SoundHound AI (SOUN) enters Equity Distribution Agreement

SoundHound AI (NASDAQ: SOUN) disclosed:

On April 9, 2024 SoundHound AI, Inc. (the “Company”) entered into an Equity Distribution Agreement (the “Agreement”) with Citigroup Global Markets Inc., Barclays Capital Inc., Wedbush Securities Inc., Northland Securities, Inc. and Ladenburg Thalmann & Co. Inc., as sales managers and/or principals (each, a “Manager” and collectively, the “Managers”), with respect to an at-the-market equity program under which the Company may offer and sell up to $150,000,000 of shares of its Class A common stock, par value $0.0001 per share (the “Shares”) from time to time through the Managers (the “ATM Offering”). Under the Agreement, the Managers will be entitled to a commission at a fixed rate of 2.5% of the gross sales price of Shares sold under the Agreement. The Company will also reimburse the Managers for certain specified expenses in connection with entering the Agreement.

Sales of the Shares, if any, under the Agreement may be made in negotiated transactions, including block trades, or transactions that are deemed to be ‘‘at the market’’ offerings as defined in Rule 415 under the Securities Act of 1933, as amended, including sales made by means of ordinary brokers’ transactions, including directly on the Nasdaq Global Market or sales made to or through a market maker other than on an exchange at prevailing market prices, at prices related to prevailing market prices or at negotiated prices or by any other method permitted by law. The Company has no obligation to sell, and the Managers are not obligated to buy or sell, any of the Shares under the Agreement and may at any time suspend offers under the Agreement or terminate the Agreement. The Company has agreed to provide the Managers with customary indemnification and contribution rights, including for liability under the Securities Act and Securities Exchange Act of 1934, as amended. The ATM Offering will terminate upon the termination of the Agreement as permitted therein.

The Shares will be issued pursuant to the Company’s previously filed Registration Statement on Form S-3 (File No. 333-273393) that was declared effective on August 4, 2023 and the prospectus included therein, as supplemented by the prospectus supplement relating to the ATM Offering filed with the with the Securities and Exchange Commission on April 9, 2024. This Current Report on 8-K (this “Report”) shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the Shares in any state in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state.

The foregoing description of the Agreement does not purport to be complete and is qualified in its entirety by reference to the Agreement, a copy of which is filed as Exhibit 1.1 to this Report. Also attached as Exhibit 5.1 to this Report is the opinion of Ellenoff Grossman & Schole LLP relating to the legality of the issuance and sale of the Shares.

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