SoundHound AI 8-K公告收購LivePerson 備考收入4.55億美元 每股虧損0.10美元

EX-99.1
2
ea029773601ex99-1.htm
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION OF SOUNDHOUND AI, INC. AND LIVEPERSON, INC. AS OF AND FOR THE YEAR ENDED DECEMBER 31, 2025 AND THE THREE MONTHS ENDED MARCH 31, 2026

 

Exhibit 99.1

 

Unaudited
Pro Forma Condensed Combined Financial Information 

 

The unaudited pro forma condensed
combined financial information of SoundHound AI, Inc. (“SoundHound” or the “Company”) has been prepared in
accordance with Article 11 of Regulation S-X and presents the combination of the historical financial information
of SoundHound and LivePerson, Inc. (“LivePerson” or the “Target”), adjusted to give effect to the LivePerson Merger
(as defined below). The unaudited pro forma condensed combined financial information of SoundHound also gives effect to the acquisition
of Interactions Corporation (“Interactions”) that occurred on September 3, 2025 but was not reflected in the historical
financial information of SoundHound for a full fiscal year.

 

Description of the Acquisitions

 

On April 21, 2026, SoundHound,
LivePerson and Lightspeed Merger Sub, Inc., an indirect, wholly owned subsidiary of SoundHound (“Merger Sub I”) entered into
a Merger Agreement (the “Original Merger Agreement”), which was subsequently amended and restated on July 2, 2026, among SoundHound,
LivePerson, Merger Sub I and Lightspeed Merger Sub II, Inc., an indirectly, wholly owned subsidiary of SoundHound (“Merger Sub II”)
(the Original Merger Agreement, as amended and restated, the “Merger Agreement”). Upon the terms and subject to the conditions
set forth in the Merger Agreement, Merger Sub I will be merged with and into LivePerson (the “First Merger”), with LivePerson
surviving the First Merger as an indirect, wholly owned subsidiary of SoundHound and, immediately following the First Merger, Merger Sub
II will be merged with and into LivePerson (the “Second Merger,” and together with the First Merger, collectively the “LivePerson
Merger”), with LivePerson surviving the Second Merger as an indirect, wholly owned subsidiary of SoundHound. Also on April 21, 2026,
concurrently with the execution of the Original Merger Agreement, SoundHound entered into a Notes Restructuring Agreement (the “Notes
Restructuring Agreement”, together with the Merger Agreement, collectively, the “Transaction Agreements”) with LivePerson
and the Secured Holders (as defined below), pursuant to which, and on the terms and subject to the conditions thereof, among other things,
the Secured Holders have agreed to release and deem satisfied the Secured Notes for the consideration contemplated thereby.

 

The Merger Agreement provides
for a two-step transaction for holders of LivePerson common stock.

 

●First, all shares of LivePerson common stock other than shares
listed on the Tel Aviv Stock Exchange Ltd. (the “non-TASE Shares”) will be cancelled and converted into the right to receive
the consideration described below, while the shares listed on the Tel Aviv Stock Exchange Ltd., (the “TASE Shares”) will
remain issued and outstanding.

 

●Second, the TASE
Shares will automatically be converted into the right to receive cash consideration, except for TASE Shares held by holders or beneficial
owners of TASE Shares who (i) do not vote in favor of the merger proposal, (ii) properly demand appraisal of their shares of LivePerson
Common Stock, (iii) continuously hold or beneficially own such shares through TASECH from the date of making the demand through the effective
time of the Second Merger, (iv) otherwise comply with Section 262 of the DGCL and (v) do not withdraw or otherwise lose their appraisal
rights. The Company expects all TASE Shares to be converted into cash consideration, except to the extent any TASE Shares are paid through
the appraisal process.

 

Under the terms of the Transaction
Agreements, total consideration consisted of the following:

 

i.Shares of SoundHound Class A common stock issued to holders
of LivePerson’s First Lien Convertible Senior Notes due 2029 and 10.0% Second Lien Senior Subordinated Secured Notes (collectively,
the “Secured Notes,” and the holders of such Secured Notes, the “Secured Holders”) equal to approximately $178.0 million
and $83.2 million (the “First and Second Lien Stock Consideration”), respectively, each divided by the SoundHound Closing
Stock Price.

 

ii.Consideration issued to holders of LivePerson common stock with
an aggregate value of $42.8 million (the “Shareholder Consideration Amount”), subject to adjustment for LivePerson’s
closing cash balance relative to a $74.0 million minimum cash threshold, divided by the SoundHound Closing Stock Price (the “Closing
Merger Consideration”), and settled as follows:

 

a.shares of SoundHound Class A common stock issued to holders
of the non-TASE Shares,

 

b.cash consideration to holders of the TASE Shares, subject to
a cap of $7.5 million.

 

iii.Replacement restricted stock units (RSUs) and cash-settled awards
issued to continuing LivePerson employees in exchange for outstanding unvested equity awards. All out-of-the-money stock options and
warrants were cancelled at closing for no consideration.

 

  

  

 

 

The SoundHound Closing Stock
Price is determined based on the average of the daily volume-weighted average prices of a share of SoundHound Common Stock on each of
the ten consecutive trading days ending on and including the trading day that is three trading days prior to the closing
date, subject to a collar of $7.00 (floor) and $12.00 (cap) per share. SoundHound retains the right to substitute cash in lieu of all
or a portion of the stock consideration payable to Secured Note holders.

 

As of March 31, 2026,
LivePerson had approximately $20.1 million in aggregate principal amount of 0% Convertible Notes due 2026 outstanding. Pursuant to
the Merger Agreement, LivePerson is required to use commercially reasonable best efforts to retire these notes at or prior to closing.

 

The determination of estimated
preliminary consideration under GAAP and the preliminary purchase price allocation, including the fair value of assets acquired and liabilities
assumed, are accounted for as a business combination under ASC 805, Business Combinations, and are discussed in Note 4
to the Unaudited Pro Forma Condensed Combined Financial Statements included herein.

