Cover Page
Cover Page - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Feb. 21, 2022 | Jun. 30, 2021 | |
Document Information [Line Items] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Entity File Number | 001-39314 | ||
Entity Registrant Name | TALKSPACE, INC. | ||
Entity Incorporation State Country Code | DE | ||
Entity Tax Identification Number | 84-4636604 | ||
Entity Central Index Key | 0001803901 | ||
City Area Code | 212 | ||
Local Phone Number | 284-7206 | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
Document Period End Date | Dec. 31, 2021 | ||
Document Fiscal Year Focus | 2021 | ||
Document Fiscal Period Focus | FY | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
ICFR Auditor Attestation Flag | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 789.8 | ||
Entity Common Stock, Shares Outstanding | 153,973,930 | ||
Documents Incorporated By Reference Text Block | DOCUMENTS INCORPORATED BY REFERENCE None. | ||
Auditor Firm Id | 1281 | ||
Auditor Name | Kost Forer Gabbay & Kasierer, a member of Ernst & Young Global | ||
Auditor Location | Tel-Aviv, Israel | ||
Common Stock | |||
Document Information [Line Items] | |||
Security12b Title | Common stock, par value $0.0001 per share | ||
Trading Symbol | TALK | ||
Security Exchange Name | NASDAQ | ||
Warrant | |||
Document Information [Line Items] | |||
Security12b Title | Warrants to purchase common stock | ||
Trading Symbol | TALKW | ||
Security Exchange Name | NASDAQ |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 | |
CURRENT ASSETS: | |||
Cash and cash equivalents | $ 198,256 | $ 13,248 | |
Accounts receivable, net of allowance of $4,918 and $824 as of December 31, 2021 and 2020, respectively | 5,512 | 5,914 | |
Other current assets | 9,562 | 1,515 | |
Total current assets | 213,330 | 20,677 | |
Property and equipment, net | 624 | 175 | |
Deferred issuance cost | 0 | 692 | |
Intangible assets, net | 3,436 | 5,195 | |
Goodwill | 6,134 | 6,134 | |
Other long-term assets | 82 | 0 | |
Total assets | 223,606 | 32,873 | |
CURRENT LIABILITIES: | |||
Accounts payable | 7,429 | 7,901 | |
Deferred revenues | 7,186 | 5,172 | |
Accrued expenses and other current liabilities | 12,562 | 7,416 | |
Total current liabilities | 27,177 | 20,489 | |
Warrant liabilities | 4,070 | 0 | |
Other long-term liabilities | 86 | 0 | |
Total liabilities | 31,333 | 20,489 | |
Commitments and contingencies (note 9) | |||
CONVERTIBLE PREFERRED STOCK: | |||
Convertible preferred stock (Series Seed, Seed-1, Seed-2, A, B, C and D) of $0.0001 par value - Authorized: 0 and 95,709,146 shares at December 31, 2021 and 2020, respectively; Issued and outstanding: 0 and 94,582,550 shares at December 31, 2021 and 2020, respectively (1) | [1] | 0 | 111,282 |
STOCKHOLDERS’ EQUITY (DEFICIT): | |||
Common stock of 0.0001 par value - Authorized: 1,000,000,000 and 129,397,278 shares at December 31, 2021 and 2020, respectively; Issued and outstanding: 152,862,447 and 13,413,431 shares at December 31, 2021 and 2020, respectively (1) | 15 | 1 | |
Additional paid-in capital (1) | [1] | 363,788 | 9,889 |
Accumulated deficit | [1] | (171,530) | (108,788) |
Total stockholders’ equity (deficit) | 192,273 | (98,898) | |
Total liabilities, convertible preferred stock and stockholders’ equity (deficit) | $ 223,606 | $ 32,873 | |
[1] | Prior period results have been adjusted to reflect the exchange of Old Talkspace’s common stock for Talkspace’s common stock at an exchange ratio of approximately 1.134140 in June 2021 as a result of the Business Combination. See Note 3, “Business Combination” in the notes to the consolidated financial statements for further details. |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) $ in Thousands | 1 Months Ended | 6 Months Ended | ||||
Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2021USD ($)$ / sharesshares | Jun. 22, 2021shares | Dec. 31, 2020USD ($)$ / sharesshares | Dec. 31, 2019USD ($) | |
Allowance, Accounts Receivable | $ | $ 4,918 | $ 824 | $ 0 | |||
Preferred stock, par value | $ / shares | $ 0.0001 | |||||
Preferred stock, shares authorized | 100,000,000 | |||||
Preferred stock, shares issued | 0 | |||||
Preferred stock, shares outstanding | 0 | |||||
Common stock, par value | $ / shares | $ 0.0001 | $ 0.0001 | ||||
Common stock, shares authorized | 1,000,000,000 | 129,397,278 | ||||
Common stock, shares issued | 152,862,447 | 13,413,431 | ||||
Common stock, shares outstanding | 152,862,447 | 152,255,736 | 13,413,431 | |||
Common stock, conversion ratio | 1.134140 | 1.134140 | ||||
Convertible Preferred Stock Series Seed Seed One Seed Two A,B,C And D | ||||||
Preferred stock, par value | $ / shares | $ 0.0001 | $ 0.0001 | ||||
Preferred stock, shares authorized | 0 | 95,709,146 | ||||
Preferred stock, shares issued | 0 | 94,582,550 | ||||
Preferred stock, shares outstanding | 0 | 94,582,550 |
Consolidated Statements of Oper
Consolidated Statements of Operations and Comprehensive Loss - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | ||
Statement Of Income And Comprehensive Income [Abstract] | ||||
Revenues | $ 113,671 | $ 76,190 | $ 38,178 | |
Cost of revenues | 46,899 | 26,353 | 18,042 | |
Gross profit | 66,772 | 49,837 | 20,136 | |
Operating expenses: | ||||
Research and development, net | 15,919 | 9,583 | 11,997 | |
Clinical operations | 9,365 | 4,332 | 4,672 | |
Sales and marketing | 100,641 | 47,705 | 27,536 | |
General and administrative | 34,770 | 10,199 | 5,359 | |
Total operating expenses | 160,695 | 71,819 | 49,564 | |
Operating loss | (93,923) | (21,982) | (29,428) | |
Financial (income) expense, net | (31,228) | 364 | (350) | |
Loss before taxes on income | (62,695) | (22,346) | (29,078) | |
Taxes on income | 47 | 24 | 8 | |
Net loss | (62,742) | (22,370) | (29,086) | |
Other comprehensive income (loss) | 0 | 0 | 0 | |
Comprehensive loss | $ (62,742) | $ (22,370) | $ (29,086) | |
Net loss per share (1): | ||||
Basic and diluted net loss per share | [1] | $ (0.72) | $ (1.67) | $ (2.29) |
Weighted average number of common shares used in computing basic and diluted net loss per share (1) | [1],[2] | 86,775,948 | 13,359,350 | 12,721,426 |
[1] | Prior period results have been adjusted to reflect the exchange of Old Talkspace’s common stock for Talkspace’s common stock at an exchange ratio of approximately 1.134140 in June 2021 as a result of the Business Combination. See Note 3, “Business Combination” in the notes to the consolidated financial statements for further details | |||
[2] | Prior period results have been adjusted to reflect the exchange of Old Talkspace’s common stock for Talkspace’s common stock at an exchange ratio of approximately 1.134140 in June 2021 as a result of the Business Combination. See Note 3, “Business Combination” for further details. |
Consolidated Statements of Op_2
Consolidated Statements of Operations and Comprehensive Loss (Prenthetical) | 1 Months Ended | 6 Months Ended |
Jun. 30, 2021 | Jun. 30, 2020 | |
Statement Of Income And Comprehensive Income [Abstract] | ||
Common stock, conversion ratio | 1.134140 | 1.134140 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders' Equity (Deficit) - USD ($) $ in Thousands | Total | Convertible Preferred Stock | Common Stock | Additional Paid-in Capital | Accumulated Deficit | |
Beginning balance at Dec. 31, 2018 | $ (54,214) | $ 1 | $ 3,117 | $ (57,332) | ||
Beginning balance, shares at Dec. 31, 2018 | 73,424,071 | |||||
Beginning balance, value at Dec. 31, 2018 | $ 60,078 | |||||
Beginning balance, shares at Dec. 31, 2018 | 11,713,491 | |||||
Issuance of series D convertible preferred stock, net of issuance costs | $ 51,204 | |||||
Issuance of series D convertible preferred stock, shares | 21,158,479 | |||||
Exercise of stock options | 297 | 297 | ||||
Exercise of stock options, share | 1,510,181 | |||||
Stock-based compensation | 3,404 | 3,404 | ||||
Net loss | (29,086) | (29,086) | ||||
Ending balance at Dec. 31, 2019 | (79,599) | $ 1 | 6,818 | (86,418) | ||
Ending balance, shares at Dec. 31, 2019 | 94,582,550 | |||||
Ending balance, value at Dec. 31, 2019 | $ 111,282 | |||||
Ending balance, shares at Dec. 31, 2019 | 13,223,672 | |||||
Exercise of stock options | 94 | 94 | ||||
Exercise of stock options, share | 189,759 | |||||
Stock-based compensation | 2,977 | 2,977 | ||||
Net loss | (22,370) | (22,370) | ||||
Ending balance at Dec. 31, 2020 | $ (98,898) | $ 1 | 9,889 | (108,788) | ||
Ending balance, shares at Dec. 31, 2020 | 94,582,550 | |||||
Ending balance, value at Dec. 31, 2020 | $ 111,282 | |||||
Ending balance, shares at Dec. 31, 2020 | 13,413,431 | 13,413,431 | ||||
Exercise of stock options | $ 2,098 | 2,098 | ||||
Exercise of stock options, share | 3,627,103 | [1] | 3,627,127 | |||
Restricted stock units settled | $ (491) | (491) | ||||
Restricted stock units settled, shares | 282,415 | |||||
Stock-based compensation | 27,405 | 27,405 | ||||
Issuance of warrants | 125 | 125 | ||||
Common stock issued related to exercise of warrants | 609 | 609 | ||||
Common stock issued related to exercise of warrants, shares | 98,871 | |||||
Acquisition of warrants | 27,945 | 27,945 | ||||
Preferred stock conversion | 111,282 | $ (111,282) | $ 10 | 111,272 | ||
Preferred stock conversion, Share | (94,582,550) | 94,582,550 | ||||
Issuance of common stock in connection with Business Combination and PIPE offering, net of issuance costs | 184,940 | $ 4 | 184,936 | |||
Issuance of common stock in connection with Business Combination and PIPE offering, net of issuance costs, shares | 40,858,053 | |||||
Net loss | (62,742) | (62,742) | ||||
Ending balance at Dec. 31, 2021 | $ 192,273 | $ 15 | $ 363,788 | $ (171,530) | ||
Ending balance, shares at Dec. 31, 2021 | 0 | |||||
Ending balance, value at Dec. 31, 2021 | $ 0 | |||||
Ending balance, shares at Dec. 31, 2021 | 152,862,447 | 152,862,447 | ||||
[1] | Number of options and the weighted average exercise price have been adjusted to reflect the exchange of Old Talkspace’s common stock for Talkspace’s common stock at an exchange ratio of approximately 1.134140 in June 2021 as a result of the Business Combination. See Note 3, “Business Combination” in the notes to the consolidated financial statements for further details. |
Consolidated Statements of Ch_2
Consolidated Statements of Changes in Stockholders' Equity (Deficit) (Parenthetical) | 1 Months Ended | 6 Months Ended |
Jun. 30, 2021 | Jun. 30, 2020 | |
Statement Of Stockholders Equity [Abstract] | ||
Common stock, conversion ratio | 1.134140 | 1.134140 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Cash flows from operating activities: | |||
Net loss | $ (62,742) | $ (22,370) | $ (29,086) |
Adjustments to reconcile net loss to net cash used in operating activities: | |||
Depreciation and amortization | 1,973 | 379 | 59 |
Amortization of debt issuance costs | 175 | 0 | 0 |
Warrant issuance cost and change in fair value | (31,784) | 0 | 0 |
Stock-based compensation | 27,405 | 2,977 | 3,404 |
Decrease (increase) in accounts receivable | 402 | (5,017) | (840) |
Increase in other current assets | (8,053) | (695) | (216) |
Increase in accounts payable | 503 | 2,561 | 3,277 |
Increase in deferred revenues | 2,014 | 2,028 | 1,193 |
Increase in accrued expenses and other current liabilities | 4,396 | 4,962 | 1,017 |
Net cash used in operating activities | (65,711) | (15,175) | (21,192) |
Cash flows from investing activities: | |||
Purchase of property and equipment | (663) | (126) | (138) |
Acquisition of business | 0 | (10,685) | 0 |
Purchase of an intangible asset | 0 | (939) | 0 |
Proceeds from restricted long-term bank deposit | 0 | 447 | 0 |
Net cash used in investing activities | (663) | (11,303) | (138) |
Cash flows from financing activities: | |||
Proceeds from reverse capitalization, net of transaction costs | 249,334 | 0 | 0 |
Proceeds from issuance of convertible preferred stock, net | 0 | 0 | 51,204 |
Proceeds from borrowings | 6,000 | 0 | 0 |
Repayment of borrowings | (6,000) | 0 | 0 |
Payment of debt issuance costs | (50) | 0 | 0 |
Proceeds from exercise of stock options | 2,098 | 94 | 297 |
Net cash provided by financing activities | 251,382 | 94 | 51,501 |
Net increase (decrease) in cash and cash equivalents | 185,008 | (26,384) | 30,171 |
Cash and cash equivalents at the beginning of the year | 13,248 | 39,632 | 9,461 |
Cash and cash equivalents at the end of the year | 198,256 | 13,248 | 39,632 |
Supplemental cash flow data: | |||
Cash paid during the year for interest | 538 | 37 | 45 |
Non-cash financing activity: | |||
Employee taxes withheld related to restricted stock units vested | 491 | 0 | 0 |
Deferred issuance cost on credit | 0 | 692 | 0 |
Conversion of preferred stock to common stock | $ 111,282 | $ 0 | $ 0 |
Description of Organization and
Description of Organization and Business Operations | 12 Months Ended |
Dec. 31, 2021 | |
Description Of Organisation And Business Operation [Abstract] | |
Description Of Organization And Business Operation Disclosure | NOTE 1. DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS Talkspace, Inc. (together with its consolidated subsidiaries, the “Company” or “Talkspace”) is a leading behavioral healthcare company enabled by a purpose-built technology platform. Talkspace provides individuals and licensed therapists, psychologists and psychiatrists with an online platform for one-on-one therapy delivered via messaging, audio and video. Talkspace was originally incorporated as Hudson Executive Investment Corp. (“HEC”), a special purpose acquisition company, in Delaware on October 30, 2019 for the purpose of entering into a merger, share exchange, asset acquisition, stock purchase, recapitalization or other similar business combination with one or more businesses or entities. On January 12, 2021, HEC, entered into an Agreement and Plan of Merger, dated as of January 12, 2021 (the “Merger Agreement”), with Groop Internet Platform, Inc. (“Old Talkspace”), Tailwind Merger Sub I, Inc., a Delaware corporation and a direct wholly owned subsidiary of HEC (“First Merger Sub”), and Tailwind Merger Sub II, LLC, a Delaware limited liability company (“Second Merger Sub”). On June 22, 2021, as contemplated by the Merger Agreement, First Merger Sub merged with and into Old Talkspace (the “First Merger”) with Old Talkspace surviving the First Merger, and immediately following the First Merger and as part of the same overall transaction as the First Merger, Old Talkspace merged with and into Second Merger Sub, with Second Merger Sub surviving the merger as a wholly owned subsidiary of HEC (the “Second Merger” and, together with the First Merger, the “Business Combination”). In connection with the Business Combination, HEC filed the Certificate of Incorporation and changed its name to “Talkspace, Inc.”. See Note 3, “Business Combination” in the notes to the consolidated financial statements for further details. COVID-19 The global pandemic associated with COVID-19 has caused major disruption to all aspects of the global economy and daily life, particularly as quarantine and stay-at-home orders have been imposed by all levels of government. The Company has followed guidance by the United States, Israeli and other applicable foreign and local governments to protect its employees and operations during the pandemic and has implemented a remote environment for its business. The Company cannot predict the potential impacts of the COVID-19 pandemic on its business or operations, but continuously monitors performance and other industry reports to assess the risk of future negative impacts as the disruptions of the COVID-19 pandemic continue to evolve. |
Significant Accounting Policies
Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND ESTIMATES Basis of Presentation The consolidated financial statements have been prepared in conformity with generally accepted accounting principles in the U.S. (“U.S. GAAP”). Use of Estimates The preparation of consolidated financial statements, in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. The Company evaluates its assumptions on an ongoing basis. The Company’s management believes that the estimates, judgment, and assumptions used are reasonable based upon information available at the time they are made. These estimates, judgments and assumptions can affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the consolidated financial statements, and the reported amounts of revenue and expenses during the reporting periods. Actual results could differ from those estimates. Consolidation The consolidated financial statements include the accounts of Talkspace, Inc. and its subsidiaries. The Company consolidates all subsidiaries in which it has a controlling financial interest. Intercompany transactions and balances have been eliminated upon consolidation. Business Combination The Company accounts for business combinations in accordance with ASC No. 805, “Business Combinations” (“ASC No. 805”). ASC No. 805 requires recognition of assets acquired, liabilities assumed, and any non-controlling interest at the acquisition date, measured at their fair values as of that date. The excess of the fair value of the purchase price over the fair values of the identifiable assets and liabilities is recorded as goodwill. Such valuations require management to make significant estimates and assumptions, especially with respect to intangible assets. Acquisition related costs are expensed to the statement of operations in the period incurred. Financial statements in U.S. dollars Most of the Company’s revenues and costs are denominated in United States dollar (“dollar”). The Company’s management believes that the dollar is the primary currency of the economic environment in which the Company and each of its subsidiaries operate. Thus, the dollar is the Company’s functional and reporting currency. Accordingly, non-dollar denominated transactions and balances have been re-measured into the functional currency in accordance with Accounting Standard Codification (“ASC”) 830, “Foreign Currency Matters”. All transaction gains and losses from the re-measured monetary balance sheet items are reflected in the statements of comprehensive loss as financial income or expenses, as appropriate. Operating Segments The Company operates its business in a single segment and as one reporting unit, which is how its chief operating decision maker, the Company’s Interim Chief Executive Officer, reviews financial performance and allocates resources. The majority of the Company’s operations are based in the United States. Cash and cash equivalents Cash equivalents are short-term unrestricted highly liquid investments that are readily convertible to cash and with original maturities of three months or less at acquisition. Property and equipment Property and equipment are stated at cost, net of accumulated depreciation. Depreciation is calculated using the straight-line method over the estimated useful lives of the assets, at the following annual rates: % Computers 33 Electronic equipment 15 Goodwill Goodwill represents the excess of the purchase price in a business combination over the fair value of the net tangible and intangible assets acquired. ASC 350 requires goodwill to be tested for impairment at the reporting unit level at least annually or between annual tests under certain circumstances and written down when impaired. Goodwill is tested for impairment by comparing the fair value of the reporting unit with its carrying value. ASC 350 allows an entity to first assess qualitative factors to determine whether it is necessary to perform the two-step quantitative goodwill impairment test. If the qualitative assessment does not result in a more likely than not indication of impairment, no further impairment testing is required. If it does result in a more likely than not indication of impairment, the two-step impairment test is performed. Alternatively, ASC 350 permits an entity to bypass the qualitative assessment for any reporting unit and proceed directly to performing the first step of the goodwill impairment test. Intangible Assets Acquired identifiable finite-lived intangible assets are amortized on a straight-line basis or accelerated method over the estimated useful lives of the assets. The basis of amortization approximates the pattern in which the assets are utilized, over their estimated useful lives. The Company routinely reviews the remaining estimated useful lives of finite-lived intangible assets. In case the Company reduces the estimated useful life for any asset, the remaining unamortized balance is amortized or depreciated over the revised estimated useful life. Impairment of long-lived assets and intangible assets subject to amortization Property and equipment and intangible assets subject to amortization are reviewed for impairment in accordance with ASC No. 360, “Accounting for the Impairment or Disposal of Long-Lived Assets,” whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the future undiscounted cash flows expected to be generated by the assets. