Item 1.01 Entry into a Material Definitive Agreement
Merger Agreement
On November 15, 2021, Archimedes Tech SPAC Partners Co., a Delaware corporation
("Archimedes"), entered into a Merger Agreement (the "Merger Agreement") by and
among Archimedes, ATSPC Merger Sub, Inc., a Delaware corporation and a wholly
owned subsidiary of Archimedes ("Merger Sub"), and SoundHound, Inc., a Delaware
corporation ("SoundHound"). Pursuant to the terms of the Merger Agreement, a
business combination between Archimedes and SoundHound will be effected through
the merger of Merger Sub with and into SoundHound, with SoundHound surviving the
merger as a wholly owned subsidiary of Archimedes (the "Merger"). The board of
directors of Archimedes has (i) approved and declared advisable the Merger
Agreement, the Merger and the other transactions contemplated thereby and (ii)
resolved to recommend approval of the Merger Agreement and related transactions
by the stockholders of Archimedes.
Merger Consideration
The total consideration to be paid by Archimedes to SoundHound security holders
at the Closing will be an amount equal to $2.0 billion, with outstanding
SoundHound stock options and warrants assumed by Archimedes included on a net
exercise basis.
Treatment of SoundHound Securities
Cancellation of Securities. Each share of SoundHound capital stock, if any, that
is owned by Archimedes, Merger Sub, SoundHound, or any of their subsidiaries (as
treasury stock or otherwise) immediately prior to the Effective Time, will
automatically be cancelled and retired without any conversion or consideration.
Preferred Stock. Immediately prior to the Effective Time, each issued and
outstanding share of SoundHound's (i) Series A Preferred Stock, (ii) Series B
Preferred Stock, (iii) Series C Preferred Stock, (iv) Series C-1 Preferred
Stock, (v) Series D Preferred Stock, (vi) Series D-1 Preferred Stock, (vii)
Series D-2 Preferred Stock, (viii) Series D-3 Preferred Stock, and (ix) Series
D-3A Preferred Stock (collectively, "SoundHound Preferred Stock"), will be
converted into shares of Class A Common Stock, par value $0.0001 per share, of
SoundHound (the "SoundHound Class A Common Stock") at the Conversion Ratio. The
"Conversion Ratio" as defined in the Merger Agreement means an amount equal to
(a)(i) the sum of (A) $2,000,000,000, plus (B) the aggregate exercise price of
outstanding SoundHound in-the-money stock options and warrants, divided by (ii)
the number of fully diluted SoundHound shares (including in-the-money stock
options and warrants); divided by (b) $10.00.
Class A Common Stock. Each share of SoundHound Class A Common Stock issued and
outstanding immediately prior to the Effective Time (other than any such shares
of SoundHound capital stock cancelled as described above and any dissenting
shares) will be converted into the right to receive a number of shares of Class
A Common Stock, par value $0.0001 per share, of Archimedes ("Class A Common
Stock") at the Conversion Ratio.
Class B Common Stock. SoundHound does not currently have any Class B Common
Stock authorized or outstanding. SoundHound intends to set up a special
committee of disinterested independent directors to consider a proposal from
SoundHound's founders to (1) authorize the creation of a new class of common
stock, Class B Common Stock, which will be identical to the SoundHound Class A
Common Stock, but will entitle the holders thereof to multiple votes per share
on all matters on which stockholders are entitled to vote, with the number of
votes per share to be determined by the special committee and the founders if
they reach agreement on the matter, and (2) immediately prior to the Closing,
exchange the shares of SoundHound Class A Common Stock held by SoundHound's
founders for Class B Common Stock in exchange for consideration to be provided
by SoundHound's founders and as agreed to by SoundHound's founders and the
special committee, and, in each case, subject to approval and ratification by
SoundHound's stockholders (excluding SoundHound's founders and their
affiliates). If SoundHound's founders and the special committee reach agreement
with respect to the authorization and issuance of the Class B Common Stock,
which is approved and ratified by SoundHound's stockholders (excluding
SoundHound's founders and their affiliates), and accordingly shares of Class B
Common Stock are issued by SoundHound prior to the closing of Merger, then such
shares of Class B Common Stock will be converted into the right to receive a
number of shares of Class B Common Stock of Archimedes ("Archimedes Class B
Common Stock") at the Conversion Ratio. The Archimedes Class B Common Stock will
have the same multiple votes per share as SoundHound's Class B Common Stock.