 

Description of Interactions Acquisition during
the year ended December 31, 2025

 

On September 3, 2025,
SoundHound completed its acquisition of Interactions (the “Interactions Acquisition”, “Acquisition”), pursuant
to the terms of the Agreement and Plan of Merger entered into by and among SoundHound, Iris Merger
Sub, Inc., Interactions Corporation and Shareholder Representative Services LLC. The transaction included cash paid to selling shareholders,
repayment of Interactions’ outstanding debt at closing, payment of seller transaction expenses, customary cash holdbacks, and contingent
earnout consideration tied to specified future milestones. On the acquisition date, each outstanding share of Interactions’ capital
stock, stock options, warrants to purchase Interactions’ capital stock, and treasury stock were cancelled and extinguished without
any present or future right to receive any consideration with the exception of certain shares of Interactions’ preferred stock that
were converted into the right to receive the consideration defined above.

 

Other Information

 

The unaudited pro forma condensed
combined balance sheet as of March 31, 2026 combines the historical consolidated balance sheets of SoundHound and LivePerson, giving
effect to the acquisition as if it had occurred on March 31, 2026. The unaudited pro forma condensed combined statement of operations
for the three months ended March 31, 2026, and the year ended December 31, 2025, assumes that the LivePerson Merger and
the Interactions Acquisition (the “Transactions”) occurred as of January 1, 2025, and combines the historical results
of SoundHound, Interactions, and LivePerson giving pro forma effect for the periods then ended.

 

The unaudited pro forma condensed
combined financial information is derived from the historical financial information of SoundHound, Interactions, and LivePerson, and should
be read in conjunction with the following information:

 

●the historical audited consolidated financial statements of
SoundHound for the year ended December 31, 2025, included in its Annual Report on Form 10-K filed with the Securities and Exchange
Commission (“SEC”) on March 2, 2026,

 

●the historical unaudited condensed consolidated financial statements
of SoundHound for the three months ended March 31, 2026, included in its Quarterly Report on Form 10-Q filed with the
SEC on May 11, 2026,

 

●the historical audited consolidated financial statements of
LivePerson for the year ended December 31, 2025, included in its Annual Report on Form 10-K filed with the SEC on March 16,
2026,

 

●the historical unaudited condensed consolidated financial statements
of LivePerson, Inc. for the three months ended March 31, 2026, included in its Quarterly Report on Form 10-Q filed with
the SEC on May 8, 2026,

 

●the historical unaudited financial information of Interactions
for the period from January 1, 2025 to September 2, 2025, which is derived from the historical unaudited pro forma condensed
combined statement of operations of SoundHound for the nine months ended September 30, 2025, that are included as Exhibit 99.3
in the Company’s Report on Form 8-K/A filed with the SEC on November 17, 2025.

 

Assumptions underlying the
pro forma adjustments are described in the accompanying notes, which should be read in conjunction with the unaudited pro forma condensed
combined financial information. The transaction accounting adjustments are based on available information and assumptions that the Company’s
management believes are reasonable. Actual results and valuations may differ materially from the assumptions within the accompanying unaudited
pro forma condensed combined financial information.

 

The LivePerson Merger is subject
to closing adjustments that have not yet been finalized. Accordingly, the pro forma adjustments are preliminary and have been made solely
for the purpose of providing unaudited pro forma condensed combined financial information as required by SEC rules. Differences between
these preliminary estimates and the final acquisition accounting may be material.

 

 2

  

 

 

SOUNDHOUND AI, INC.

Unaudited Pro Forma Condensed Combined Balance
Sheet

As of March 31, 2026

(in thousands)

 

 
 SoundHound Consolidated 
Balance Sheet Line Items 
 SoundHound Historical  
 LivePerson Historical As Adjusted (Note 2)  
 Transaction Accounting Adjustments (Note 4)  
 Note 
 Pro Forma Combined 

 
 ASSETS 
    
    
    
   
   

 
 Current assets: 
    
    
    
   
   

 
 Cash and cash equivalents 
 $215,642  
 $101,499  
 $(54,751) 
 4(a), 4(b), 4(c) 
 $262,390 

 
 Accounts receivable, net of allowances 
  30,068  
  25,664  
  —  
   
  55,732 

 
 Contract assets and unbilled receivable, net 
  32,752  
  3,365  
  —  
   
  36,117 

 
 Other current assets 
  10,343  
  15,417  
  —  
   
  25,760 

 
 Total current assets 
  288,805  
  145,945  
  (54,751) 
   
  379,999 

 
 Restricted cash equivalents, non-current 
  676  
  —  
  —  
   
  676 

 
 Right-of-use assets 
  5,920  
  72  
  —  
   
  5,992 

 
 Property and equipment, net 
  2,863  
  4,616  
  —  
   
  7,479 

 
 Goodwill 
  122,277  
  184,540  
  (32,538) 
 4(d) 
  274,279 

 
 Intangible assets, net 
  172,036  
  13,502  
  104,498  
 4(e) 
  290,036 

 
 Deferred tax asset 
  28  
  4,533  
  —  
   
  4,561 

 
 Contract assets and unbilled receivable, non-current, net 
  34,067  
  —  
  —  
   
  34,067 

 
 Other non-current assets 
  18,279  
  104,374  
  (104,098) 
 4(f), 4(g) 
  18,555 

 
 Total assets 
 $644,951  
 $457,582  
 $(86,889) 
   
 $1,015,644 

 
   
     
     
     
   
    

 
 LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) 
     
     
     
   
    

 
 Current liabilities: 
     
     
     
   
    

 
 Accounts payable 
 $8,048  
 $4,357  
 $—  
   
 $12,405 

 
 Accrued liabilities 
  29,321  
  47,661  
  (2,138) 
 4(c), 4(h), 4(i) 
  74,844 

 
 Operating lease liabilities 
  2,751  
  87  
  —  
   
  2,838 

 
 Finance lease liabilities 
  289  
  —  
  —  
   
  289 

 
 Income tax liability 
  2,812  
  —  
  —  
   
  2,812 

 
 Deferred revenue 
  28,509  
  57,987  
  —  
   
  86,496 

 
 Other current liabilities 
  1,557  
  20,428  
  (20,071) 
 4(c) 
  1,914 

 
 Total current liabilities 
  73,287  
  130,520  
  (22,209) 
   
  181,598 

 
   
     
     
     
   
    