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. No impairment losses were recorded during the years ended December 31, 2021, 2020 or 2019. Revenue recognition The Company recognizes revenues in accordance with ASC 606, “Revenue from Contracts with Customers”. As such, the Company identifies a contract with a customer, identifies the performance obligations in the contract, determines the transaction price, allocates the transaction price to each performance obligation in the contract and recognizes revenues when (or as) the Company satisfies a performance obligation. A contract with a customer exists only when the parties to the contract have approved it and are committed to perform their respective obligations, the Company can identify each party’s rights regarding the distinct services to be transferred (“performance obligations”), the Company can determine the transaction price for the services to be transferred, the contract has commercial substance and it is probable that the Company will collect the consideration to which it will be entitled in exchange for the services that will be transferred to the customer. The Company is operating a virtual behavioral healthcare business that connects individuals and licensed therapists, psychologists and psychiatrists (“therapists”) with an online platform for one-on-one therapy delivered via messaging, audio and video. Individuals access the Company’s services through the Company’s website or mobile app. Revenues are recognized when the Company satisfies its performance obligation to perform its defined contractual obligations to provide virtual behavioral healthcare services. Revenue is recognized in an amount that reflects the consideration that is expected in exchange for the service rendered. The Company provides its services directly to individuals, enterprises, health insurance organizations and employee assistance organizations. Subscription fees that derived from individuals are prepaid and recognized as services over the subscription period. Individuals may cancel their subscription at any time and will receive a pro-rata refund for the subscription price. The Company contracts with enterprises to provide access to its therapist platform for their employees, primarily based on a per-member-per-month access fee model. Revenues from access fees are recognized ratably over the contractual term period. Contracts with enterprises are one or more years in length with the ability to provide 60 days advance notice prior to termination at each year mark during the term. On occasion and depending on the customer, the Company allows for an intra-year termination upon a 60-day or 90-day advance notice following the expiration of the contract’s first year. The Company also contracts with health insurance and employee assistance (EAP) organizations to provide its therapy and psychiatry services to their eligible covered members. Revenue is recognized at a point in time, as virtual therapy or psychi atry session is rendered. Contracts with health insurance and EAP organizations include annual evergreen clauses and generally may be terminated by either party typically upon a minimum 30 -day advance notice. The Company elected to use the practical expedient and recognize the incremental costs of obtaining contracts as an expense since the amortization period of the assets that the Company otherwise would have recognized is one year or less. Deferred Revenue The Company records contract liabilities as deferred revenues, when it receives payments from customers before performance obligations have been performed and satisfied. The Company recognizes deferred revenues as revenues in the statement of operations and comprehensive loss once performance obligations have been performed and satisfied. The balance of deferred revenues approximates the aggregate amount of the transaction price allocated to the unsatisfied performance obligations at the end of reporting period. The Company anticipates that it will satisfy all of its performance obligations associated with the deferred revenue within the prospective fiscal year. Cost of revenues Cost of revenues consists of therapist payments and costs for cloud-based hosting and managing. Operating expenses Operating expenses consist of research and development, clinical operations, sales and marketing, and general and administrative expenses. Research and development expenses Research and development expenses include personnel and related expenses for software development and engineering, information technology infrastructure, security and privacy compliance and product development (inclusive of stock-based compensation for the Company’s research and development employees), third-party services and contractors related to research and development, information technology, software-related costs, and cost savings related to the application of research grant proceeds. Research grant proceeds for the years ending December 31, 2021 and 2020 were $ 1.2 million and $ 0.1 million, respectively. No research grant proceeds were received for the year ending December 31, 2019. Software development expenses also include costs to develop software to be used solely to meet internal needs and applications used to deliver our services. These software development costs meet the criteria for capitalization once the preliminary project stage is complete and it is probable that the project will be completed and the software will be used to perform the function intended. Development costs that meet the criteria for capitalization were not material to date. Clinical operations expenses Clinical operations expenses are associated with the management of the Company’s network of therapists. Such costs consist of recruiting, credentialing, onboarding, training, performing ongoing quality assurance activities (inclusive of stock-based compensation for the Company’s clinical operations employees), costs of third-party services and contractors related to recruiting and training and software-related costs. Sales and marketing expenses Sales expenses consist primarily of employee-related expenses, including salaries, benefits, commissions, travel and stock-based compensation costs for the Company’s employees engaged in sales and account management. Marketing expenses consist primarily of advertising and marketing expenses for consumer acquisition and engagement, as well as personnel costs, including salaries, benefits, bonuses, stock-based compensation expense for marketing employees and third-party services and contractors. Marketing expenses also include third-party software subscription services, third-party independent research, participation in trade shows, brand messaging and costs of communications materials that are produced for the Company’s clients to generate greater awareness and utilization of our platform among our health plan and enterprise clients. Advertising costs are expensed when incurred and include all campaigns to the Company’s platform. For the years ended December 31, 2021, 2020 and 2019 advertising expenses were $ 69.3 million, $ 31.5 million and $ 18.9 million, respectively. General and administrative expenses General and administrative expenses consist primarily of personnel costs, including salaries, benefits, bonuses and stock-based compensation expense for the Company’s executive, finance, accounting, legal and human resources functions, as well as professional fees, occupancy costs, and other general overhead costs. Concentrations of credit risk s Financial instruments that potentially subject the Company and its subsidiaries to concentrations of credit risk consist principally of cash and cash equivalents and accounts receivable. The majority of the Company’s cash and cash equivalents are maintained in U.S. dollar. Generally, these cash and cash equivalents and deposits may be redeemed upon demand. Although the Company deposits its cash with multiple financial institutions in U.S. its deposits, at times, may exceed federally insured limits. Management believes that the financial institutions that hold the Company’s and its subsidiaries’ cash and cash equivalents are institutions with high credit standing, and accordingly, minimal credit risk exists with respect to these assets. The Company’s accounts receivable are derived from sales to customers in the United States. Concentration of credit risk with respect to accounts receivable is limited by credit limits, ongoing credit evaluation and account monitoring procedures. Revenue Reserves Revenue reserves relate primarily to allowances for balances which collection is uncertain and estimated refunds. Account receivables are recorded at the invoiced amount and amounts for which revenue has been recognized but not invoiced, net of the impact from revenue reserves. Revenue reserves are based on the Company’s assessment of historical collection experience. The Company regularly reviews the adequacy of its reserve based on a combination of factors, including an assessment of the current customer’s aging balance, the nature of the balance and any receivables in dispute. T he Company accrues for estimated refunds in the period in which the related revenue is recognized. Revenue reserves are recorded as a reduction against revenue when identified. Refer to Note 5, “Revenue Recognition” for further information. No single customer represented 10 % or more of total revenue during the years ended December 31, 2021, 2020 and 2019. As of December 31, 2021, one customer represents 16.8 % of the accounts receivable balance. As of December 31, 2020, one customer represented 26.6 % of the accounts receivable balance. As of December 31, 2019, three customers represented 25.7 %, 12.6 % and 10.8 % of the accounts receivable balance. Stock-based compensation The Company accounts for stock-based compensation in accordance with ASC 718,“Compensation-Stock Compensation”, which requires compensation expenses to be recognized in the consolidated statements of operations and comprehensive loss at grant date fair value over the requisite service period of each of the awards. The Company recognizes forfeitures of awards as they occur. The fair value of restricted stock units is measured as the grant-date closing price of the Company’s common stock. The fair value of stock options is determined using the Black-Scholes-Merton option pricing model. The option-pricing model requires a number of assumptions, of which the most significant are the expected stock price volatility and the expected option term. Expected volatility was calculated based upon similar traded companies’ historical share price movements as adequate historical experience is not available to provide a reasonable estimate. Expected term is calculated based on the simplified method as adequate historical experience is not available to provide a reasonable estimate. The simplified method will continue to apply until enough historical experience is available to provide a reasonable estimate of the expected term. The risk-free interest rate is calculated based on the yield from U.S. Treasury zero-coupon bonds with an equivalent term. The Company has historically not paid dividends and have no foreseeable plans to pay dividends. Determination of Fair Value of our Common Stock prior to the Business Combination Due to the absence of an active market for our shares of common stock prior to the Business Combination, the grant-date fair market value of the common shares underlying stock options was historically determined by management with the assistance of third-party valuation specialists and approved by the Company’s board of directors. Because there was no public market for the Company’s common shares, the Board of Directors exercised reasonable judgment and considered a number of objective and subjective factors to determine the best estimate of the fair market value, which included important developments in the Company’s operations, the prices at which the Company sold shares of its convertible preferred shares, the rights, preferences and privileges of the Company’s convertible preferred shares relative to those of the Company’s common shares, actual operating results, financial performance and the lack of marketability of the Company’s common shares. Fair value of financial instruments The Company applies ASC 820, “Fair Value Measurements and Disclosures”. Under this standard, fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (i.e., the “exit price”) in an orderly transaction between market participants at the measurement date. In determining fair value, the Company uses various valuation approaches. ASC 820 establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing the asset or liability developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. The hierarchy is broken down into three levels based on the inputs as follows: Level 1: Valuations based on quoted prices in active markets for identical assets that the Company has the ability to access. Since valuations are based on quoted prices that are readily and regularly available in an active market, valuation of these products does not entail a significant degree of judgment. Level 2: Valuations based on one or more quoted prices in markets that are not active or for which all significant inputs are observable, either directly or indirectly. Level 3: Valuations based on inputs that are unobservable and significant to the overall fair value measurement. The fair value hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. Income taxes The Company accounts for income taxes in accordance with ASC 740, "Income Taxes". ASC 740 prescribes the use of an asset and liability approach that requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized in its financial statements or tax returns. The net deferred tax assets assume sufficient future earnings for their realization, as well as the continued application of currently enacted tax rates. Included in net deferred tax assets is a valuation allowance for deferred tax assets, where management believes it is more-likely-than-not that the deferred tax assets will not be realized in the relevant jurisdiction. If the Company determines that a deferred tax asset will not be realizable, an adjustment to the deferred tax asset will result in a reduction of net earnings at that time. Accrued interest and penalties are included within the related tax asset or liability in the accompanying financial statements. The Company follows the provisions in ASC 740 and the guidance related to accounting for uncertainty in income taxes. The Company determines its uncertain tax positions based on a determination of whether and how much of a tax benefit taken in its tax filings or positions is more likely than not to be sustained upon examination by the relevant income tax authorities. The Company is subject to U.S. federal and state and Israeli income taxes with varying statutes of limitations. The Company is not currently under examination by any income tax authority, nor has it been notified that an examination is contemplated. The Company is no longer subject to U.S. federal, state or local income tax examinations by the tax authorities for years before 2018. The Israel subsidiary tax assessments filed by the Company through the 2015 are considered closed; tax years after 2015 remain open to examination due to the carryover of net operating losses. The Company's policy is to recognize interest related to unrecognized tax benefits as interest expense and penalties as operating expenses. As of December 31, 2021 and 2020 the Company did no t record any provision for uncertain tax positions. The Company does not anticipate that the assessment will significantly increase or decrease within the next 12 months. No accrued interest or penalties were accrued as of December 31, 2021 and 2020. Net loss per share The Company computes net loss per share using the two-class method required for participating securities. The two-class method requires income available to ordinary shareholders for the period to be allocated between shares of common stock and participating securities based upon their respective rights to receive dividends as if all income for the period had been distributed. For the years ended December 31, 2020 and 2019, the Company considered its convertible preferred shares to be participating securities as the holders of the convertible preferred shares would be entitled to dividends that would be distributed to the holders of shares of common stock, on a pro-rata basis assuming conversion of all convertible preferred shares into shares of common stock. These participating securities did not contractually require the holders of such shares to participate in the Company’s losses. As such, net loss for the years ended December 31, 2020 and 2019 were not allocated to the Company’s participating securities. The Company’s basic net loss per share is calculated by dividing net loss attributable to ordinary shareholders by the weighted-average number of shares of common stock outstanding for the period, without consideration of potentially dilutive securities. The diluted net loss per share is calculated by giving effect to all potentially dilutive securities outstanding for the period using the treasury share method or the if-converted method based on the nature of such securities. Diluted net loss per share is the same as basic net loss per share in periods when the effects of potentially dilutive shares of shares of common stock are anti-dilutive. Recently Issued Accounting Pronouncements In November 2021, the Financial Accounting Standards Board (“FASB”) issued ASU 2021-10, Government Assistance (Topic 832): Disclosures by Business Entities about Government Assistance, which requires entities to disclose information about certain types of government assistance they receive in the notes to the financial statements. Entities are required to provide the new disclosures prospectively for all transactions with a government entity that are accounted for under either a grant or a contribution accounting model and are reflected in the financial statements at the date of initially applying the new amendments, and to new transactions entered into after that date. Retrospective application of t he guidance is permitted. The amendments in this ASU are effective for all entities within their scope for financial statements issued for annual periods beginning after December 15, 2021. The Company adopted this guidance on January 1, 2022 and the adoption did not have a significant impact on its consolidated financial statements or related disclosures. In May 2021, the FASB issued ASU 2021-04—Earnings Per Share (Topic 260), Debt—Modifications and Extinguishments (Subtopic 470-50), Compensation—Stock Compensation (Topic 718), and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options, which clarifies and reduces diversity in accounting for modifications or exchanges of freestanding equity-written call options that remain equity classified after modifications or exchanges based on the substance of the transactions. The amendments in this ASU are effective for all entities for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. The Company adopted this guidance on January 1, 2022 and the adoption did not have an impact on its consolidated financial statements. Recently Adopted Accounting Pronouncements ASU 2016-02, “Leases” (Topic 842 ) In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). This ASU clarifies the definition of a lease and requires a lessee to recognize in the statement of financial position a liability to make lease payments (the lease liability) and a right-to-use asset representing its right to use the underlying asset for the lease term. The Company adopted ASC 842 on January 1, 2021 and did not restate comparative periods. In addition, the Company elected the available practical expedients discussed below on adoption. The Company determines if an arrangement is a lease at inception. Lease classification is governed by five criteria in ASC 842-10-25-2. If any of these five criteria is met, the Company classifies the lease as a finance lease. Otherwise, the Company classifies the lease as an operating lease. As of December 31, 2021, all arrangements were classified as operating leases. Operating leases are included in operating lease right-of-use (“ROU”) assets and operating lease liabilities in the consolidated balance sheets. ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. The Company uses its incremental borrowing rate based on the information available at the commencement date to determine the present value of the lease payments. Operating lease expenses are recognized on a straight-line basis over the lease term. The new standard also provides practical expedients for an entity’s ongoing accounting. The Company elected the short-term lease recognition exemption for all leases with a term shorter than 12 months. This means that for those leases, the Company does not recognize ROU assets or lease liabilities, including not recognizing ROU assets or lease liabilities for existing short-term leases of those assets in transition, but recognizes lease expenses over the lease term on a straight-line basis. The Company also elected the practical expedient to not separate lease and non-lease components for all of the Company’s leases. The Company does not currently have any leases with terms in excess of 12 months. The Company adopted this ASU with no impact on its consolidated financial statements or related disclosures. |
Business Combination
Business Combination | 12 Months Ended |
Dec. 31, 2021 | |
Business Combinations [Abstract] | |
