10-Q

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2023


☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 001-39314

TALKSPACE, INC.

(Exact Name of Registrant as Specified in its Charter)


Delaware	84-4636604
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
622 Third Avenue, New York, New York	10017
(Address of principal executive offices)	(Zip Code)

(212) 284-7206

(Registrant’s telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common stock, par value $0.0001 per share	TALK	Nasdaq Stock Market
Warrants to purchase common stock	TALKW	Nasdaq Stock Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of May 8, 2023, the registrant had 163,659,536 shares of common stock, $0.0001 par value per share, outstanding.

Table of Contents


		Page
PART I.	FINANCIAL INFORMATION
Item 1.	Financial Statements (Unaudited)	3
	Condensed Consolidated Balance Sheets as of March 31, 2023 (unaudited) and December 31, 2022	3
	Condensed Consolidated Statements of Operations (unaudited) for the three months ended March 31, 2023 and 2022	4
	Condensed Consolidated Statements of Stockholder’s Equity (Deficit) (unaudited) for the three months ended March 31, 2023 and 2022	5
	Condensed Consolidated Statements of Cash Flows (unaudited) for the three months ended March 31, 2023 and 2022	6
	Notes to Unaudited Condensed Consolidated Financial Statements	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	14
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	22
Item 4.	Controls and Procedures	23
PART II.	OTHER INFORMATION
Item 1.	Legal Proceedings	24
Item 1A.	Risk Factors	24
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	24
Item 3.	Defaults Upon Senior Securities	24
Item 4.	Mine Safety Disclosures	24
Item 5.	Other Information	24
Item 6.	Exhibits	25
Signatures		26

Table of Contents

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements.

TALKSPACE, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS


	March 31, 2023			December 31, 2022
(U.S. dollars in thousands, except share and per share data)	(Unaudited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	125,083		$	138,545
Accounts receivable, net		12,460			9,640
Other current assets		3,813			4,372
Total current assets		141,356			152,557
Property and equipment, net		563			677
Intangible assets, net		2,343			2,529
Other long-term assets		518			491
Total assets	$	144,780		$	156,254
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable	$	7,674		$	6,461
Deferred revenues		4,123			4,355
Accrued expenses and other current liabilities		9,800			16,502
Total current liabilities		21,597			27,318
Warrant liabilities		1,128			939
Other long-term liabilities		418			461
Total liabilities		23,143			28,718
Commitments and contingencies (Note 6)
STOCKHOLDERS’ EQUITY:
Common stock of $0.0001 par value — Authorized: 1,000,000,000 shares at March 31, 2023 and December 31, 2022; Issued and outstanding: 163,119,345 and 161,155,030 shares at March 31, 2023 and December 31, 2022, respectively		16			16
Additional paid-in capital		381,581			378,722
Accumulated deficit		(259,960	)		(251,202	)
Total stockholders’ equity		121,637			127,536
Total liabilities and stockholders’ equity	$	144,780		$	156,254

The accompanying notes are an integral part of the condensed consolidated financial statements.

Table of Contents

TALKSPACE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)


	Three Months Ended
	March 31,
(U.S. dollars in thousands, except share and per share data)	2023			2022
Revenues	$	33,336		$	30,150
Cost of revenues		16,588			15,129
Gross profit		16,748			15,021
Operating expenses:
Research and development, net		5,353			5,035
Clinical operations, net		1,601			1,776
Sales and marketing		13,469			21,408
General and administrative		5,364			8,010
Total operating expenses		25,787			36,229
Operating loss		(9,039	)		(21,208	)
Financial income, net		(424	)		(869	)
Loss before taxes on income		(8,615	)		(20,339	)
Taxes on income		143			21
Net loss	$	(8,758	)	$	(20,360	)
Net loss per share:
Basic and Diluted	$	(0.05	)	$	(0.13	)
Weighted average number of common shares used in computing basic and diluted net loss per share:
Basic and Diluted		161,797,781			154,083,443

The accompanying notes are an integral part of the condensed consolidated financial statements.

Table of Contents

TALKSPACE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT)

(Unaudited)



(U.S. dollars in thousands, except share data)	Common Stock
Three Months Ended March 31, 2023	Number of Shares Outstanding		Amount		Additional paid-in capital		Accumulated deficit			Total
Balance as of December 31, 2022		161,155,030	$	16	$	378,722	$	(251,202	)	$	127,536
Exercise of stock options		1,739,265	*)			621		—

SEC Form 10-Q filed by Talkspace Inc.