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Merger Sub Securities. Each share of common stock, par value $0.0001 per share,
of Merger Sub issued and outstanding immediately prior to the Effective Time
will be converted into and become one newly issued share of common stock of the
Archimedes.
Stock Options.At the Effective Time, each outstanding option to purchase shares
of SoundHound Common Stock will be converted into an option to purchase, subject
to substantially the same terms and conditions as were applicable under such
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.
Warrants. Immediately prior to the Effective Time, each outstanding warrant to
purchase shares of SoundHound capital stock that is unvested as of immediately
prior to the Effective Time shall be automatically converted into a warrant to
purchase, subject to substantially the same terms and conditions as were
applicable under such warrants prior to the Effective Time, shares of the 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 Time
divided by the Conversion Ratio.
Restricted Stock and SoundHound RSUs. Any outstanding restricted shares of
SoundHound Common Stock that have not vested as of the Effective Time will have
the same continuing vesting periods apply to the Merger Consideration Shares (as
defined in the Merger Agreement) issued in exchange for such restricted shares.
Prior to the Closing, each SoundHound RSU (as defined in the Merger Agreement)
will be converted into a restricted stock unit of Archimedes, subject to
substantially the same terms and conditions as were applicable under the
SoundHound RSU, except that upon conversion thereof, the holder of a SoundHound
RSU will receive the same consideration that they would have received if such
SoundHound RSU was converted into SoundHound Common Stock immediately prior to
the Effective Time.
Representations and Warranties
The Merger Agreement contains customary representations and warranties of the
parties thereto with respect to, among other things, (a) corporate existence and
power, (b) authorization to enter into the Merger Agreement and related
. . .
Item 3.02 Unregistered Sales of Equity Securities.
The information set forth above in Item 1.01 of this Report under the heading
"Subscription Agreements" is incorporated by reference herein. The shares of
Common Stock to be issued in connection with the Subscription Agreements and the
transactions contemplated thereby will not be registered under the Securities
Act, in reliance on the exemption from registration provided by Section 4(a)(2)
of the Securities Act and/or Regulation D promulgated thereunder.
Item 7.01 Regulation FD Disclosure.
On November 16, 2021, Archimedes and SoundHound issued a joint press release
announcing the execution of the Merger Agreement and related matters. A copy of
the press release is furnished hereto as Exhibit 99.1.
Furnished as Exhibits 99.2 and 99.3 hereto are the investor presentation that
will be used by Archimedes and SoundHound in connection with the Merger and
related matters and the transcript of the investor call on November 16, 2021
discussing the Merger and related matters.
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The information in this Item 7.01 and Exhibits 99.1, 99.2 and 99.3, attached
hereto shall not be deemed "filed" for purposes of Section 18 of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to
the liabilities of that section, nor shall it be deemed incorporated by
reference in any filing under the Securities Act or the Exchange Act, except as
expressly set forth by specific reference in such filing.
