Cover Page
Cover Page - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Mar. 08, 2023 | Jun. 30, 2022 | |
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 Address, Address Line One | 622 Third Avenue | ||
Entity Address, City or Town | New York | ||
Entity Address, State or Province | NY | ||
Entity Address, Postal Zip Code | 10017 | ||
Entity Central Index Key | 0001803901 | ||
City Area Code | 212 | ||
Local Phone Number | 284-7206 | ||
Entity Filer Category | Accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | false | ||
Document Period End Date | Dec. 31, 2022 | ||
Document Fiscal Year Focus | 2022 | ||
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 | true | ||
Entity Shell Company | false | ||
Entity Public Float | $ 167.7 | ||
Entity Common Stock, Shares Outstanding | 162,195,723 | ||
Documents Incorporated By Reference Text Block | DOCUMENTS INCORPORATED BY REFERENCE The Company's definitive Proxy Statement for the 2023 Annual Meeting of Stockholders to be filed by the Company pursuant to Regulation 14A is incorporated into Items 10, 11, 12, 13 and 14 of Part III of this Form 10-K. | ||
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, 2022 | Dec. 31, 2021 |
CURRENT ASSETS: | ||
Cash and cash equivalents | $ 138,545 | $ 198,256 |
Accounts receivable | 9,640 | 5,512 |
Other current assets | 4,372 | 9,562 |
Total current assets | 152,557 | 213,330 |
Property and equipment, net | 677 | 624 |
Intangible assets, net | 2,529 | 3,436 |
Goodwill | 0 | 6,134 |
Other assets | 491 | 82 |
Total assets | 156,254 | 223,606 |
CURRENT LIABILITIES: | ||
Accounts payable | 6,461 | 7,429 |
Deferred revenues | 4,355 | 7,186 |
Accrued expenses and other current liabilities | 16,502 | 12,562 |
Total current liabilities | 27,318 | 27,177 |
Warrant liabilities | 939 | 4,070 |
Other liabilities | 461 | 86 |
Total liabilities | 28,718 | 31,333 |
Commitments and contingencies (note 7) | ||
STOCKHOLDERS' EQUITY: | ||
Common stock of $0.0001 par value - Authorized: 1,000,000,000 and shares at December 31, 2022 and 2021, Issued and outstanding: 161,155,030 and 152,862,447 shares at December 31, 2022 and 2021, respectively | 16 | 15 |
Additional paid-in capital | 378,722 | 363,788 |
Accumulated deficit | (251,202) | (171,530) |
Total stockholders equity | 127,536 | 192,273 |
Total liabilities and stockholders' equity | $ 156,254 | $ 223,606 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2022 | Dec. 31, 2021 |
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 1,000,000,000 | 1,000,000,000 |
Common stock, shares issued | 161,155,030 | 152,862,447 |
Common stock, shares outstanding | 161,155,030 | 152,862,447 |
Consolidated Statements of Oper
Consolidated Statements of Operations and Comprehensive Loss - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Statement of Comprehensive Income [Abstract] | |||
Revenues | $ 119,567 | $ 113,671 | $ 76,190 |
Cost of revenues | 59,229 | 46,899 | 26,353 |
Gross profit | 60,338 | 66,772 | 49,837 |
Operating expenses: | |||
Research and development, net | 21,659 | 15,919 | 9,583 |
Clinical operations | 6,591 | 9,365 | 4,332 |
Sales and marketing | 72,842 | 100,641 | 47,705 |
General and administrative | 36,270 | 34,770 | 10,199 |
Impairment of goodwill | 6,134 | 0 | 0 |
Total operating expenses | 143,496 | 160,695 | 71,819 |
Operating loss | (83,158) | (93,923) | (21,982) |
Financial (income) expense, net | (3,740) | (31,228) | 364 |
Loss before taxes on income | (79,418) | (62,695) | (22,346) |
Taxes on income | 254 | 47 | 24 |
Net loss | $ (79,672) | $ (62,742) | $ (22,370) |
Net loss per share: | |||
Earnings Per Share, Basic | $ (0.51) | $ (0.72) | $ (1.67) |
Earnings Per Share, Diluted | $ (0.51) | $ (0.72) | $ (1.67) |
Weighted average number of common shares used in computing basic net loss per share | 156,885,256 | 86,775,948 | 13,359,350 |
Weighted average number of common shares used in computing diluted net loss per share | 156,885,256 | 86,775,948 | 13,359,350 |
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, 2019 | $ (79,599) | $ 1 | $ 6,818 | $ (86,418) | |
Beginning balance, shares at Dec. 31, 2019 | 94,582,550 | ||||
Beginning balance, value at Dec. 31, 2019 | $ 111,282 | ||||
Beginning 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 | ||||
Exercise of stock options | 2,098 | 2,098 | |||
Exercise of stock options, share | 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 | |||
Exercise of stock options | $ 3,181 | $ 1 | 3,180 | ||
Exercise of stock options, share | 5,331,634 | 5,331,634 | |||
Restricted stock units settled | $ (362) | (362) | |||
Restricted stock units settled, shares | 2,960,949 | ||||
Stock-based compensation | 12,116 | 12,116 | |||
Net loss | (79,672) | (79,672) | |||
Ending balance at Dec. 31, 2022 | $ 127,536 | $ 16 | $ 378,722 | $ (251,202) | |
Ending balance, shares at Dec. 31, 2022 | 0 | ||||
Ending balance, value at Dec. 31, 2022 | $ 0 | ||||
Ending balance, shares at Dec. 31, 2022 | 161,155,030 | 161,155,030 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Cash flows from operating activities: | |||
Net loss | $ (79,672) | $ (62,742) | $ (22,370) |
Adjustments to reconcile net loss to net cash used in operating activities: | |||
Depreciation and amortization | 1,357 | 1,973 | 379 |
Amortization of debt issuance costs | 0 | 175 | 0 |
Stock-based compensation | 12,116 | 27,405 | 2,977 |
Remeasurement of warrant liabilities | (3,131) | (31,784) | 0 |
Impairment of goodwill | 6,134 | 0 | 0 |
(Increase) decrease in accounts receivable | (4,126) | 402 | (5,017) |
Decrease (increase) in other current assets | 5,080 | (8,053) | (695) |
(Decrease) increase in accounts payable | (968) | 503 | 2,561 |
(Decrease) increase in deferred revenues | (2,831) | 2,014 | 2,028 |
Increase in accrued expenses and other current liabilities | 4,862 | 4,396 | 4,962 |
Increase in other liabilities | 102 | 0 | 0 |
Net cash used in operating activities | (61,077) | (65,711) | (15,175) |
Cash flows from investing activities: | |||
Purchase of property and equipment | (350) | (663) | (126) |
Proceeds from sale of property and equipment | 33 | 0 | 0 |
Acquisition of business | 0 | 0 | (10,685) |
Purchase of an intangible asset | 0 | 0 | (939) |
Proceeds from restricted long-term bank deposit | 0 | 0 | 447 |
Net cash used in investing activities | (317) | (663) | (11,303) |
Cash flows from financing activities: | |||
(Payments) proceeds from reverse capitalization, net of transaction costs | (645) | 249,334 | 0 |
Proceeds from exercise of stock options | 3,181 | 2,098 | 94 |
Payments for employee taxes withheld related to vested stock-based awards | (853) | 0 | 0 |
Proceeds from borrowings | 0 | 6,000 | 0 |
Repayment of borrowings | 0 | (6,000) | 0 |
Payment of debt issuance costs | 0 | (50) | 0 |
Net cash provided by financing activities | 1,683 | 251,382 | 94 |
Net (decrease) increase in cash and cash equivalents | (59,711) | 185,008 | (26,384) |
Cash and cash equivalents at the beginning of the year | 198,256 | 13,248 | 39,632 |
Cash and cash equivalents at the end of the year | 138,545 | 198,256 | 13,248 |
Supplemental cash flow data: | |||
Cash paid during the year for interest | 68 | 538 | 37 |
Cash paid during the year for income taxes | 122 | 0 | 0 |
Non-cash investing activity: | |||
Lease liabilities arising from obtaining right-of-use assets | 466 | 0 | 0 |
Non-cash financing activity: | |||
Employee taxes withheld related to restricted stock units vested | 0 | 491 | 0 |
Deferred issuance cost on credit | 0 | 0 | 692 |
Conversion of preferred stock to common stock | $ 0 | $ 111,282 | $ 0 |
Description of Organization and
Description of Organization and Business Operations | 12 Months Ended |
Dec. 31, 2022 | |
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. The Company offers convenient and affordable access to a fully credentialed network of highly qualified providers. Since Talkspace’s founding in 2012, the Company has connected millions of patients with licensed behavioral health providers across a wide and growing spectrum of care through virtual counseling, psychotherapy, and psychiatry. Through its platform, Talkspace serves its business-to-business ("B2B") channel, comprised of large enterprise clients, large health plans and employee assistance programs who offer their employees and insured members access to the Company's platform while their employer is under an active contract with Talkspace, or at in-network reimbursement rates, where applicable, and its business-to-consumer ("B2C") channel, comprised of individual consumers who subscribe directly to the Company's platform. Talkspace was originally incorporated as Hudson Executive Investment Corp. (“HEC”), a special purpose acquisition company, 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 Company refers to this transaction as the Business Combination. In connection with the Business Combination, HEC filed the Certificate of Incorporation and changed its name to “Talkspace, Inc.” The Company's principal executive office is located in New York, NY. The Company has three wholly owned subsidiaries, Talkspace LLC, Talkspace Network LLC and Groop Internet Platform LTD. In addition, the Company holds a variable interest in one professional association and six professional corporations, which have been established pursuant to the requirements of their respective domestic jurisdiction governing the corporate practice of medicine. See Note 15, “Variable Interest Entities,” in the notes to the consolidated financial statements for further details. |
Significant Accounting Policies
Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2022 | |
