false00018039010000000018039012022-02-222022-02-220001803901talk:WarrantsMember2022-02-222022-02-220001803901us-gaap:CommonStockMember2022-02-222022-02-22

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(D)

OF THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): February 22, 2022

 

 

Talkspace, Inc.

(Exact name of registrant as specified in its charter)

 

 

Delaware		001-39314		84-4636604
(State or other jurisdiction of incorporation)		(Commission File Number)		(I.R.S. Employer Identification No.)
Address Not Applicable				Address Not Applicable
(Address of principal executive offices)				(Zip Code)

(212) 284-7206

(Registrant’s telephone number, including area code)

 

Not Applicable

(Former name or former address, if changed since last report)

 

Check the appropriate box below if the Form 8-K is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

☐	Written communications pursuant to Rule 425 under the Securities Act

 

☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act

 

☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act

 

☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act

 

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, $0.0001 par value per share		TALK		Nasdaq Global Select Market
Warrants to purchase common stock		TALKW		Nasdaq Global Select Market

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

 

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. ☐

 

 

 

 

 

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Item 2.02 Results of Operations and Financial Condition.

Talkspace, Inc. (the “Company”) issued a press release on February 22, 2022 announcing its financial results for the fourth quarter and fiscal year ended December 31, 2021. A copy of the press release issued in connection with this announcement is furnished as Exhibit 99.1 attached hereto.

 

The information in this Item 2.02, including the information contained in Exhibit 99.1 of this Current Report on Form 8-K, is being furnished hereby and shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”), or otherwise subject to the liabilities of such section, nor shall such information be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits
 

Exhibit Number		Description
99.1		Press Release issued by Talkspace, Inc. dated February 22, 2022.
104		Cover Page Interactive Data File (embedded within the Inline XBRL document).

 

 

 

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.

			Talkspace, Inc.
Date:	February 22, 2022	By:	/s/ Jennifer Fulk
			Jennifer Fulk Chief Financial Officer

 

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Exhibit 99.1

 

Talkspace Reports 2021 Full Year and Fourth Quarter Results

Revenue grew 49% in 2021 to $114 million, driven by continued strong B2B performance

Completed B2B sessions grew 139% in 2021 versus the prior year

B2B eligible lives increased 75% in 2021 compared to the prior year

NEW YORK, February 22, 2022 – Talkspace, Inc. (Nasdaq: TALK), a leading virtual behavioral healthcare company, today reported 2021 full year and fourth quarter results as summarized below. All financial results refer to 2021 full year or fourth quarter and the applicable prior-year period unless otherwise stated.

 

		Three Months							Twelve Months
Periods ended December 31, 2021		Results			Variance from Prior Year				Results			Variance from Prior Year
(In thousands unless otherwise noted, unaudited)
Number of B2B eligible lives (in millions)			69			75	%			69			75	%
Number of active members 1			55.6			11	%			55.6			11	%
Number of completed B2B sessions			81.6			52	%			273.7			139	%
Total revenue		$	29,172			14	%		$	113,671			49	%
Gross profit		$	15,971			(5	%)		$	66,772			34	%
Gross margin %			55	%	~(1,000) bps					59	%	~(700) bps
Operating expenses		$	44,549			61	%		$	160,695			124	%
Net income (loss)		$	(21,068	)	*				$	(62,742	)	*
Adjusted EBITDA 2		$	(17,565	)	*				$	(60,868	)	*
Cash and cash equivalents		$	198,256		*				$	198,256		*

* = not meaningful

(1) Reflects active members at the end of the period.

(2) Adjusted EBITDA is a non-GAAP financial measure. For a reconciliation to the most directly comparable GAAP measure, see “Reconciliation of Non-GAAP Results to GAAP Results.”

 

“We delivered revenue and gross profit growth in 2021, led by increasing demand for our B2B services, partially offset by a decline in our consumer business in the final months of the year,” said Chief Financial Officer Jennifer Fulk. “Importantly, we made progress on our near-term priorities as we continue to invest in growth initiatives and optimize our business mix, setting the stage for long term value creation.”
 

Full Year 2021 Key Performance Metrics

 

 

 

 

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Fourth Quarter 2021 Key Performance Metrics

 

 

 

 

Conference Call, Presentation Slides, and Webcast Details

 

Visit investors.talkspace.com to view a presentation related to 2021 full year and fourth quarter results and business outlook and listen to a conference call scheduled to begin at 5:00 p.m. ET on Tuesday, February 22, 2022. The conference call can also be accessed by dialing (888) 660-0107 for U.S. participants or (409) 216-0599 for international participants (participant code 3365024). A replay will be available shortly after the call’s completion and remain available for approximately 90 days.

 

About Talkspace

 

Talkspace is a leading virtual behavioral healthcare company enabled by a purpose-built technology platform. As a digital healthcare company, all care is delivered through an easy-to-use and fully encrypted web and mobile platform, consistent with HIPAA and other state regulatory requirements.

