SoundHound AI 8K Reports Record Quarter with 80% Q4 Revenue Growth to $17.1 Million; Adjusted EBITDA Improved by 80% Year-Over-Year in Q4 | SOUN 29 Feb 24

Exhibit 99.2

SOUNDHOUND AI, INC.

CONSOLIDATED BALANCE SHEETS

(In thousands, except share and per share data)

	December 31, 2023			December 31, 2022
ASSETS
Current assets:
Cash and cash equivalents	$	95,260		$	9,245
Accounts receivable, net of allowances of $203 and $109 as of December 31, 2023 and 2022, respectively		4,050			3,414
Prepaid expenses		924			2,514
Contract assets and unbilled revenue, net		11,780			1,671
Other current assets		1,528			859
Total current assets		113,542			17,703
Restricted cash equivalents, non-current		13,775			230
Right-of-use assets		5,210			8,119
Property and equipment, net		1,515			3,447
Deferred tax asset		11			55
Contract assets and unbilled revenue, non-current, net		16,492			7,041
Other non-current assets		577			1,391
Total assets	$	151,122		$	37,986

LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
Current liabilities:
Accounts payable	$	1,653		$	2,798
Accrued liabilities		13,884			8,537
Operating lease liabilities		2,637			3,282
Finance lease liabilities		121			160
Income tax liability		1,618			1,314
Deferred revenue		4,310			5,812
Notes payable		—			16,668
Total current liabilities		24,223			38,571

Operating lease liabilities, net of current portion		3,089			5,715
Deferred revenue, net of current portion		4,910			7,543
Notes payable, net of current portion		84,312			18,299
Other non-current liabilities		6,420			4,423
Total liabilities		122,954			74,551
Commitments and contingencies (Note 7)

Stockholders’ equity (deficit):
Series A Preferred Stock, $0.0001 par value; 1,000,000 shares authorized; 475,005 and 0 shares issued and outstanding, aggregate liquidation preference of $16,227 and $— as of December 31, 2023 and December 31, 2022, respectively		14,187			—
Class A Common Stock, $0.0001 par value; 455,000,000 shares authorized; 216,943,349 and 160,297,664 shares issued and outstanding as of December 31, 2023 and 2022, respectively		22			16
Class B Common Stock, $0.0001 par value; 44,000,000 shares authorized; 37,485,408 and 39,735,408 shares issued and outstanding as of December 31, 2023 and 2022, respectively		4			4
Additional paid-in capital		606,135			466,857
Accumulated deficit		(592,379	)		(503,442	)
Accumulated other comprehensive income	$	199			—
Total stockholders’ equity (deficit)		28,168			(36,565	)
Total liabilities and stockholders’ equity (deficit)	$	151,122		$	37,986

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

SOUNDHOUND AI, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

AND COMPREHENSIVE LOSS

(In thousands, except share and per share data)

	Year Ended December 31,
	2023			2022			2021
Revenues	$	45,873		$	31,129		$	21,197
Operating expenses:
Cost of revenues		11,307			9,599			6,585
Sales and marketing		18,893			20,367			4,240
Research and development		51,439			76,392			59,178
General and administrative		28,285			30,443			16,521
Restructuring		4,557			—			—
Total operating expenses		114,481			136,801			86,524
Loss from operations		(68,608	)		(105,672	)		(65,327	)

Other expense, net:
Interest expense		(17,570	)		(6,893	)		(8,342	)
Other income (expense), net		1,155			(1,259	)		(5,415	)
Total other expense, net		(16,415	)		(8,152	)		(13,757	)
Loss before provision for income taxes		(85,023	)		(113,824	)		(79,084	)
Provision for income taxes		3,914			2,889			456
Net loss		(88,937	)		(116,713	)		(79,540	)
Cumulative dividends attributable to Series A Preferred Stock		(2,774	)		—			—
Net loss attributable to SoundHound common shareholders		(91,711	)		(116,713	)		(79,540	)

Other comprehensive loss:
Unrealized gains on investments		199			—			1
Comprehensive loss	$	(91,512	)	$	(116,713	)	$	(79,539	)

Net loss per share:
Basic and diluted	$	(0.40	)	$	(0.74	)	$	(1.18	)

Weighted-average common shares outstanding:
Basic and diluted		229,264,904			157,317,695			67,255,538