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 United States of America (“U.S. GAAP”). The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries and variable interest entities (“VIEs”) for which the Company is the primary beneficiary. Intercompany transactions and balances have been eliminated in the preparation of the consolidated financial statements. Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates, judgments, and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, together with amounts disclosed in the related notes to the consolidated financial statements. The Company’s significant estimates and assumptions used in these financial statements include, but are not limited to, the recognition and disclosure of contingent liabilities, revenue recognition, stock-based compensation awards, the fair value of warrant liabilities and the estimates and assumptions related to the impairment analysis of goodwill and intangible assets. The Company bases its estimates on historical factors, current circumstances and the experience and judgment of management. Estimates, by their nature, are based on judgment and available information, therefore, actual results could be materially different from these estimates. Consolidation The Business Combination was accounted for as a reverse recapitalization, and Old Talkspace was deemed to be the accounting acquirer. Consequently, 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. The Company consolidates all subsidiaries in which it has a controlling financial interest, as well as any VIEs where the Company is deemed to be the primary beneficiary. In the second quarter of 2022, the Company completed the transition of its structure with respect to its relationships with healthcare providers under certain affiliated professional association (“PA”) and professional corporations (“ PC”) entities. The Company determined that the PA and PC entities are VIEs. The Company also determined that it is able to direct the activities of these entities that most significantly impact their economic performance and it funds and absorbs all losses of these VIEs resulting in the Company being the primary beneficiary of the PA and PC entities. Accordingly, the Company consolidates the VIEs. See Note 15, “Variable Interest Entities,” in the notes to the consolidated financial statements for further details. Business Combination The Company accounts for business combinations in accordance with Accounting Standard Codification (“ASC”) 805, “Business Combinations”. ASC 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. Operating Segments The Company operates its business as a single segment and as one reporting unit, which is how the chief operating decision maker, the Company's Chief Executive Officer, reviews financial performance and allocates resources. The majority of the Company’s operations are based in the United States. 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 ASC 830, “Foreign Currency Matters”. These transactions were not material for the year ended December 31, 2022, 2021 and 2020. Cash and cash equivalents Cash equivalents are short-term, highly liquid investments that are readily convertible to cash, with original maturities of three months or less at the date a cquired. The Company’s cash and cash equivalents generally consist of bank deposits and investments in money market funds. The carrying value of cash and cash equivalents approximate their fair values due to the short-term maturities of such instruments. The majority of the Company’s cash and cash equivalents are invested in one major bank in the United States. Generally, these cash and cash equivalents and deposits may be redeemed upon demand. The Company deposits its cash with one major financial institution in the U.S., and its deposits may exceed federally insured limits. Management believes that the financial institution that holds the Company’s and its subsidiaries’ cash and cash equivalents is an institution with high credit standing, and accordingly, minimal credit risk exists with respect to these assets . Property and equipment, net 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 Furniture and equipment 15 Leases The Company accounts for leases in accordance with ASC 842, "Leases". The right-of-use ("ROU") asset represents the Company’s right to use an underlying asset for the lease term and the lease liability represents an obligation to make payments based on the present value of lease payments over the lease term. The Company uses incremental borrowing rates based on the estimated rate of interest for collateralized borrowing over a similar term of the lease payments at commencement date. The lease term includes options to extend or terminate the lease when it is reasonably certain they will be exercised. The Company has elected not to record operating lease ROU assets and lease liabilities for leases with an initial term of 12 months or less. The Company also elected the practical expedient to not separate lease and non-lease components for its leases. See Note 9, "Leases" in the notes to the consolidated financial statements for further details. Goodwill Goodwill reflects the excess of the consideration transferred, including the fair value of any contingent consideration and any non-controlling interest in the acquiree, over the assigned fair values of the identifiable net assets acquired. Goodwill is not amortized, and is tested for impairment at least on an annual basis. The Company operates as one reporting unit and the fair value of the reporting unit is estimated using quoted market prices of the Company’s stock in active markets. The Company tests goodwill for impairment annually in the fourth quarter and whenever events or changes in circumstances indicate the carrying amount of goodwill may not be recoverable. When testing goodwill for impairment, the Company may first perform a qualitative assessment. If the Company determines it is not more likely than not the reporting unit’s fair value is less than its carrying value, then no further analysis is necessary. If the Company determines that it is more likely than not that the fair value of its reporting unit is less than its carrying amount, then the quantitative impairment test will be performed. The Company may elect to bypass the qualitative assessment and proceed directly to performing a quantitative analysis. Under the quantitative impairment test, if the carrying amount of the Company’s reporting unit exceeds its fair value, the Company will recognize an impairment loss in an amount equal to that excess but limited to the total amount of goodwill. See Note 4, "Goodwill" in the notes to the consolidated financial statements for further details. Intangible Assets Acquired identifiable finite-lived intangible assets are amortized on a straight-line basis 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 cases where the Company reduces the estimated useful life for any asset, the remaining unamortized balance is amortized or depreciated over the revised estimated useful life. See Note 5, "Intangible Assets, net" in the notes to the consolidated financial statements for further details. Impairment of long-lived assets and intangible assets subject to amortization, including ROU lease asset Property and equipment, intangible assets subject to amortization and ROU lease assets are reviewed for impairment in accordance with ASC 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 group 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, 2022, 2021 or 2020 for these assets. Revenue recognition The Company recognizes revenue in accordance with ASC 606, “Revenue from Contracts with Customers”, 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 the Company will be entitled in exchange for the service rendered. To the extent the transaction price includes variable consideration, the Company estimates the amount of variable consideration that is included in the transaction price in accordance using the expected value method, as this method best predicts the amount of consideration to which the Company will be entitled based on the terms of its contracts. Variable consideration is included in the transaction price to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. The Company's revenue is generated from two revenue streams: B2B and B2C. B2B Revenue - Comprised of large enterprise clients and large health plans and employee assistance programs who offer their employees and insured members access to the Company's platform while their employer is under an active contract with Talkspace, or at in-network reimbursement rates, where applicable. 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. The majority of contracts with enterprise clients typically range in length from one to three years and are non-cancelable during the initial contractual term. Customers typically have the right to terminate their contracts for cause if the Company fails to perform in accordance with the contractual terms. The Company also contracts with health insurance plans and employee assistance (EAP) organizations ("insurance payors") to provide its therapy and psychiatry services to their eligible covered members. Revenue is recognized at a point in time, as virtual therapy or psychiatry session is rendered. The transaction price is determined based on contracted rates and includes variable consideration in the form of implicit price concessions. The Company determines the total transaction price, including an estimate of variable consideration, at contract inception and reassesses this estimate at each reporting date. The Company estimates the amount of variable consideration that is included in the transaction price using the expected value method primarily based on actual historical collection experience for each insurance payor over a twelve-month period. Revenue from health insurance plans and EAP organizations is presented net of implicit price concessions. Contracts with health insurance plans and EAP organizations include annual evergreen clauses and generally may be terminated by either party typically upon a minimum 60 -day advance notice. B2C Revenue - The Company generates revenues from the sale of monthly, quarterly, bi-annual and annual membership subscriptions to the Company's therapy platform as well as supplementary a la carte offerings directly to individual consumers through a subscription plan. The Company recognizes member subscription revenues ratably over the subscription period, beginning when therapy services commence. The Company recognizes revenues from supplementary a la carte offerings at a point in time, as virtual therapy session is rendered. Members may cancel their subscription at any time and will receive a pro-rata refund for the subscription price. The transaction price from member subscription revenue and supplementary a la carte offerings includes variable consideration in the form of refunds. The Company estimates the refund liability for the