 

Today, the need for care feels more urgent than ever. When seeking treatment, whether it’s psychiatry or adolescent, individual or couples therapy, Talkspace offers treatment options for almost every need. With Talkspace, members can send their dedicated therapists text, video, and voice messages anytime, from anywhere, and engage in live video sessions. As of December 2021, over 2 million people have used Talkspace, and 69 million lives were covered for Talkspace through insurance and employee assistance programs or other network behavioral health paid benefit programs.

 

For more information about Talkspace commercial relationships, visit https://business.talkspace.com/. To learn more about online therapy, please visit https://www.talkspace.com/online-therapy/. To learn more about Talkspace Psychiatry, please visit https://www.talkspace.com/psychiatry.

 

 

 

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Forward Looking Statements

This press release contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, as amended. All statements contained in this press release that do not relate to matters of historical fact should be considered forward-looking, including statements regarding our financial condition, anticipated financial performance, achieving profitability, business strategy and plans, market opportunity and expansion and objectives of our management for future operations. These forward-looking statements generally are identified by the words “anticipate,” “believe,” “contemplate,” “continue,” “could,” “estimate,” “expect,” “forecast”, “future”, “intend,” “may,” “might”, “opportunity”, “plan,” “possible”, “potential,” “predict,” “project,” “should,” “strategy”, “strive”, “target,” “will,” or “would”, the negative of these words or other similar terms or expressions. The absence of these words does not mean that a statement is not forward-looking. Forward-looking statements are predictions, projections and other statements about future events that are based on current expectations and assumptions and, as a result, are subject to risks and uncertainties. Many important factors could cause actual future events to differ materially from the forward-looking statements in this press release, including but not limited to: our history of losses; the rapid evolution of our business and the markets in which we operate; our ability to continue growing at the rates we have historically grown, or at all; the development of the virtual behavioral health market; COVID-19 and its impact on business and economic conditions; competition in our industry; and our relationships with affiliated professional entities to provide physician and other professional services. The foregoing list of factors is not exhaustive. You should carefully consider the foregoing factors and the other risks and uncertainties described under the caption “Risk Factors” in our Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2021 filed with the Securities and Exchange Commission (“SEC”), and our other documents filed from time to time with the SEC. These filings identify and address other important risks and uncertainties that could cause actual events and results to differ materially from those contained in the forward-looking statements. Forward-looking statements speak only as of the date they are made. Readers are cautioned not to put undue reliance on forward-looking statements, and we assumes no obligation and do not intend to update or revise these forward-looking statements, whether as a result of new information, future events, or otherwise. We do not give any assurance that we will achieve our expectations.

 

Financial Disclosures

The financial results reported in this press release are unaudited and subject to change as additional information becomes available pending completion of the audit.

 

Contacts

‍For Investors:

Mike Lovell, Senior Director Investor Relations

515-771-1585

Mike.Lovell@Talkspace.com

 

Westwicke, an ICR Company

Bob East / Asher Dewhurst / Jordan Kohnstam

443-213-0500

TalkspaceIR@westwicke.com

 

 

 

 

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Talkspace, Inc.

Consolidated Statements of Operations

(Unaudited)

 

		Three months ended December 31,								Variance								Twelve months ended December 31,								Variance
		2021				2020				$				%				2021				2020				$				%
(in thousands, except percentages and per share data)
Consumer revenue		$	16,471			$	19,378			$	(2,907	)			(15.0	)		$	74,757			$	61,586			$	13,171				21.4
Commercial revenue			12,701				6,310				6,391				101.3				38,914				14,604				24,310				166.5
Total revenue			29,172				25,688				3,484				13.6				113,671				76,190				37,481				49.2
Cost of revenues			13,201				8,959				4,242				47.3				46,899				26,353				20,546				78.0
Gross profit			15,971				16,729				(758	)			(4.5	)			66,772				49,837				16,935				34.0
Operating expenses:
Research and development, net			3,896				2,256				1,640				72.7				15,919				9,583				6,336				66.1
Clinical operations			3,479				1,797				1,682				93.6				9,365				4,332				5,033				116.2
Sales and marketing			25,516				17,685				7,831				44.3				100,641				47,705				52,936				111.0
General and administrative			11,658				6,001				5,657				94.3				34,770				10,199				24,571				240.9
Total operating expenses			44,549				27,739				16,810				60.6				160,695				71,819				88,876				123.7
Operating loss			28,578				11,010				17,568				159.6				93,923				21,982				71,941				327.3
Financial (income) expense, net			(7,528	)			110				(7,638	)		*					(31,228	)			364				(31,592	)		*
Loss before taxes on income			21,050				11,120				9,930				89.3				62,695				22,346				40,349				180.6
Taxes on income			18				12				6				50.0				47				24				23				95.8
Net loss		$	21,068			$	11,132			$	9,936				89.3			$	62,742			$	22,370			$	40,372				180.5
Net loss per share (1):
Basic and Diluted		$	0.14			$	0.83			$	(0.69	)			(83.1	)		$	0.72			$	1.67			$	(0.95	)			(56.9	)
Weighted average number of common shares (1):
Basic and Diluted			152,467				13,391												86,776				13,359

* = not meaningful

(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.

