.94 per share and raised $ 67.7 million of gross proceeds.

The commissions and offering costs borne by the Company were approximately $ 1.4 million.

Following this issuance, the Company has a remaining capacity to sell up to an additional $ 182.3 million of the Company's common stock under the Second Equity Distribution Agreement.

On January 23, 2026, the Company paid $ 4.7 million to the selling shareholders under Interaction Acquisition to settle a portion of the Contingent Interactions Earnout Consideration due to the achievement of the target through the renewal of an existing contract with a specific customer.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosures

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 8. Financial Statements and Supplementary Data