UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended
OR
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:
(Exact Name of Registrant as Specified in its Charter)
( State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer |
Not applicable |
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(Address of principal executive offices) |
(Zip Code) |
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(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:
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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.
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).
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.
Large accelerated filer |
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Accelerated filer |
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Smaller reporting company |
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Emerging growth company |
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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
As of November 8, 2021, the registrant had
Table of Contents
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Page |
PART I. |
FINANCIAL INFORMATION |
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Item 1. |
8 |
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Condensed Consolidated Balance Sheets as of September 30, 2021 (unaudited) and December 31, 2020 |
8 |
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9 |
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10 |
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11 |
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Notes to Unaudited Condensed Consolidated Financial Statements |
12 |
Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
23 |
Item 3. |
34 |
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Item 4. |
34 |
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PART II. |
OTHER INFORMATION |
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Item 1. |
37 |
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Item 1A. |
37 |
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Item 2. |
73 |
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Item 3. |
73 |
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Item 4. |
73 |
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Item 5. |
73 |
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Item 6. |
74 |
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75 |
2
basis of presentation
As used in this Quarterly Report, unless the context otherwise requires, references to:
3
4
FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q (the “Quarterly Report”) contains forward-looking statements. We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). All statements other than statements of historical facts contained in this Quarterly Report may be forward-looking statements. In some cases, you can identify forward-looking statements by terms such as “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “could,” “intends,” “targets,” “projects,” “contemplates,” “believes,” “estimates,” “forecasts,” “predicts,” “potential” or “continue” or the negative of these terms or other similar expressions. Forward-looking statements contained in this Quarterly Report include, but are not limited to statements regarding our future results of operations and financial position, industry and business trends, business strategy, expectations regarding the impact of COVID-19, our efforts to remediate our material weakness in internal control over financial reporting, and our objectives for future operations.
These forward-looking statements are based on information available as of the date of this Quarterly Report and current expectations, forecasts and assumptions, which involve a number of judgments, risks and uncertainties, including without limitation, risks related to:
Accordingly, forward-looking statements should not be relied upon as representing our views as of any subsequent date, and we do not undertake any obligation to update forward-looking statements to reflect events or circumstances after the date they were made, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.
5
RISK FACTORS SUMMARY
Our business is subject to numerous risks and uncertainties, including those highlighted in the section entitled “Risk Factors” in Part II, Item 1A of this Quarterly Report, that represent challenges that we face in connection with the successful implementation of our strategy and the growth of our business. In particular, the following considerations, among others, may offset our competitive strengths or have a negative effect on our business strategy, which could cause a decline in the price of shares of our common stock or warrants and result in a loss of all or a portion of your investment:
6
7
PART I—FINANCIAL INFORMATION
Item 1. Financial Statements.
TALKSPACE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
U.S. dollars in thousands (except share and per share data)
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September 30, 2021 |
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December 31, 2020 |
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(Unaudited) |
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ASSETS |
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CURRENT ASSETS: |
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Cash and cash equivalents |
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$ |
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$ |
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Accounts receivable, net |
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Other current assets |
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Total current assets |
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Property and equipment, net |
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Deferred issuance costs |
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Intangible assets, net |
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Goodwill |
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Other long-term assets |
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Total assets |
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$ |
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$ |
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LIABILITIES, CONVERTIBLE PREFERRED STOCK AND |
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CURRENT LIABILITIES: |
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Accounts payable |
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$ |
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$ |
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Deferred revenues |
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Accrued expenses and other current liabilities |
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Total current liabilities |
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Warrant liabilities |
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Other long-term liabilities |
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Total liabilities |
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CONVERTIBLE PREFERRED STOCK: |
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Convertible preferred stock (Series Seed, Seed-1, Seed-2, A, B, C and D) of $ |
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STOCKHOLDERS’ EQUITY (DEFICIT): |
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Common stock of $ |
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Additional paid-in capital (1) |
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Accumulated deficit |
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( |
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( |
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Total stockholders’ equity (deficit) |
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( |
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Total liabilities, convertible preferred stock and stockholders’ equity (deficit) |
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$ |
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$ |
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(1)
The accompanying notes are an integral part of the condensed consolidated financial statements.