 

 

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Talkspace, Inc.

Consolidated Balance Sheets

(Unaudited)

 

		December 31,
(in thousands except share and per share data)		2021				2020
ASSETS
CURRENT ASSETS:
Cash and cash equivalents		$	198,256			$	13,248
Accounts receivable, net of allowance			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			—				692
Intangible assets, net			3,436				5,195
Goodwill			6,134				6,134
Other long-term assets			82				—
Total assets		$	223,606			$	32,873
LIABILITIES, CONVERTIBLE PREFERRED STOCK AND    STOCKHOLDERS’ EQUITY (DEFICIT)
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				—
Other long-term liabilities			86				—
Total liabilities			31,333				20,489
Commitments and contingencies
CONVERTIBLE PREFERRED STOCK:
Convertible preferred stock			—				111,282
STOCKHOLDERS’ EQUITY (DEFICIT):
Common stock (1)			15				1
Additional paid-in capital (1)			363,788				9,889
Accumulated deficit			(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.

 

 

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Talkspace, Inc.

Consolidated Statements of Cash Flows

(Unaudited)

 

		For the Years Ended December 31,
(in thousands)		2021				2020				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				—				—
Warrant issuance cost and change in fair value			(31,784	)			—				—
Stock-based compensation			27,405				2,977				3,404
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			—				(10,685	)			—
Purchase of an intangible asset			—				(939	)			—
Proceeds from restricted long-term bank deposit			—				447				—
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				—				—
Proceeds from issuance of convertible preferred stock, net			—				—				51,204
Proceeds from borrowings			6,000				—				—
Repayment of borrowings			(6,000	)			—				—
Payment of debt issuance costs			(50	)			—				—
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

 

 

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Non-GAAP Financial Measures

In addition to our financial results determined in accordance with GAAP, we believe adjusted EBITDA, a non-GAAP measure, is useful in evaluating our operating performance. We use adjusted EBITDA to evaluate our ongoing operations and for internal planning and forecasting purposes. We believe that this non-GAAP financial measure, when taken together with the corresponding GAAP financial measures, provides meaningful supplemental information regarding our performance by excluding certain items that may not be indicative of our business, results of operations or outlook. We believe that the use of adjusted EBITDA is helpful to our investors as it is a metric used by management in assessing the health of our business and our operating performance. However, non-GAAP financial information is presented for supplemental informational purposes only, has limitations as an analytical tool and should not be considered in isolation or as a substitute for financial information presented in accordance with GAAP. In addition, other companies, including companies in our industry, may calculate similarly titled non-GAAP measures differently or may use other measures to evaluate their performance, all of which could reduce the usefulness of our non-GAAP financial measure as a tool for comparison. A reconciliation is provided below for this non-GAAP financial measure to net loss, the most directly comparable financial measure stated in accordance with GAAP. Investors are encouraged to review our GAAP financial measure and the reconciliation of our non-GAAP financial measure to its most directly comparable GAAP financial measure, and not to rely on any single financial measure to evaluate our business.

Adjusted EBITDA

Adjusted EBITDA is a key performance measure that our management uses to assess our operating performance. Because adjusted EBITDA facilitates internal comparisons of our historical operating performance on a more consistent basis, we use this measure for business planning purposes and in evaluating acquisition opportunities.

We calculate adjusted EBITDA as net loss adjusted to exclude (i) interest and other expenses (income), net, (ii) tax benefit and expense, (iii) depreciation and amortization (iv) stock-based compensation expense and (v) certain non-recurring expenses, where applicable.

Talkspace, Inc.

Reconciliation of Non-GAAP Results to GAAP Results

			For the Three Months Ended December 31,								For the Years Ended December 31,
(in thousands)			2021				2020				2021				2020
Net loss			$	(21,068	)		$	(11,132	)		$	(62,742	)		$	(22,370	)
Add:
Depreciation and amortization				515				324				1,973				379
Financial (income) expense, net (1)				(7,528	)			110				(31,228	)			364
Taxes on income				18				12				47				24
Stock-based compensation				6,821				1,908				27,405				2,977
Non-recurring expenses (2)				3,677				177				3,677				177
Adjusted EBITDA			$	(17,565	)		$	(8,601	)		$	(60,868	)		$	(18,449	)

(1) For the three months ended December 31, 2021, financial income, net primarily consisted of $7.9 million in gains resulting from the revaluation of warrant liabilities. For the twelve months ended December 31, 2021, financial income, net primarily consisted of $36.0 million in gains resulting from the revaluation of warrant liabilities, partially offset by $4.2 million in warrant issuance costs in connection with the close of the Business Combination.

(2) For the year ended December 31, 2021, non-recurring expenses primarily consisted of severance costs related to the separation of Oren Frank and Roni Frank, co-founders and former executives of the Company, in November 2021. For the year ended December 31, 2020, nonrecurring expenses consisted of legal expenses related to the acquisition of Lasting in November 2020.

 

 

 

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