Business Combination | NOTE 3. BUSINESS COMBINATION On June 22, 2021, the Company completed the Business Combination pursuant to the Merger Agreement dated January 12, 2021 . The Business Combination was accounted for as a reverse recapitalization in accordance with U.S. GAAP. Under this method of accounting, HEC who was the legal acquirer, is treated as the “acquired” company for financial reporting purposes. Accordingly, the Business Combination was treated as the equivalent of Old Talkspace issuing stock for the net assets of HEC, accompanied by a recapitalization. The net assets of HEC are stated at historical cost, with no goodwill or other intangible assets recorded. Old Talkspace was determined to be the accounting acquirer based on the following predominant factors: o Old Talkspace’s shareholders represent a relative majority of the voting rights in the Company and have the ability to nominate the members of the board of directors for the Company; o Old Talkspace’s operations prior to the acquisition represent the ongoing operations of the Company; and o Old Talkspace’s senior management represents a majority of the senior management of the Company. The consolidated assets, liabilities and results of operations prior to the Business Combination are those of Old Talkspace. The shares and corresponding capital amounts and losses per share, prior to the Business Combination, have been retroactively restated based on shares reflecting the exchange ratio established in the Business Combination. Upon the closing of the Business Combination, among other things, all shares of Old Talkspace’s Common Stock, par value $ 0.001 per share (the “Old Talkspace Common Stock”), all shares of Old Talkspace’s Series Seed Preferred Stock, par value $ 0.001 per share, Series Seed-1 Preferred Stock, par value $ 0.001 per share, Series Seed-2 Preferred Stock, par value $ 0.001 per share, Series A Preferred Stock, par value $ 0.001 per share, Series B Preferred Stock, par value $ 0.001 per share, Series C Preferred Stock, par value $ 0.001 per share and Series D Preferred Stock, par value $ 0.001 per share (collectively, the “Old Talkspace Preferred Stock” and, together with the Old Talkspace Common Stock, the “Old Talkspace Capital Stock”) and all vested options exercisable for Old Talkspace Common Stock (“Old Talkspace Vested Options”) outstanding as of immediately prior to Closing were cancelled or assumed, as applicable, and converted into the right to receive, at the election of the holders thereof, a number of shares of Talkspace’s Common Stock, par value $ 0.0001 per share (the “Talkspace common stock”) (or, with respect to holders of Old Talkspace Vested Options, a number of vested options exercisable for Talkspace common stock “Talkspace Vested Options”) or a combination of shares of Talkspace common stock and cash (or, with respect to holders of Old Talkspace Vested Options, a combination of Talkspace Vested Options and cash), in each case, as adjusted pursuant to the Merger Agreement, which, in the aggregate with the unvested options exercisable for Old Talkspace Common Stock assumed by Talkspace and converted into unvested options exercisable for Talkspace common stock, equaled approximately $ 199.3 million in cash and 109,461,534 shares of Talkspace common stock (at a deemed value of $ 10.00 per share). The 109,461,534 shares consisted of 91,473,779 shares issued to holders of Old Talkspace capital stock and 17,987,755 options to purchase Talkspace common stock issued to holders of Old Talkspace stock options. The exchange ratio of 1.134140 was used to convert Old Talkspace capital stock and stock options into Talkspace capital stock and stock options. In connection with the Business Combination, a number of investors (each, a “Subscriber”) purchased from the Company an aggregate of 30,000,000 shares of common stock (the “PIPE”), for a purchase price of $ 10.00 per share and an aggregate purchase price of $ 300.0 million (the “PIPE Shares”), pursuant to separate subscription agreements (each, a “Subscription Agreement”) entered into effective as of January 12, 2021. In addition, in connection with the execution of the Merger Agreement, Talkspace entered into an amendment to the forward purchase agreement (as amended, the “Forward Purchase Agreement”) with HEC Master Fund LP, a Delaware limited partnership and affiliate of the Sponsor (“HEC Fund”), dated June 8, 2020. Pursuant to the Forward Purchase Agreement, HEC Fund agreed to purchase 2,500,000 forward purchase units, consisting of one share of HEC’s Class A common stock and one-half of one warrant to purchase one share of HEC’s Class A common stock, for $ 10.00 per unit, or an aggregate amount of $ 25.0 million, in a private placement that would close concurrently with the Closing and to backstop up to $ 25.0 million of redemptions by stockholders of HEC (the “Forward Purchase”). Immediately after giving effect to the redemption of 25,968,043 shares of HEC’s Class A common stock in connection with the Business Combination, the Forward Purchase and the PIPE Investment, there were 152,255,736 shares of Talkspace common stock and 33,480,000 warrants to purchase Talkspace common stock (the “Talkspace warrants”) outstanding. Upon the consummation of the Business Combination, HEC’s Class A common stock, warrants and units ceased trading on The Nasdaq Stock Market LLC (the “Nasdaq”), and Talkspace common stock and Talkspace warrants began trading on June 23, 2021 on Nasdaq under the symbols “TALK” and “TALKW,” respectively. Upon the closing of the Business Combination, the Company’s certificate of incorporation was amended and restated to, among other things, increase the total number of authorized shares of common stock to 1,000,000,000 shares, $ 0.0001 par value per share, and authorized shares of preferred stock to 100,000,000 , $ 0.0001 par value per share. Public Warrants and Private Placement Warrants As a result of the Business Combination, the Company assumed the outstanding Public Warrants to purchase 20,700,000 shares of the Company’s common stock and the outstanding Private Placement Warrants to purchase 10,280,000 shares of the Company’s common stock. Additionally, the Company issued 2,500,000 Private Placement Warrants at Closing pursuant to the Forward Purchase Agreement with HEC Fund as described above. Each whole Warrant entitles the registered holder to purchase one share of the Company’s common stock at a price of $ 11.50 per share, at any time commencing 30 days after the closing of the Business Combination . The warrants expire five years after the completion of the Business Combination. Redemption of Warrants for Cash The Company may call the Public Warrants for redemption: ▪ in whole and not in part; ▪ at a price of $ 0.01 per warrant; ▪ upon a minimum of thirty ( 30 ) days’ prior written notice of redemption, or the thirty ( 30 )-day redemption period, to each warrant holder; and ▪ if, and only if, the closing price of the Company’s common stock equals or exceeds $ 18.00 per share (as adjusted for stock splits, stock recapitalizations, reorganizations, recapitalizations and the like) for any twenty ( 20 ) trading days within a thirty (30)-trading day period ending on the third business day prior to the date on which we send the notice of redemption to the warrant holders. When the Public Warrants become redeemable, the Company may exercise the redemption right even if the Company is unable to register or qualify the underlying securities for sale under all applicable state securities laws. If the Company calls the Public Warrants for redemption for cash, management will have the option to require all holders that wish to exercise the Public Warrants to do so on a “cashless basis,” as described in the warrant agreement. The exercise price and number of shares of common stock issuable upon exercise of the warrants may be adjusted in certain circumstances including in the event of a stock dividend, or recapitalization, reorganization, merger or consolidation. However, the warrants will not be adjusted for issuance of common stock at a price below its exercise price. Additionally, in no event will the Company be required to net cash settle the warrants. The Private Placement Warrants are identical to the Public Warrants, except that the Private Placement Warrants and the shares of common stock issuable upon the exercise of the Private Placement Warrants will not be transferable, assignable or saleable until 30 days after the completion of a Business Combination, subject to certain limited exceptions. Additionally, the Private Placement Warrants will be exercisable for cash or on a cashless basis, at the holder’s option, and be non-redeemable so long as they are held by the initial purchasers or their permitted transferees. If the Private Placement Warrants are held by someone other than the initial purchasers or their permitted transferees, the Private Placement Warrants will be redeemable by the Company and exercisable by such holders on the same basis as the Public Warrants. The Company determined the Public Warrants met the criteria to be classified as equity in accordance with ASC 815-40. The Company valued these warrants using the instrument’s publicly listed trading price on the date of acquisition or issuance, where applicable, and included $ 27.9 million related to these warrants in additional paid-in capital within stockholder’s equity. The Private Placement Warrants are accounted for as liabilities in accordance with ASC 815-40. As of December 31, 2021, the Company included $ 4.1 milli on within warrant liabilities in the accompanying consolidated balance sheets. See Note 8, “Fair Value Measurement” in the notes to the consolidated financial statements for further details. |
Acquisition
Acquisition | 12 Months Ended |
Dec. 31, 2021 | |
Business Acquisition [Line Items] | |
Business Combination | NOTE 3. BUSINESS COMBINATION On June 22, 2021, the Company completed the Business Combination pursuant to the Merger Agreement dated January 12, 2021 . The Business Combination was accounted for as a reverse recapitalization in accordance with U.S. GAAP. Under this method of accounting, HEC who was the legal acquirer, is treated as the “acquired” company for financial reporting purposes. Accordingly, the Business Combination was treated as the equivalent of Old Talkspace issuing stock for the net assets of HEC, accompanied by a recapitalization. The net assets of HEC are stated at historical cost, with no goodwill or other intangible assets recorded. Old Talkspace was determined to be the accounting acquirer based on the following predominant factors: o Old Talkspace’s shareholders represent a relative majority of the voting rights in the Company and have the ability to nominate the members of the board of directors for the Company; o Old Talkspace’s operations prior to the acquisition represent the ongoing operations of the Company; and o Old Talkspace’s senior management represents a majority of the senior management of the Company. The consolidated assets, liabilities and results of operations prior to the Business Combination are those of Old Talkspace. The shares and corresponding capital amounts and losses per share, prior to the Business Combination, have been retroactively restated based on shares reflecting the exchange ratio established in the Business Combination. Upon the closing of the Business Combination, among other things, all shares of Old Talkspace’s Common Stock, par value $ 0.001 per share (the “Old Talkspace Common Stock”), all shares of Old Talkspace’s Series Seed Preferred Stock, par value $ 0.001 per share, Series Seed-1 Preferred Stock, par value $ 0.001 per share, Series Seed-2 Preferred Stock, par value $ 0.001 per share, Series A Preferred Stock, par value $ 0.001 per share, Series B Preferred Stock, par value $ 0.001 per share, Series C Preferred Stock, par value $ 0.001 per share and Series D Preferred Stock, par value $ 0.001 per share (collectively, the “Old Talkspace Preferred Stock” and, together with the Old Talkspace Common Stock, the “Old Talkspace Capital Stock”) and all vested options exercisable for Old Talkspace Common Stock (“Old Talkspace Vested Options”) outstanding as of immediately prior to Closing were cancelled or assumed, as applicable, and converted into the right to receive, at the election of the holders thereof, a number of shares of Talkspace’s Common Stock, par value $ 0.0001 per share (the “Talkspace common stock”) (or, with respect to holders of Old Talkspace Vested Options, a number of vested options exercisable for Talkspace common stock “Talkspace Vested Options”) or a combination of shares of Talkspace common stock and cash (or, with respect to holders of Old Talkspace Vested Options, a combination of Talkspace Vested Options and cash), in each case, as adjusted pursuant to the Merger Agreement, which, in the aggregate with the unvested options exercisable for Old Talkspace Common Stock assumed by Talkspace and converted into unvested options exercisable for Talkspace common stock, equaled approximately $ 199.3 million in cash and 109,461,534 shares of Talkspace common stock (at a deemed value of $ 10.00 per share). The 109,461,534 shares consisted of 91,473,779 shares issued to holders of Old Talkspace capital stock and 17,987,755 options to purchase Talkspace common stock issued to holders of Old Talkspace stock options. The exchange ratio of 1.134140 was used to convert Old Talkspace capital stock and stock options into Talkspace capital stock and stock options. In connection with the Business Combination, a number of investors (each, a “Subscriber”) purchased from the Company an aggregate of 30,000,000 shares of common stock (the “PIPE”), for a purchase price of $ 10.00 per share and an aggregate purchase price of $ 300.0 million (the “PIPE Shares”), pursuant to separate subscription agreements (each, a “Subscription Agreement”) entered into effective as of January 12, 2021. In addition, in connection with the execution of the Merger Agreement, Talkspace entered into an amendment to the forward purchase agreement (as amended, the “Forward Purchase Agreement”) with HEC Master Fund LP, a Delaware limited partnership and affiliate of the Sponsor (“HEC Fund”), dated June 8, 2020. Pursuant to the Forward Purchase Agreement, HEC Fund agreed to purchase 2,500,000 forward purchase units, consisting of one share of HEC’s Class A common stock and one-half of one warrant to purchase one share of HEC’s Class A common stock, for $ 10.00 per unit, or an aggregate amount of $ 25.0 million, in a private placement that would close concurrently with the Closing and to backstop up to $ 25.0 million of redemptions by stockholders of HEC (the “Forward Purchase”). Immediately after giving effect to the redemption of 25,968,043 shares of HEC’s Class A common stock in connection with the Business Combination, the Forward Purchase and the PIPE Investment, there were 152,255,736 shares of Talkspace common stock and 33,480,000 warrants to purchase Talkspace common stock (the “Talkspace warrants”) outstanding. Upon the consummation of the Business Combination, HEC’s Class A common stock, warrants and units ceased trading on The Nasdaq Stock Market LLC (the “Nasdaq”), and Talkspace common stock and Talkspace warrants began trading on June 23, 2021 on Nasdaq under the symbols “TALK” and “TALKW,” respectively. Upon the closing of the Business Combination, the Company’s certificate of incorporation was amended and restated to, among other things, increase the total number of authorized shares of common stock to 1,000,000,000 shares, $ 0.0001 par value per share, and authorized shares of preferred stock to 100,000,000 , $ 0.0001 par value per share. Public Warrants and Private Placement Warrants As a result of the Business Combination, the Company assumed the outstanding Public Warrants to purchase 20,700,000 shares of the Company’s common stock and the outstanding Private Placement Warrants to purchase 10,280,000 shares of the Company’s common stock. Additionally, the Company issued 2,500,000 Private Placement Warrants at Closing pursuant to the Forward Purchase Agreement with HEC Fund as described above. Each whole Warrant entitles the registered holder to purchase one share of the Company’s common stock at a price of $ 11.50 per share, at any time commencing 30 days after the closing of the Business Combination . The warrants expire five years after the completion of the Business Combination. Redemption of Warrants for Cash The Company may call the Public Warrants for redemption: ▪ in whole and not in part; ▪ at a price of $ 0.01 per warrant; ▪ upon a minimum of thirty ( 30 ) days’ prior written notice of redemption, or the thirty ( 30 )-day redemption period, to each warrant holder; and ▪ if, and only if, the closing price of the Company’s common stock equals or exceeds $ 18.00 per share (as adjusted for stock splits, stock recapitalizations, reorganizations, recapitalizations and the like) for any twenty ( 20 ) trading days within a thirty (30)-trading day period ending on the third business day prior to the date on which we send the notice of redemption to the warrant holders. When the Public Warrants become redeemable, the Company may exercise the redemption right even if the Company is unable to register or qualify the underlying securities for sale under all applicable state securities laws. If the Company calls the Public Warrants for redemption for cash, management will have the option to require all holders that wish to exercise the Public Warrants to do so on a “cashless basis,” as described in the warrant agreement. The exercise price and number of shares of common stock issuable upon exercise of the warrants may be adjusted in certain circumstances including in the event of a stock dividend, or recapitalization, reorganization, merger or consolidation. However, the warrants will not be adjusted for issuance of common stock at a price below its exercise price. Additionally, in no event will the Company be required to net cash settle the warrants. The Private Placement Warrants are identical to the Public Warrants, except that the Private Placement Warrants and the shares of common stock issuable upon the exercise of the Private Placement Warrants will not be transferable, assignable or saleable until 30 days after the completion of a Business Combination, subject to certain limited exceptions. Additionally, the Private Placement Warrants will be exercisable for cash or on a cashless basis, at the holder’s option, and be non-redeemable so long as they are held by the initial purchasers or their permitted transferees. If the Private Placement Warrants are held by someone other than the initial purchasers or their permitted transferees, the Private Placement Warrants will be redeemable by the Company and exercisable by such holders on the same basis as the Public Warrants. The Company determined the Public Warrants met the criteria to be classified as equity in accordance with ASC 815-40. The Company valued these warrants using the instrument’s publicly listed trading price on the date of acquisition or issuance, where applicable, and included $ 27.9 million related to these warrants in additional paid-in capital within stockholder’s equity. The Private Placement Warrants are accounted for as liabilities in accordance with ASC 815-40. As of December 31, 2021, the Company included $ 4.1 milli on within warrant liabilities in the accompanying consolidated balance sheets. See Note 8, “Fair Value Measurement” in the notes to the consolidated financial statements for further details. |
Lasting | |
Business Acquisition [Line Items] | |
Business Combination | NOTE 4. ACQUISITION On November 1, 2020, the Company completed an acquisition of Lasting, an app-based subscription for relationship and couple counseling for a total cash consideration of $ 10.7 million. In addition, the Company entered into a non-competition agreement for a total consideration of $ 0.9 million, which was recorded as an intangible asset and amortized over a period of 3.17 years. Purchase price allocation Under business combination accounting principles, the total purchase price was allocated to Lasting’s intangible assets based on their estimated fair values. The excess of the purchase price over the identifiable intangible assets was recorded as goodwill. The purchase price allocation for the acquisition has been determined as follows: (in thousands) Fair Value Amortization period (years) Intangible assets: Technology $ 3,201 7.17 Customer relationship 1,350 1.33 Goodwill 6,134 infinite Total purchase price $ 10,685 In performing the purchase price allocation, the Company considered, among other factors, analysis of historical financial performance, the best use of the acquired assets and estimates of future performance of Lasting’s operations. In its allocation, applying the income approach, the Company determined the fair values of the Lasting technology and the non-competition agreement. The acquired customer relationship was determined based on the cost approach. Pro forma results of operations related to this acquisition have not been prepared because they are not material to the Company’s consolidated statements of operations and comprehensive loss. |
Revenue Recognition
Revenue Recognition | 12 Months Ended |
Dec. 31, 2021 | |
Revenue From Contract With Customer [Abstract] | |
Revenue Recognition | NOTE 5. REVENUE RECOGNITION The Company is operating a virtual behavioral healthcare business that connects individuals and licensed therapists, psychologists and psychiatrists with an online platform for one-on-one therapy delivered via messaging, audio and video. Individuals access the Company’s services through the Company’s website or mobile app. The Company generates revenues from the sale of monthly, quarterly, bi-annual and annual membership subscriptions to its therapy platform as well as supplementary a la carte offerings, payments from members and their respective insurance companies and annually contracted platform access fees from enterprise clients for the delivery of therapy services to their members or employees. The following table presents the Company’s revenues disaggregated by revenue source: For the Years Ended December 31, (in thousands) 2021 2020 2019 Revenues from sales to unaffiliated customers: Consumers $ 74,757 $ 61,586 $ 35,438 Commercial 38,914 14,604 2,740 Total $ 113,671 $ 76,190 $ 38,178 During the years ended December 31, 2021, 2020 and 2019, over 90 % of the Company’s revenue was generated from customers located in the United States. Accounts Receivable and Revenue Reserves Revenue reserves are deducted from accounts receivable to present the net amount expected to be collected. As of December 31, 2021, revenue reserves mainly relate to allowances for accounts receivable balances from health insurance and EAP organizations. As of December 31, 2021, the balance of receivables related to these customers was $ 6.4 million and the revenue reserves against these receivables was $ 4.9 million, of this amount $ 1.1 million is related to aged balances prior to 2021. The following table presents activity for revenue reserves for the years ended December 31, 2021 and 2020: For the Years Ended December 31, (in thousands) 2021 2020 Beginning balance $ 824 $ — Additions and other adjustments 4,094 824 Ending balance $ 4,918 $ 824 Deferred Revenue The Company records deferred revenue when cash payments are received in advance of the Company’s performance obligation to provide services. Total deferred revenue was $ 7.2 million and $ 5.2 million for the years ended December 31, 2021 and 2020, respectively. The Company recognizes deferred revenues as revenues in the statement of operations and comprehensive loss once performance obligations have been performed and satisfied. The Company expects to satisfy all performance obligations associated with the deferred revenue within one year or less. Contract Costs The Company elected to use the practical expedient and recognize the incremental costs of obtaining contracts as an expense since the amortization period of the assets that the Company otherwise would have recognized is one year or less. |
Goodwill
Goodwill | 12 Months Ended |
Dec. 31, 2021 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Goodwill | NOTE 6. GOODWILL The Company has goodwill of $ 6.1 million as a result of its acquisition of Lasting on November 1, 2020, an app-based subscription for relationship and couple counseling. The Company operates as one reporting unit and the fair value of the reporting unit is estimated using quoted market prices in active markets of the Company’s stock. Goodwill of a reporting unit is required to be tested for impairment between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. The Company’s annual goodwill impairment test resulted in no impairment charges for the year ended December 31, 2021. No impairment test was performed for the year ended December 31, 2020 as the acquisition was completed in November 2020, as such no impairment charges were recognized for the year ended December 31, 2020. |
Intangible Assets, Net
Intangible Assets, Net | 12 Months Ended |
Dec. 31, 2021 | |
Finite Lived Intangible Assets Net [Abstract] | |