Important Information for Investors and Stockholders
This document relates to a proposed transaction between Archimedes and
SoundHound. This document does not constitute an offer to sell or exchange, or
the solicitation of an offer to buy or exchange, any securities, nor shall there
be any sale of securities in any jurisdiction in which such offer, sale or
exchange would be unlawful prior to registration or qualification under the
securities laws of any such jurisdiction. Archimedes intends to file a
registration statement on Form S-4 with the SEC, which will include a document
that serves as a prospectus and proxy statement of Archimedes, referred to as a
proxy statement/prospectus. A proxy statement/prospectus will be sent to all
Archimedes stockholders. Archimedes also will file other documents regarding the
proposed transaction with the SEC. Before making any voting or investment
decision, investors and security holders of Archimedes are urged to read the
registration statement, the proxy statement/prospectus and all other relevant
documents filed or that will be filed with the SEC in connection with the
proposed transaction as they become available because they will contain
important information about the proposed transaction.
Investors and security holders will be able to obtain free copies of the
registration statement, the proxy statement/prospectus and all other relevant
documents filed or that will be filed with the SEC by Archimedes through the
website maintained by the SEC at www.sec.gov.
Forward Looking Statements
Certain statements included in this Current Report on Form 8-K are not
historical facts but are forward-looking statements. Forward-looking statements
generally are accompanied by words such as "believe," "may," "will," "estimate,"
"continue," "anticipate," "intend," "expect," "should," "would," "plan,"
"future," "outlook," and similar expressions that predict or indicate future
events or trends or that are not statements of historical matters, but the
absence of these words does not mean that a statement is not forward-looking.
These forward-looking statements include, but are not limited to, statements
regarding estimates and forecasts of other performance metrics and projections
of market opportunity. These statements are based on various assumptions,
whether or not identified in this Current Report on Form 8-K and on the current
expectations of Archimedes' and SoundHound's respective management and are not
predictions of actual performance. These forward-looking statements are provided
for illustrative purposes only and are not intended to serve as, and must not be
relied on by any investor as, a guarantee, an assurance, a prediction or a
definitive statement of fact or probability. Actual events and circumstances are
difficult or impossible to predict and will differ from assumptions. Many actual
events and circumstances are beyond the control of Archimedes and SoundHound.
Some important factors that could cause actual results to differ materially from
those in any forward-looking statements could include changes in domestic and
foreign business, market, financial, political and legal conditions.
These forward-looking statements are subject to a number of risks and
uncertainties, including, the inability of the parties to successfully or timely
consummate the Merger, including the risk that any required regulatory approvals
are not obtained, are delayed or are subject to unanticipated conditions that
could adversely affect the Company or the expected benefits of the Merger, if
not obtained; the failure to realize the anticipated benefits of the Merger;
matters discovered by the parties as they complete their respective due
diligence investigation of the other parties; the ability of Archimedes prior to
the Merger, and the Company following the Merger, to maintain the listing of the
Company's shares on Nasdaq; costs related to the Merger; the failure to satisfy
the conditions to the consummation of the Merger, including the approval of the
Merger Agreement by the shareholders of Archimedes, the satisfaction of the
minimum cash requirements of the Merger Agreement, which is an amount equal to
the PIPE commitments as of the date of the Merger Agreement, following any
redemptions by Archimedes' public shareholders; the risk that the Merger may not
be completed by the stated deadline and the potential failure to obtain an
extension of the stated deadline; the inability to complete a PIPE transaction;
the outcome of any legal proceedings that may be instituted against Archimedes
or SoundHound related to the Merger; the attraction and retention of qualified
directors, officers, employees and key personnel of Archimedes and SoundHound
prior to the Merger, and SoundHound following the Merger; the ability of
SoundHound to compete effectively in a highly competitive market; the ability to
protect and enhance SoundHound's corporate reputation and brand; the impact from
future regulatory, judicial, and legislative changes in SoundHound's industry;
the uncertain effects of the COVID-19 pandemic; competition from larger
technology companies that have greater resources, technology, relationships
and/or expertise; future financial performance of SoundHound following the
Merger including the ability of future revenues to meet projected annual
bookings; the ability of SoundHound to forecast and maintain an adequate rate of
revenue growth and appropriately plan its expenses; the ability of SoundHound to
generate sufficient revenue from each of its revenue streams; the ability of
SoundHound's patents and patent applications to protect SoundHound's core
technologies from competitors; SoundHound's ability to manage a complex set of
marketing relationships and realize projected revenues from subscriptions,
advertisements, product sales and/or services; SoundHound's ability to execute
its business plans and strategy; and those factors set forth in documents of
Archimedes filed, or to be filed, with SEC. The foregoing list of risks is not
exhaustive.