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

SOUNDHOUND AI, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

	Year Ended December 31,
	2023			2022			2021
Cash flows from operating activities:
Net loss	$	(88,937	)	$	(116,713	)	$	(79,540	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		2,313			4,037			5,502
Stock-based compensation		27,931			28,792			6,322
Loss on change in fair value of ELOC program		1,901			1,075			—
Change in fair value of derivative and warrant liability		—			606			4,920
Amortization of debt issuance costs		5,400			2,287			4,746
Non-cash lease amortization		3,346			3,189			3,586
Loss on debt extinguishment		837			—			—
Foreign currency gain/loss from remeasurement		143
Deferred income taxes		30			2,127			112
Other, net		93			—			—
Changes in operating assets and liabilities:
Accounts receivable, net		(627	)		(1,354	)		1,515
Prepaid expenses		1,590			(1,238	)		(168	)
Other current assets		(821	)		299			(917	)
Contract assets		(19,578	)		(8,658	)		—
Other non-current assets		671			(274	)		(1,470	)
Accounts payable		(1,162	)		302			424
Accrued liabilities		4,266			116			3,671
Operating lease liabilities		(3,657	)		(3,912	)		(3,565	)
Deferred revenue		(4,135	)		(7,646	)		(10,281	)
Other liabilities		2,131			2,946			(1,034	)
Net cash used in operating activities		(68,265	)		(94,019	)		(66,177	)

Cash flows from investing activities:
Purchases of property and equipment		(392	)		(1,329	)		(636	)
Net cash used in investing activities		(392	)		(1,329	)		(636	)

Cash flows from financing activities:
Proceeds from the issuance of Series A Preferred Stock, net of issuance costs		24,942			—			—
Proceeds from sales of common stock under the ELOC program, net of issuance cost		71,615			—			—
Proceeds from sales of common stock under the Sales Agreement		12,412			—			—
Proceeds from issuance of debt, net of issuance costs		85,087			—			44,738
Proceeds from the issuance of common stock		9,369			4,160			2,490
Proceeds from Business Combination and PIPE, net of transaction costs		—			90,689			—
Payments on notes payable		(35,029	)		(11,545	)		—
Payments on finance leases		(159	)		(1,303	)		(2,575	)
Net cash provided by financing activities		168,237			82,001			44,653
Effects of exchange rate changes on cash		(20	)		—			—
Net change in cash, cash equivalents, and restricted cash equivalents		99,560			(13,347	)		(22,160	)
Cash, cash equivalents, and restricted cash equivalents, beginning of year		9,475			22,822			44,982
Cash, cash equivalents, and restricted cash equivalents, end of year	$	109,035		$	9,475		$	22,822

Reconciliation to amounts on the consolidated balance sheets:
Cash and cash equivalents	$	95,260		$	9,245		$	21,626
Current portion of restricted cash equivalents		—			—			460
Non-current portion of restricted cash equivalents		13,775			230			736
Total cash, cash equivalents, and restricted cash equivalents shown in the consolidated statements of cash flows	$	109,035		$	9,475		$	22,822

SOUNDHOUND, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS — Continued

For the Year Ended December 31, 2023 and 2022

(In thousands)

	Year Ended December 31,
	2023		2022		2021
Supplemental disclosures of cash flow information:
Cash paid for interest	$	11,984	$	4,364	$	2,631
Cash paid for income taxes	$	2,356	$	1,044	$	263

Noncash investing and financing activities:
Conversion of convertible preferred stock to common stock	$	10,755	$	—	$	—
Debt discount through issuance of common stock warrants	$	4,136	$	—	$	4,367
Issuance of common stock to settle commitment shares related to the ELOC program	$	915
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	$	—	$	650	$	3,422
Operating lease liabilities and right-of-use assets through adoption of ASC 842	$	—	$	—	$	11,428
Issues of series C redeemable convertible preferred stock for exercise of warrants	$	—	$	—	$	5,816
Property and equipment acquired under finance leases or debt	$	—	$	—	$	584

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

SoundHound AI (SOUN) 8-KSoundHound AI Reports Record Quarter with 80% Q4 Revenue Growth to $17.1 Million; Adjusted EBITDA Improved by 80% Year-Over-Year in Q4