variable consideration portion of the transaction price primarily based on historical experience. The refund liability is recorded within the “Accrued expenses and other current liabilities” line item in the consolidated balance sheet. Revenue from individual consumers is presented net of refunds. Accounts Receivable Accounts receivables are stated net of credit losses allowance. The Company is exposed to credit losses primarily through its contracts with enterprise clients, health insurance plans and EAP organizations. The Company’s methodology is based on historical collection experience, customer creditworthiness, current and future economic condition and market condition. Additionally, specific allowance amounts are established to record the appropriate provision for customers that have a higher probability of default. Accounts receivables are written off after all reasonable means to collect the full amount have been exhausted. The allowance for credit losses is immaterial for the years ended December 31, 2022 and 2021. Deferred Revenue The Company records deferred revenues when cash payments from customers are received in advance of the Company's performance obligations to provide services. The Company recognizes deferred revenues as revenues in the statement of operations once the related performance obligations have been performed and satisfied. Deferred revenue that will be recognized during the succeeding twelve-month period is recorded as a current liability and the remaining portion is recorded as a noncurrent liability on the consolidated balance sheet. The Company expects to satisfy the majority of its performance obligations associated with deferred revenue within one year or less. Stock-based compensation The Company accounts for stock-based compensation in accordance with ASC 718, “Compensation - Stock Compensation”. Compensation cost for share-based awards is measured at the fair value on the grant date and recognized as expense using the straight-line method for service-based awards over the requisite service period. 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 the Company's historical share price movements as well as similar traded companies’ historical share price movements as adequate historical experience is not available to provide a reasonable estimate based only on the Company's share price. 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 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. 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's matching contributions to participants’ accounts were immaterial for the years ended December 31, 2022, 2021 and 2020, respectively. 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 used to measure fair value to the extent that relevant observable inputs are not available. An entity develops unobservable inputs using the best information available in the circumstances, which might include the entity's own data, taking into account all information about market participant assumptions that is reasonably available. Three levels of inputs may be used to measure fair value: Level 1: Quoted prices in active markets for identical assets or liabilities. Level 2: Observable inputs other than Level 1 prices such as quoted prices for similar assets of liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3: Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. 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". 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 consolidated financial statements. The Company follows the provisions in ASC 740 and the guidance related to accounting for uncertainty in income taxes. ASC 740 contains a two-step approach to recognizing and measuring a liability for uncertain tax positions. The first step is to evaluate the tax position taken or expected to be taken in a tax return by determining if the weight of available evidence indicates that it is more likely than not that, on an evaluation of the technical merits, the tax position will be sustained on audit, including resolution of any related appeals or litigation processes. The second step is to measure the tax benefit as the largest amount that is more than 50% likely to be realized upon ultimate settlement. The Company's policy is to recognize interest related to unrecognized tax benefits as interest expense and penalties as operating expenses. The Company does not provide deferred tax liabilities when it intends to reinvest earnings of a foreign subsidiary indefinitely or if distributed, no tax liability will be imposed. Undistributed earnings of a foreign subsidiary and unrecognized deferred tax liability related to such earnings are immaterial as of December 31, 2022. As of December 31, 2022 and 2021 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, 2022 and 2021. Net loss per share The Company computes net loss per share using the two-class method required for participating securities. For the year ended December 31, 2020, 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 year ended December 31, 2020 was 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 Accounting Pronouncements The Company has reviewed recent accounting pronouncements and concluded that they are either not applicable to its business or that no material effect is expected on the consolidated financial statements as a result of their future adoption. |
Revenue Recognition
Revenue Recognition | 12 Months Ended |
Dec. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Revenue Recognition | NOTE 3. REVENUE RECOGNITION The following table presents the Company’s revenues from sales to unaffiliated customers disaggregated by revenue source: For the Year Ended December 31, (in thousands) 2022 2021 2020 Revenues from sales to unaffiliated customers: B2B revenue $ 64,409 $ 38,914 $ 14,604 B2C revenue 55,158 74,757 61,586 Total $ 119,567 $ 113,671 $ 76,190 For the years ended December 31, 2022, 2021 and 2020, the majority of the Company’s revenues were generated from customers located in the United States. For the year ended December 31, 2022, two customers represented 10 % or more of total revenue and no single customer represented 10 % or more of total revenue for the years ended December 31, 2021 and 2020. Accounts Receivable The Company had receivables related to revenue from contracts with enterprise clients of $ 7.4 million and $ 4.0 million at December 31, 2022 and December 31, 2021, respectively. As of December 31, 2022 and 2021, the balance of receivables related to health insurance plans and EAP organizations was $ 2.2 million and $ 1.5 million, respectively. As of December 31, 2022, four customers represen ted 10.4 %, 15.1 %, 16.9 %, 25.0 % of the accounts receivable balance. As of December 31, 2021, one customer represented 16.8 % of the accounts receivable balance. Deferred Revenue For the year ended December 31, 2022 and 2021, the Company recognized revenues of $ 6.2 million and $ 5.2 million, respectively, that were included in deferred revenues at the beginning of the year. As of December 31, 2022, deferred revenue related mainly to the Company’s B2C subscription business. |
Goodwill
Goodwill | 12 Months Ended |
Dec. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill | NOTE 4. GOODWILL For the year ended December 31, 2022, the Company decided to by-pass the qualitative assessment and proceed directly to step one of the impairment test. The Company operates as one reporting unit and the fair value of the reporting unit is estimated using quoted market prices of the Company’s stock in active markets. The annual impairment test indicated that the carrying amount of the reporting unit exceeded its fair value, which was primarily due to the continuous decline in our market capitalization as a result of a deterioration of the current economic environment. For the year ended December 31, 2022, the Company recorded a goodwill impairment charge of $ 6.1 million. For the years ended December 31, 2021 and 2020, the Company did no t record any impairment charge of goodwill. |
Intangible Assets, Net
Intangible Assets, Net | 12 Months Ended |
Dec. 31, 2022 | |
Finite-Lived Intangible Assets, Net [Abstract] | |
Intangible Assets, Net | NOTE 5. INTANGIBLE ASSETS, NET Intangible assets are comprised of the following: As of December 31, (in thousands) 2022 2021 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 968 522 Customer relationship 1,350 1,186 Non-Competition agreement 643 346 2,961 2,054 Intangible assets, net $ 2,529 $ 3,436 Amortization expen se for intangible assets was $ 0.9 million for the year end ed December 31, 2022 ($ 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 for the periods presented. Future amortization that will be charged to expense over the remaining life of the intangible assets as of December 31, 2022 is as follows: December 31, In thousands 2023 $ 745 2024 446 2025 446 2026 446 2027 and thereafter 446 $ 2,529 |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | NOTE 6. FAIR VALUE MEASUREMENT The carrying value of the Company’s cash equivalents, accounts receivable, other current assets, 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 assumed in connection with the consummation of the Business Combination and the closing of the Forward Purchase Agreement with the HEC Fund 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 were measured at fair value at inception and thereafter on a recurring, quarterly basis, with changes in fair value presented within financial (income) expense, net, in the consolidated statement of operations. 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. For the year ended December 31, 2022, the Company had gains related to the revaluation of the Private Placement Warrants of $3.1 million compared to $36.0 million for the year ended December 31, 2021. 