 
 Operating lease liabilities, net of current portion 
  3,186  
  —  
  —  
   
  3,186 

 
 Deferred revenue, net of current portion 
  6,756  
  —  
  —  
   
  6,756 

 
 Long-term debt 
  —  
  373,723  
  (373,723) 
 4(c) 
  — 

 
 Contingent acquisition liabilities, net of current portion 
  87,334  
  —  
  —  
   
  87,334 

 
 Income tax liability, net of current portion 
  1,379  
  —  
  —  
   
  1,379 

 
 Deferred tax liability 
  2,209  
  4,199  
  —  
   
  6,408 

 
 Other non-current liabilities 
  10,134  
  636  
  —  
   
  10,770 

 
 Total liabilities 
 $184,285  
 $509,078  
 $(395,932) 
   
 $297,431 

 
   
     
     
     
   
    

 
 Stockholders’ equity (deficit): 
     
     
     
   
    

 
 Series A Preferred Stock 
  —  
  —  
  —  
   
  — 

 
 Class A Common Stock 
  37  
  173  
  (169) 
 4(j) 
  41 

 
 Class B Common Stock 
  3  
  —  
  —  
   
  3 

 
 Treasury stock, at cost 
  —  
  (3) 
  3  
 4(j) 
  — 

 
 Additional paid-in capital 
  1,442,560  
  1,023,338  
  (758,688) 
 4(j) 
  1,707,210 

 
 Accumulated deficit 
  (982,094) 
  (1,067,321) 
  1,060,214  
 4(j) 
  (989,201)

 
 Accumulated other comprehensive income (loss) 
  160  
  (7,683) 
  7,683  
 4(j) 
  160 

 
 Total stockholders’ equity (deficit) 
 $460,666  
 $(51,496) 
 $309,043  
   
 $718,213 

 
 Total liabilities and stockholders’ equity (deficit) 
 $644,951  
 $457,582  
 $(86,889) 
   
 $1,015,644 

 

 

See Notes to the Unaudited Pro Forma Condensed
Combined Financial Information.

 

 3

  

 

 

SOUNDHOUND AI, INC.
Unaudited Pro Forma Condensed Combined Statement of Operations
For the year ended December 31, 2025
(in thousands, except share and per share data)

 

 
 SoundHound Consolidated Income 
Statement Line Items 
 SoundHound
Historical  
 Interactions Historical & Transaction Accounting (Note 3)  
 LivePerson Historical As Adjusted (Note 2)  
 Transaction Accounting Adjustments (Note 4)  
 Note 
 Pro Forma Combined 

 
 Revenues 
 $168,920  
 $42,781  
 $243,742  
 $—  
   
 $455,443 

 
 Operating expenses: 
     
     
     
     
   
    

 
 Cost of revenues 
  97,369  
  15,391  
  74,818  
  7,600  
 4(k) 
  195,178 

 
 Sales and marketing 
  61,640  
  6,103  
  78,223  
  (17,300) 
 4(l) 
  128,666 

 
 Research and development 
  98,250  
  2,416  
  68,645  
  (15,934) 
 4(m) 
  153,377 

 
 General and administrative 
  82,188  
  12,912  
  44,676  
  7,107  
 4(i) 
  146,883 

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

 
 Amortization of intangible assets 
  15,872  
  3,827  
  709  
  15,634  
 4(k) 
  36,042 

 
 Restructuring 
  —  
  —  
  11,667  
  —  
   
  11,667 

 
 Impairment of goodwill 
  —  
  —  
  41,595  
  (41,595) 
 4(p) 
  — 

 
 Impairment of intangibles and other assets 
  —  
  —  
  2,108  
  —  
   
  2,108 

 
 Total operating expenses 
  192,192  
  40,649  
  322,441  
  (44,488) 
   
  510,794 

 
 Loss from operations 
  (23,272) 
  2,132  
  (78,699) 
  44,488  
   
  (55,351)

 
   
     
     
     
     
   
    

 
 Other income (expense), net: 
     
     
     
     
   
    

 
 Gain on troubled debt restructuring 
  —  
  —  
  27,720  
  (27,720) 
 4(q) 
  — 

 
 Interest expense 
  (670) 
  —  
  (31,530) 
  31,530  
 4(n) 
  (670)

 
 Other income (expense), net 
  14,668  
  288  
  18,728  
  (13,202) 
 4(o) 
  20,482 

 
 Total other income (expense), net 
  13,998  
  288  
  14,918  
  (9,392) 
   
  19,812 

 
 Loss before provision (benefit) for income taxes 
  (9,274) 
  2,420  
  (63,781) 
  35,096  
   
  (35,539)

 
 Provision (benefit) for income taxes 
  4,732  
  —  
  3,452  
  —  
   
  8,184 

 
 Net loss 
 $(14,006) 
 $2,420  
 $(67,233) 
 $35,096  
   
 $(43,723)

 
   
     
     
     
     
   
    

 
 Net loss per share: 
     
     
     
     
   
    

 
 Basic 
 $(0.03) 
     
     
     
 4(r) 
 $(0.10)

 
 Diluted 
 $(0.28) 
     
     
     
 4(r) 
 $(0.32)

 
   
     
     
     
     
   
    

 
 Weighted-average common shares outstanding: 
     
     
     
     
   
    

 
 Basic 
  405,421,412  
     
     
     
 4(r) 
  448,054,712 

 
 Diluted 
  409,456,342  
     
     
     
 4(r) 
  452,089,642 

 

 

See Notes to the Unaudited Pro Forma Condensed
Combined Financial Information.