Intangible Assets, Net | NOTE 7. INTANGIBLE ASSETS, NET Intangible assets are comprised of the following: For the Years Ended December 31, (in thousands) 2021 2020 Intangible assets with finite lives: Acquired technology $ 3,201 $ 3,201 Customer relationship 1,350 1,350 Non-Competition agreement 939 939 5,490 5,490 Accumulated amortization: Acquired technology 522 75 Customer relationship 1,186 170 Non-Competition agreement 346 50 2,054 295 Intangible assets, net $ 3,436 $ 5,195 Amortization expense for intangible assets was $ 1.8 million and $ 0.3 million for the years ended December 31, 2021 and 2020, respectively. Amortization related to intangible assets for acquired technology was included in cost of revenues and amortization related to intangible assets for customer relationships was included in sales and marketing expenses in the Company ’s consolidated statement of operations and comprehensive loss for the periods presented. Future amortization that will be charged to expense over the remaining life of the intangible assets as of December 31, 2021 is as follows: December 31, In thousands 2022 $ 907 2023 743 2024 446 2025 446 2026 and thereafter 894 $ 3,436 |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2021 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | NOTE 8. FAIR VALUE MEASUREMENT The carrying value of the Company’s cash equivalents, accounts receivable, accounts payable, and accrued liabilities approximate fair value because of the relatively short-term nature of the underlying assets. The Company’s Private Placement Warrants are carried at fair value with changes in fair value recognized in earnings each period. The Private Placement Warrants acquired in connection with the consummation of the Business Combination are accounted for as liabilities in accordance with ASC 815-40 and are presented within warrant liabilities in the accompanying consolidated balance sheets. The warrant liabilities are measured at fair value at inception and on a recurring basis, with changes in fair value presented within financial income (expense), net in the consolidated statement of operations and comprehensive loss. The Private Placement Warrants were valued using the Black-Scholes-Merton Model, which is considered to be a Level 3 fair value measurement. The primary unobservable input utilized in determining the fair value of the Private Placement Warrants is the expected volatility of the Company’s common stock. The expected volatility of the Company’s common stock was estimated to be approxi mately 67.8 % as of December 31, 2021. For t he year ended December 31, 2021, the Company had gains related to the revaluation of the Private Placement Warrants of $ 36.0 million . Prior to the Business Combination, Old Talkspace had issued warrants to purchase its common stock and its Series D preferred stock. In connection with the Business Combination, the warrants to purchase Old Talkspace’s common stock and its Series D preferred stock were exercised and converted into common shares of the Company during June 2021. As of December 31, 2020, there were 60,000 outstanding warrants to purchase the Old Talkspace’s common stock for a price of $ 0.44 per share and 50,881 outstanding warrants to purchase the Company’s preferred D stock for a price of $ 2.75 per share. The inputs related to Old Talkspace’s share prices prior to the Business Combination were determined based on management’s assumptions and based on the Option Pricing Model (“OPM”). The fair value of the underlying preferred share price was determined by the board of directors, considering among others, a third-party valuation. These inputs were considered to be a Level 3 measurement. The following table presents information about the Company’s liabilities that are measured at fair value on a recurring basis at December 31, 2021 and 2020 and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value: (in thousands) Level December 31, 2021 December 31, 2020 Liabilities: Warrant liability – Private Placement Warrants 3 $ 4,070 $ — Warrant liability – warrants to purchase Old Talkspace’s preferred D shares 3 — 444 The following table presents the changes in the fair value of warrant liabilities during the year ended December 31, 2021: (in thousands) Private Old Talkspace Warrants Balance at December 31, 2020 $ — $ 444 Acquired in Business Combination 32,399 — Issued in connection with closing of the Forward Purchase Agreement 7,879 — Change in value ( 36,208 ) 165 Converted into equity — ( 609 ) Balance at December 31, 2021 $ 4,070 $ — In connection with the consummation of the Business Combination, the Company also acquired Public Warrants from HEC and also issued equity warrants to certain consultants. The Company determined these warrants met the criteria to be classified as equity in accordance with ASC 815-40. The Company valued these warrants using the instrument’s publicly listed trading price on the date of acquisition or issuance, where applicable, and included in additional paid-in capital within stockholder’s deficit. T his is considered to be a non-recurring Level 1 measurement due to the use of an observable market quote in an active market. |
Commitments and Contingent Liab
Commitments and Contingent Liabilities | 12 Months Ended |
Dec. 31, 2021 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingent Liabilities | NOTE 9. COMMITMENTS AND CONTINGENT LIABILITIES Lease commitments The Company does not currently have any leases with terms in excess of 12 months. Since terminating our prior office lease in New York City in August 2020, we currently have no permanent physical office space and the majority of our employees are working remotely. In August 2021, the Company entered into a temporary short-term co-working space agreement in New York City which expires in February 2022 and will not be renewed. We have limited operations outside the United States. As of December 31, 2021, we have one foreign subsidiary located in Israel which leases its operating facilities under a non-cancelable short-term operating lease agreement, which expired in July, 2021 and renews monthly on the first day of every month. The Company elected the short-term lease recognition exemption for all leases with a term shorter than 12 months. This means that for those leases, the Company does not recognize ROU assets or lease liabilities, including not recognizing ROU assets or lease liabilities for existing short-term leases of those assets in transition, but recognizes lease expenses over the lease term on a straight-line basis. The Company also elected the practical expedient to not separate lease and non-lease components for all of the Company’s leases. Rent expenses under these operating leases for the years ended December 31, 2021, 2020 and 2019 were $ 0.1 million, $ 0.5 million and $ 0.6 million, respectively. Litigation The Company is and may in the future be involved in various legal proceedings arising from the normal course of business activities. Although the results of litigation and claims cannot be predicted with certainty, currently, the Company believes that the likelihood of any material adverse impact on the Company’s consolidated results of operations, cash flows or our financial position for any such litigation or claims is remote. Regardless of the outcome, litigation can have an adverse impact on the Company because of the costs to defend lawsuits, diversion of management resources and other factors. Between January 7, 2022, and January 31, 2022, the Company and certain of its current and former officers and directors were named as defendants in two putative securities class action complaints in the United States District Court for the Southern District of New York (the “Securities Actions”): (1) Baron v. Talkspace et al., No. 22-cv-00163 (S.D.N.Y.) and (2) Valdez v. Talkspace et al., No. 22-cv-00840 (S.D.N.Y.). The Securities Actions both asserted violations of sections 14(a) and 20(a) of the Securities Exchange Act of 1934 and SEC Rule 14a-9 promulgated thereunder. The Valdez action asserted additional claims under sections 10(b) of the Exchange Act and Rule 10b-5 promulgated under the Exchange Act. The Securities Actions generally relate to public disclosures and statements by the Company in connection with the Business Combination that plaintiffs allege contained material misstatements and omissions regarding the Company’s business, financial conditions, and growth prospects. The complaints seek, among other things, damages on behalf of all members of the proposed class. On February 10, 2021, two purported shareholders of HEC filed actions against HEC and the members of HEC’s board of directors relating to the Business Combination. In each case, the shareholders allege a variety of disclosure deficiencies in HEC’s proxy statement/prospectus and seek disclosures of additional information. The alleged omissions generally relate to (i) certain financial projections; (ii) certain valuation analyses performed by HEC; and (iii) alleged conflicts of interest. Plaintiffs sought to enjoin the shareholder vote on the Business Combination unless and until HEC disclosed the allegedly omitted material information summarized above. The plaintiffs also seek damages and attorneys’ fees. On June 29, 2021, one of the plaintiffs dismissed their complaint; the other remains pending. We cannot predict the outcome of the lawsuits, nor can we predict the amount of time and expense that will be required to resolve the lawsuits and demand letter. We believe that the lawsuits and demand letter are without merit and intends to vigorously defend against them. In addition to the foregoing, from time-to-time, the Company is party to various legal proceedings, claims and litigation that arise in the normal course of business. In the opinion of management, the ultimate outcome of these matters will not have a material adverse effect on the Company’s financial position, results of operations or cash flows. Accruals for loss contingencies are recorded when a loss is probable, and the amount of such loss can be reasonably estimated. Warranties and Indemnification The Company’s arrangements generally include certain provisions for indemnifying clients against liabilities if there is a breach of a client’s data or if the Company’s service infringes a third party’s intellectual property rights. To date, the Company has not incurred any material costs as a result of such indemnifications. The Company has also agreed to indemnify its directors and executive officers for costs associated with any fees, expenses, judgments, fines and settlement amounts incurred by any of these persons in any action or proceeding to which any of those persons is, or is threatened to be, made a party by reason of the person’s service as a director or officer, including any action by the Company, arising out of that person’s services as a director or officer or that person’s services provided to any other company or enterprise at the Company’s request. The Company maintains director and officer liability insurance coverage that would generally enable it to recover a portion of any future amounts paid. The Company may also be subject to indemnification obligations by law with respect to the actions of its employees under certain circumstances and in certain jurisdictions. |
Borrowing Arrangements
Borrowing Arrangements | 12 Months Ended |
Dec. 31, 2021 | |
Borrowing Arrangements | NOTE 10. BORROWING ARRANGEMENTS On March 15, 2021, Talkspace entered into a credit and security agreement (the “Credit Agreement”) by and among, Talkspace and Talkspace Network LLC, as borrowers (each and collectively, jointly and severally, “Borrower”) and JPMorgan Chase Bank, N.A. and the other loan parties party thereto to provide Borrower with a term loan of up to $ 15.0 million, which was available to be drawn in a period of twelve months . The term loan will be required to be repaid within thirty-six months, beginning twelve months from the effective date of the Credit Agreement. In addition, under the Credit Agreement, the Borrower was provided with a credit line of up to $ 5.0 million, available for a period of two years from the effective date of the Credit Agreement. Under the Credit Agreement, Borrower was required to maintain certain covenants as detailed in the agreement. In May 2021, the Company borrowed $ 6.0 million under the Credit Agreement to provide for additional liquidity. This amount was repaid in June 2021. In June 2021, the Company terminated the Credit Agreement. In accordance with the Credit Agreement entered into on March 15, 2021, the Company issued a warrant (the “Warrant”) to JPMorgan Chase Bank, N.A. to purchase 114,454 shares at an exercise price of $ 0.01 per share. In accordance with the terms of the Warrant, the Warrant was cancelled during June 2021. During the year ended December 31, 2021, the Company recorded debt issuance costs of $ 0.2 million, which comprised of $ 0.1 million in upfront fees and $ 0.1 million for the issued warrant. These costs were fully amortized through the termination of the Credit Agreement. |
Capital Stock
Capital Stock | 12 Months Ended |
Dec. 31, 2021 | |
Stockholders' Equity Note [Abstract] | |
Capital Stock | NOTE 11. CAPITAL STOCK The Company’s authorized capital stock consists of (a) 1,000,000,000 shares of common stock, par value $ 0.0001 per share; and (b) 100,000,000 shares of preferred stock, par value $ 0.0001 per share. As of December 31, 2021, there were 152,862,447 shares of common stock issued and outstanding. As of December 31, 2021, there were no shares of preferred stock issued or outstanding. Prior to the Business Combination, Old Talkspace’s convertible preferred stock consisted of the following: December 31, 2020 (in thousands except share and per share data) Issue Shares (1) Shares (1) Net Aggregate Seed $ 0.3275 3,895,772 3,895,771 $ 1,112 $ 1,125 Seed-1 0.3036 8,860,187 8,860,185 2,340 2,372 Seed-2 0.3624 3,755,433 3,755,433 1,150 1,200 Series A 0.5842 18,163,165 18,163,165 9,316 9,356 Series B 1.0413 16,718,570 16,337,364 14,934 15,000 Series C 1.5839 22,412,141 22,412,141 31,226 31,300 Series D 2.7515 21,903,878 21,158,491 51,204 51,332 Total 95,709,146 94,582,550 $ 111,282 $ 111,685 (1) Shares authorized and shares issued and outstanding have been adjusted to reflect the exchange of Old Talkspace’s common stock for Talkspace’s common stock at an exchange ratio of approximately 1.134140 in June 2021 as a result of the Business Combination. See Note 3, “Business Combination” in the notes to the consolidated financial statements for further details. The terms for the preferred stock provided that each share shall automatically be converted into shares of common stock at the then effective conversion price for such share immediately upon either (i) the closing of the sale of shares of common stock to the public at a price of at least $ 4.8151 per share (before deduction of the underwriting discount and commissions and subject to appropriate adjustments), in a firm-commitment underwritten public offering pursuant to an effective registration statement under the Securities Act of 1933, as amended, resulting in at least $ 50.0 million of proceeds, before deduction of the underwriting discount and commissions, to the Company, (ii) the closing of the sale of shares of common stock to the public in a firm commitment underwritten public offering pursuant to an effective registration statement under the Securities Act of 1933, as amended, that is approved by the holders of at least a majority of the then outstanding shares of senior preferred stock, which shall include the holders of 55 % of the outstanding shares of series D preferred stock, or (iii) the affirmative vote or written consent of the holders of at least a majority of the then outstanding shares of senior preferred stock, voting together as a single class and on an as-converted basis, which (A) shall include the holders of a majority of the outstanding shares of each of the series C preferred stock and series D preferred stock, if such conversion is not made in connection with a deemed liquidation event, and (B) shall include the holders of at least 70 % of the outstanding shares of series C preferred stock and the holders of 55 % of the outstanding shares of series D preferred stock, if such conversion is made in connection with a deemed liquidation event. As a result of the Business Combination, all of the shares of preferred stock were converted into common stock. |
Property and Equipment, Net
Property and Equipment, Net | 12 Months Ended |
Dec. 31, 2021 | |
Property Plant And Equipment [Abstract] | |
Property and Equipment, Net | NOTE 12. PROPERTY AND EQUIPMENT, NET Property and equipment, net consist of the following: As of December 31, (in thousands) 2021 2020 Computer equipment and software $ 926 $ 263 Less accumulated depreciation ( 302 ) ( 88 ) Property and equipment, net $ 624 $ 175 Depreciation expense, included in general and administrative expense in the consolidated statement of operations and comprehensive loss, was $ 0.2 million, $ 0.1 million and $ 0.1 million for the years ended December 31, 2021, 2020 and 2019, respectively. |
Share-Based Compensation
Share-Based Compensation | 12 Months Ended |
Dec. 31, 2021 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Share-Based Compensation | NOTE 13. SHARE-BASED COMPENSATION The Company adopted the 2014 Stock Incentive Plan (the “2014 Plan”) pursuant to which incentive and nonqualified stock options and stock purchase rights to purchase the Company’s common stock may be granted to officers, employees, directors, consultants and service providers. In connection with the closing of the Business Combination, the Company adopted the 2021 Incentive Award Plan (the “2021 Plan”) under which the Company may grant cash and equity incentive awards to eligible service providers in order to attract, motivate and retain the talent. In connection with the effectiveness of the 2021 Plan, no further awards will be granted under the 2014 Plan. Employees, consultants and directors of the Company, and employees and consultants of its subsidiaries, are eligible to receive awards under the 2021 Plan. The 2021 Plan is administered by the Company’s board of directors, which may delegate its duties and responsibilities to one or more committees of the Company’s directors and/or officers (referred to collectively as the “plan administrator”), subject to the limitations imposed under the 2021 Plan, Section 16 of the Securities Exchange Act of 1934, as amended, stock exchange rules and other applicable laws. The plan administrator has the authority to take all actions and make all determinations under the 2021 Plan, to interpret the 2021 Plan and award agreements and to adopt, amend and repeal rules for the administration of the 2021 Plan as it deems advisable. The plan administrator also has the authority to determine which eligible service providers receive awards, grant awards and set the terms and conditions of all awards under the 2021 Plan, including any vesting and vesting acceleration provisions, subject to the conditions and limitations in the 2021 Plan. An aggregate of 15,875,574 shares of Talk space common stock were available for issuance under the 2021 Plan. The maximum number of shares of Talkspace common stock that may be issued pursuant to the exercise of incentive stock options granted under the 2021 Plan is 100,000,000 . The aggregate share limit under the 2021 Plan is subject to an annual increase on the first day of each calendar year beginning January 1, 2022 and ending on and including January 1, 2031 by a number of shares equal to the lesser of (i) a number equal to 5 % of the aggregate number of shares of Talkspace common stock outstanding on the final day of the immediately preceding calendar year and (ii) such smaller number of shares of Talkspace common stock as is determined by the Talkspace board of directors. As of December 31, 2021, the number of shares available under the 2021 Plan but not yet awarded, was 8,806,534 . In connection with the closing of the Business Combination, the Company also adopted the 2021 Employee Stock Purchase Plan (the “2021 ESPP”) under which employees of Talkspace and its participating subsidiaries are provided with the opportunity to purchase Talkspace common stock at a discount through accumulated payroll deductions during successive offering periods. The 2021 ESPP is administered by the compensation committee of the Company’s board of directors (referred to collectively as the “plan administrator”). The plan administrator has the authority to take all actions and make all determinations under the 2021 ESPP, to interpret the 2021 ESPP and to adopt, amend and repeal rules for the administration of the 2021 ESPP as it deems advisable. As of December 31, 2021, an aggregate of 3,045,115 shares of Talkspace common stock were available for issuance under the 2021 ESPP. In addition, the number of shares of common stock available for issuance under the ESPP will be annually increased on January 1 of each calendar year beginning in 2022 and ending in 2031, by an amount equal to the lesser of (i) 1 % of the aggregate number of shares of Talkspace common stock outstanding on the final day of the immediately preceding calendar year and (ii) such smaller number of shares of Talkspace common stock as determined by the Talkspace board of directors. The maximum number of shares of Talkspace common stock that may be granted under the 2021 ESPP is 50,000,000 . All stock-based awards are measured based on the grant date fair value and are generally recognized on a straight-line basis in the Company’s consolidated statement of operations and comprehensive loss over the period during which the employee is required to perform services in exchange for the award (generally requiring a four-year vesting period). Stock Options Stock options issued under the Plans generally vest over a four-year period and are exercisable a maximum period of ten years. A summary of the Company’s stock option activity under the 2014 Plan and the 2021 Plan for the year ended December 31, 2021 is as follows: Year ended December 31, 2021 (1) Number of Weighted Weighted Aggregate (2) (in thousands) Outstanding at beginning of year 20,525,332 $ 0.71 6.76 $ 153,934 Granted 7,983,650 6.05 Exercised ( 3,627,103 ) 0.58 Forfeited ( 5,387,677 ) 3.82 Outstanding at end of year 19,494,202 $ 1.95 6.88 $ 19,214 Exercisable at end of year 14,496,437 $ 0.84 6.09 $ 18,358 (1) Number of options and the weighted average exercise price have been adjusted to reflect the exchange of Old Talkspace’s common stock for Talkspace’s common stock at an exchange ratio of approximately 1.134140 in June 2021 as a result of the Business Combination. See Note 3, “Business Combination” in the notes to the consolidated financial statements for further details. (2) The aggregate intrinsic value of options outstanding at end of the year and options exercisable at end of the year does not include 4,459,905 and 515,313 options that are out of the money, respectively. The weighted average