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. These inputs were considered to be a Level 3 measurement. The following table presents the changes in the fair value of warrant liabilities during the year ended December 31, 2022 and 2021: Level 3 Liabilities For the Year Ended December 31, 2022 (in thousands) Beginning Balance Purchases and Issuances Change in Fair Value Converted into Equity Ending Balance Private Placement Warrants $ 4,070 $ - $ (3,131 ) $ - $ 939 Level 3 Liabilities For the Year Ended December 31, 2021 (in thousands) Beginning Balance Purchases and Issuances Change in fair Value Converted into Equity Ending Balance Private Placement Warrants $ - $ 40,278 $ (36,208 ) $ - $ 4,070 Old Talkspace Warrants $ 444 $ - $ 165 $ (609 ) $ - 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, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingent Liabilities | NOTE 7. COMMITMENTS AND CONTINGENT LIABILITIES Contingencies In January 2022, the Company and certain of its current and former officers and directors were named as defendants in securities class action complaints filed in the United States District Court for the Southern District of New York under the case headings: (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.). These securities actions asserted violations of sections 10(b), 14(a) and 20(a) of the Securities Exchange Act of 1934 and SEC Rules 10b-5 and 14a-9 promulgated thereunder. These actions generally relate to public disclosures and statements by the Company in connection with its merger with HEC. In June 2022, these actions were consolidated under the caption In re Talkspace, Inc. Securities Litigation (the “Consolidated Securities Action”). In December 2022, the company’s subsidiary Tailwind Merger Sub II, LLC, certain of the Company’s current and former directors and officers, and others were named as defendants in a putative class action complaint filed in the Delaware Court of Chancery under the case caption Valdez v. Braunstein, et al., Case No. 2022-1148 (the “Delaware Action”). The Delaware Action asserts claims for breach of fiduciary duty and aiding and abetting breach of fiduciary duty relating to the merger with HEC, among other things, based on many of the same facts at issue in the Consolidated Securities Action. The complaint seeks, among other things damages on behalf of putative class members who did not redeem their shares in connection with the Company’s merger with HEC. In February 2023, the Company resolved the Consolidated Securities Action and the Delaware Action through mediation. The settlement resolves these litigations with respect to all named defendants. The Company recorded an accrual for its respective share of the settlement agreement as of December 31, 2022. The settlement will have to be approved by the court, which the Company expects will occur in the second or third quarter of 2023. In June and July 2022, two individuals filed stockholder derivative lawsuits purportedly on behalf of Talkspace in the United States District Court for the Southern District of New York under the case captions: (1) Odsvall v. Oren Frank et al., No. 22-cv-05016 (S.D.N.Y.) and (2) Nayman v. Berg, et al., No. 22-cv-06258 (S.D.N.Y.), which were subsequently consolidated (the “Derivative Action”). The Derivative Action names certain of the Company’s current and former officers and directors as defendants and the Company as a nominal defendant. The Derivative Action asserts claims for violations of federal securities laws, breach of fiduciary duty, and aiding and abetting breaches of fiduciary duty relating to the merger with HEC, among other things, based on many of the same facts at issue in the Consolidated Securities Action. In February 2023 the parties agreed to resolve the Derivative Action with respect to all named defendants in exchange for the Company’s agreement to implement certain changes to its Governance environment. The settlement will have to be approved by the court, which the Company expects will occur in the second or third quarter of 2023. The Company is responsible for payment of legal fees to the counsel representing the plaintiffs in the Derivative Action. The Company accrued the estimated total legal fees as of December 31, 2022. In addition to the foregoing, the Company may in the future be involved in various legal proceedings, claims and litigation that arise in the normal course of business. The Company accrues for estimated loss contingencies related to legal matters when available information indicates that it is probable a liability had been incurred and the Company can reasonably estimate the amount of that loss. In many proceedings, however, it is inherently difficult to determine whether any loss is probable or even possible or to estimate the amount of any loss. In addition, even where a loss is possible or an exposure to loss exists in excess of the liability already accrued with respect to a previously recognized loss contingency, it is often not possible to reasonably estimate the size of the possible loss or range of loss or possible additional losses or range of additional losses. 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. |
Capital Stock
Capital Stock | 12 Months Ended |
Dec. 31, 2022 | |
Stockholders' Equity Note [Abstract] | |
Capital Stock | NOTE 10. 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, 2022 and 2021 there were 12,780,000 Private Placement Warrants and 21,350,000 Public Warrants to purchase the Company’s common stock at an exercise price of $ 11.50 per share. As of December 31, 2022 and 2021, no shares of preferred stock were issued or outstanding. |
Property and Equipment, Net
Property and Equipment, Net | 12 Months Ended |
Dec. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment, Net | NOTE 8. PROPERTY AND EQUIPMENT, NET Property and equipment, net consist of the following: As of December 31, (in thousands) 2022 2021 Computer equipment and software $ 1,319 $ 926 Less accumulated depreciation ( 642 ) ( 302 ) Property and equipment, net $ 677 $ 624 Depreciation expense, included in general and administrative expense in the consolidated statement of operations, was $ 0.4 million, $ 0.2 million and $ 0.1 million for the years ended December 31, 2022, 2021 and 2020, respectively. |
Leases
Leases | 12 Months Ended |
Dec. 31, 2022 | |
Leases [Abstract] | |
Leases | NOTE 9. LEASES In November 2022, the Company entered into a long-term lease agreement lease for new office space in New York, NY. This operating lease expires two years from the commencement date and has the option to be renewed for an additional year. The Company recognized ROU lease asset and lease liability based on the present value of the future minimum lease payments at the lease commencement date. The Company did not include the renewal options as part of the ROU lease asset and lease liability at the commencement date as it was not reasonably certain that the renewal option will be exercised. The Company used incremental borrowing rates based on the estimated rate of interest for collateralized borrowing over a similar term of the lease payments at commencement date in determining the present value of future payments. As of December 31, 2022, the weighted-average remaining lease term was 1.83 years and weighted-average discount rate was 7.17 %. As of December 31, 2022, the ROU lease asset was of $ 0.4 million and is included within the "Other assets" line item in the consolidated balance sheet. As of December 31, 2022, the short-term portion of the lease liability was $ 0.2 million and is included within the "Accrued expenses and other current liabilities" line item in the consolidated balance sheet. As of December 31, 2022, the long-term portion of the lease liability was $ 0.3 million and is included within the "Other liabilities" line item in the consolidated balance sheet. Operating lease costs recognized for the year ended December 31, 2022 were immaterial. In addition, the Company's wholly owned subsidiary, Groop Internet Platform LTD, located in Israel, leases its operating facilities under a month-to-month operating lease agreement. Leases with an initial term of 12 months or less are not recorded on the balance sheet. The Company recognizes rent expense for these leases on a straight-line basis over the lease term. Rent expense related to these leases for the years ended December 31, 2022, 2021 and 2020 was $ 0.2 million, $ 0.1 million and $ 0.5 million, respectively. The following table outlines the maturities of the Company’s lease liabilities as of December 31, 2022: December 31, In thousands 2023 $ 270 2024 225 Total undiscounted lease payments $ 495 Less interest ( 29 ) Present value of operating lease liability $ 466 |
Share-Based Compensation
Share-Based Compensation | 12 Months Ended |
Dec. 31, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Share-Based Compensation | NOTE 11. 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 officers, employees, directors, consultants and 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. 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. As of December 31, 2022, no employee stock purchases have been made under the 2021 ESPP. 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 over the period during which the employee is required to perform services in exchange for the award. Stock Options Stock options 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 for the year ended December 31, 2022 is as follows: Year ended December 31, 2022 Number of Weighted Weighted Aggregate (1) (in thousands) Outstanding at beginning of year 19,494,202 $ 1.95 6.88 $ 19,214 Granted 4,175,212 1.29 Exercised ( 5,331,634 ) 0.57 Forfeited ( 1,461,454 ) 4.04 Outstanding at end of year (2) 16,876,326 $ 2.03 7.26 $ 1,135 Exercisable at end of year 11,641,663 $ 1.44 6.50 $ 1,135 (1) The aggregate intrinsic value of options outstanding at end of the year and options exercisable at end of the year does not include 11,861,426 and 6,626,765 options that are out of the money, respectively. (2) Excludes 650,000 fully-vested options with an exercise price of $ 11.50 issued in June 2021 to a consultant in connection with the Business Combination. The weighted average grant-date fair value of stock options granted to employees during the years ended December 31, 2022 and 2021 was $ 0.88 and $ 3.81 per share, respectively. The fair value for options granted for the years ended December 31, 2022, 2021 and 2020 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, 2022 2021 2020 Dividend yield (1) 0 % 0 % 0 % Expected volatility (2) 66.80 %- 86.13 % 65.00 %- 75.23 % 53.96 %- 66.55 % Risk-free interest rate (3) 1.76 %- 4.11 % 0.66 %- 1.39 % 0.25 %- 1.45 % Expected term (years) (4) 5.07 - 6.25 5.27 - 6.25 5.27 - 6.08 (1) No dividends were paid during the years