 

 4

  

 

 

SOUNDHOUND AI, INC.
Unaudited Pro Forma Condensed Combined Statement of Operations
For the three months ended March 31, 2026
(in thousands, except share and per share data)

 

 
 SoundHound Consolidated Income 
Statement Line Items 
 SoundHound Historical  
 LivePerson Historical As Adjusted (Note 2)  
 Transaction Accounting Adjustments (Note 4)  
 Note 
 Pro Forma Combined 

 
 Revenues 
 $44,195  
 $56,956  
 $—  
   
 $101,151 

 
 Operating expenses: 
     
     
     
   
    

 
 Cost of revenues 
  30,453  
  16,599  
  1,900  
 4(k) 
  48,952 

 
 Sales and marketing 
  19,215  
  14,200  
  (4,100) 
 4(l) 
  29,315 

 
 Research and development 
  26,200  
  15,436  
  (3,788) 
 4(m) 
  37,848 

 
 General and administrative 
  25,676  
  12,300  
  —  
   
  37,976 

 
 Change in fair value of contingent acquisition liabilities 
  (39,392) 
  —  
  —  
   
  (39,392)

 
 Amortization of intangible assets 
  4,714  
  172  
  3,914  
 4(k) 
  8,800 

 
 Total operating expenses 
  66,866  
  58,707  
  (2,074) 
   
  123,499 

 
 Loss from operations 
  (22,671) 
  (1,751) 
  2,074  
   
  (22,348)

 
   
     
     
     
   
    

 
 Other income (expense), net: 
     
     
     
   
    

 
 Interest expense 
  (71) 
  (8,252) 
  8,252  
 4(n) 
  (71)

 
 Other income (expense), net 
  (1,488) 
  1,501  
  (1,116) 
 4(o) 
  (1,103)

 
 Total other income (expense), net 
  (1,559) 
  (6,751) 
  7,136  
   
  (1,174)

 
 Loss before provision for income taxes 
  (24,230) 
  (8,502) 
  9,210  
   
  (23,522)

 
 Provision for income taxes 
  798  
  325  
  —  
   
  1,123 

 
 Net loss 
 $(25,028) 
 $(8,827) 
 $9,210  
   
 $(24,645)

 
   
     
     
     
   
    

 
 Net loss per share: 
     
     
     
   
    

 
 Basic 
 $(0.06) 
     
     
 4(r) 
 $(0.05)

 
 Diluted 
 $(0.11) 
     
     
 4(r) 
 $(0.10)

 
   
     
     
     
   
    

 
 Weighted-average common shares outstanding: 
     
     
     
   
    

 
 Basic 
  421,472,827  
     
     
 4(r) 
  464,106,127 

 
 Diluted 
  429,783,201  
     
     
 4(r) 
  472,416,501 

 

 

See Notes to the Unaudited Pro Forma Condensed
Combined Financial Information.

 

 5

  

 

 

Notes to the Unaudited Pro Forma Condensed
Combined Financial Information

 

Note 1 — Basis of Presentation

 

The unaudited pro forma condensed
combined financial information has been prepared in accordance with Article 11 of Regulation S-X. The historical financial
information of SoundHound, Interactions and LivePerson has been adjusted in the unaudited pro forma condensed combined financial information
to reflect transaction accounting adjustments related to the Transactions in accordance with generally accepted accounting principles
(“GAAP”), based on the assumptions and adjustments that are described in the accompanying notes.

 

The LivePerson Merger has been
accounted for as a business combination in accordance with the acquisition method of accounting under GAAP. Under this method of
accounting, SoundHound has been determined to be the accounting acquirer and LivePerson to be the accounting acquiree. The acquisition
method of accounting requires, among other things, that the assets acquired and liabilities assumed in a business combination are measured
and recognized at fair value as of the acquisition date. The excess of the consideration over the fair value of assets acquired and liabilities
assumed is allocated to goodwill. The final purchase price allocation could differ materially from the preliminary allocation used in
the transaction accounting adjustments as the final allocation may include changes in allocations to intangible assets as well as goodwill.

 

The unaudited pro forma condensed
combined financial information includes certain reclassifications to conform LivePerson’s and Interactions’ historical accounting
presentation to SoundHound’s accounting presentation.

 

The unaudited pro forma condensed
combined balance sheet as of March 31, 2026 gives effect to the LivePerson Merger, as if the Merger had been completed on March 31,
2026 and combines the unaudited condensed consolidated balance sheet of SoundHound as of March 31, 2026 with LivePerson’s unaudited
condensed consolidated balance sheet as of March 31, 2026.

 

The unaudited pro forma condensed
combined statements of operations for the year ended December 31, 2025 and the three months ended March 31, 2026 give effect
to the LivePerson Merger as if it had occurred on January 1, 2025, the first day of SoundHound’s fiscal 2025, and combines
the historical results of SoundHound, Interactions, and LivePerson. The unaudited pro forma condensed combined statement of operations
for the year ended December 31, 2025 combines the audited consolidated statement of operations of SoundHound for the year ended December 31,
2025 with LivePerson’s audited consolidated statement of operations for the year ended December 31, 2025 and Interactions’
unaudited consolidated statement of operations from January 1, 2025 to September 2, 2025. The unaudited pro forma condensed
combined statement of operations for the three months ended March 31, 2026 combines the unaudited condensed consolidated statement
of operations of SoundHound for the three months ended March 31, 2026 with LivePerson’s unaudited condensed consolidated
statement of operations for the three months ended March 31, 2026.

 

The pro forma financial information
reflects transaction accounting adjustments that management believes are necessary to present fairly SoundHound’s pro forma results
of operations and financial position following the closing of the LivePerson Merger as of and for the periods indicated. The pro forma
adjustments, which SoundHound believes are reasonable under the circumstances, are preliminary and are based upon available information
and certain assumptions described in the accompanying notes to the unaudited pro forma condensed combined financial information. Actual
results and valuations may differ materially from the assumptions within the accompanying unaudited pro forma condensed combined financial
information.

 

 6

  

 

 

The actual results of operations
of the combined company will likely differ, perhaps materially, from the pro forma amounts reflected herein due to a variety of factors.
The Company believes that its assumptions and methodologies provide a reasonable basis for presenting all of the significant effects of
the transactions based on information available to management at this time, and that the pro forma transaction accounting adjustments
give effect to those assumptions and are properly applied in the unaudited pro forma condensed combined financial information.

 

The unaudited pro forma condensed
combined financial information does not give effect to any anticipated synergies, operating efficiencies, tax savings, or cost savings
that may be associated with the LivePerson Merger.

 

No deferred tax liability has
been recorded with respect to the basis differences associated with the identifiable intangible assets recognized in the transaction because
the Company has sufficient net operating loss carryforwards to offset the related deferred tax effects. Accordingly, no pro forma balance
sheet adjustment has been reflected for such intangible assets. The preliminary purchase price allocation in the unaudited pro forma information
reflects a full valuation allowance against the acquired U.S. federal and state net deferred tax assets, including net operating
loss carryforwards, as the realization of the full amount of these acquired net deferred tax assets is uncertain, and reflects the carryover
of deferred tax balances of foreign jurisdictions which do not carry a full valuation allowance.

