SoundHound AI, Inc. (NASDAQ: SOUN) Securities Fraud Class Action

LEAD PLAINTIFF DEADLINE IS MAY 27, 2025.

If you have suffered losses and would like to discuss your rights, please fill out this form or you may contact Jonathan Naji, Esq. at (484) 270-1453 or via e-mail at info@ktmc.com.

Case Background:
A class action lawsuit was filed on behalf of those who purchased or otherwise acquired SoundHound AI, Inc. (“SoundHound”) (NASDAQ: SOUN) securities between May 10, 2024, and March 3, 2025, inclusive (the “Class Period”). 

Before the beginning of the Class Period, in January 2024, SoundHound acquired all of the issued and outstanding equity of SYNQ3, a provider of voice AI and other technology solutions to the restaurant industry, for total purchase consideration of $15.8 million. The Class Period begins on May 10, 2024, the day after SoundHound hosted an earnings call with investors and analysts—post-market on May 9, 2024—to discuss the company’s first quarter 2024 results (the “Q1 2024 Earnings Call”). During the scripted portion of the Q1 2024 Earnings Call, SoundHound stated, “[w]ith our recent acquisitions, SYNQ3, now fully in the mix, the benefits of integrating this pioneering restaurant tech organization with our years of voice AI innovations are clear. And the breadth of coverage we now have in the restaurant sector is so exciting and showing up in overflowing customer activity.” Also on May 10, 2024, SoundHound filed a Quarterly Report on Form 10-Q with the SEC, reporting the company’s financial and operational results for the quarter ended March 31, 2024 (the “Q1 2024 10-Q”). In providing an overview of SoundHound’s controls and procedures, the Q1 2024 10-Q acknowledged that SoundHound had previously identified material weaknesses in its internal control over financial reporting “related to the control environment as the Company lacked sufficient oversight of activities related to its internal control over financial reporting due to a lack of appropriate level of experience and training commensurate with its financial reporting requirements,” but discussed its purported efforts to remediate the foregoing weaknesses.

In August 2024, SoundHound acquired Amelia Holdings, Inc., a privately-held conversational AI software company involved in the development and delivery of AI and automation solutions and related services, for a “[p]urchase price of $80M in cash and equity, with partial payment and assumption of Amelia’s debt, as well as future earnout potential aligned to revenue milestone achievements” (the “Amelia Acquisition”). 

Then, on March 4, 2025, SoundHound disclosed in a filing with the SEC that it would be unable to timely file its Annual Report for 2024. Specifically, SoundHound stated that “[d]ue to the complexity of accounting for [the SYNQ3 and Amelia Acquisitions], the Company require[d] additional time to prepare financial statements and accompanying notes,” and that SoundHound “ha[d] identified material weaknesses in its internal control over financial reporting.” On this news, SoundHound’s stock price fell $0.61 per share, or 5.86%, to close at $9.72 per share on March 4, 2025.

After the end of the Class Period, on March 11, 2025, SoundHound released its 2024 financial report, revealing that, as of December 31, 2024, “[t]he Company did not design and maintain effective controls related to the identification of and accounting for certain non-routine, unusual or complex transactions, including the accounting for complex financing transactions and acquisitions.” Additionally, SoundHound disclosed that it had “recorded adjustments to correct certain errors in the preliminary purchase price allocation that existed as of [August 6, 2024 (the Amelia Acquisition date)],” which “decreased the contingent earnout consideration by $5.3 million, decreased the accounts payable by $3.7 million, decreased the accrued liabilities by $1.2 million, increased deferred revenue by $0.3 million and increased the deferred tax liabilities by $0.7 million”

The complaint alleges that, throughout the Class Period, Defendants made false and misleading statements and/or failed to disclose that: (1) the material weaknesses in SoundHound’s internal controls over financial reporting impaired SoundHound’s ability to effectively account for corporate acquisitions; (2) SoundHound overstated the extent to which it had remediated, and/or its ability to remediate, the material weaknesses in its internal controls over financial reporting; (3) as a result of the foregoing material weaknesses, SoundHound’s reported goodwill following the Amelia Acquisition was inflated and would need to be corrected; (4) SoundHound would likely require extra time and expense to effectively account for the SYNQ3 and Amelia Acquisitions; (5) the foregoing increased the risk that SoundHound would be unable to timely file certain financial reports with the SEC; and (6) as a result, SoundHound’s public statements were materially false and misleading at all relevant times.
 

What is a Lead Plaintiff?

A lead plaintiff is a representative party that acts on behalf of other class members in directing the litigation. In order to be appointed lead plaintiff, the Court must determine that the class member’s claim is typical of the claims of other class members, and that the class member will adequately represent the class. Your ability to share in any recovery is not, however, affected by the decision whether or not to serve as a lead plaintiff. Filling out the online form above or communicating with any counsel is not necessary to participate or share in any recovery achieved in this case.  Any member of the purported class may move the court to serve as a lead plaintiff through counsel of his/her choice, or may choose to do nothing and remain an inactive class member.