ending December 31, 2022, 2021 and 2020. (2) The expected volatility was calculated based upon historical stock price movements of the Company and 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, 2022, there was $ 11.5 million of total unrecognized compensation cost related to non-vested options that are expected to be recognized over a period of up to 5.2 years. Restricted Stock Units Restricted Stock Units ("RSUs") typically vest over a four-year period. The following table summarizes the activity for RSUs for the year ended December 31, 2022: Year ended December 31, 2022 Number of Weighted Nonvested at beginning of year 2,330,094 $ 3.58 Granted 11,699,481 $ 1.21 Vested ( 3,253,792 ) $ 1.60 Forfeited ( 1,648,732 ) $ 2.37 Nonvested at end of year 9,127,051 $ 1.46 As of December 31, 2022, there was $ 12.6 million of total unrecognized compensation cost related to non-vested RSUs that are expected to be recognized over a period of up to 5.2 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: For the Year Ended (in thousands) 2022 2021 2020 Research and development, net $ 2,550 $ 3,102 $ 229 Clinical Operations 549 1,711 102 Sales and Marketing 3,090 6,089 1,568 General and administrative 5,927 16,503 1,078 Total stock-based compensation expense $ 12,116 $ 27,405 $ 2,977 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 Company recognized $ 3.8 million in share-based compensation expense as a result of the modification of Mr. and Ms. Frank's equity awards during the year ended December 31, 2021, in connection with their departure from the Company. |
Net Loss Per Share
Net Loss Per Share | 12 Months Ended |
Dec. 31, 2022 | |
Earnings Per Share [Abstract] | |
Net Loss Per Share | NOTE 12. 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, 2022, 2021 and 2020: For the Year Ended (in thousands except share and per share data) 2022 2021 2020 Net loss $ ( 79,672 ) $ ( 62,742 ) $ ( 22,370 ) Weighted-average shares used to compute net loss per share: Basic and diluted 156,885,256 86,775,948 13,359,350 Net loss per share: Basic and diluted $ ( 0.51 ) $ ( 0.72 ) $ ( 1.67 ) F or the year ended December 31, 2022, 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: 17,526,326 stock options, 9,127,051 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, 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. |
Taxes On Income
Taxes On Income | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Tax | NOTE 13. 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 positions at December 31, 2022. A reconciliation of the Company’s statutory income tax rate to the Company’s effective income tax rate is as follows: For the Year ended (in thousands) 2022 2021 2020 Loss before income taxes $ ( 79,418 ) $ ( 62,695 ) $ ( 22,346 ) Statutory tax rate 21 % 21 % 21 % Theoretical tax benefit 16,678 13,166 4,693 Increase (decrease) in effective tax rate due to: State taxes, net of federal benefit 4,079 2,500 1,125 Impairment of goodwill ( 1,288 ) Permanent differences ( 83 ) 1,492 ( 586 ) Other Adjustments 7,177 — — Valuation allowance ( 26,309 ) ( 17,111 ) ( 5,208 ) Actual income taxes $ 254 $ 47 $ 24 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 Year Ended (in thousands) 2022 2021 2020 U.S. operations $ ( 79,788 ) $ ( 62,902 ) $ ( 22,415 ) Foreign operations 370 207 69 $ ( 79,418 ) $ ( 62,695 ) $ ( 22,346 ) The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities are as follows: As of (in thousands) 2022 2021 Net deferred tax assets: Net operating loss carryforwards $ 64,644 $ 49,906 Stock based compensation 4,098 3,150 Fixed assets 375 340 Other 1,378 45 Total gross deferred tax assets, net 70,495 53,441 Valuation allowance ( 70,495 ) ( 44,186 ) Net deferred tax assets Deferred tax liabilities (long term): Warrants — ( 9,255 ) 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, 2022 and 2021. 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 $ 26.3 million during the year ended December 31, 2022 primarily due to increases in its net operating loss carryforwards. At December 31, 2022, the Company has federal and state net operating loss carryovers (“NOL”) of approximately $ 255.1 million and $ 224.3 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 excess 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 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 2019. The Israel subsidiary tax assessments filed by the Company thr ough the year 2017 are considered closed. |
Accrued Expenses and Other Curr
Accrued Expenses and Other Current Liabilities | 12 Months Ended |
Dec. 31, 2022 | |
Accrued Expenses and Other Current Liabilities Abstract | |
Accrued Expenses and Other Current Liabilities | NOTE 14. 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) 2022 2021 Litigation costs $ 5,500 $ — Employee compensation 5,290 5,988 User acquisition 2,256 2,680 Professional fees 543 1,303 Other 2,913 2,591 Accrued expenses and other current liabilities $ 16,502 $ 12,562 |
Variable Interest Entities
Variable Interest Entities | 12 Months Ended |
Dec. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Variable Interest Entity Disclosure [Text Block] | NOTE 15. VARIABLE INTEREST ENTITIES ("VIEs") In the second quarter of 2022, the Company completed a transition with respect to its relationships with healthcare providers, transitioning to a structure whereby Talkspace LLC has entered into various agreements with a Texas professional association entity (Talkspace Provider Network, PA or “TPN”), which in turn contracts with affiliated professional entities ("PC entities"), and physicians, therapists, and other licensed professionals for clinical and professional services provided to the Company's members. Talkspace LLC is party to various Management Services Agreements (“MSAs”) with TPN as well the PC entities as part of this transition. The Company believes the transition to a structure where it operates under various MSAs with professional associations and professional corporations authorized by state law to contract with affiliated professionals to delivery teletherapy services to its members, helps ensure the Company is able to comply with all applicable regulatory requirements, including the corporate practice of medicine and fee-splitting laws, that are necessarily implicated by engaging in telehealth care that can only be delivered by physicians. The Company is continuing to transition its current agreements with its clients, members and other business partners to TPN or the PC entities, where applicable. Pursuant to the MSAs, Talkspace LLC is the managing entity (the “Manager”) and provides management and administrative resources and services essential to the operations of TPN and the PC entities and receives a management fee for these services and reimbursement of expenses incurred. TPN and the PC entities in turn have the obligation under the MSAs to engage all licensed physicians and other health professionals to provide behavioral healthcare services to the Company's members. In addition, to the extent that TPN or the PC entities lack sufficient funds to meet their obligations, the Manager may, at its sole discretion, advance funds to TPN or the PC entities to cover these obligations. Such advances would be considered loans made by Manager and should be repaid as per the terms of the management agreement. No such advances have been made by the Manager to TPN or the PC entities for years ended December 31, 2022 and 2021. The Company holds a variable interest in TPN and the PC entities. The Company evaluates whether an entity in which it has a variable interest is considered a VIE. VIEs are generally entities that have either a total equity investment that is insufficient to permit the entity to finance its activities without additional subordinated financial support, or whose equity investors lack the characteristics of a controlling financial interest (i.e., ability to direct the activities of the entity that most significantly impact the entity's economic performance through voting rights and a right to receive the expected residual returns of the entity or an obligation to absorb the expected losses of the entity). Under the provisions of ASC 810, “Consolidation”, an entity consolidates a VIE if it is determined to be the primary beneficiary of the VIE. The primary beneficiary has both (a) the power to direct the activities of the VIE that most significantly impact the entity’s economic performance, and (b) the obligation to absorb losses or the right to receive benefits from the VIE that could potentially be significant to the VIE. The Company determined that TPN and the PC entities are VIEs. The Company also determined that it is able to direct the activities of TPN and the PC entities that most significantly impact their economic performance and it funds and absorbs all losses of these VIEs resulting in the Company being the primary beneficiary of these entities. Accordingly, the Company consolidates these VIEs. The following table details the assets and liabilities of the VIEs as of December 31, 2022: (in thousands) December 31, 2022 ASSETS Cash and cash equivalents $ 883 Accounts receivable 1,716 Other assets 4,813 Total Assets $ 7,412 LIABILITIES Accrued expenses and other current liabilities 3,758 Total Liabilities $ 3,758 |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2022 | |
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 United States of America (“U.S. GAAP”). The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries and variable interest entities (“VIEs”) for which the Company is the primary beneficiary. Intercompany transactions and balances have been eliminated in the preparation of the consolidated financial statements. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates, judgments, and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, together with amounts disclosed in the related notes to the consolidated financial statements. The Company’s significant estimates and assumptions used in these financial statements include, but are not limited to, the recognition and disclosure of contingent liabilities, revenue recognition, stock-based compensation awards, the fair value of warrant liabilities and the estimates and assumptions related to the impairment analysis of goodwill and intangible assets. The Company bases its estimates on historical factors, current circumstances and the experience and judgment of management. Estimates, by their nature, are based on judgment and available information, therefore, actual results could be materially different from these estimates. |