 

Income tax expense reflects
the combined historical income tax provisions of LivePerson and SoundHound. This presentation assumes that the existing full valuation
allowance will continue to be maintained and, therefore, no incremental tax benefit or other pro forma tax adjustment has been reflected
in the unaudited pro forma condensed statement of operations. Management has not completed its analysis of the tax impact of the LivePerson
Merger on the combined company. Upon consummation of the LivePerson Merger, SoundHound will perform a comprehensive analysis of the tax
impact of the LivePerson Merger on the combined company with full information. The effective tax rate of the combined company could be
significantly different than what is presented in these unaudited pro forma financial statements depending on post-business combination
activities.

 

Note 2 — Reclassification Adjustments

 

The accounting policies used
in the preparation of the unaudited pro forma condensed combined financial information are those set out in SoundHound’s unaudited
condensed consolidated financial statements as of and for the three months ended March 31, 2026 and SoundHound’s audited
annual financial statements as of and for the year ended December 31, 2025. Certain reclassifications are reflected in the unaudited
pro forma condensed combined balance sheet and statement of operations to conform presentation between SoundHound and LivePerson. These
reclassifications have no effect on previously reported assets, liabilities, stockholders’ equity (deficit) and net loss of SoundHound
or LivePerson. Upon consummation of the LivePerson Merger, SoundHound will perform a comprehensive review of LivePerson’s accounting
policies. As a result of that review, SoundHound may identify differences between the accounting policies of the two companies which,
when conformed, could have a material impact on the combined consolidated financial statements.

 

 7

  

 

 

Refer to the table below for
a summary of identified reclassification adjustments made to present LivePerson’s consolidated balance sheet as of March 31,
2026, to conform presentation to that of SoundHound (in thousands):

 

 
 LivePerson Consolidated 
Balance Sheet Line Items 
 SoundHound Consolidated Balance Sheet Line Items 
 LivePerson Historical  
 Reclassification Adjustments  
 Note 
 LivePerson Historical (Adjusted) 

 
 Current assets: 
 Current assets: 
     
     
   
    

 
 Cash and cash equivalents 
 Cash and cash equivalents 
 $101,499  
 $—  
   
 $101,499 

 
 Accounts receivable, net of allowances 
 Accounts receivable, net of allowances 
  29,029  
  (3,365) 
 (d) 
  25,664 

 
 Prepaid expenses and other current assets 
 Other current assets 
  15,417  
     
   
  15,417 

 
   
 Contract assets and unbilled receivable, net 
     
  3,365  
 (d) 
  3,365 

 
 Total current assets 
 Total current assets 
  145,945  
  —  
   
  145,945 

 
   
 Right-of-use assets 
     
  72  
 (a) 
  72 

 
 Property and equipment, net 
 Property and equipment, net 
  87,858  
  (83,242) 
 (e) 
  4,616 

 
 Goodwill 
 Goodwill 
  184,540  
     
   
  184,540 

 
 Intangible assets, net 
 Intangible assets, net 
  13,502  
     
   
  13,502 

 
 Deferred tax asset 
 Deferred tax asset 
  4,533  
     
   
  4,533 

 
 Contract acquisition costs, net 
 Other non-current assets 
  20,856  
     
   
  20,856 

 
 Other assets 
 Other non-current assets 
  348  
  83,170  
 (a), (e) 
  83,518 

 
 Total assets 
 Total assets 
 $457,582  
 $—  
   
 $457,582 

 
   
   
     
     
   
    

 
 Current liabilities: 
 Current liabilities: 
     
     
   
    

 
 Accounts payable 
 Accounts payable 
  4,357  
     
   
 $4,357 

 
 Accrued expenses and other current liabilities 
 Accrued liabilities 
  48,105  
  (444) 
 (b), (c) 
  47,661 

 
   
 Operating lease liabilities 
     
  87  
 (c) 
  87 

 
 Deferred revenue 
 Deferred revenue 
  57,987  
     
   
  57,987 

 
   
 Other current liabilities 
     
  357  
 (b) 
  357 

 
 Current portion of long-term debt 
 Other current liabilities 
  20,071  
     
   
  20,071 

 
 Total current liabilities 
 Total current liabilities 
  130,520  
  —  
   
  130,520 

 Senior notes, net of current portion 
 Long-term debt 
  373,723  
        
   
  373,723 

 
 Deferred tax liability 
 Deferred tax liability 
  4,199  
     
   
  4,199 

 
 Other liabilities 
 Other non-current liabilities 
  636  
     
   
  636 

 
 Total liabilities 
 Total liabilities 
 $509,078  
 $            —  
   
 $509,078 

 
   
   
     
     
   
    

 
 Stockholders’ equity (deficit) 
 Stockholders’ equity (deficit): 
     
     
   
    

 
 Common stock 
 Class A Common Stock 
  173  
     
   
  173 

 
 Treasury stock 
 Treasury stock, at cost 
  (3) 
     
   
  (3)

 
 Additional paid-in capital 
 Additional paid-in capital 
  1,023,338  
     
   
  1,023,338 

 
 Accumulated deficit 
 Accumulated deficit 
  (1,067,321) 
     
   
  (1,067,321)

 
 Accumulated other comprehensive income (loss) 
 Accumulated other comprehensive income (loss) 
  (7,683) 
     
   
  (7,683)

 
 Total stockholders’ equity 
 Total stockholders’ equity 
 $(51,496) 
 $—  
   
 $(51,496)

 
 Total liabilities and stockholders’ equity 
 Total liabilities and stockholders’ equity 
 $457,582  
 $—  
   
 $457,582 

 

 

(a)Reclassification of LivePerson’s historical right-of-use
assets of $0.1 million from other assets to right-of-use assets within SoundHound’s balance sheet.

 

 8

  

 

 

(b)Reclassification of LivePerson’s historical other current
liabilities of $0.4 million from accrued expenses and other current liabilities to other current liabilities within SoundHound’s
balance sheet.

 

(c)Reclassification of LivePerson’s historical lease liabilities
of $0.1 million from accrued expenses and other current liabilities to operating lease liabilities within SoundHound’s balance
sheet.