8
TALKSPACE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) (Unaudited)
U.S. dollars in thousands (except share and per share data)
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Three months ended |
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Nine months ended |
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September 30, |
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September 30, |
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2021 |
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2020 |
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2021 |
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2020 |
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Revenues |
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$ |
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$ |
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$ |
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$ |
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Cost of revenues |
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Gross profit |
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Operating expenses: |
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Research and development, net |
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Clinical operations |
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Sales and marketing |
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General and administrative |
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Total operating expenses |
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Operating loss |
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( |
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( |
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( |
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( |
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Financial income (expense), net |
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( |
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( |
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Income (loss) before taxes on income |
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( |
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( |
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( |
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Taxes on income |
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Net income (loss) |
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( |
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( |
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( |
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Other comprehensive income (loss) |
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Comprehensive income (loss) |
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( |
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( |
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Net income (loss) per share (1): |
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Basic |
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$ |
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$ |
( |
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$ |
( |
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$ |
( |
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Diluted |
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$ |
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$ |
( |
) |
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$ |
( |
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$ |
( |
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Weighted average number of common shares (1): |
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Basic |
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Diluted |
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(1)
The accompanying notes are an integral part of the condensed consolidated financial statements.
9
TALKSPACE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT) (Unaudited)
U.S. dollars in thousands (except share data)
Nine months ended September 30, 2020: |
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Convertible Preferred Stock (1) |
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Common Stock (1) |
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Number of Shares |
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Amount |
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Number of Shares |
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Amount |
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Additional paid-in |
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Accumulated |
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Total |
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Balance as of December 31, 2019 |
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$ |
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$ |
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$ |
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$ |
( |
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$ |
( |
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Exercise of stock options |
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— |
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— |
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*) |
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— |
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Stock-based compensation |
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— |
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— |
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— |
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— |
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— |
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Net loss |
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— |
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— |
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— |
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— |
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— |
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( |
) |
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( |
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Balance as of March 31, 2020 |
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( |
) |
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( |
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Exercise of stock options |
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— |
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— |
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*) |
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— |
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Stock-based compensation |
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— |
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— |
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— |
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— |
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— |
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Net loss |
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— |
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— |
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— |
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— |
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— |
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( |
) |
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( |
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Balance as of June 30, 2020 |
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( |
) |
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( |
) |
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Stock-based compensation |
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— |
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— |
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— |
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— |
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— |
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Net loss |
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— |
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— |
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— |
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— |
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— |
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( |
) |
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( |
) |
Balance as of September 30, 2020 |
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$ |
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$ |
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$ |
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$ |
( |
) |
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$ |
( |
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Nine months ended September 30, 2021: |
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Convertible Preferred Stock (1) |
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Common Stock (1) |
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Number of Shares |
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Amount |
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Number of Shares |
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Amount |
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Additional paid-in |
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Accumulated |
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Total |
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Balance as of December 31, 2020 |
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$ |
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$ |
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$ |
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$ |
( |
) |
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( |
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Exercise of stock options |
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— |
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— |
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*) |
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— |
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Stock-based compensation |
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— |
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— |
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— |
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— |
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Issuance of warrants |
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— |
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— |
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— |
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— |
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Net loss |
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— |
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— |
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— |
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— |
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— |
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( |
) |
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( |
) |
Balance as of March 31, 2021 |
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( |
) |
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( |
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Exercise of stock options |
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— |
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— |
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*) |
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— |
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Stock-based compensation |
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— |
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— |
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— |
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— |
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— |
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Common stock issued related to exercise of warrants |
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— |
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— |
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*) |
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— |
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Acquisition of warrants |
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— |
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— |
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— |
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— |
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— |
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Preferred stock conversion |
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( |
) |
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( |
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— |
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Issuance of common stock in connection with Business Combination and PIPE offering, net of issuance costs |
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— |
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— |
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Net loss |
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— |
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— |
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— |
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— |
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— |
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( |
) |
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( |
) |
Balance as of June 30, 2021 |
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( |
) |
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||||||
Exercise of stock options |
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— |
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— |
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*) |
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— |
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||||
Stock-based compensation |
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— |
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— |
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— |
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— |
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— |
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Net income |
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— |
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— |
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— |
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— |
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— |
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Issuance costs in connection with Business Combination and PIPE offering |
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— |
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— |
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( |
) |
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( |
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Balance as of September 30, 2021 |
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