SOUNDHOUND AI, INC.

Current report

Changes to U.S. tax laws could adversely impact our results of operations and cash flow.

Current report

We are subject to U.S. tax laws and regulations, which are complex and often changing. Changes in tax rules and regulations, or a failure to comply with any new tax laws and regulations, may adversely affect our results of operations and cash flow. On July 4, 2025, the United States enacted tax reform legislation through the One Big Beautiful Bill Act. Included in this legislation are provisions that allow for the immediate expensing of domestic United States research and development expenses, immediate expensing of certain capital expenditures, and other changes to the U.S. taxation of profits derived from foreign operations. We do not expect that the enactment of the legislation will lead to a significant change of our tax expense during the third and fourth quarters of 2025, primarily due to our taxable loss position and the full valuation allowance on deferred tax assets in the US jurisdiction. The Company continues to evaluate the impact the new legislation will have on our annual or interim consolidated financial statements.

Previous report

Although SoundHound is not directly impacted by the tariffs as a software-as-a-service (SaaS) provider, SoundHound’s business or stock price may be adversely affected by the imposition of duties and tariffs and other trade barriers and retaliatory countermeasures on our customers implemented by the U.S. and other governments.

Previous report

Recently there have been significant changes to U.S. trade policies, sanctions, legislation, treaties and tariffs, including, but not limited to, trade policies and tariffs affecting products from outside of the U.S. For example, in early April, 2025, the current U.S. presidential administration announced significant new tariffs on foreign imports into the U.S. from about 90 nations. Although SoundHound is not directly impacted by the tariffs as a software-as-a-service (SaaS) provider, the extent and duration of increased tariffs and the resulting impact on general economic conditions and on our business partners are uncertain and depend on various factors, such as negotiations between the U.S. and affected countries, the responses of other countries or regions, and exemptions or exclusions that may be granted. Any new or additional tariffs on goods imported to the U.S. could also increase the cost of our business partners and reduce their margins, which may eventually impact the demand of our products and services or our pricing strategy, depending on our business partners' ability to mitigate tariffs through alternative sourcing or manufacturing or allocate tariff costs to counterparties. Additionally, U.S. policy changes and uncertainty about such changes could increase market volatility and currency exchange rate fluctuations. As a result of these dynamics, we cannot predict the impact to our business or stock price that may be caused by any future changes to the U.S.’s or other countries’ trading relationships or the impact of new laws or regulations adopted by the U.S. or other countries.