 

(d)Reclassification of LivePerson’s historical unbilled receivables
of $3.4 million from accounts receivable, net of allowances to contract assets and unbilled receivable, net within SoundHound’s
balance sheet.

 

(e)Reclassification of LivePerson’s historical internal-use
software development costs of $83.2 million from property and equipment to other non-current assets within SoundHound’s balance
sheet.

 

Refer to the table below for
a summary of identified reclassification adjustments made to present LivePerson’s consolidated statement of operations for the year
ended December 31, 2025, to conform presentation to that of SoundHound (in thousands):

 

 
 LivePerson Consolidated Statement of Operations Line Items 
 SoundHound Consolidated Statement of Operations Line Items 
 LivePerson Historical  
 Reclassification Adjustments  
 Note 
 LivePerson Historical (Adjusted) 

 
 Revenues 
 Revenues 
 $243,742  
     
   
 $243,742 

 
 Costs, expenses and other: 
 Operating expenses: 
     
     
   
    

 
 Cost of revenue (exclusive of depreciation and amortization shown separately below) 
 Cost of revenues 
  69,392  
  5,426  
 (a) 
  74,818 

 
 Sales and marketing 
 Sales and marketing 
  75,800  
  2,423  
 (a) 
  78,223 

 
 Product development 
 Research and development 
  54,706  
  13,939  
 (a) 
  68,645 

 
 General and administrative 
 General and administrative 
  44,441  
  235  
 (a) 
  44,676 

 
   
 Amortization of intangible assets 
  —  
  709  
 (a) 
  709 

 
 Restructuring costs 
 Restructuring 
  11,667  
     
   
  11,667 

 
 Depreciation and amortization 
   
  22,732  
  (22,732) 
 (a) 
  — 

 
 Impairment of goodwill 
 Impairment of goodwill 
  41,595  
     
   
  41,595 

 
 Impairment of intangibles and other assets 
 Impairment of intangibles and other assets 
  2,108  
     
   
  2,108 

 
 Total operating expenses 
 Total operating expenses 
  322,441  
  —  
   
  322,441 

 
 Loss from operations 
 Loss from operations 
  (78,699) 
  —  
   
  (78,699)

 

 

 9

  

 

 

 
 LivePerson Consolidated Statement of Operations Line Items 
 SoundHound Consolidated Statement of Operations Line Items 
 LivePerson Historical  
 Reclassification Adjustments  
 Note 
 LivePerson Historical (Adjusted) 

 
 Other income (expense), net 
 Other income (expense), net 
     
     
   
    

 
 Gain on troubled debt restructuring 
 Gain on troubled debt restructuring 
  27,720  
     
   
  27,720 

 
 Interest expense 
 Interest expense 
  (31,530) 
     
   
  (31,530)

 
 Interest income 
   
  4,751  
  (4,751) 
 (b) 
  — 

 
 Other income (expense), net 
 Other income (expense), net 
  13,977  
  4,751  
 (b) 
  18,728 

 
 Total other
 income (expense), net 
 Total other income (expense), net 
  14,918  
  —  
   
  14,918 

 
 Loss before provision for income taxes 
 Loss before provision (benefit) for income taxes 
  (63,781) 
     
   
  (63,781)

 
 Provision for income taxes 
 Provision (benefit) for income taxes 
  3,452  
     
   
  3,452 

 
 Net loss 
 Net loss 
 $(67,233) 
 $—  
   
 $(67,233)

 

 

(a)Reclassification of $22.7 million of historical LivePerson’s
depreciation and amortization to cost of revenues, sales and marketing, general and administrative, research and development, and amortization
of intangible assets within SoundHound’s statement of operations line items.

 

(b)Reclassification of $4.8 million of historical LivePerson’s
interest income from interest income to other income, net within SoundHound’s statement of operations line item.

 

Refer to the table below for
a summary of identified reclassification adjustments made to present LivePerson’s consolidated statement of operations for the three months
ended March 31, 2026, to conform presentation to that of SoundHound (in thousands):

 

 
 LivePerson Consolidated Income Statement Line Items 
 SoundHound Consolidated Income Statement Line Items 
 LivePerson Historical  
 Reclassification Adjustments  
 Note 
 LivePerson Historical (Adjusted) 

 
 Revenue 
 Revenues 
 $56,956  
     
   
 $56,956 

 
 Costs, expenses and other: 
 Operating expenses: 
     
     
   
    

 
 Cost of revenue (exclusive of depreciation and amortization shown separately below) 
 Cost of revenues 
  15,525  
  1,074  
 (a) 
  16,599 

 
 Sales and marketing 
 Sales and marketing 
  13,770  
  430  
 (a) 
  14,200 

 
 Product development 
 Research and development 
  12,180  
  3,256  
 (a) 
  15,436 

 
 General and administrative 
 General and administrative 
  12,120  
  180  
 (a) 
  12,300 

 
   
 Amortization of intangible assets 
     
  172  
 (a) 
  172 

 
 Depreciation and amortization expense 
   
  5,112  
  (5,112) 
 (a) 
  — 

 
 Total operating expenses 
 Total operating expenses 
  58,707  
  —  
   
  58,707 

 
 Loss from operations 
 Loss from operations 
  (1,751) 
  —  
   
  (1,751)

 
   
   
     
     
   
    

 
 Other income (expense), net: 
 Other income (expense), net: 
     
     
   
    

 
 Interest expense 
 Interest expense 
  (8,252) 
     
   
  (8,252)

 
 Interest income 
   
  503  
  (503) 
 (b) 
  — 

 
 Other income (expense), net 
 Other income (expense), net 
  998  
  503  
 (b) 
  1,501 

 
 Total other income (expense), net 
 Total other income (expense), net 
  (6,751) 
  —  
   
  (6,751)

 
 Loss before provision (benefit) for income taxes 
 Loss before provision (benefit) for income taxes 
  (8,502) 
     
   
  (8,502)

 
 Provision for income taxes 
 Provision for income taxes 
  325  
     
   
  325 

 
 Net loss 
 Net loss 
 $(8,827) 
 $—  
   
 $(8,827)

 

 

(a)Reclassification of LivePerson’s historical depreciation
and amortization of $5.1 million to cost of revenues, sales and marketing, general and administrative, research and development,
and amortization of intangible assets within SoundHound’s statement of operations line items.