grant-date fair value of stock options granted to employees during the years ended December 31, 2021 and 2020 was $ 3.81 and $ 1.92 per share, respectively. The fair value for options granted for the years ended December 31, 2021, 2020 and 2019 was estimated on the date of grant using a Black-Scholes-Merton options pricing model with the following weighted average assumptions: Years ended December 31, 2021 2020 2019 Dividend yield (1) 0 % 0 % 0 % Expected volatility (2) 65.00 %- 75.23 % 53.96 %- 66.55 % 59.81 %- 64.61 % Risk-free interest rate (3) 0.66 %- 1.39 % 0.25 %- 1.45 % 1.59 %- 2.41 % Expected term (years) (4) 5.27 - 6.25 5.27 - 6.08 6.02 - 6.08 (1) No dividends were paid during the years ending December 31, 2021, 2020 and 2019. (2) The expected volatility was calculated based upon historical stock price movements of similar publicly traded peer companies over the most recent periods ending on the grant date, equal to the expected term of the options, as adequate historical experience is not available to provide a reasonable estimate. (3) The risk-free interest rate is based on the yield from U.S. treasury bonds with an equivalent term to the expected term of the options. (4) The expected term of options granted is calculated using the simplified method for “plain vanilla” stock options awards. As of December 31, 2021, there was $ 17.4 million of total unrecognized compensation cost related to non-vested options that are expected to be recognized over a period of up to 4 years . During the year ended December 31, 2021, the Company issued 650,000 warrants with similar terms as the Public Warrants to certain consultants in connection with the Closing of the Business Combination. The Company recognized $0.9 million of expense in connection with these warrants. Restricted Stock Units The Company began issuing restricted stock units (“RSUs”) to certain employees and directors of the Company in the fourth quarter of 2021 under the 2021 plan. These RSUs typically vest over a four-year period. The following table summarizes the activity for restricted stock units for the year ended December 31, 2021: Year ended December 31, 2021 Number of Weighted Nonvested at beginning of year - $ - Granted 3,472,106 3.58 Vested ( 512,686 ) 3.58 Forfeited ( 629,326 ) 3.58 Nonvested at end of year 2,330,094 $ 3.58 As of December 31, 2021, there was $ 8.2 million of total unrecognized compensation cost related to non-vested RSUs that are expected to be recognized over a period of up to 3.7 years. The following table sets forth the total share-based compensation expense related to stock options and restricted stock units included in the respective components of operating expenses in the consolidated statement of operations and comprehensive loss: For the Years Ended (in thousands) 2021 2020 2019 Research and development, net $ 3,102 $ 229 $ 768 Clinical Operations 1,711 102 401 Sales and Marketing 6,089 1,568 182 General and administrative 16,503 1,078 2,053 Total stock-based compensation expense $ 27,405 $ 2,977 $ 3,404 As discussed in Note 3, upon closing of the Business Combination, vested and unvested stock options of Old Talkspace were converted into Talkspace stock options using an exchange ratio of 1.134140 . As a result of this modification, the Company recognized $ 15.2 million in additional share-based compensation expense during the year ended December 31, 2021. Additionally, the unrecognized compensation cost includes $ 1.5 million of expense related to the modification of unvested stock options in connection with the Business Combination. This cost will be recognized over the vesting period for the respective stock options. On November 15, 2021, Oren Frank (co-founder and former Chief Executive Officer and Director) and Roni Frank (co-founder and former Head of Clinical Services and Director) resigned from the Company’s Board of Directors and from all other board, officer and fiduciary positions held with the Company, but agreed to continue to serve as strategic advisors to the Board of Directors for a period of up to six months. Per the terms of their respective Separation and Transition Agreements, Mr. Frank and Ms. Frank will each receive the severance benefits provided for under the Company’s Executive Severance Plan (except that, rather than receiving 12 and 6 months of COBRA reimbursement payments, respectively, Mr. and Ms. Frank will each receive 24 months of COBRA reimbursement payments). In addition, the Company paid up-front payments of $ 750,000 to each of Mr. and Ms. Frank as an additional separation payment in recognition of their contributions to the Company as founders and as additional consideration for their continued compliance with their restrictive covenants. All stock options held by Mr. Frank and Ms. Frank that were granted prior to the Business Combination accelerated vesting and will remain exercisable until June 1, 2024, and all stock options granted following the Business Combination were cancelled and forfeited. The vesting of restricted stock units granted after the Business Combination that would have otherwise vested through June 1, 2024 were accelerated and the remainder were cancelled and forfeited. The Company recognized $ 3.8 million in share-based compensation expense as a result of the modification of Mr. and Ms. Frank equity awards during the fourth quarter of 2021. |
Net Loss Per Share
Net Loss Per Share | 12 Months Ended |
Dec. 31, 2021 | |
Earnings Per Share [Abstract] | |
Net Loss Per Share | NOTE 14. NET LOSS PER SHARE The following table sets forth the computation of basic and diluted net loss per share attributable to common stockholders for the years ended December 31, 2021, 2020 and 2019: For the Years Ended 2021 2020 2019 (in thousands except share and per share data) Net loss $ 62,742 $ 22,370 $ 29,086 Weighted-average shares used to compute net loss per share, (1) 86,775,948 13,359,350 12,721,426 Net loss per share, basic and diluted $ 0.72 $ 1.67 $ 2.29 (1) Prior period results have been adjusted to reflect the exchange of Old Talkspace’s common stock for Talkspace’s common stock at an exchange ratio of approximately 1.134140 in June 2021 as a result of the Business Combination. See Note 3, “Business Combination” for further details. For the year ended December 31, 2021, the following were excluded from the calculation of diluted loss per share since each would have had an anti-dilutive effect given the Company’s net loss: 19,494,861 stock options, 2,330,094 restricted stock units, 12,780,000 private placement warrants and 21,350,000 public warrants to purchase the Company’s common stock. For the year ended December 31, 2020, the following were excluded from the calculation of diluted loss per share since each would have had an anti-dilutive effect given the Company’s net loss: 83,395,815 shares of convertible preferred stock, 18,097,815 stock options, 60,000 warrants to the Company’s common stock and 50,881 warrants to the Company’s series D convertible preferred stock. For the year ended December 31, 2019, the following were excluded from the calculation of diluted loss per share since each would have had an anti-dilutive effect given the Company’s net loss: 83,395,815 shares of convertible preferred stock, 13,841,065 stock options, 60,000 warrants to the Company’s common stock and 50,881 warrants to the Company’s series D convertible preferred stock. |
Income Tax
Income Tax | 12 Months Ended |
Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Income Tax | NOTE 15. TAXES ON INCOME The Company and its subsidiaries file income tax returns in the U.S. federal, and various states and foreign jurisdictions. The Company assessed its uncertain tax positions and determined that it has no uncertain tax position at December 31, 2021. A reconciliation of the Company’s statutory income tax rate to the Company’s effective income tax rate is as follows: For the Years ended (in thousands) 2021 2020 2019 Loss before income taxes $ 62,695 $ 22,346 $ 29,078 Statutory tax rate 21 % 21 % 21 % Theoretical tax benefit 13,166 4,693 6,106 Increase (decrease) in effective tax rate due to: State taxes, net of federal benefit 2,500 1,125 1,508 Permanent differences 1,492 ( 586 ) ( 591 ) Valuation allowance ( 17,111 ) ( 5,208 ) ( 7,015 ) Actual income taxes $ 47 $ 24 $ 8 The main reconciling item between the statutory tax rate of the Company and the effective tax rate is the recognition of valuation allowance in respect of deferred taxes relating to accumulated net operating losses carried forward due to the uncertainty of the realization of such deferred taxes. Loss (income) before taxes is attributable to the following tax jurisdictions: For the Years Ended (in thousands) 2021 2020 2019 U.S. operations $ 62,902 $ 22,415 $ 29,127 Foreign operations ( 207 ) ( 69 ) ( 49 ) $ 62,695 $ 22,346 $ 29,078 The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities are as follows: For the Years ended (in thousands) 2021 2020 Net deferred tax assets: Net operating loss carryforwards $ 49,906 $ 25,778 Stock based compensation 3,150 318 Fixed assets 340 45 Other 45 818 Total gross deferred tax assets, net 53,441 26,959 Valuation allowance ( 44,186 ) ( 27,075 ) Net deferred tax assets Deferred tax liabilities (long term): Warrants ( 9,255 ) 116 Net deferred tax assets $ — $ — Realization of the future tax benefits is dependent on the Company’s ability to generate sufficient taxable income within the carryforward period. A valuation allowance is provided for deferred tax assets when it is “more likely than not” that some portion of the deferred tax asset will not be realized. Because of the Company’s recent history of operating losses, management believes the recognition of the deferred tax assets arising from the above-mentioned future tax benefits is currently not more likely than not to be realized and, accordingly, has provided a full valuation allowance. A valuation allowance has been recorded for the net deferred tax assets at December 31, 2021 and 2020. The Company maintains a full valuation allowance on its net deferred tax assets. The assessment regarding whether a valuation allowance is required considers both positive and negative evidence when determining whether it is more likely than not that deferred tax assets are recoverable. In making this assessment, significant weight is given to evidence that can be objectively verified. Management considered the Company’s cumulative loss in recent years and forecasted losses in the near term as significant negative evidence. Based upon a review of the four sources of income identified within ASC 740, management determined that the negative evidence outweighed the positive evidence and that a full valuation allowance on the net deferred tax assets will be maintained. Management will continue to assess the realizability of our deferred tax assets going forward and will adjust the valuation allowance as needed. The Company’s valuation allowance increased by $ 17.1 million during the year ended December 31, 2021 primarily due to increases in its net operating loss carryforwards. At December 31, 2021, the Company has federal and state net operating loss carryovers (“NOL”) of approximately $ 194.0 million and $ 180.6 million, respectively, which are available to reduce future taxable income. The NOL carryforwards begin to expire in 2032 and may become subject to annual limitation in the event of certain cumulative changes in the ownership interest of significant stockholders over a three-year period in exc ess of 50 %, as defined under I.R.C. Section 382 . This could limit the amount of tax attributes that can be utilized annually to offset future taxable income or future tax liabilities. The federal losses generated from 2018 onward do not expire. The Company files income tax returns in the United States and Israel. The Company is not currently under examination by any income tax authority, nor has it been notified that an examination is contemplated. The Company is no longer subject to U.S. federal, state or local income tax examinations by the tax authorities for years before 2018. The Israel subsidiary tax assessments filed by the Company through the 2015 are considered closed. |
Employee Benefit Plan
Employee Benefit Plan | 12 Months Ended |
Dec. 31, 2021 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Employee Benefit Plan | NOTE 16. EMPLOYEE BENEFIT PLAN The Company has established a 401(k) plan that qualifies as a deferred compensation arrangement under Section 401 of the Internal Revenue Code. All U.S. employees over the age of 21 are eligible to participate in the plan. The Company contributes 100 % of eligible employee’s elective deferral up to 4 % of eligible earnings. The Company made matching contributions to participants’ accounts to taling $ 0.5 million, $ 0.3 million and $ 0.3 million during the years ended December 31, 2021, 2020 and 2019, respectively. |
Accrued Expenses and Other Curr
Accrued Expenses and Other Current Liabilities | 12 Months Ended |
Dec. 31, 2021 | |
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES Abstract | |
Accrued Expenses and Other Current Liabilities | NOTE 17. ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES Accrued expenses and other current liabilities are comprised of the following: For the Years Ended December 31, (in thousands) 2021 2020 Employee compensation $ 5,988 $ 2,715 User acquisition 2,680 1,290 Professional fees 1,303 2,020 Other 2,591 1,391 Accrued expenses and other current liabilities $ 12,562 $ 7,416 |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The consolidated financial statements have been prepared in conformity with generally accepted accounting principles in the U.S. (“U.S. GAAP”). |
Use of Estimates | Use of Estimates The preparation of consolidated financial statements, in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. The Company evaluates its assumptions on an ongoing basis. The Company’s management believes that the estimates, judgment, and assumptions used are reasonable based upon information available at the time they are made. These estimates, judgments and assumptions can affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the consolidated financial statements, and the reported amounts of revenue and expenses during the reporting periods. Actual results could differ from those estimates. |
Consolidation | Consolidation The consolidated financial statements include the accounts of Talkspace, Inc. and its subsidiaries. The Company consolidates all subsidiaries in which it has a controlling financial interest. Intercompany transactions and balances have been eliminated upon consolidation. |
Business Combinations | Business Combination The Company accounts for business combinations in accordance with ASC No. 805, “Business Combinations” (“ASC No. 805”). ASC No. 805 requires recognition of assets acquired, liabilities assumed, and any non-controlling interest at the acquisition date, measured at their fair values as of that date. The excess of the fair value of the purchase price over the fair values of the identifiable assets and liabilities is recorded as goodwill. Such valuations require management to make significant estimates and assumptions, especially with respect to intangible assets. Acquisition related costs are expensed to the statement of operations in the period incurred. |
Financial statements in U.S. dollars | Financial statements in U.S. dollars Most of the Company’s revenues and costs are denominated in United States dollar (“dollar”). The Company’s management believes that the dollar is the primary currency of the economic environment in which the Company and each of its subsidiaries operate. Thus, the dollar is the Company’s functional and reporting currency. Accordingly, non-dollar denominated transactions and balances have been re-measured into the functional currency in accordance with Accounting Standard Codification (“ASC”) 830, “Foreign Currency Matters”. All transaction gains and losses from the re-measured monetary balance sheet items are reflected in the statements of comprehensive loss as financial income or expenses, as appropriate. |
Operating Segment | Operating Segments The Company operates its business in a single segment and as one reporting unit, which is how its chief operating decision maker, the Company’s Interim Chief Executive Officer, reviews financial performance and allocates resources. The majority of the Company’s operations are based in the United States. |
Cash and Cash Equivalents | Cash and cash equivalents Cash equivalents are short-term unrestricted highly liquid investments that are readily convertible to cash and with original maturities of three months or less at acquisition. |
Property, Plant and Equipment | Property and equipment Property and equipment are stated at cost, net of accumulated depreciation. Depreciation is calculated using the straight-line method over the estimated useful lives of the assets, at the following annual rates: % Computers 33 Electronic equipment 15 |
Goodwill | Goodwill Goodwill represents the excess of the purchase price in a business combination over the fair value of the net tangible and intangible assets acquired. ASC 350 requires goodwill to be tested for impairment at the reporting unit level at least annually or between annual tests under certain circumstances and written down when impaired. Goodwill is tested for impairment by comparing the fair value of the reporting unit with its carrying value. ASC 350 allows an entity to first assess qualitative factors to determine whether it is necessary to perform the two-step quantitative goodwill impairment test. If the qualitative assessment does not result in a more likely than not indication of impairment, no further impairment testing is required. If it does result in a more likely than not indication of impairment, the two-step impairment test is performed. Alternatively, ASC 350 permits an entity to bypass the qualitative assessment for any reporting unit and proceed directly to performing the first step of the goodwill impairment test. |
Intangible Assets | Intangible Assets Acquired identifiable finite-lived intangible assets are amortized on a straight-line basis or accelerated method over the estimated useful lives of the assets. The basis of amortization approximates the pattern in which the assets are utilized, over their estimated useful lives. The Company routinely reviews the remaining estimated useful lives of finite-lived intangible assets. In case the Company reduces the estimated useful life for any asset, the remaining unamortized balance is amortized or depreciated over the revised estimated useful life. Impairment of long-lived assets and intangible assets subject to amortization Property and equipment and intangible assets subject to amortization are reviewed for impairment in accordance with ASC No. 360, “Accounting for the Impairment or Disposal of Long-Lived Assets,” whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the future undiscounted cash flows expected to be generated by the assets. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. No impairment losses were recorded during the years ended December 31, 2021, 2020 or 2019. |
Revenue Recognition | Revenue recognition The Company recognizes revenues in accordance with ASC 606, “Revenue from Contracts with Customers”. As such, the Company identifies a contract with a customer, identifies the performance obligations in the contract, determines the transaction price, allocates the transaction price to each performance obligation in the contract and recognizes revenues when (or as) the Company satisfies a performance obligation. A contract with a customer exists only when the parties to the contract have approved it and are committed to perform their respective obligations, the Company can identify each party’s rights regarding the distinct services to be transferred (“performance obligations”), the Company can determine the transaction price for the services to be transferred, the contract has commercial substance and it is probable that the Company will collect the consideration to which it will be entitled in exchange for the services that will be transferred to the customer. The Company is operating a virtual behavioral healthcare business that connects individuals and licensed therapists, psychologists and psychiatrists (“therapists”) with an online platform for one-on-one therapy delivered via messaging, audio and video. Individuals access the Company’s services through the Company’s website or mobile app. Revenues are recognized when the Company satisfies its performance obligation to perform its defined contractual obligations to provide virtual behavioral healthcare services. Revenue is recognized in an amount that reflects the consideration that is expected in exchange for the service rendered. The Company provides its services directly to individuals, enterprises, health insurance organizations and employee assistance organizations. Subscription fees that derived from individuals are prepaid and recognized as services over the subscription period. Individuals may cancel their subscription at any time and will receive a pro-rata refund for the subscription price. The Company contracts with enterprises to provide access to its therapist platform for their employees, primarily based on a per-member-per-month access fee model. Revenues from access fees are recognized ratably over the contractual term period. Contracts with enterprises are one or more years in length with the ability to provide 60 days advance notice prior to termination at each year mark during the term. On occasion and depending on the customer, the Company allows for an intra-year termination upon a 60-day or 90-day advance notice following the expiration of the contract’s first year. The Company also contracts with health insurance and employee assistance (EAP) organizations to provide its therapy and psychiatry services to their eligible covered members. Revenue is recognized at a point in time, as virtual therapy or psychi atry session is rendered. Contracts with health insurance and EAP organizations include annual evergreen clauses and generally may be terminated by either party typically upon a minimum 30 -day advance notice. The Company elected to use the practical expedient and recognize the incremental costs of obtaining contracts as an expense since the amortization period of the assets that the Company otherwise would have recognized is one year or less. Deferred Revenue The Company records contract liabilities as deferred revenues, when it receives payments from customers before performance obligations have been performed and satisfied. The Company recognizes deferred revenues as revenues in the statement of operations and comprehensive loss once performance obligations have been performed and satisfied. The balance of deferred revenues approximates the aggregate amount of the transaction price allocated to the unsatisfied performance obligations at the end of reporting period. The Company anticipates that it will satisfy all of its performance obligations associated with the deferred revenue within the prospective fiscal year. |
