425: SoundHound AI and LivePerson Amend Merger Agreement

SoundHound AI, Inc. has entered into an Amended and Restated Merger Agreement with LivePerson, Inc., outlining the terms for their previously announced merger.

Summary

• SoundHound AI, Inc. (the Company) and LivePerson, Inc. have entered into an Amended and Restated Merger Agreement, updating the original agreement from April 21, 2026.
• The agreement details a two-step merger process where Merger Sub I will merge with LivePerson, followed by Merger Sub II merging with the surviving entity.
• LivePerson shareholders will receive shares of SoundHound AI's Class A Common Stock, with the exchange ratio determined by a specified formula based on SoundHound AI's stock price.
• A portion of LivePerson's shareholders, specifically those holding shares through the Tel-Aviv Stock Exchange Clearing House Ltd. (TASE Shares), will receive cash consideration.
• The aggregate consideration amount is calculated based on a base amount of $42,784,532.64, adjusted by LivePerson Shortfall Cash and the aggregate exercise price of in-the-money options.
• The agreement outlines specific treatments for LivePerson's outstanding equity awards, including options and RSUs, with some being assumed by SoundHound AI and others being cashed out or cancelled.
• Warrants to purchase LivePerson Common Stock will be cancelled without any payment.
• The closing of the merger is subject to customary conditions, including the adoption of the agreement by LivePerson stockholders, receipt of regulatory approvals, and the listing of SoundHound AI's shares on Nasdaq.
• The agreement includes provisions for termination under specific circumstances, such as failure to close by October 21, 2026 (with a potential extension to December 5, 2026), failure to obtain stockholder approval, or a material breach by either party.
• LivePerson may be required to pay a termination fee of $5,000,000 plus expenses to SoundHound AI under certain termination scenarios.

Sentiment

Score: 6

Explanation: StockSavvy.ai views this as a neutral to slightly positive development, as the amendment indicates continued commitment to the merger, but the inherent risks and conditions of the transaction remain.

Positives

• The amendment to the merger agreement signifies continued progress towards the acquisition of LivePerson by SoundHound AI.
• The agreement clearly defines the exchange ratios and consideration for LivePerson shareholders, providing clarity on the transaction terms.
• Specific provisions for the treatment of equity awards and warrants aim to address existing incentives and potential dilution.

Negatives

• The merger is subject to various closing conditions, including regulatory approvals and stockholder adoption, which introduce execution risk.
• The potential for a termination fee of $5,000,000 plus expenses for LivePerson creates a financial risk if the deal does not close under certain circumstances.

Risks

• The transaction may not be completed or may not provide the expected benefits.
• Failure to obtain LivePerson stockholder approval or required regulatory approvals could prevent the closing.
• Conditions to closing may not be satisfied on a timely basis or at all.
• Stockholder litigation in connection with the merger could result in expense or delay.
• Integration of SoundHound AI and LivePerson may be more difficult, time-consuming, or expensive than anticipated.
• There is a risk of customer loss or other business disruption in connection with the transaction, or loss of key employees.
• Unforeseen liabilities of either company may exist.
• Changes in applicable laws or regulations, and extensive and evolving government regulations, could impact operations.
• Investigations, claims, disputes, enforcement actions, litigation, and other regulatory or legal proceedings, particularly concerning AI technology, could arise.
• SoundHound AI may not be able to manage strains associated with its growth.
• Dependence on key personnel is a risk factor.
• Stock price volatility for SoundHound AI is a consideration.
• The ability to protect intellectual property and litigation risks are present.
• LivePerson's usage patterns, customer renewals, and customer outcomes may differ from expectations.
• Cybersecurity incidents or breaches impacting LivePerson's business are a risk.
• Risks related to the use and regulation of artificial intelligence and machine learning are noted.
• General economic, financial, legal, political, and business conditions could impact the transaction and the combined entity.

Future Outlook

The filing does not provide specific forward-looking financial guidance but details the structure and terms of the proposed acquisition of LivePerson by SoundHound AI, which is expected to create a combined entity with enhanced capabilities in conversational AI.

Industry Context

StockSavvy.ai notes that this amended merger agreement between SoundHound AI and LivePerson reflects ongoing consolidation trends in the AI and conversational technology sectors, as companies seek to scale and expand their offerings in a competitive market.

Legal Proceedings

• Risk of stockholder litigation in connection with the Mergers.

Stakeholder Impact

• LivePerson shareholders will receive SoundHound AI stock or cash, depending on the share's listing.
• SoundHound AI shareholders will see their company acquire LivePerson, potentially altering the company's scale and market position.
• Employees of both companies may face changes in roles, responsibilities, and benefits as integration plans are executed.
• Creditors and suppliers of both companies may see changes in contractual relationships and payment terms post-merger.

Next Steps

• LivePerson stockholders to adopt the Amended and Restated Merger Agreement.
• SoundHound AI to prepare and file a registration statement on Form S-4 with the SEC.
• Obtain necessary regulatory approvals.
• Satisfy other customary closing conditions.
• Complete the two-step merger process.

Key Dates

Keywords

SoundHound AI, LivePerson, Merger Agreement, Acquisition, AI Technology, Speech Recognition, Conversational AI, SEC Filing, Form 8-K, Merger Terms, Stock Consideration, Cash Consideration, Equity Awards, Warrants, Closing Conditions, Termination Fee