 

(b)Reclassification of LivePerson’s historical interest income
of $0.5 million from interest income to other income, net within SoundHound’s statement of operations line item.

 

 10

  

 

 

Note 3 — Transaction Accounting
Adjustments to Unaudited Pro Forma Condensed Combined Statement of Operations for the year ended December 31, 2025, pertaining to
the Interactions Acquisition

 

The statement of operations
information for Interactions from September 3, 2025 to December 31, 2025, is already included in SoundHound’s historical
fiscal year 2025 results. The transaction accounting adjustments for the Interactions Acquisition in the unaudited pro forma condensed
combined statement of operations for the year ended December 31, 2025, are intended to derive pro forma financial information from
January 1, 2025 to September 2, 2025, as if the Interactions Acquisition closed on January 1, 2025, as follows:

  

 
   
 January 1, 2025 to September 2, 2025 

 
   
 (in thousands) 

 
   
 Interactions Historical (unaudited)  
 Interactions Transaction Accounting Adjustments  
 Note 
 Interactions Historical & Transaction Accounting Adjustments 

 
 Revenues 
 $42,781  
 $—  
   
 $42,781 

 
 Operating expenses: 
     
     
   
    

 
 Cost of revenues 
  20,323  
  (4,932) 
 3(a), 3(b) 
  15,391 

 
 Sales and marketing 
  6,426  
  (323) 
 3(b) 
  6,103 

 
 Research and development 
  2,416  
  —  
   
  2,416 

 
 General and administrative 
  12,912  
  —  
   
  12,912 

 
 Amortization of intangible assets 
  37  
  3,790  
 3(a) 
  3,827 

 
 Total operating expenses 
  42,114  
  (1,465) 
   
  40,649 

 
 Income from operations 
  667  
  1,465  
   
  2,132 

 
   
     
     
   
    

 
 Other income (expense), net: 
     
     
   
    

 
 Interest expense 
  (4,060) 
  4,060  
 3(c) 
  — 

 
 Other income (expense), net 
  1,380  
  (1,092) 
 3(d) 
  288 

 
 Total other income (expense), net 
  (2,680) 
  2,968  
   
  288 

 
 Loss before provision (benefit) for income taxes 
  (2,013) 
  4,433  
   
  2,420 

 
 Provision (benefit) for income taxes 
  (629) 
  629  
 3(e) 
  — 

 
 Net loss 
  (1,384) 
  3,804  
   
  2,420 

 
 Net loss attributable to non-controlling interest 
  (276) 
  276  
 3(f) 
  — 

 
 Net loss attributable to Interactions 
 $(1,108) 
 $3,528  
   
 $2,420 

 

 

(a)Reflects the elimination of Interactions’ historical amortization
expense and the recognition of new amortization expense related to the acquired identifiable intangible assets based on the fair value
as of the acquisition date. Amortization expense is calculated based on the fair value of each of the identifiable intangible assets
and the associated useful lives.

 

 11

  

 

 

The acquired intangible assets
have been amortized using a straight-line method based on their estimated useful lives as if the Acquisition had been completed on January 1,
2025.

 

 
 Intangible assets acquired 
 For the period from January 1, 2025 to September 2, 2025  
 Estimated useful life

 
   
 (in thousands)  
 (in years)

 
 Trademark/Trade name 
 $267  
 2

 
 Customer relationships 
  3,560  
 5

 
 Developed technology 
  1,600  
 5

 
 Total amortization expense for acquired intangible assets 
 $5,427  
  

 

 

Adjustment to Cost of revenues —

 

 
   
 For the period from January 1, 2025 to September 2, 2025 

 
   
 (in thousands) 

 
 Amortization expense for acquired intangible assets (developed technology) 
 $1,600 

 
 Elimination of historical Interactions’ intangible asset amortization expense 
  — 

 
 Net adjustment to cost of revenues 
 $1,600 

 

 

Adjustment to Amortization of intangible assets —

 

 
   
 For the period from January 1, 2025 to September 2, 2025 

 
   
 (in thousands) 

 
 Amortization expense for acquired intangible assets (customer relationships and trademark/trade name) 
 $3,827 

 
 Elimination of historical Interactions’ intangible asset amortization expense 
  (37)

 
 Net adjustment to amortization of intangible assets 
 $3,790 

 

 

 12

  

 

 

 

(b)Reflects the elimination of historical deferred commission amortization
and capitalized contract expense from sales and marketing expenses, and historical amortization of capitalized software development costs
from Cost of revenues.

 

 
   
 For the period from January 1, 2025 to September 2, 2025 

 
   
  (in thousands) 

 
 Sales and marketing 
 $(323)

 
 Cost of revenues 
  (6,532)

 

 

(c)Reflects the reduction of $4.1 million in historical interest
expense related to the settlement of Interactions’ debt at closing.

 

(d)Reflects an adjustment to eliminate the historical fair value
adjustments of warrant liabilities extinguished as a result of the Acquisition, resulting in a reduction of $1.1 million of historical
gains.

 

(e)Reflects the elimination of $0.6 million of tax benefit. Prior
to the acquisition, Interactions held interest in a partnership and recorded a deferred tax liability associated with the outside basis
difference and recorded the corresponding deferred tax expense/benefit as a result of changes to the deferred tax liability. However,
upon the Acquisition, the partnership became a single member LLC and the deferred tax liability is no longer needed. Accordingly, no
deferred tax expense/benefit would be recorded.

 

(f)Reflects the elimination of $0.3 million of loss, from earnings
attributable to non-controlling interest due to changes in Interactions’ ownership structure.