Cost of revenues | Cost of revenues Cost of revenues consists of therapist payments and costs for cloud-based hosting and managing. |
Operating expense | Operating expenses Operating expenses consist of research and development, clinical operations, sales and marketing, and general and administrative expenses. Research and development expenses Research and development expenses include personnel and related expenses for software development and engineering, information technology infrastructure, security and privacy compliance and product development (inclusive of stock-based compensation for the Company’s research and development employees), third-party services and contractors related to research and development, information technology, software-related costs, and cost savings related to the application of research grant proceeds. Research grant proceeds for the years ending December 31, 2021 and 2020 were $ 1.2 million and $ 0.1 million, respectively. No research grant proceeds were received for the year ending December 31, 2019. Software development expenses also include costs to develop software to be used solely to meet internal needs and applications used to deliver our services. These software development costs meet the criteria for capitalization once the preliminary project stage is complete and it is probable that the project will be completed and the software will be used to perform the function intended. Development costs that meet the criteria for capitalization were not material to date. Clinical operations expenses Clinical operations expenses are associated with the management of the Company’s network of therapists. Such costs consist of recruiting, credentialing, onboarding, training, performing ongoing quality assurance activities (inclusive of stock-based compensation for the Company’s clinical operations employees), costs of third-party services and contractors related to recruiting and training and software-related costs. Sales and marketing expenses Sales expenses consist primarily of employee-related expenses, including salaries, benefits, commissions, travel and stock-based compensation costs for the Company’s employees engaged in sales and account management. Marketing expenses consist primarily of advertising and marketing expenses for consumer acquisition and engagement, as well as personnel costs, including salaries, benefits, bonuses, stock-based compensation expense for marketing employees and third-party services and contractors. Marketing expenses also include third-party software subscription services, third-party independent research, participation in trade shows, brand messaging and costs of communications materials that are produced for the Company’s clients to generate greater awareness and utilization of our platform among our health plan and enterprise clients. Advertising costs are expensed when incurred and include all campaigns to the Company’s platform. For the years ended December 31, 2021, 2020 and 2019 advertising expenses were $ 69.3 million, $ 31.5 million and $ 18.9 million, respectively. General and administrative expenses General and administrative expenses consist primarily of personnel costs, including salaries, benefits, bonuses and stock-based compensation expense for the Company’s executive, finance, accounting, legal and human resources functions, as well as professional fees, occupancy costs, and other general overhead costs. |
Concentration Risk of Credit Risk | Concentrations of credit risk s Financial instruments that potentially subject the Company and its subsidiaries to concentrations of credit risk consist principally of cash and cash equivalents and accounts receivable. The majority of the Company’s cash and cash equivalents are maintained in U.S. dollar. Generally, these cash and cash equivalents and deposits may be redeemed upon demand. Although the Company deposits its cash with multiple financial institutions in U.S. its deposits, at times, may exceed federally insured limits. Management believes that the financial institutions that hold the Company’s and its subsidiaries’ cash and cash equivalents are institutions with high credit standing, and accordingly, minimal credit risk exists with respect to these assets. The Company’s accounts receivable are derived from sales to customers in the United States. Concentration of credit risk with respect to accounts receivable is limited by credit limits, ongoing credit evaluation and account monitoring procedures. |
Revenue Reserves | Revenue Reserves Revenue reserves relate primarily to allowances for balances which collection is uncertain and estimated refunds. Account receivables are recorded at the invoiced amount and amounts for which revenue has been recognized but not invoiced, net of the impact from revenue reserves. Revenue reserves are based on the Company’s assessment of historical collection experience. The Company regularly reviews the adequacy of its reserve based on a combination of factors, including an assessment of the current customer’s aging balance, the nature of the balance and any receivables in dispute. T he Company accrues for estimated refunds in the period in which the related revenue is recognized. Revenue reserves are recorded as a reduction against revenue when identified. Refer to Note 5, “Revenue Recognition” for further information. No single customer represented 10 % or more of total revenue during the years ended December 31, 2021, 2020 and 2019. As of December 31, 2021, one customer represents 16.8 % of the accounts receivable balance. As of December 31, 2020, one customer represented 26.6 % of the accounts receivable balance. As of December 31, 2019, three customers represented 25.7 %, 12.6 % and 10.8 % of the accounts receivable balance. |
Shared-based compensation | Stock-based compensation The Company accounts for stock-based compensation in accordance with ASC 718,“Compensation-Stock Compensation”, which requires compensation expenses to be recognized in the consolidated statements of operations and comprehensive loss at grant date fair value over the requisite service period of each of the awards. The Company recognizes forfeitures of awards as they occur. The fair value of restricted stock units is measured as the grant-date closing price of the Company’s common stock. The fair value of stock options is determined using the Black-Scholes-Merton option pricing model. The option-pricing model requires a number of assumptions, of which the most significant are the expected stock price volatility and the expected option term. Expected volatility was calculated based upon similar traded companies’ historical share price movements as adequate historical experience is not available to provide a reasonable estimate. Expected term is calculated based on the simplified method as adequate historical experience is not available to provide a reasonable estimate. The simplified method will continue to apply until enough historical experience is available to provide a reasonable estimate of the expected term. The risk-free interest rate is calculated based on the yield from U.S. Treasury zero-coupon bonds with an equivalent term. The Company has historically not paid dividends and have no foreseeable plans to pay dividends. Determination of Fair Value of our Common Stock prior to the Business Combination Due to the absence of an active market for our shares of common stock prior to the Business Combination, the grant-date fair market value of the common shares underlying stock options was historically determined by management with the assistance of third-party valuation specialists and approved by the Company’s board of directors. Because there was no public market for the Company’s common shares, the Board of Directors exercised reasonable judgment and considered a number of objective and subjective factors to determine the best estimate of the fair market value, which included important developments in the Company’s operations, the prices at which the Company sold shares of its convertible preferred shares, the rights, preferences and privileges of the Company’s convertible preferred shares relative to those of the Company’s common shares, actual operating results, financial performance and the lack of marketability of the Company’s common shares. |
Fair Value of Financial Instruments | Fair value of financial instruments The Company applies ASC 820, “Fair Value Measurements and Disclosures”. Under this standard, fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (i.e., the “exit price”) in an orderly transaction between market participants at the measurement date. In determining fair value, the Company uses various valuation approaches. ASC 820 establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing the asset or liability developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. The hierarchy is broken down into three levels based on the inputs as follows: Level 1: Valuations based on quoted prices in active markets for identical assets that the Company has the ability to access. Since valuations are based on quoted prices that are readily and regularly available in an active market, valuation of these products does not entail a significant degree of judgment. Level 2: Valuations based on one or more quoted prices in markets that are not active or for which all significant inputs are observable, either directly or indirectly. Level 3: Valuations based on inputs that are unobservable and significant to the overall fair value measurement. The fair value hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. |
Income Tax | Income taxes The Company accounts for income taxes in accordance with ASC 740, "Income Taxes". ASC 740 prescribes the use of an asset and liability approach that requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized in its financial statements or tax returns. The net deferred tax assets assume sufficient future earnings for their realization, as well as the continued application of currently enacted tax rates. Included in net deferred tax assets is a valuation allowance for deferred tax assets, where management believes it is more-likely-than-not that the deferred tax assets will not be realized in the relevant jurisdiction. If the Company determines that a deferred tax asset will not be realizable, an adjustment to the deferred tax asset will result in a reduction of net earnings at that time. Accrued interest and penalties are included within the related tax asset or liability in the accompanying financial statements. The Company follows the provisions in ASC 740 and the guidance related to accounting for uncertainty in income taxes. The Company determines its uncertain tax positions based on a determination of whether and how much of a tax benefit taken in its tax filings or positions is more likely than not to be sustained upon examination by the relevant income tax authorities. The Company is subject to U.S. federal and state and Israeli income taxes with varying statutes of limitations. The Company is not currently under examination by any income tax authority, nor has it been notified that an examination is contemplated. The Company is no longer subject to U.S. federal, state or local income tax examinations by the tax authorities for years before 2018. The Israel subsidiary tax assessments filed by the Company through the 2015 are considered closed; tax years after 2015 remain open to examination due to the carryover of net operating losses. The Company's policy is to recognize interest related to unrecognized tax benefits as interest expense and penalties as operating expenses. As of December 31, 2021 and 2020 the Company did no t record any provision for uncertain tax positions. The Company does not anticipate that the assessment will significantly increase or decrease within the next 12 months. No accrued interest or penalties were accrued as of December 31, 2021 and 2020. |
Net loss per share | Net loss per share The Company computes net loss per share using the two-class method required for participating securities. The two-class method requires income available to ordinary shareholders for the period to be allocated between shares of common stock and participating securities based upon their respective rights to receive dividends as if all income for the period had been distributed. For the years ended December 31, 2020 and 2019, the Company considered its convertible preferred shares to be participating securities as the holders of the convertible preferred shares would be entitled to dividends that would be distributed to the holders of shares of common stock, on a pro-rata basis assuming conversion of all convertible preferred shares into shares of common stock. These participating securities did not contractually require the holders of such shares to participate in the Company’s losses. As such, net loss for the years ended December 31, 2020 and 2019 were not allocated to the Company’s participating securities. The Company’s basic net loss per share is calculated by dividing net loss attributable to ordinary shareholders by the weighted-average number of shares of common stock outstanding for the period, without consideration of potentially dilutive securities. The diluted net loss per share is calculated by giving effect to all potentially dilutive securities outstanding for the period using the treasury share method or the if-converted method based on the nature of such securities. Diluted net loss per share is the same as basic net loss per share in periods when the effects of potentially dilutive shares of shares of common stock are anti-dilutive. |
Recently Issued and Adopted | Recently Issued Accounting Pronouncements In November 2021, the Financial Accounting Standards Board (“FASB”) issued ASU 2021-10, Government Assistance (Topic 832): Disclosures by Business Entities about Government Assistance, which requires entities to disclose information about certain types of government assistance they receive in the notes to the financial statements. Entities are required to provide the new disclosures prospectively for all transactions with a government entity that are accounted for under either a grant or a contribution accounting model and are reflected in the financial statements at the date of initially applying the new amendments, and to new transactions entered into after that date. Retrospective application of t he guidance is permitted. The amendments in this ASU are effective for all entities within their scope for financial statements issued for annual periods beginning after December 15, 2021. The Company adopted this guidance on January 1, 2022 and the adoption did not have a significant impact on its consolidated financial statements or related disclosures. In May 2021, the FASB issued ASU 2021-04—Earnings Per Share (Topic 260), Debt—Modifications and Extinguishments (Subtopic 470-50), Compensation—Stock Compensation (Topic 718), and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options, which clarifies and reduces diversity in accounting for modifications or exchanges of freestanding equity-written call options that remain equity classified after modifications or exchanges based on the substance of the transactions. The amendments in this ASU are effective for all entities for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. The Company adopted this guidance on January 1, 2022 and the adoption did not have an impact on its consolidated financial statements. Recently Adopted Accounting Pronouncements ASU 2016-02, “Leases” (Topic 842 ) In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). This ASU clarifies the definition of a lease and requires a lessee to recognize in the statement of financial position a liability to make lease payments (the lease liability) and a right-to-use asset representing its right to use the underlying asset for the lease term. The Company adopted ASC 842 on January 1, 2021 and did not restate comparative periods. In addition, the Company elected the available practical expedients discussed below on adoption. The Company determines if an arrangement is a lease at inception. Lease classification is governed by five criteria in ASC 842-10-25-2. If any of these five criteria is met, the Company classifies the lease as a finance lease. Otherwise, the Company classifies the lease as an operating lease. As of December 31, 2021, all arrangements were classified as operating leases. Operating leases are included in operating lease right-of-use (“ROU”) assets and operating lease liabilities in the consolidated balance sheets. ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. The Company uses its incremental borrowing rate based on the information available at the commencement date to determine the present value of the lease payments. Operating lease expenses are recognized on a straight-line basis over the lease term. The new standard also provides practical expedients for an entity’s ongoing accounting. The Company elected the short-term lease recognition exemption for all leases with a term shorter than 12 months. This means that for those leases, the Company does not recognize ROU assets or lease liabilities, including not recognizing ROU assets or lease liabilities for existing short-term leases of those assets in transition, but recognizes lease expenses over the lease term on a straight-line basis. The Company also elected the practical expedient to not separate lease and non-lease components for all of the Company’s leases. The Company does not currently have any leases with terms in excess of 12 months. The Company adopted this ASU with no impact on its consolidated financial statements or related disclosures. |
Significant Accounting Polici_3
Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
Schedule Of Depreciation Of Property Plant Equipment | Property and equipment are stated at cost, net of accumulated depreciation. Depreciation is calculated using the straight-line method over the estimated useful lives of the assets, at the following annual rates: % Computers 33 Electronic equipment 15 |
Acquisition (Tables)
Acquisition (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Lasting | |
Business Acquisition [Line Items] | |
Summary of Purchase Price Allocation | The purchase price allocation for the acquisition has been determined as follows: (in thousands) Fair Value Amortization period (years) Intangible assets: Technology $ 3,201 7.17 Customer relationship 1,350 1.33 Goodwill 6,134 infinite Total purchase price $ 10,685 |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Revenue From Contract With Customer [Abstract] | |
Schedule of Disaggregation of Revenue by Revenue Source | The following table presents the Company’s revenues disaggregated by revenue source: For the Years Ended December 31, (in thousands) 2021 2020 2019 Revenues from sales to unaffiliated customers: Consumers $ 74,757 $ 61,586 $ 35,438 Commercial 38,914 14,604 2,740 Total $ 113,671 $ 76,190 $ 38,178 During the years ended December 31, 2021, 2020 and 2019, over 90 % of the Company’s revenue was generated from customers located in the United States. |
Schedule of Allowance for Credit Losses | The following table presents activity for revenue reserves for the years ended December 31, 2021 and 2020: For the Years Ended December 31, (in thousands) 2021 2020 Beginning balance $ 824 $ — Additions and other adjustments 4,094 824 Ending balance $ 4,918 $ 824 |
Intangible Assets, Net (Tables)
Intangible Assets, Net (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Finite Lived Intangible Assets Net [Abstract] | |
Schedule of Finite-Lived Intangible Assets | Intangible assets are comprised of the following: For the Years Ended December 31, (in thousands) 2021 2020 Intangible assets with finite lives: Acquired technology $ 3,201 $ 3,201 Customer relationship 1,350 1,350 Non-Competition agreement 939 939 5,490 5,490 Accumulated amortization: Acquired technology 522 75 Customer relationship 1,186 170 Non-Competition agreement 346 50 2,054 295 Intangible assets, net $ 3,436 $ 5,195 |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | Future amortization that will be charged to expense over the remaining life of the intangible assets as of December 31, 2021 is as follows: December 31, In thousands 2022 $ 907 2023 743 2024 446 2025 446 2026 and thereafter 894 $ 3,436 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Fair Value Disclosures [Abstract] | |
Summary of Fair Value Measurements | The following table presents information about the Company’s liabilities that are measured at fair value on a recurring basis at December 31, 2021 and 2020 and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value: (in thousands) Level December 31, 2021 December 31, 2020 Liabilities: Warrant liability – Private Placement Warrants 3 $ 4,070 $ — Warrant liability – warrants to purchase Old Talkspace’s preferred D shares 3 — 444 |
Summary of warrants | The following table presents the changes in the fair value of warrant liabilities during the year ended December 31, 2021: (in thousands) Private Old Talkspace Warrants Balance at December 31, 2020 $ — $ 444 Acquired in Business Combination 32,399 — Issued in connection with closing of the Forward Purchase Agreement 7,879 — Change in value ( 36,208 ) 165 Converted into equity — ( 609 ) Balance at December 31, 2021 $ 4,070 $ — |
Capital Stock (Tables)
Capital Stock (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Stockholders' Equity Note [Abstract] | |
Summary of Convertible preferred stock | Prior to the Business Combination, Old Talkspace’s convertible preferred stock consisted of the following: December 31, 2020 (in thousands except share and per share data) Issue Shares (1) Shares (1) Net Aggregate Seed $ 0.3275 3,895,772 3,895,771 $ 1,112 $ 1,125 Seed-1 0.3036 8,860,187 8,860,185 2,340 2,372 Seed-2 0.3624 3,755,433 3,755,433 1,150 1,200 Series A 0.5842 18,163,165 18,163,165 9,316 9,356 Series B 1.0413 16,718,570 16,337,364 14,934 15,000 Series C 1.5839 22,412,141 22,412,141 31,226 31,300 Series D 2.7515 21,903,878 21,158,491 51,204 51,332 Total 95,709,146 94,582,550 $ 111,282 $ 111,685 (1) Shares authorized and shares issued and outstanding have been adjusted to reflect the exchange of Old Talkspace’s common stock for Talkspace’s common stock at an exchange ratio of approximately 1.134140 in June 2021 as a result of the Business Combination. See Note 3, “Business Combination” in the notes to the consolidated financial statements for further details. |