Consolidation | Consolidation The Business Combination was accounted for as a reverse recapitalization, and Old Talkspace was deemed to be the accounting acquirer. Consequently, 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. The Company consolidates all subsidiaries in which it has a controlling financial interest, as well as any VIEs where the Company is deemed to be the primary beneficiary. In the second quarter of 2022, the Company completed the transition of its structure with respect to its relationships with healthcare providers under certain affiliated professional association (“PA”) and professional corporations (“ PC”) entities. The Company determined that the PA and PC entities are VIEs. The Company also determined that it is able to direct the activities of these entities that most significantly impact their economic performance and it funds and absorbs all losses of these VIEs resulting in the Company being the primary beneficiary of the PA and PC entities. Accordingly, the Company consolidates the VIEs. See Note 15, “Variable Interest Entities,” in the notes to the consolidated financial statements for further details. |
Business Combinations | Business Combination The Company accounts for business combinations in accordance with Accounting Standard Codification (“ASC”) 805, “Business Combinations”. ASC 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 ASC 830, “Foreign Currency Matters”. These transactions were not material for the year ended December 31, 2022, 2021 and 2020. |
Operating Segment | Operating Segments The Company operates its business as a single segment and as one reporting unit, which is how the chief operating decision maker, the Company's 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, highly liquid investments that are readily convertible to cash, with original maturities of three months or less at the date a cquired. The Company’s cash and cash equivalents generally consist of bank deposits and investments in money market funds. The carrying value of cash and cash equivalents approximate their fair values due to the short-term maturities of such instruments. The majority of the Company’s cash and cash equivalents are invested in one major bank in the United States. Generally, these cash and cash equivalents and deposits may be redeemed upon demand. The Company deposits its cash with one major financial institution in the U.S., and its deposits may exceed federally insured limits. Management believes that the financial institution that holds the Company’s and its subsidiaries’ cash and cash equivalents is an institution with high credit standing, and accordingly, minimal credit risk exists with respect to these assets . |
Property, Plant and Equipment | Property and equipment, net 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 Furniture and equipment 15 |
Leases | Leases The Company accounts for leases in accordance with ASC 842, "Leases". The right-of-use ("ROU") asset represents the Company’s right to use an underlying asset for the lease term and the lease liability represents an obligation to make payments based on the present value of lease payments over the lease term. The Company uses incremental borrowing rates based on the estimated rate of interest for collateralized borrowing over a similar term of the lease payments at commencement date. The lease term includes options to extend or terminate the lease when it is reasonably certain they will be exercised. The Company has elected not to record operating lease ROU assets and lease liabilities for leases with an initial term of 12 months or less. The Company also elected the practical expedient to not separate lease and non-lease components for its leases. See Note 9, "Leases" in the notes to the consolidated financial statements for further details. |
Goodwill | Goodwill Goodwill reflects the excess of the consideration transferred, including the fair value of any contingent consideration and any non-controlling interest in the acquiree, over the assigned fair values of the identifiable net assets acquired. Goodwill is not amortized, and is tested for impairment at least on an annual basis. The Company operates as one reporting unit and the fair value of the reporting unit is estimated using quoted market prices of the Company’s stock in active markets. The Company tests goodwill for impairment annually in the fourth quarter and whenever events or changes in circumstances indicate the carrying amount of goodwill may not be recoverable. When testing goodwill for impairment, the Company may first perform a qualitative assessment. If the Company determines it is not more likely than not the reporting unit’s fair value is less than its carrying value, then no further analysis is necessary. If the Company determines that it is more likely than not that the fair value of its reporting unit is less than its carrying amount, then the quantitative impairment test will be performed. The Company may elect to bypass the qualitative assessment and proceed directly to performing a quantitative analysis. Under the quantitative impairment test, if the carrying amount of the Company’s reporting unit exceeds its fair value, the Company will recognize an impairment loss in an amount equal to that excess but limited to the total amount of goodwill. See Note 4, "Goodwill" in the notes to the consolidated financial statements for further details. |
Intangible Assets | Intangible Assets Acquired identifiable finite-lived intangible assets are amortized on a straight-line basis 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 cases where the Company reduces the estimated useful life for any asset, the remaining unamortized balance is amortized or depreciated over the revised estimated useful life. See Note 5, "Intangible Assets, net" in the notes to the consolidated financial statements for further details. Impairment of long-lived assets and intangible assets subject to amortization, including ROU lease asset Property and equipment, intangible assets subject to amortization and ROU lease assets are reviewed for impairment in accordance with ASC 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 group 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, 2022, 2021 or 2020 for these assets. |
Revenue Recognition | Revenue recognition The Company recognizes revenue in accordance with ASC 606, “Revenue from Contracts with Customers”, 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 the Company will be entitled in exchange for the service rendered. To the extent the transaction price includes variable consideration, the Company estimates the amount of variable consideration that is included in the transaction price in accordance using the expected value method, as this method best predicts the amount of consideration to which the Company will be entitled based on the terms of its contracts. Variable consideration is included in the transaction price to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. The Company's revenue is generated from two revenue streams: B2B and B2C. B2B Revenue - Comprised of large enterprise clients and large health plans and employee assistance programs who offer their employees and insured members access to the Company's platform while their employer is under an active contract with Talkspace, or at in-network reimbursement rates, where applicable. 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. The majority of contracts with enterprise clients typically range in length from one to three years and are non-cancelable during the initial contractual term. Customers typically have the right to terminate their contracts for cause if the Company fails to perform in accordance with the contractual terms. The Company also contracts with health insurance plans and employee assistance (EAP) organizations ("insurance payors") to provide its therapy and psychiatry services to their eligible covered members. Revenue is recognized at a point in time, as virtual therapy or psychiatry session is rendered. The transaction price is determined based on contracted rates and includes variable consideration in the form of implicit price concessions. The Company determines the total transaction price, including an estimate of variable consideration, at contract inception and reassesses this estimate at each reporting date. The Company estimates the amount of variable consideration that is included in the transaction price using the expected value method primarily based on actual historical collection experience for each insurance payor over a twelve-month period. Revenue from health insurance plans and EAP organizations is presented net of implicit price concessions. Contracts with health insurance plans and EAP organizations include annual evergreen clauses and generally may be terminated by either party typically upon a minimum 60 -day advance notice. B2C Revenue - The Company generates revenues from the sale of monthly, quarterly, bi-annual and annual membership subscriptions to the Company's therapy platform as well as supplementary a la carte offerings directly to individual consumers through a subscription plan. The Company recognizes member subscription revenues ratably over the subscription period, beginning when therapy services commence. The Company recognizes revenues from supplementary a la carte offerings at a point in time, as virtual therapy session is rendered. Members may cancel their subscription at any time and will receive a pro-rata refund for the subscription price. The transaction price from member subscription revenue and supplementary a la carte offerings includes variable consideration in the form of refunds. The Company estimates the refund liability for the variable consideration portion of the transaction price primarily based on historical experience. The refund liability is recorded within the “Accrued expenses and other current liabilities” line item in the consolidated balance sheet. Revenue from individual consumers is presented net of refunds. Accounts Receivable Accounts receivables are stated net of credit losses allowance. The Company is exposed to credit losses primarily through its contracts with enterprise clients, health insurance plans and EAP organizations. The Company’s methodology is based on historical collection experience, customer creditworthiness, current and future economic condition and market condition. Additionally, specific allowance amounts are established to record the appropriate provision for customers that have a higher probability of default. Accounts receivables are written off after all reasonable means to collect the full amount have been exhausted. The allowance for credit losses is immaterial for the years ended December 31, 2022 and 2021. Deferred Revenue The Company records deferred revenues when cash payments from customers are received in advance of the Company's performance obligations to provide services. The Company recognizes deferred revenues as revenues in the statement of operations once the related performance obligations have been performed and satisfied. Deferred revenue that will be recognized during the succeeding twelve-month period is recorded as a current liability and the remaining portion is recorded as a noncurrent liability on the consolidated balance sheet. The Company expects to satisfy the majority of its performance obligations associated with deferred revenue within one year or less. |
