Executives and directors of California-based voice recognition technology company SoundHound Inc. were hit with a shareholder derivative suit alleging they failed to disclose material weaknesses related to accounting for two acquisitions completed last year. As alleged in the complaint, SoundHound announced last month it would be unable to file its 2024 annual report on time due to the “complexity” of accounting for acquisitions, causing shares to decline nearly 6%. The suit says SoundHound revealed in March that its weak internal controls caused it to make errors in determining the preliminary purchase price allocation that existed at the time it acquired Synq3, a company providing voice ordering systems in the food and beverage industry, in January 2024; and Amelia Holdings Inc., a conversational AI platform, in August 2024. Before the March disclosures, Sound Hound told investors the two acquisitions it completed in 2024 contributed to its “breakthrough year” and expanded its leadership position in the industry.
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