Filing summary
Entity and period: The supplied filing is Archimedes Tech SPAC Partners Co.’s Form 10-Q for the quarter ended March 31, 2021, signed July 26, 2021. This does not match the request metadata identifying SoundHound AI, Inc.; the filing describes a blank-check SPAC, not SoundHound.
Business context and financial results
Archimedes was formed to pursue a business combination, with a stated focus on artificial intelligence, cloud services, and automotive technology. It had not begun revenue-generating operations. The quarter’s activities related to formation, its March 2021 IPO, and the search for a target.
- Revenue: None reported; the company said it would not expect operating revenue before a business combination.
- Profit: Net loss was $84,033, comprising $81,441 of operating costs, $525 of trust interest income, and a $3,117 unrealized warrant fair-value loss. Basic and diluted loss per nonredeemable share was $0.02.
- Cash flow: Operating cash outflow was $185,958; investing outflow was $133.0 million, reflecting trust funding; financing inflow was $134.15 million. Ending cash outside the trust was $963,695.
- Assets and liquidity: Total assets were $134.13 million, including $133.00 million in the trust account and $963,695 of available cash. Trust assets were generally restricted for a business combination or redemptions.
- Liabilities and equity: Total liabilities were $385,336, including a $273,424 warrant liability; no debt was reported outstanding. Common stock subject to possible redemption was $128.74 million, classified as temporary equity. Stockholders’ equity was $5.00 million.
- Margins: Not meaningful because the company had no operating revenue.
Changes, outlook, and risks
- The March IPO raised $120.0 million, followed by a partial over-allotment raising another $13.0 million. Private placements raised $4.16 million. A total of $133.0 million was deposited in the trust account.
- Following SEC staff guidance on SPAC warrants, the company revised its accounting: private warrants were classified as derivative liabilities and remeasured at fair value, with changes recorded in earnings. It reported a $273,424 warrant liability at quarter-end and a $3,117 quarterly fair-value loss.
- Management stated that available working capital and borrowing capacity should meet needs through the earlier of a business combination or one year from the filing. The SPAC had 18 months from the IPO closing to complete a combination; otherwise it would wind up and redeem public subunits.
- The company reported ineffective disclosure controls and a material weakness in accounting for private warrants. Management described plans to enhance accounting review processes but gave no assurance of successful remediation.
- Risk disclosures include uncertainty from COVID-19 and the possibility that the company may not complete a business combination. The sponsor’s trust-protection indemnity may be difficult to collect; the company said it believed the sponsor was unlikely to be able to satisfy it.
- The cover page marks “No” for having filed all required reports during the preceding 12 months or applicable shorter period; investors should verify the filing-status context.
Important facts to verify
- Confirm the filing is the intended issuer: this document is for Archimedes Tech SPAC Partners Co., not SoundHound AI, Inc.
- Review the warrant-liability correction and related restatement disclosures, including the effects on previously reported figures.
- Assess remediation of the disclosed material weakness and the effectiveness of controls in subsequent filings.
- Verify the SPAC’s remaining unrestricted cash, trust restrictions, business-combination deadline, and any subsequent financing or transaction developments.
- Check the filing-status indication and subsequent SEC filings for any reporting delinquency or correction.