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If any of these risks materialize or our assumptions prove incorrect, actual
results could differ materially from the results implied by these
forward-looking statements. There may be additional risks that neither
Archimedes nor SoundHound presently know, or that Archimedes and SoundHound
currently believe are immaterial that could also cause actual results to differ
from those contained in the forward-looking statements. In addition,
forward-looking statements reflect Archimedes' and SoundHound's current
expectations, plans and forecasts of future events and views as of the date
hereof. Nothing in this Current Report on Form 8-K and the attachments hereto
should be regarded as a representation by any person that the forward-looking
statements set forth herein will be achieved or that any of the contemplated
results of such forward-looking statements will be achieved. You should not
place undue reliance on forward-looking statements in this Current Report on
Form 8-K and the attachments hereto, which speak only as of the date they are
made and are qualified in their entirety by reference to the cautionary
statements herein and the risk factors of Archimedes and SoundHound described
above. Archimedes and SoundHound anticipate that subsequent events and
developments will cause their assessments to change. However, while Archimedes
and SoundHound may elect to update these forward-looking statements at some
point in the future, they each specifically disclaim any obligation to do so,
except as required by law. These forward-looking statements should not be relied
upon as representing Archimedes' or SoundHound's assessments as of any date
subsequent to the date of this Current Report. Accordingly, undue reliance
should not be placed upon the forward-looking statements.
Participants in the Solicitation
Archimedes and SoundHound and their respective directors and executive officers
may be deemed to be participants in the solicitation of proxies from Archimedes'
stockholders in connection with the proposed transaction. A list of the names of
the directors and executive officers of Archimedes and information regarding
their interests in the Merger will be contained in the proxy
statement/prospectus when available. You may obtain free copies of these
documents as described in the preceding paragraph.
This communication does not constitute an offer to sell or the solicitation of
an offer to buy any securities or a solicitation of any vote or approval, nor
shall there be any sale of any securities in any state or jurisdiction in which
such offer, solicitation, or sale would be unlawful prior to registration or
qualification under the securities laws of such other jurisdiction.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits:
Exhibit Description
2.1* Merger Agreement dated as of November 15, 2021 by and among Archimedes
Tech SPAC Partners Co., ATSPC Merger Sub, Inc. and SoundHound, Inc.
10.1 Form of Parent Support Agreement dated as of November 15, 2021 by and
among Archimedes Tech SPAC Partners Co, SoundHound, Inc. and certain
stockholders of Archimedes Tech SPAC Partners Co.
10.2 Form of Company Support Agreement dated as of November 15, 2021 by and
among Archimedes Tech SPAC Partners Co., SoundHound, Inc. and certain
stockholders of SoundHound, Inc.
10.3 Form of Subscription Agreement.
10.4 Form of Lock-Up Agreement.
10.5 Form of Amended and Restated Registration Rights Agreement.
99.1 Press Release issued by Archimedes Tech SPAC Partners Co. and
SoundHound, Inc. on November 16, 2021.
99.2 Investor Presentation dated November 16, 2021
99.3 Transcript of Investor Call dated November 16, 2021
104 Cover Page Interactive Data File - the cover page XBRL tags are embedded
within the Inline XBRL document.
* Certain exhibits and schedules to this Exhibit have been omitted in accordance
with Regulation S-K Item 601(b)(2). Archimedes agrees to furnish supplementally
a copy of all omitted exhibits and schedules to the Securities and Exchange
Commission upon its request.
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