Shared-based compensation | Stock-based compensation The Company accounts for stock-based compensation in accordance with ASC 718, “Compensation - Stock Compensation”. Compensation cost for share-based awards is measured at the fair value on the grant date and recognized as expense using the straight-line method for service-based awards over the requisite service period. 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 the Company's historical share price movements as well as similar traded companies’ historical share price movements as adequate historical experience is not available to provide a reasonable estimate based only on the Company's share price. 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 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. 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's matching contributions to participants’ accounts were immaterial for the years ended December 31, 2022, 2021 and 2020, respectively. |
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 used to measure fair value to the extent that relevant observable inputs are not available. An entity develops unobservable inputs using the best information available in the circumstances, which might include the entity's own data, taking into account all information about market participant assumptions that is reasonably available. Three levels of inputs may be used to measure fair value: Level 1: Quoted prices in active markets for identical assets or liabilities. Level 2: Observable inputs other than Level 1 prices such as quoted prices for similar assets of liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3: Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. 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". 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 consolidated financial statements. The Company follows the provisions in ASC 740 and the guidance related to accounting for uncertainty in income taxes. ASC 740 contains a two-step approach to recognizing and measuring a liability for uncertain tax positions. The first step is to evaluate the tax position taken or expected to be taken in a tax return by determining if the weight of available evidence indicates that it is more likely than not that, on an evaluation of the technical merits, the tax position will be sustained on audit, including resolution of any related appeals or litigation processes. The second step is to measure the tax benefit as the largest amount that is more than 50% likely to be realized upon ultimate settlement. The Company's policy is to recognize interest related to unrecognized tax benefits as interest expense and penalties as operating expenses. The Company does not provide deferred tax liabilities when it intends to reinvest earnings of a foreign subsidiary indefinitely or if distributed, no tax liability will be imposed. Undistributed earnings of a foreign subsidiary and unrecognized deferred tax liability related to such earnings are immaterial as of December 31, 2022. As of December 31, 2022 and 2021 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, 2022 and 2021. |
Net loss per share | Net loss per share The Company computes net loss per share using the two-class method required for participating securities. For the year ended December 31, 2020, 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 year ended December 31, 2020 was 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 Accounting Pronouncements | Recently Issued and Adopted Accounting Pronouncements The Company has reviewed recent accounting pronouncements and concluded that they are either not applicable to its business or that no material effect is expected on the consolidated financial statements as a result of their future adoption. |
Significant Accounting Polici_3
Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
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 Furniture and equipment 15 |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Disaggregation of Revenue by Revenue Source | The following table presents the Company’s revenues from sales to unaffiliated customers disaggregated by revenue source: For the Year Ended December 31, (in thousands) 2022 2021 2020 Revenues from sales to unaffiliated customers: B2B revenue $ 64,409 $ 38,914 $ 14,604 B2C revenue 55,158 74,757 61,586 Total $ 119,567 $ 113,671 $ 76,190 For the years ended December 31, 2022, 2021 and 2020, the majority of the Company’s revenues were generated from customers located in the United States. For the year ended December 31, 2022, two customers represented 10 % or more of total revenue and no single customer represented 10 % or more of total revenue for the years ended December 31, 2021 and 2020. |
Intangible Assets, Net (Tables)
Intangible Assets, Net (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Finite-Lived Intangible Assets, Net [Abstract] | |
Schedule of Finite-Lived Intangible Assets | Intangible assets are comprised of the following: As of December 31, (in thousands) 2022 2021 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 968 522 Customer relationship 1,350 1,186 Non-Competition agreement 643 346 2,961 2,054 Intangible assets, net $ 2,529 $ 3,436 |
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, 2022 is as follows: December 31, In thousands 2023 $ 745 2024 446 2025 446 2026 446 2027 and thereafter 446 $ 2,529 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
Summary of Fair Value Measurements | Level 3 Liabilities For the Year Ended December 31, 2022 (in thousands) Beginning Balance Purchases and Issuances Change in Fair Value Converted into Equity Ending Balance Private Placement Warrants $ 4,070 $ - $ (3,131 ) $ - $ 939 Level 3 Liabilities For the Year Ended December 31, 2021 (in thousands) Beginning Balance Purchases and Issuances Change in fair Value Converted into Equity Ending Balance Private Placement Warrants $ - $ 40,278 $ (36,208 ) $ - $ 4,070 Old Talkspace Warrants $ 444 $ - $ 165 $ (609 ) $ - |
Property and Equipment, Net (Ta
Property and Equipment, Net (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
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) 2022 2021 Computer equipment and software $ 1,319 $ 926 Less accumulated depreciation ( 642 ) ( 302 ) Property and equipment, net $ 677 $ 624 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Leases [Abstract] | |
Schedule of outlines maturities of the Company's lease liabilities | The following table outlines the maturities of the Company’s lease liabilities as of December 31, 2022: December 31, In thousands 2023 $ 270 2024 225 Total undiscounted lease payments $ 495 Less interest ( 29 ) Present value of operating lease liability $ 466 |
Share-Based Compensation (Table
Share-Based Compensation (Table) | 12 Months Ended |
Dec. 31, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Summary of Stock Option Activity under 2014 Plan and 2021 Plan | A summary of the Company’s stock option activity for the year ended December 31, 2022 is as follows: Year ended December 31, 2022 Number of Weighted Weighted Aggregate (1) (in thousands) Outstanding at beginning of year 19,494,202 $ 1.95 6.88 $ 19,214 Granted 4,175,212 1.29 Exercised ( 5,331,634 ) 0.57 Forfeited ( 1,461,454 ) 4.04 Outstanding at end of year (2) 16,876,326 $ 2.03 7.26 $ 1,135 Exercisable at end of year 11,641,663 $ 1.44 6.50 $ 1,135 (1) The aggregate intrinsic value of options outstanding at end of the year and options exercisable at end of the year does not include 11,861,426 and 6,626,765 options that are out of the money, respectively. (2) Excludes 650,000 fully-vested options with an exercise price of $ 11.50 issued in June 2021 to a consultant in connection with the Business Combination. |
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, 2022, 2021 and 2020 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, 2022 2021 2020 Dividend yield (1) 0 % 0 % 0 % Expected volatility (2) 66.80 %- 86.13 % 65.00 %- 75.23 % 53.96 %- 66.55 % Risk-free interest rate (3) 1.76 %- 4.11 % 0.66 %- 1.39 % 0.25 %- 1.45 % Expected term (years) (4) 5.07 - 6.25 5.27 - 6.25 5.27 - 6.08 (1) No dividends were paid during the years ending December 31, 2022, 2021 and 2020. (2) The expected volatility was calculated based upon historical stock price movements of the Company and 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 RSUs for the year ended December 31, 2022: Year ended December 31, 2022 Number of Weighted Nonvested at beginning of year 2,330,094 $ 3.58 Granted 11,699,481 $ 1.21 Vested ( 3,253,792 ) $ 1.60 Forfeited ( 1,648,732 ) $ 2.37 Nonvested at end of year 9,127,051 $ 1.46 As of December 31, 2022, there was $ 12.6 million of total unrecognized compensation cost related to non-vested RSUs that are expected to be recognized over a period of up to 5.2 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: For the Year Ended (in thousands) 2022 2021 2020 Research and development, net $ 2,550 $ 3,102 $ 229 Clinical Operations 549 1,711 102 Sales and Marketing 3,090 6,089 1,568 General and administrative 5,927 16,503 1,078 Total stock-based compensation expense $ 12,116 $ 27,405 $ 2,977 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, 2022 | |