 

Note 4 — Transaction Accounting
Adjustments to Unaudited Pro Forma Condensed Combined Balance Sheet and Statement of Operations — LivePerson Merger

 

The estimated preliminary consideration
of $271.8 million was determined by reference to the fair value of SoundHound’s common stock on June 25, 2026 of $6.21 per
share. The calculation of estimated preliminary consideration is as follows:

 

Estimated Preliminary Consideration

 

 
   
 Shares  
 Per Share  
 Total 

 
   
 (In thousands, except share and per share amounts) 

 
 Estimated SoundHound shares issued for settlement of Secured Notes(1) 
  37,316,495  
 $6.21  
 $231,735 

 
 Estimated SoundHound shares issued to holders of non-TASE Shares(2) 
  5,086,246  
  6.21  
  31,586 

 
 Estimated replacement equity awards for LivePerson’s equity awards(3) 
  176,136  
  6.21  
  995 

 
 Estimated equity consideration for LivePerson’s equity awards settled(4) 
  54,423  
  6.21  
  338 

 
 Estimated cash consideration to holders of TASE Share(5) 
     
     
  7,181 

 
 Total 
     
     
 $271,835 

 

 

 

(1)SoundHound expects the Secured Notes to be entirely settled
in shares of Class A Common Stock. As such, estimated preliminary consideration is equal to the fair value of shares issued to holders
of the Secured Notes based on the Total Consideration for the First and Second Lien Secured Notes each divided by the $7.00 floor price
as follows:

 

 
 Description 
 First Lien  
 Second Lien  
 Total 

 
 Total Consideration 
 $178,007,734  
 $83,207,733  
 $261,215,467 

 
 Divided by floor price 
 $7.00  
 $7.00  
    

 
 Shares to be issued 
  25,429,676  
  11,886,819  
  37,316,495 

 
 Multiplied by fair value per share 
 $6.21  
 $6.21  
    

 
 Total fair value of shares issued 
 $157,918,288  
 $73,817,146  
 $231,735,434 

 
 

 13

  

 

 

(2)Common stock consideration is computed based on the Shareholder
Consideration Amount of $42.8 million divided by the $7.00 floor multiplied by the quotient of the fully diluted non-TASE Shares
divided by the fully diluted shares of LivePerson common stock issued and outstanding, rounded to the nearest whole share.

 

(3)Certain equity awards of LivePerson will be replaced by SoundHound
equity awards. The pre-combination portion of such equity awards represents estimated preliminary consideration. There was no incremental
post-acquisition expense in excess of that recorded in the historical financial statements of SoundHound as a result of the replacement
equity awards. We have adjusted replacement equity award consideration down by $0.1 million, but not shares, to reflect the fair value
of estimated forfeitures.

 

(4)Certain Board of Directors’ and vested equity awards of
LivePerson will be settled in shares of SoundHound common stock. Such settlement of equity awards represents estimated preliminary consideration.

 

(5)Cash consideration to TASE shareholders amounting to $7.2 million
is computed by the lower of (a) $7.5 million, and (b) the Closing Merger Consideration multiplied by the 10-day VWAP stock price of $6.84
estimated as of June 25, 2026, and further multiplied by the quotient of the fully diluted TASE Shares divided by the fully diluted shares
of LivePerson common stock issued and outstanding. The maximum amount of cash that can be granted to TASE shareholders is $7.5 million.

 

The final shares and total
estimated preliminary consideration could significantly differ from the amounts presented in the unaudited pro forma condensed combined
financial information due to movements in the SoundHound common stock price up to the closing date of the LivePerson Merger.

 

The Company has assumed that
the 2026 Notes will be settled by LivePerson in cash prior to close. There exists a remote possibility that the 2026 Notes may be assumed
by the Company and in that case, there will be no impact on consideration transferred and goodwill.

 

The SoundHound Closing Stock
Price was determined based on the average of the daily volume-weighted average price of SoundHound Common stock for each of the ten consecutive trading
days ending on and including the trading day that is three trading days prior to the closing date, subject to a collar of $7.00
(floor) and $12.00 (cap) per share. June 25, 2026 was determined to be the most recent practicable date prior to the effective date. As
such, June 25, 2026 was the last day of this ten-day volume-weighted period, in which the stock price was determined.

 

A sensitivity analysis on the SoundHound share
price was performed to assess the impact on purchase consideration at each end of the collar, or $7 per share and $12 per share, and a
change of 30% on the closing date share price of $6.21 estimated as of June 25, 2026, as this represents a reasonable range for share
price based on recent volatility. Purchase consideration will not be impacted by stock price volatility within the collar when SoundHound
Closing Stock Price and closing date share price match. If the closing share price falls below the floor, purchase consideration will
decrease ratably by the shortfall of the share price against the floor. Likewise, if the share price exceeds the cap, purchase consideration
will increase ratably by the excess of the share price over the cap. The impact to purchase consideration from LivePerson equity awards
when considering a 30% range of outcomes, is immaterial, and has been excluded from the share price sensitivity analysis below.

 

 14

  

 

 

The following table shows the
change in stock price and estimated consideration when no cash is paid to TASE shareholders:

 

 
 SoundHound Closing Stock Price 
 Number of Shares  
 Share Price (June 25, 2026 +/- 30%)  
 Fair Value of Shares Issued (Consideration)  
 Impact on Purchase Consideration 

 
   
 (In thousands, except share and per share amounts) 

 
 Floor – $7 (with a 30% increase in share price) 
  43,428,571  
 $8.07  
 $350,469  
 $78,634 

 
 Floor – $7 (with a 30% decrease in share price) 
  43,428,571  
 $4.35  
 $188,914  
 $(82,921)

 
 Cap – $12 (with a 30% increase in share price) 
  25,333,334  
 $8.07  
 $204,440  
 $(67,395)

 
 Cap – $12 (with a 30% decrease in share price) 
  25,333,334  
 $4.35  
 $110,220  
 $(161,615)

 

 

Preliminary Purchase Price Allocation

 

Under the acquisition method
of accounting, the identifiable assets acquired and liabilities assumed of LivePerson are recognized and measured as of the acquisition
date at fair value and added to those of SoundHound. The determination of fair value used in the pro forma adjustments presented herein
are preliminary and based on management estimates of the fair value and useful lives of the assets acquired and liabilities assumed and
have been prepared to illustrate the estimated effect of the LivePerson Merger. The final determination of the purchase price allocation,
upon the completion of the LivePerson Merger, will be based on LivePerson’s net assets acquired as of that date and will depend
on a number of factors that cannot be predicted with certainty at this time. Therefore, the actual allocations will differ from the pro
forma adjustments presented. The allocation is dependent upon certain valuation and other studies that have not yet been completed. Accordingly,
the pro forma purchase price allocation is subject to further adjustment as additional information becomes available and as additional
analyses and final valuations are completed. There can be no assurances that these additional analyses and final valuations will not result
in significant changes to the estimates of fair value set forth below.

 

The following table sets forth
a preliminary a