Property and Equipment, Net (Ta
Property and Equipment, Net (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Property Plant And Equipment [Abstract] | |
Summary of Property and Equipment, Net | Property and equipment, net consist of the following: As of December 31, (in thousands) 2021 2020 Computer equipment and software $ 926 $ 263 Less accumulated depreciation ( 302 ) ( 88 ) Property and equipment, net $ 624 $ 175 |
Share-Based Compensation (Table
Share-Based Compensation (Table) | 12 Months Ended |
Dec. 31, 2021 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Summary of Stock Option Activity under 2014 Plan and 2021 Plan | A summary of the Company’s stock option activity under the 2014 Plan and the 2021 Plan for the year ended December 31, 2021 is as follows: Year ended December 31, 2021 (1) Number of Weighted Weighted Aggregate (2) (in thousands) Outstanding at beginning of year 20,525,332 $ 0.71 6.76 $ 153,934 Granted 7,983,650 6.05 Exercised ( 3,627,103 ) 0.58 Forfeited ( 5,387,677 ) 3.82 Outstanding at end of year 19,494,202 $ 1.95 6.88 $ 19,214 Exercisable at end of year 14,496,437 $ 0.84 6.09 $ 18,358 (1) Number of options and the weighted average exercise price have been adjusted to reflect the exchange of Old Talkspace’s common stock for Talkspace’s common stock at an exchange ratio of approximately 1.134140 in June 2021 as a result of the Business Combination. See Note 3, “Business Combination” in the notes to the consolidated financial statements for further details. (2) The aggregate intrinsic value of options outstanding at end of the year and options exercisable at end of the year does not include 4,459,905 and 515,313 options that are out of the money, respectively. |
Schedule of Fair Value of Option Granted Share-based Payment Award Stock Options Valuation Assumptions | The fair value for options granted for the years ended December 31, 2021, 2020 and 2019 was estimated on the date of grant using a Black-Scholes-Merton options pricing model with the following weighted average assumptions: Years ended December 31, 2021 2020 2019 Dividend yield (1) 0 % 0 % 0 % Expected volatility (2) 65.00 %- 75.23 % 53.96 %- 66.55 % 59.81 %- 64.61 % Risk-free interest rate (3) 0.66 %- 1.39 % 0.25 %- 1.45 % 1.59 %- 2.41 % Expected term (years) (4) 5.27 - 6.25 5.27 - 6.08 6.02 - 6.08 (1) No dividends were paid during the years ending December 31, 2021, 2020 and 2019. (2) The expected volatility was calculated based upon historical stock price movements of similar publicly traded peer companies over the most recent periods ending on the grant date, equal to the expected term of the options, as adequate historical experience is not available to provide a reasonable estimate. (3) The risk-free interest rate is based on the yield from U.S. treasury bonds with an equivalent term to the expected term of the options. (4) The expected term of options granted is calculated using the simplified method for “plain vanilla” stock options awards. |
Summary of Stock Option Activity Under Restricted Stock Units | The following table summarizes the activity for restricted stock units for the year ended December 31, 2021: Year ended December 31, 2021 Number of Weighted Nonvested at beginning of year - $ - Granted 3,472,106 3.58 Vested ( 512,686 ) 3.58 Forfeited ( 629,326 ) 3.58 Nonvested at end of year 2,330,094 $ 3.58 As of December 31, 2021, there was $ 8.2 million of total unrecognized compensation cost related to non-vested RSUs that are expected to be recognized over a period of up to 3.7 years. |
Summary of Stock-Based Compensation Expense | The following table sets forth the total share-based compensation expense related to stock options and restricted stock units included in the respective components of operating expenses in the consolidated statement of operations and comprehensive loss: For the Years Ended (in thousands) 2021 2020 2019 Research and development, net $ 3,102 $ 229 $ 768 Clinical Operations 1,711 102 401 Sales and Marketing 6,089 1,568 182 General and administrative 16,503 1,078 2,053 Total stock-based compensation expense $ 27,405 $ 2,977 $ 3,404 As discussed in Note 3, upon closing of the Business Combination, vested and unvested stock options of Old Talkspace were converted into Talkspace stock options using an exchange ratio of 1.134140 . |
Net Loss Per Share (Tables)
Net Loss Per Share (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Earnings Per Share [Abstract] | |
Summary of Basic and Diluted Net Loss Per Share | The following table sets forth the computation of basic and diluted net loss per share attributable to common stockholders for the years ended December 31, 2021, 2020 and 2019: For the Years Ended 2021 2020 2019 (in thousands except share and per share data) Net loss $ 62,742 $ 22,370 $ 29,086 Weighted-average shares used to compute net loss per share, (1) 86,775,948 13,359,350 12,721,426 Net loss per share, basic and diluted $ 0.72 $ 1.67 $ 2.29 (1) Prior period results have been adjusted to reflect the exchange of Old Talkspace’s common stock for Talkspace’s common stock at an exchange ratio of approximately 1.134140 in June 2021 as a result of the Business Combination. See Note 3, “Business Combination” for further details. |
Taxes on Income (Tables)
Taxes on Income (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Summary of Deferred Tax Assets | The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities are as follows: For the Years ended (in thousands) 2021 2020 Net deferred tax assets: Net operating loss carryforwards $ 49,906 $ 25,778 Stock based compensation 3,150 318 Fixed assets 340 45 Other 45 818 Total gross deferred tax assets, net 53,441 26,959 Valuation allowance ( 44,186 ) ( 27,075 ) Net deferred tax assets Deferred tax liabilities (long term): Warrants ( 9,255 ) 116 Net deferred tax assets $ — $ — |
Summary of Income Before Income Taxes | Loss (income) before taxes is attributable to the following tax jurisdictions: For the Years Ended (in thousands) 2021 2020 2019 U.S. operations $ 62,902 $ 22,415 $ 29,127 Foreign operations ( 207 ) ( 69 ) ( 49 ) $ 62,695 $ 22,346 $ 29,078 |
Summary of Reconciliation of Effective Tax Rate and Statutory Income Tax Rate | A reconciliation of the Company’s statutory income tax rate to the Company’s effective income tax rate is as follows: For the Years ended (in thousands) 2021 2020 2019 Loss before income taxes $ 62,695 $ 22,346 $ 29,078 Statutory tax rate 21 % 21 % 21 % Theoretical tax benefit 13,166 4,693 6,106 Increase (decrease) in effective tax rate due to: State taxes, net of federal benefit 2,500 1,125 1,508 Permanent differences 1,492 ( 586 ) ( 591 ) Valuation allowance ( 17,111 ) ( 5,208 ) ( 7,015 ) Actual income taxes $ 47 $ 24 $ 8 |
ACCRUED EXPENSES AND OTHER CU_2
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES Abstract | |
Schedule of accrued expenses and other current liabilities | Accrued expenses and other current liabilities are comprised of the following: For the Years Ended December 31, (in thousands) 2021 2020 Employee compensation $ 5,988 $ 2,715 User acquisition 2,680 1,290 Professional fees 1,303 2,020 Other 2,591 1,391 Accrued expenses and other current liabilities $ 12,562 $ 7,416 |
Description of Organization a_2
Description of Organization and Business Operations - Additional Information (Detail) | 12 Months Ended |
Dec. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Entity Incorporation, Date of Incorporation | Oct. 30, 2019 |
Summary of Significant Accounti
Summary of Significant Accounting Policies - Additional Information (Detail) | 12 Months Ended | ||
Dec. 31, 2021USD ($)Segment | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) | |
Number of operating segments | Segment | 1 | ||
Cash equivalents, Maturity terms | 3 months | ||
Impairment losses | $ 0 | $ 0 | $ 0 |
Provision for uncertain tax positions | 0 | 0 | |
Accrued interest or penalties | 0 | 0 | |
Advertising expense | $ 69,300,000 | 31,500,000 | 18,900,000 |
Contract description | The Company contracts with enterprises to provide access to its therapist platform for their employees, primarily based on a per-member-per-month access fee model. Revenues from access fees are recognized ratably over the contractual term period. Contracts with enterprises are one or more years in length with the ability to provide 60 days advance notice prior to termination at each year mark during the term. On occasion and depending on the customer, the Company allows for an intra-year termination upon a 60-day or 90-day advance notice following the expiration of the contract’s first year. | ||
Research and Development Expense | |||
Research grant proceeds | $ 1,200,000 | $ 100,000 | $ 0 |
Maximum | |||
Recognition of incremental costs of obtaining contracts as expenses, Terms | 12 months | ||
Minimum [Member] | |||
Notice Period (Advance) | 30 days | ||
Customer Concentration Risk [Member] | No Customer [Member] | Maximum | |||
Concentration of credit risk percentage | 10.00% | 10.00% | 10.00% |
Customer Concentration Risk [Member] | Accounts Receivable [Member] | Customer One | |||
Concentration of credit risk percentage | 16.80% | 26.60% | 25.70% |
Customer Concentration Risk [Member] | Accounts Receivable [Member] | Customer Two [Member] | |||
Concentration of credit risk percentage | 12.60% | ||
Customer Concentration Risk [Member] | Accounts Receivable [Member] | Customer Three [Member] | |||
Concentration of credit risk percentage | 10.80% |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies - Summary Of Depreciation Of Property Plant Equipment (Detail) | 12 Months Ended |
Dec. 31, 2021 | |
Computer Equipment | |
Schedule Of Depreciation Of Property Plant Equipment [Line Items] | |
Property Plant And Equipment Annual Depreciation Rate | 33.00% |
Electronic Equipment | |
Schedule Of Depreciation Of Property Plant Equipment [Line Items] | |
Property Plant And Equipment Annual Depreciation Rate | 15.00% |
Business Combination - Addition
Business Combination - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Thousands | Jun. 22, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Business Acquisition [Line Items] | |||||
Common stock, par value | $ 0.0001 | $ 0.0001 | |||
Preferred stock, par value | $ 0.0001 | ||||
Conversion Of Stock, Conversion Rate | $ 1.134140 | ||||
Payments to Acquire Businesses, Gross | $ 0 | $ 10,685 | $ 0 | ||
Common stock, shares outstanding | 152,255,736 | 152,862,447 | 13,413,431 | ||
Class of Warrant or Right, Outstanding | 33,480,000 | ||||
Common stock, shares authorized | 1,000,000,000 | 129,397,278 | |||
Preferred stock, shares authorized | 100,000,000 | ||||
Conversion of Stock, Description | Each whole Warrant entitles the registered holder to purchase one share of the Company’s common stock at a price of $11.50 per share, at any time commencing 30 days after the closing of the Business Combination | ||||
Warrants And Rights Outstanding Expiration Period | 5 years | ||||
Redemption Trigger Share Price | $ 18 | ||||
Class of Warrant or Right Minimum Notice Period For Redemption | 30 days | ||||
Class of Warrant or Right Redemption Threshold Consecutive Trading Days | 30 days | ||||
Warrant liabilities | $ 4,070 | $ 0 | |||
Public Warrants | |||||
Business Acquisition [Line Items] | |||||
Class of Warrant or Right, Outstanding | 20,700,000 | ||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 0.01 | ||||
Class of Warrant or Right Redemption Threshold Consecutive Trading Days | 20 days | ||||
Proceeds from issuance of warrants | 27,900 | ||||
Private Placement Warrants | |||||
Business Acquisition [Line Items] | |||||
Shares Issued, Price Per Share | $ 11.50 | ||||
Class of Warrant or Right, Outstanding | 10,280,000 | ||||
Class of warrant or right issued during the period | 2,500,000 | ||||
Warrant liabilities | $ 4,100 | ||||
Common Stock [Member] | |||||
Business Acquisition [Line Items] | |||||
Common stock, shares outstanding | 152,862,447 | 13,413,431 | 13,223,672 | 11,713,491 | |
Old Talkspace | |||||
Business Acquisition [Line Items] | |||||
Business Acquisition, Date of Acquisition Agreement | Jan. 12, 2021 | ||||
Payments for Repurchase of Common Stock | $ 199,300 | ||||
Conversion of Stock, Shares Converted | 109,461,534 | ||||
Converted Stock, Deemed Value Per Share | $ 10 | ||||
Conversion of Stock, Shares Issued | 91,473,779 | ||||
Conversion of Stock, Shares Options | 17,987,755 | ||||
Conversion Of Stock, Conversion Rate | $ 1.134140 | ||||
Old Talkspace | Common Stock [Member] | |||||
Business Acquisition [Line Items] | |||||
Common stock, par value | 0.001 | ||||
Old Talkspace | Seed Preferred Stock | |||||
Business Acquisition [Line Items] | |||||
Preferred stock, par value | 0.001 | ||||
Old Talkspace | Seed One Convertible Preferred Stock | |||||
Business Acquisition [Line Items] | |||||
Preferred stock, par value | 0.001 | ||||
Old Talkspace | Seed Two Convertible Preferred Stock | |||||
Business Acquisition [Line Items] | |||||
Preferred stock, par value | 0.001 | ||||
Old Talkspace | Series A Preferred Stock | |||||
Business Acquisition [Line Items] | |||||
Preferred stock, par value | 0.001 | ||||
Old Talkspace | Series B Preferred Stock | |||||
Business Acquisition [Line Items] | |||||
Preferred stock, par value | 0.001 | ||||
Old Talkspace | Series C Preferred Stock | |||||
Business Acquisition [Line Items] | |||||
Preferred stock, par value | 0.001 | ||||
Old Talkspace | Preferred D stock | |||||
Business Acquisition [Line Items] | |||||
Preferred stock, par value | 0.001 | ||||
Talkspace | Common Stock [Member] | |||||
Business Acquisition [Line Items] | |||||
Common stock, par value | $ 0.0001 | ||||
Pipe Investors | Subscription Agreement | |||||
Business Acquisition [Line Items] | |||||
Business Acquisition, Equity Interest Issued or Issuable, Number of Shares | 30,000,000 | ||||
Shares Issued, Price Per Share | $ 10 | ||||
Payments to Acquire Businesses, Gross | $ 300,000 | ||||
Hec Master Fund Lp | Forward Contracts | |||||
Business Acquisition [Line Items] | |||||
Redemption Amount From Forward Purchase | 25,000 | ||||
Hec Master Fund Lp | Forward Contracts | Private Placement | |||||
Business Acquisition [Line Items] | |||||
Forward Purchase Amount | $ 25,000 | ||||
Hec Master Fund Lp | Common Class A | |||||
Business Acquisition [Line Items] | |||||
Redemption of Stock | 25,968,043 | ||||
Hec Master Fund Lp | Common Class A | Forward Contracts | |||||
Business Acquisition [Line Items] | |||||
Common stock, par value | $ 10 | ||||
Forward Purchase Unit | 2,500,000 |
Acquisition - Additional Inform
Acquisition - Additional Information (Detail) - Lasting $ in Thousands | Nov. 01, 2020USD ($) |
Total cash consideration | $ 10,685 |
Non-competition agreements [Member] | |
Total consideration | $ 900 |
Amortization period | 3 years 2 months 1 day |
Acquisition - Summary of Purcha
Acquisition - Summary of Purchase Price Allocation (Detail) - Lasting $ in Thousands | Nov. 01, 2020USD ($) |
Schedule Of Finite And Indefinite Lived Intangible Assets Acquired As Part Of Business Combination [Line Items] | |
Goodwill | $ 6,134 |
Total purchase price | 10,685 |
Technology [Member] | |
Schedule Of Finite And Indefinite Lived Intangible Assets Acquired As Part Of Business Combination [Line Items] | |
Intangible assets | $ 3,201 |
Amortization period (years) | 7 years 2 months 1 day |
Customer relationship [Member] | |
Schedule Of Finite And Indefinite Lived Intangible Assets Acquired As Part Of Business Combination [Line Items] | |
Intangible assets | $ 1,350 |
Amortization period (years) | 1 year 3 months 29 days |
Revenue Recognition - Schedule
Revenue Recognition - Schedule of Disaggregation of Revenue by Revenue Source (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Revenues from sales to unaffiliated customers: | |||
Total Revenue | $ 113,671 | $ 76,190 | $ 38,178 |
Consumer | |||
Revenues from sales to unaffiliated customers: | |||
Total Revenue | 74,757 | 61,586 | 35,438 |
Commercial | |||
Revenues from sales to unaffiliated customers: | |||
Total Revenue | $ 38,914 | $ 14,604 | $ 2,740 |
Revenue Recognition - Schedul_2
Revenue Recognition - Schedule of Allowance for Credit Losses (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Revenue From Contract With Customer [Abstract] | ||
Beginning balance | $ 824 | $ 0 |
Additions and other adjustments | 4,094 | 824 |
Ending balance | $ 4,918 | $ 824 |
Revenue Recognition - Additiona
Revenue Recognition - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Disaggregation of Revenue [Line Items] | |||
Deferred Revenue | $ 7.2 | $ 5.2 | |
Minimum [Member] | UNITED STATES | |||
Disaggregation of Revenue [Line Items] | |||
Percentage of Revenue Generated from Customers | 90.00% | 90.00% | 90.00% |
Health plans and EAP customers | |||
Disaggregation of Revenue [Line Items] | |||
Accounts Receivable | $ 6.4 | ||
Revenue Reserves | 4.9 | ||
Aged Balances | $ 1.1 |
Goodwill - Additional Informati
Goodwill - Additional Information (Detail) | 12 Months Ended | ||
Dec. 31, 2021USD ($)Unit | Dec. 31, 2020USD ($) | Nov. 01, 2020USD ($) | |
Goodwill [Line Items] | |||
Goodwill | $ 6,134,000 | $ 6,134,000 | |
Number of Reporting Units | Unit | 1 | ||
Impairment charge of goodwill | $ 0 | $ 0 | |
App Based Subscription For Relationship And Couple Counseling | |||
Goodwill [Line Items] | |||
Goodwill | $ 6,100,000 |
Intangible Assets, Net - Summar
Intangible Assets, Net - Summary of Intangible Assets (Detail) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Intangible assets with finite lives: | ||
Acquired technology | $ 5,490 | $ 5,490 |
Accumulated amortization: | ||
Acquired technology | 2,054 | 295 |
Intangible assets, net | 3,436 | 5,195 |
Acquired technology [Member] | ||
Intangible assets with finite lives: | ||
Acquired technology | 3,201 | 3,201 |
Accumulated amortization: | ||
Acquired technology | 522 | 75 |
Customer relationship [Member] | ||
Intangible assets with finite lives: | ||
Acquired technology | 1,350 | 1,350 |
Accumulated amortization: | ||
Acquired technology | 1,186 | 170 |
Non-competition agreements [Member] | ||
Intangible assets with finite lives: | ||
Acquired technology | 939 | 939 |
Accumulated amortization: | ||
Acquired technology | $ 346 | $ 50 |
Intangible Assets, Net - Additi
Intangible Assets, Net - Additional Information (Detail) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Finite Lived Intangible Assets Net [Abstract] | ||
Amortization of Intangible Assets | $ 1.8 | $ 0.3 |
Intangible Assets, Net - Summ_2
Intangible Assets, Net - Summary of Future Amortization Expenses (Detail) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Finite Lived Intangible Assets Net [Abstract] | ||
2022 | $ 907 | |
2023 | 743 | |
2024 | 446 | |
2025 | 446 | |
2026 and thereafter | 894 | |
Intangible assets, net | $ 3,436 | $ 5,195 |
Fair Value Measurements - Addit
Fair Value Measurements - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Jun. 22, 2021 | Dec. 31, 2020 | |
Class of Warrant or Right, Outstanding | 33,480,000 | ||
Private Placement Warrant [Member] | |||
Expected volatility | 67.80% | ||
Class of Warrant or Right, Outstanding | 10,280,000 | ||
Gains on Revaluation of Warrants | $ 36 | ||
Old Talkspace | Common Stock | |||
Class of Warrant or Right, Outstanding | 60,000 | ||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 0.44 | ||
Old Talkspace | Preferred D stock | |||
Class of Warrant or Right, Outstanding | 50,881 | ||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 2.75 |
Fair Value Measurements - Summa
Fair Value Measurements - Summary of Fair Value Measurements (Detail) - Fair Value, Recurring [Member] - Fair Value, Inputs, Level 3 [Member] - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Private Placement Warrants | ||
Liabilities: | ||
Warrant liability – Private Placement Warrants | $ 4,070 | $ 0 |
Preferred D stock | ||
Liabilities: | ||
Warrant liability – Private Placement Warrants | $ 0 | $ 444 |
Fair Value Measurements - Sum_2
Fair Value Measurements - Summary of warrants (Detail) $ in Thousands | 12 Months Ended |
Dec. 31, 2021USD ($) | |
Private Placement Warrants | |
Class Of Warrant Or Right [Line Items] | |
Fair value as of beginning | $ 0 |
Acquired in Business Combination | 32,399 |
Issued in connection with closing of the Forward Purchase Agreement | 7,879 |
Change in value | (36,208) |
Converted into equity | |
Fair value as of ending | 4,070 |
Old Talkspace Warrants | |
Class Of Warrant Or Right [Line Items] | |
Fair value as of beginning | 444 |
Acquired in Business Combination | |
Issued in connection with closing of the Forward Purchase Agreement | |
Change in value | 165 |
Converted into equity | (609) |
Fair value as of ending |
Commitments and Contingencies -
Commitments and Contingencies - Contingencies (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Commitments And Contingencies Disclosure [Abstract] | |||
Rental Expense | $ 0.1 | $ 0.5 | $ 0.6 |
Borrowing Arrangements - Additi
Borrowing Arrangements - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Millions | Mar. 15, 2021 | Jun. 30, 2021 | Dec. 31, 2021 | May 31, 2021 |
Credit And Security Agreement [Member] | ||||
Line Of Credit Facility [Line Items] | ||||
Debt Issuance Costs, Net | $ 0.2 | |||
Debt Instrument, Fee Amount | 0.1 | |||
Fees Related To Issuance Of Warrant | $ 0.1 | |||
Credit Agreement [Member] | ||||
Line Of Credit Facility [Line Items] | ||||
Amount Borrowed | $ 6 | |||
Amount Repaid | $ 6 | |||
Credit Agreement [Member] | JPMorgan Chase Bank NA [Member] | ||||
Line Of Credit Facility [Line Items] | ||||
Class of warrant or right, number of securities called by warrants or rights | 114,454 | |||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 0.01 | |||
Old Talkspace [Member] | Credit And Security Agreement [Member] | Term Loan [Member] | ||||
Line Of Credit Facility [Line Items] | ||||
Debt Instrument, Face Amount | $ 15 | |||
Old Talkspace [Member] | Credit And Security Agreement [Member] | JPMorgan Chase Bank NA [Member] | Term Loan [Member] | ||||
Line Of Credit Facility [Line Items] | ||||
Debt Instrument, Drawn Period | 12 months | |||
Debt Instrument, Payment Terms | The term loan will be required to be repaid within thirty-six months, beginning twelve months from the effective date of the Credit Agreement. | |||
Old Talkspace [Member] | Credit Agreement [Member] | ||||
Line Of Credit Facility [Line Items] | ||||
Line of credit facility, maximum borrowing capacity | $ 5 |
Capital Stock - Summary of Conv
Capital Stock - Summary of Convertible preferred stock (Details) - USD ($) $ / shares in Units, $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Temporary Equity [Line Items] | |||||
