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January 12, 2023
Jennifer Fulk
Chief Financial Officer
Talkspace, Inc.
.
.
Re: Talkspace, Inc.
Form 10-K for the
fiscal year ended December 31, 2021
Filed February 25,
2022
Response Dated
December 22, 2022
File No. 001-39314
Dear Jennifer Fulk:
We have reviewed your December 22, 2022 response to our comment
letter and have the
following comments. In some of our comments, we may ask you to provide
us with information
so we may better understand your disclosure.
Please respond to these comments within ten business days by
providing the requested
information or advise us as soon as possible when you will respond. If
you do not believe our
comments apply to your facts and circumstances, please tell us why in
your response.
After reviewing your response to these comments, we may have
additional
comments. Unless we note otherwise, our references to prior comments are
to comments in our
December 13, 2022 letter.
Form 10-K for the fiscal year ended December 31, 2021
Management's Discussion and Analysis of Financial Condition and Results
of Operations
Revenues, page 64
1. We note in your
response to prior comment 2 that revenue prior to the impact of revenue
reserves is a non-GAAP
measure. It appears that this non-GAAP measure represents a
tailored accounting
principle prohibited by Rule 100(b) of Regulation G, as discussed in
Question 100.04 of the
Non-GAAP Financial Measures Compliance and Disclosure
Interpretations
(CD&Is). Please remove this non-GAAP measure from future filings.
Alternatively, tell us
how you comply with the guidance.
Jennifer Fulk
Talkspace, Inc.
January 12, 2023
Page 2
Consolidated Financial Statements
Revenue Recognition, page 80
2. We have reviewed your responses to prior comments 3 and 4 and have the
following
comments:
Your references to, and use of, revenue reserves does not appear
consistent with the
guidance in ASC 606 as ASC 606 does not make reference to reserves.
Please
explain to us in further detail the nature of your revenue reserves,
how revenue
reserves are determined, and how your use of revenue reserves
complies with ASC
606;
In addition, you set forth that you have not recorded any bad debt
expense for 2021
and 2020 and that your contracts do not contain variable
consideration, but it appears
that you are applying ASC 606-10-32-5 when you record revenue
reserves. Please
clarify for us whether the promised consideration is variable as set
forth in
either ASC 606-10-32-7 (a) or (b);
Please clarify for us which of the methods under ASC 606-10-32-8 you
utilize to
estimate variable consideration, if applicable;
Revise your disclosure to include all of the items required by ASC
606-10-50, as
applicable. For example, provide the qualitative and quantitative
disclosure about the
significant judgments and changes in judgments, including inputs and
assumptions,
related to your accounting for discounts, rebates, refunds, or
credits, as set forth in
ASC 606-10- 50-1(b), 50-17, and 50-20; and
Please provide us a revised accounting policy and disclosure that
address any changes
or clarifications from the preceding comments, to be included in
future filings.
You may contact Michael Fay at 202-551-3812 or Brian Cascio, Accounting
Branch
Chief, at 202-551-3676 if you have questions regarding the comments and related
matters.
Sincerely,
FirstName LastNameJennifer Fulk Division of
Corporation Finance
Office of
Industrial Applications and
Comapany NameTalkspace, Inc.
Services
January 12, 2023 Page 2
cc: John Reilly, General Counsel
FirstName LastName