SoundHound AI, Inc. announced that it has entered into a preferred stock purchase agreements with certain investors for a private placement and issued aggregate of 835,011 series A convertible preferred shares at an issue price of $29.93973 per share for gross proceeds of approximately $25,000,003.88703 on January 20, 2023. The oversubscribed financing includes investments from a diverse set of financial and strategic investors, both from the current shareholder base and new capital providers. The preferred shares are convertible into class A common shares at a conversion price $1 per share under certain circumstances, including automatic conversion on or after the one-year anniversary of the issuance date if certain price conditions are met.

The purchase agreements contain customary representations, warranties, and covenants. The company issued and sold the series A preferred stock in reliance on the exemption from the registration requirements of the Securities Act by virtue of Section 4(a)(2) thereof and Rule 506 of Regulation D thereunder. The company will issue securities pursuant to exemption provided under Regulation D.