Net Carrying Value | [1] | $ 0 | $ 111,282 | ||
Seed | Old Talkspace's | |||||
Temporary Equity [Line Items] | |||||
Issue Price | $ 0.3275 | ||||
Shares Authorized | [2] | 3,895,772 | |||
Shares Issued | [2] | 3,895,771 | |||
Share Outstanding | [2] | 3,895,771 | |||
Net Carrying Value | $ 1,112 | ||||
Aggregate Liquidation Preference | $ 1,125 | ||||
Seed-1 | Old Talkspace's | |||||
Temporary Equity [Line Items] | |||||
Issue Price | $ 0.3036 | ||||
Shares Authorized | [2] | 8,860,187 | |||
Shares Issued | [2] | 8,860,185 | |||
Share Outstanding | [2] | 8,860,185 | |||
Net Carrying Value | $ 2,340 | ||||
Aggregate Liquidation Preference | $ 2,372 | ||||
Seed-2 | Old Talkspace's | |||||
Temporary Equity [Line Items] | |||||
Issue Price | $ 0.3624 | ||||
Shares Authorized | [2] | 3,755,433 | |||
Shares Issued | [2] | 3,755,433 | |||
Share Outstanding | [2] | 3,755,433 | |||
Net Carrying Value | $ 1,150 | ||||
Aggregate Liquidation Preference | $ 1,200 | ||||
Series A | Old Talkspace's | |||||
Temporary Equity [Line Items] | |||||
Issue Price | $ 0.5842 | ||||
Shares Authorized | [2] | 18,163,165 | |||
Shares Issued | [2] | 18,163,165 | |||
Share Outstanding | [2] | 18,163,165 | |||
Net Carrying Value | $ 9,316 | ||||
Aggregate Liquidation Preference | $ 9,356 | ||||
Series B | Old Talkspace's | |||||
Temporary Equity [Line Items] | |||||
Issue Price | $ 1.0413 | ||||
Shares Authorized | [2] | 16,718,570 | |||
Shares Issued | [2] | 16,337,364 | |||
Share Outstanding | [2] | 16,337,364 | |||
Net Carrying Value | $ 14,934 | ||||
Aggregate Liquidation Preference | $ 15,000 | ||||
Series C | Old Talkspace's | |||||
Temporary Equity [Line Items] | |||||
Issue Price | $ 1.5839 | ||||
Shares Authorized | [2] | 22,412,141 | |||
Shares Issued | [2] | 22,412,141 | |||
Share Outstanding | [2] | 22,412,141 | |||
Net Carrying Value | $ 31,226 | ||||
Aggregate Liquidation Preference | $ 31,300 | ||||
Series D | Old Talkspace's | |||||
Temporary Equity [Line Items] | |||||
Issue Price | $ 2.7515 | ||||
Shares Authorized | [2] | 21,903,878 | |||
Shares Issued | [2] | 21,158,491 | |||
Share Outstanding | [2] | 21,158,491 | |||
Net Carrying Value | $ 51,204 | ||||
Aggregate Liquidation Preference | $ 51,332 | ||||
Convertible Preferred Stock | |||||
Temporary Equity [Line Items] | |||||
Share Outstanding | 0 | 94,582,550 | 94,582,550 | 73,424,071 | |
Convertible Preferred Stock | Old Talkspace's | |||||
Temporary Equity [Line Items] | |||||
Shares Authorized | [2] | 95,709,146 | |||
Shares Issued | [2] | 94,582,550 | |||
Share Outstanding | [2] | 94,582,550 | |||
Net Carrying Value | $ 111,282 | ||||
Aggregate Liquidation Preference | $ 111,685 | ||||
[1] | Prior period results have been adjusted to reflect the exchange of Old Talkspace’s common stock for Talkspace’s common stock at an exchange ratio of approximately 1.134140 in June 2021 as a result of the Business Combination. See Note 3, “Business Combination” in the notes to the consolidated financial statements for further details. | ||||
[2] | Shares authorized and shares issued and outstanding have been adjusted to reflect the exchange of Old Talkspace’s common stock for Talkspace’s common stock at an exchange ratio of approximately 1.134140 in June 2021 as a result of the Business Combination. See Note 3, “Business Combination” in the notes to the consolidated financial statements for further details. |
Capital Stock - Summary of Co_2
Capital Stock - Summary of Convertible preferred stock (Parenthetical) (Detail) | Jun. 22, 2021$ / shares |
Temporary Equity Disclosure [Abstract] | |
Conversion Of Stock, Conversion Rate | $ 1.134140 |
Capital Stock - Additional Info
Capital Stock - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Jun. 22, 2021 | Dec. 31, 2018 | |
Class Of Stock [Line Items] | |||||
Preferred stock, par value | $ 0.0001 | ||||
Preferred Stock Shares Authorized | 100,000,000 | ||||
Preferred Stock Shares Issued | 0 | ||||
Preferred Stock Shares Outstanding | 0 | ||||
Common stock, par value | $ 0.0001 | $ 0.0001 | |||
Common Stock Shares Authorized | 1,000,000,000 | 129,397,278 | |||
Common Stock Shares Issued | 152,862,447 | 13,413,431 | |||
Common Stock Shares Outstanding | 152,862,447 | 13,413,431 | 152,255,736 | ||
Underwritten public offering of convertible preferred stock | $ 0 | $ 0 | $ 51,204 | ||
Series D | |||||
Class Of Stock [Line Items] | |||||
Minimum percentage of firm commitment underwritten public offering approvel by stock holders | 55.00% | ||||
Minimum Percentage Approval of conversion by stock holders in Deemed Liquidation Event | 55.00% | ||||
Series C | |||||
Class Of Stock [Line Items] | |||||
Minimum Percentage Approval of conversion by stock holders in Deemed Liquidation Event | 70.00% | ||||
Common Stock | |||||
Class Of Stock [Line Items] | |||||
Common Stock Shares Outstanding | 152,862,447 | 13,413,431 | 13,223,672 | 11,713,491 | |
Minimum [Member] | |||||
Class Of Stock [Line Items] | |||||
Underwritten public offering of convertible preferred stock | $ 50,000 | ||||
Minimum [Member] | Common Stock | |||||
Class Of Stock [Line Items] | |||||
Sale of stock, price per share | $ / shares | $ 4.8151 |
Property and Equipment, Net - S
Property and Equipment, Net - Summary of Property and Equipment, Net (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Property Plant And Equipment [Line Items] | ||
Computer equipment and software | $ 926 | $ 263 |
Less accumulated depreciation | (302) | (88) |
Property and equipment, net | $ 624 | $ 175 |
Property and Equipment, Net - A
Property and Equipment, Net - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
General and Administrative Expense | |||
Property Plant And Equipment [Line Items] | |||
Depreciation | $ 0.2 | $ 0.1 | $ 0.1 |
Share-Based Compensation - Addi
Share-Based Compensation - Additional Information (Detail) - USD ($) | 3 Months Ended | 12 Months Ended | ||||
Dec. 31, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Nov. 15, 2021 | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||
Exercise of stock options, share | [1] | 3,627,103 | ||||
Stock option award granted | [1] | 7,983,650 | ||||
Total unrecognized compensation cost, non-vested options | $ 17,400,000 | $ 17,400,000 | ||||
Additional unrecognized stock compensation expense related to modification of stock options as a result of the Business Combination | $ 1,500,000 | |||||
Total unrecognized compensation cost non-vested options to be recognized, period | 4 years | |||||
Warrants issue | 650,000 | |||||
Share based compensation expense | $ 27,405,000 | $ 2,977,000 | $ 3,404,000 | |||
Options Outstanding, Options Exercisable | [1],[2] | 18,358,000 | $ 18,358,000 | |||
Restricted Stock Units (RSUs) | ||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||
Stock option award granted | 3,472,106 | |||||
Share-based compensation, vesting period | 4 years | |||||
Weighted average grant date fair value | $ 3.58 | |||||
Share-based Payment Arrangement, Option | ||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||
Weighted average grant date fair value | $ 3.81 | $ 1.92 | ||||
Total unrecognized compensation cost, non-vested options | $ 8,200,000 | $ 8,200,000 | ||||
Additional stock compensation expense related to modification of stock options as a result of the Business Combination | $ 15,200,000 | |||||
Total unrecognized compensation cost non-vested options to be recognized, period | 3 years 8 months 12 days | |||||
Conversion of Vested and Unvested Stock Options, Exchange Ratio | $ 1.134140 | $ 1.134140 | ||||
Number of shares excluded from aggregate intrinsic value of options outstanding | 4,459,905 | 4,459,905 | ||||
Number of Shares excluded from Options Exercisable Aggregate Intrinsic Value | 515,313 | 515,313 | ||||
Common Stock | ||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||
Exercise of stock options, share | 3,627,127 | 189,759 | 1,510,181 | |||
Mr. and Ms. Frank [Member] | ||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||
Share based compensation expense | $ 3,800,000 | |||||
Up-front payments (Contributions as Founder) | $ 750,000 | |||||
Separation and Transition Agreements Description | Oren Frank (co-founder and former Chief Executive Officer and Director) and Roni Frank (co-founder and former Head of Clinical Services and Director) resigned from the Company’s Board of Directors and from all other board, officer and fiduciary positions held with the Company, but agreed to continue to serve as strategic advisors to the Board of Directors for a period of up to six months. Per the terms of their respective Separation and Transition Agreements, Mr. Frank and Ms. Frank will each receive the severance benefits provided for under the Company’s Executive Severance Plan (except that, rather than receiving 12 and 6 months of COBRA reimbursement payments, respectively, Mr. and Ms. Frank will each receive 24 months of COBRA reimbursement payments). | |||||
Two Thousand And Twenty One Incentive Award Plan | ||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||
Common shares reserved for issuance | 15,875,574 | 15,875,574 | ||||
Number of Shares Available Under Share Based Compensation Plans Not Yet Awarded | 8,806,534 | 8,806,534 | ||||
Two Thousand And Twenty One Incentive Award Plan | Common Stock | ||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||
Maximum number of shares to be issued in connection with stock option exercises under plan | 100,000,000 | 100,000,000 | ||||
Two Thousand And Twenty One Incentive Award Plan | Common Stock | Maximum | ||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||
Maximum increase in annual amount number of common stock shares outstanding percentage | 5.00% | |||||
Two Thousand And Twenty One Employee Stock Purchase Plan | Maximum | ||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||
Maximum increase in annual amount number of common stock shares outstanding percentage | 1.00% | |||||
Two Thousand And Twenty One Employee Stock Purchase Plan | Common Stock | ||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||
Common shares reserved for issuance | 3,045,115 | 3,045,115 | ||||
Two Thousand And Twenty One Employee Stock Purchase Plan | Common Stock | Maximum | ||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||
Maximum number of shares granted | 50,000,000 | 50,000,000 | ||||
[1] | Number of options and the weighted average exercise price have been adjusted to reflect the exchange of Old Talkspace’s common stock for Talkspace’s common stock at an exchange ratio of approximately 1.134140 in June 2021 as a result of the Business Combination. See Note 3, “Business Combination” in the notes to the consolidated financial statements for further details. | |||||
[2] | The aggregate intrinsic value of options outstanding at end of the year and options exercisable at end of the year does not include 4,459,905 and 515,313 options that are out of the money, respectively. |
Share-Based Compensation - Summ
Share-Based Compensation - Summary of Stock Option Activity under 2014 Plan and 2021 Plan (Detail) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | ||
Share Based Arrangements To Obtain Goods And Services [Abstract] | |||
Number of options, Outstanding at the beginning of the period | [1] | 20,525,332 | |
Stock option award granted | [1] | 7,983,650 | |
Exercise of stock options, share | [1] | 3,627,103 | |
Number of options, Forfeited | [1] | 5,387,677 | |
Number of options, Outstanding at the end of the period | [1] | 19,494,202 | 20,525,332 |
Number of options, Exercisable at the end of the period | [1] | 14,496,437 | |
Weighted average exercise price, Outstanding at the beginning of the period | [1] | $ 0.71 | |
Weighted average exercise price, Granted | [1] | 6.05 | |
Weighted average exercise price, Exercised | [1] | 0.58 | |
Weighted average exercise price, Forfeited | [1] | 3.82 | |
Weighted average exercise price, Outstanding at the end of the period | [1] | 1.95 | $ 0.71 |
Weighted average exercise price, Exercisable at the end of the period | [1] | $ 0.84 | |
Weighted average remaining contractual term (in years) | [1] | 6 years 10 months 17 days | 6 years 9 months 3 days |
Weighted average remaining contractual term (in years) Exercisable at the end of the period | [1] | 6 years 1 month 2 days | |
Aggregate intrinsic value, Outstanding | [1],[2] | $ 19,214 | $ 153,934 |
Aggregate intrinsic value, Exercisable at the end of the period | [1],[2] | $ 18,358 | |
[1] | Number of options and the weighted average exercise price have been adjusted to reflect the exchange of Old Talkspace’s common stock for Talkspace’s common stock at an exchange ratio of approximately 1.134140 in June 2021 as a result of the Business Combination. See Note 3, “Business Combination” in the notes to the consolidated financial statements for further details. | ||
[2] | The aggregate intrinsic value of options outstanding at end of the year and options exercisable at end of the year does not include 4,459,905 and 515,313 options that are out of the money, respectively. |
Share-Based Compensation - Su_2
Share-Based Compensation - Summary of Stock Option Activity under 2014 Plan and 2021 Plan (Detail) (Parenthetical) | Jun. 22, 2021$ / shares |
Share Based Arrangements To Obtain Goods And Services [Abstract] | |
Conversion Of Stock, Conversion Rate | $ 1.134140 |
Share-Based Compensation - Su_3
Share-Based Compensation - Summary of Fair Value of Option Granted Using Black-Scholes-Merton Option Pricing Model with Assumptions (Detail) | 12 Months Ended | |||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Dividend yield | [1] | 0.00% | 0.00% | 0.00% |
Expected volatility rate, minimum | [2] | 65.00% | 53.96% | 59.81% |
Expected volatility rate, maximum | [2] | 75.23% | 66.55% | 64.61% |
Risk free interest rate, minimum | [3] | 0.66% | 0.25% | 1.59% |
Risk free interest rate, maximum | [3] | 1.39% | 1.45% | 2.41% |
Minimum [Member] | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Expected term (years) | [4] | 5 years 3 months 7 days | 5 years 3 months 7 days | 6 years 7 days |
Maximum | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Expected term (years) | [4] | 6 years 3 months | 6 years 29 days | 6 years 29 days |
[1] | No dividends were paid during the years ending December 31, 2021, 2020 and 2019. | |||
[2] | The expected volatility was calculated based upon historical stock price movements of similar publicly traded peer companies over the most recent periods ending on the grant date, equal to the expected term of the options, as adequate historical experience is not available to provide a reasonable estimate. | |||
[3] | The risk-free interest rate is based on the yield from U.S. treasury bonds with an equivalent term to the expected term of the options. | |||
[4] | The expected term of options granted is calculated using the simplified method for “plain vanilla” stock options awards. |
Share-Based Compensation - Su_4
Share-Based Compensation - Summary of Restricted Stock Units Activity (Detail) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Stock option award granted | [1] | 7,983,650 | |
Weighted average remaining contractual term (in years) | [1] | 6 years 10 months 17 days | 6 years 9 months 3 days |
Aggregate intrinsic value, Outstanding at the ending of the period | [1],[2] | $ 19,214 | $ 153,934 |
Restricted Stock Units (RSUs) | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Nonvested at beginning of year | 0 | ||
Stock option award granted | 3,472,106 | ||
Vested and settled | 512,686 | ||
Forfeited | 629,326 | ||
Nonvested at end of year | 2,330,094 | 0 | |
Weighted average fair value, beginning balance | |||
Weighted average grant date fair value | 3.58 | ||
Weighted average fair value vested | 3.58 | ||
Weighted average fair value forfeited | 3.58 | ||
Weighted average fair value, ending balance | $ 3.58 | ||
[1] | Number of options and the weighted average exercise price have been adjusted to reflect the exchange of Old Talkspace’s common stock for Talkspace’s common stock at an exchange ratio of approximately 1.134140 in June 2021 as a result of the Business Combination. See Note 3, “Business Combination” in the notes to the consolidated financial statements for further details. | ||
[2] | The aggregate intrinsic value of options outstanding at end of the year and options exercisable at end of the year does not include 4,459,905 and 515,313 options that are out of the money, respectively. |
Share-Based Compensation - Su_5
Share-Based Compensation - Summary of Stock-based Compensation Expense (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | |||
Share based compensation expense | $ 27,405 | $ 2,977 | $ 3,404 |
Research and Development Expense | |||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | |||
Share based compensation expense | 3,102 | 229 | 768 |
Clinical Operations | |||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | |||
Share based compensation expense | 1,711 | 102 | 401 |
Selling and Marketing Expense | |||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | |||
Share based compensation expense | 6,089 | 1,568 | 182 |
General and Administrative Expense | |||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | |||
Share based compensation expense | $ 16,503 | $ 1,078 | $ 2,053 |
Net Loss Per Share Attributable
Net Loss Per Share Attributable to Common Stockholders - Summary of Basic and Diluted Net Loss Per Share Attributable to Common Stockholders (Detail) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | ||
Earnings Per Share [Abstract] | ||||
Net loss | $ (62,742) | $ (22,370) | $ (29,086) | |
Weighted-average shares used to compute net loss per share, basic and diluted | [1],[2] | 86,775,948 | 13,359,350 | 12,721,426 |
Net loss per share, basic and diluted | [2] | $ (0.72) | $ (1.67) | $ (2.29) |
[1] | Prior period results have been adjusted to reflect the exchange of Old Talkspace’s common stock for Talkspace’s common stock at an exchange ratio of approximately 1.134140 in June 2021 as a result of the Business Combination. See Note 3, “Business Combination” for further details. | |||
[2] | Prior period results have been adjusted to reflect the exchange of Old Talkspace’s common stock for Talkspace’s common stock at an exchange ratio of approximately 1.134140 in June 2021 as a result of the Business Combination. See Note 3, “Business Combination” in the notes to the consolidated financial statements for further details |
Net Loss Per Share Attributab_2
Net Loss Per Share Attributable to Common Stockholders - Additional Information (Detail) - $ / shares | 12 Months Ended | |||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Jun. 22, 2021 | |
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||||
Conversion Of Stock, Conversion Rate | $ 1.134140 | |||
Private Placement Warrants | ||||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 12,780,000 | |||
Public Warrants | ||||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 21,350,000 | |||
Warrants | Common Stock | ||||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 60,000 | 60,000 | ||
Warrants | Series D | ||||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 50,881 | 50,881 | ||
Share-based Payment Arrangement, Option | ||||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 19,494,861 | 18,097,815 | 13,841,065 | |
Restricted Stock | ||||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 2,330,094 | |||
Convertible Preferred Stock | ||||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 83,395,815 | 83,395,815 |
Taxes on Income - Summary Of Re
Taxes on Income - Summary Of Reconciliation Of Effective Tax Rate And Statutory Income Tax Rate (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Effective Income Tax Rate Continuing Operations Tax Rate Reconciliation [Abstract] | |||
Loss before taxes on income | $ (62,695) | $ (22,346) | $ (29,078) |
Statutory tax rate | 21.00% | 21.00% | 21.00% |
Theoretical tax benefit | $ 13,166 | $ 4,693 | $ 6,106 |
Increase (decrease) in effective tax rate due to: | |||
State taxes, net of federal benefit | 2,500 | 1,125 | 1,508 |
Permanent differences | (1,492) | (586) | (591) |
Valuation Allowance | (17,111) | (5,208) | (7,015) |
Actual income taxes | $ 47 | $ 24 | $ 8 |
Taxes on Income - Summary of In
Taxes on Income - Summary of Income Before Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |||
Domestic | $ (62,902) | $ (22,415) | $ (29,127) |
Foreign | 207 | 69 | 49 |
Loss before taxes on income | $ (62,695) | $ (22,346) | $ (29,078) |
Taxes on Income - Summary of De
Taxes on Income - Summary of Deferred Tax Assets (Detail) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Components Of Deferred Tax Assets [Abstract] | ||
Net operating loss carryforwards | $ 49,906 | $ 25,778 |
Stock based compensation | 3,150 | 318 |
Fixed assets | 340 | 45 |
Other | 45 | 818 |
Total gross deferred tax assets, net | 53,441 | 26,959 |
Valuation allowance | (44,186) | (27,075) |
Warrants | (9,255) | 116 |
Net deferred tax assets | $ 0 | $ 0 |
Taxes on Income -Additional Inf
Taxes on Income -Additional Information (Detail) $ in Millions | 12 Months Ended |
Dec. 31, 2021USD ($) | |
Operating Loss Carryforwards [Line Items] | |
Operating Loss Carryforwards, Limitations on Use | The NOL carryforwards begin to expire in 2032 and may become subject to annual limitation in the event of certain cumulative changes in the ownership interest of significant stockholders over a three-year period in excess of 50%, as defined under I.R.C. Section 382 |
Increase in valuation allowance | $ 17.1 |
Operating Loss Carry forwards Percentage | 50.00% |
Federal [Member] | |
Operating Loss Carryforwards [Line Items] | |
Operating Loss Carryforwards | $ 194 |
State [Member] | |
Operating Loss Carryforwards [Line Items] | |
Operating Loss Carryforwards | $ 180.6 |
Equity Incentive Plan - Additio
Equity Incentive Plan - Additional Information (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Share Based Arrangements To Obtain Goods And Services [Abstract] | |||
Defined Contribution Plan, Employer Matching Contribution, Percent of Match | 100.00% | ||
Eligible Employees Elective Deferral, Percentage | 4.00% | ||
Deferred Compensation Arrangement with Individual, Contributions by Employer | $ 0.5 | $ 0.3 | $ 0.3 |
Accrued Expenses and Other Cu_3
Accrued Expenses and Other Current Liabilities - Schedule of accrued expenses and other current liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Accrued Expense and Other Current Liabilities [Abstract] | ||
Employee compensation | $ 5,988 | $ 2,715 |
User acquisition | 2,680 | 1,290 |
Professional fees | 1,303 | 2,020 |
Other | 2,591 | 1,391 |
Accrued expenses and other current liabilities | $ 12,562 | $ 7,416 |