Earnings Per Share [Abstract] | |
Schedule of Computation of Basic and Diluted Net Loss Per Share Attributable to Common Stockholders | 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, 2022, 2021 and 2020: For the Year Ended (in thousands except share and per share data) 2022 2021 2020 Net loss $ ( 79,672 ) $ ( 62,742 ) $ ( 22,370 ) Weighted-average shares used to compute net loss per share: Basic and diluted 156,885,256 86,775,948 13,359,350 Net loss per share: Basic and diluted $ ( 0.51 ) $ ( 0.72 ) $ ( 1.67 ) |
Taxes on Income (Tables)
Taxes on Income (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
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 Year ended (in thousands) 2022 2021 2020 Loss before income taxes $ ( 79,418 ) $ ( 62,695 ) $ ( 22,346 ) Statutory tax rate 21 % 21 % 21 % Theoretical tax benefit 16,678 13,166 4,693 Increase (decrease) in effective tax rate due to: State taxes, net of federal benefit 4,079 2,500 1,125 Impairment of goodwill ( 1,288 ) Permanent differences ( 83 ) 1,492 ( 586 ) Other Adjustments 7,177 — — Valuation allowance ( 26,309 ) ( 17,111 ) ( 5,208 ) Actual income taxes $ 254 $ 47 $ 24 |
Summary of Income Before Income Taxes | Loss (income) before taxes is attributable to the following tax jurisdictions: For the Year Ended (in thousands) 2022 2021 2020 U.S. operations $ ( 79,788 ) $ ( 62,902 ) $ ( 22,415 ) Foreign operations 370 207 69 $ ( 79,418 ) $ ( 62,695 ) $ ( 22,346 ) |
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: As of (in thousands) 2022 2021 Net deferred tax assets: Net operating loss carryforwards $ 64,644 $ 49,906 Stock based compensation 4,098 3,150 Fixed assets 375 340 Other 1,378 45 Total gross deferred tax assets, net 70,495 53,441 Valuation allowance ( 70,495 ) ( 44,186 ) Net deferred tax assets Deferred tax liabilities (long term): Warrants — ( 9,255 ) Net deferred tax assets $ — $ — |
Accrued Expenses and Other Cu_2
Accrued Expenses and Other Current Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
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) 2022 2021 Litigation costs $ 5,500 $ — Employee compensation 5,290 5,988 User acquisition 2,256 2,680 Professional fees 543 1,303 Other 2,913 2,591 Accrued expenses and other current liabilities $ 16,502 $ 12,562 |
Variable Interest Entities (Tab
Variable Interest Entities (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
VariableInterestEntityDisclosureAbstract | |
Assets and liabilities of the Company's consolidated VIE | The following table details the assets and liabilities of the VIEs as of December 31, 2022: (in thousands) December 31, 2022 ASSETS Cash and cash equivalents $ 883 Accounts receivable 1,716 Other assets 4,813 Total Assets $ 7,412 LIABILITIES Accrued expenses and other current liabilities 3,758 Total Liabilities $ 3,758 |
Summary of Significant Accounti
Summary of Significant Accounting Policies - Additional Information (Detail) | 12 Months Ended | ||
Dec. 31, 2022 USD ($) Age Segment | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | |
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 | |
Eligible age | Age | 21 | ||
Eligible employee's contribution | 100% | ||
Maximum | |||
Eligible earnings | 4% | ||
Minimum | |||
Notice Period (Advance) | 60 days | ||
Customer Concentration Risk [Member] | No Customer [Member] | Maximum | |||
Concentration of credit risk percentage | 10% | 10% |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies - Summary Of Depreciation Of Property Plant Equipment (Detail) | 12 Months Ended |
Dec. 31, 2022 | |
Computer Equipment | |
Schedule Of Depreciation Of Property Plant Equipment [Line Items] | |
Property Plant And Equipment Annual Depreciation Rate | 33% |
Electronic Equipment | |
Schedule Of Depreciation Of Property Plant Equipment [Line Items] | |
Property Plant And Equipment Annual Depreciation Rate | 15% |
Business Combination - Addition
Business Combination - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Business Acquisition [Line Items] | ||||
Common stock, par value | $ 0.0001 | $ 0.0001 | ||
Preferred stock, par value | $ 0.0001 | |||
Payments to Acquire Businesses, Gross | $ 0 | $ 0 | $ 10,685 | |
Common stock, shares outstanding | 161,155,030 | 152,862,447 | ||
Common stock, shares authorized | 1,000,000,000 | 1,000,000,000 | ||
Preferred stock, shares authorized | 100,000,000 | |||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 11.50 | $ 11.50 | ||
Warrant liabilities | $ 939 | $ 4,070 | ||
Common Stock [Member] | ||||
Business Acquisition [Line Items] | ||||
Common stock, shares outstanding | 161,155,030 | 152,862,447 | 13,413,431 | 13,223,672 |
Revenue Recognition - Schedule
Revenue Recognition - Schedule of Disaggregation of Revenue by Revenue Source (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Revenues from sales to unaffiliated customers: | |||
Total Revenue | $ 119,567 | $ 113,671 | $ 76,190 |
BTwoBRevenue[Member] | |||
Revenues from sales to unaffiliated customers: | |||
Total Revenue | 64,409 | 38,914 | 14,604 |
BtwoCRevenue[Member] | |||
Revenues from sales to unaffiliated customers: | |||
Total Revenue | $ 55,158 | $ 74,757 | $ 61,586 |
Revenue Recognition - Additiona
Revenue Recognition - Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Disaggregation of Revenue [Line Items] | |||
Accounts Receivable, net | $ 9,640 | $ 5,512 | |
Deferred Revenue | 6,200 | 5,200 | |
Accounts Receivable [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Accounts Receivable | 7,400 | $ 4,000 | |
Customer Concentration Risk [Member] | No Customer [Member] | Maximum [Member] | |||
Disaggregation of Revenue [Line Items] | |||
accounts receivable balance | 10% | 10% | |
Health plans and EAP customers | |||
Disaggregation of Revenue [Line Items] | |||
Accounts Receivable, net | $ 2,200 | $ 1,500 | |
Customer One [Member] | Customer Concentration Risk [Member] | Accounts Receivable [Member] | |||
Disaggregation of Revenue [Line Items] | |||
accounts receivable balance | 10.40% | 16.80% | |
Customer Two [Member] | Customer Concentration Risk [Member] | Accounts Receivable [Member] | |||
Disaggregation of Revenue [Line Items] | |||
accounts receivable balance | 15.10% | ||
Customer Two [Member] | Customer Concentration Risk [Member] | No Customer [Member] | Maximum [Member] | |||
Disaggregation of Revenue [Line Items] | |||
accounts receivable balance | 10% | ||
Customer Three [Member] | Customer Concentration Risk [Member] | Accounts Receivable [Member] | |||
Disaggregation of Revenue [Line Items] | |||
accounts receivable balance | 16.90% | ||
Customer Four [Member] | Customer Concentration Risk [Member] | Accounts Receivable [Member] | |||
Disaggregation of Revenue [Line Items] | |||
accounts receivable balance | 25% |
Goodwill - Additional Informati
Goodwill - Additional Information (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Goodwill [Line Items] | |||
Goodwill | $ 0 | $ 6,134 | |
Impairment charge of goodwill | $ 6,100 | $ 0 | $ 0 |
Intangible Assets, Net - Summar
Intangible Assets, Net - Summary of Intangible Assets (Detail) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Intangible assets with finite lives: | ||
Acquired technology | $ 5,490 | $ 5,490 |
Accumulated amortization: | ||
Acquired technology | 2,961 | 2,054 |
Intangible assets, net | 2,529 | 3,436 |
Acquired technology [Member] | ||
Intangible assets with finite lives: | ||
Acquired technology | 3,201 | 3,201 |
Accumulated amortization: | ||
Acquired technology | 968 | 522 |
Customer relationship [Member] | ||
Intangible assets with finite lives: | ||
Acquired technology | 1,350 | 1,350 |
Accumulated amortization: | ||
Acquired technology | 1,350 | 1,186 |
Non-competition agreements [Member] | ||
Intangible assets with finite lives: | ||
Acquired technology | 939 | 939 |
Accumulated amortization: | ||
Acquired technology | $ 643 | $ 346 |
Intangible Assets, Net - Additi
Intangible Assets, Net - Additional Information (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Finite-Lived Intangible Assets, Net [Abstract] | |||
Amortization of Intangible Assets | $ 0.9 | $ 1.8 | $ 0.3 |
Intangible Assets, Net - Summ_2
Intangible Assets, Net - Summary of Future Amortization Expenses (Detail) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Finite-Lived Intangible Assets, Net [Abstract] | ||
2023 | $ 745 | |
2024 | 446 | |
2025 | 446 | |
2026 | 446 | |
2027 and thereafter | 446 | |
Intangible assets, net | $ 2,529 | $ 3,436 |
Fair Value Measurements - Addit
Fair Value Measurements - Additional Information (Detail) - $ / shares | Dec. 31, 2022 | Dec. 31, 2021 |
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 11.50 | $ 11.50 |
Private Placement Warrant [Member] | ||
Class of Warrant or Right, Outstanding | 12,780,000 | 12,780,000 |
Borrowing Arrangements - Additi
Borrowing Arrangements - Additional Information (Detail) - $ / shares | Dec. 31, 2022 | Dec. 31, 2021 |
Line Of Credit Facility [Line Items] | ||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 11.50 | $ 11.50 |
Capital Stock - Summary of Conv
Capital Stock - Summary of Convertible preferred stock (Details) - shares | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Convertible Preferred Stock | ||||
Temporary Equity [Line Items] | ||||
Share Outstanding | 0 | 0 | 94,582,550 | 94,582,550 |
Capital Stock - Additional Info
Capital Stock - Additional Information (Details) - $ / shares | Dec. 31, 2022 | Dec. 31, 2021 |
Class Of Stock [Line Items] | ||
Preferred stock, par value | $ 0.0001 | |
Preferred Stock, Shares Authorized | 100,000,000 | |
Preferred Stock, Shares Issued | 0 | 0 |
Preferred Stock, Shares Outstanding | 0 | 0 |
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common Stock, Shares Authorized | 1,000,000,000 | 1,000,000,000 |
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 11.50 | $ 11.50 |
Public Warrant [Member] | ||
Class Of Stock [Line Items] | ||
Class of Warrant or Right, Outstanding | 21,350,000 | 21,350,000 |
Private Placement Warrants | ||
Class Of Stock [Line Items] | ||
Class of Warrant or Right, Outstanding | 12,780,000 | 12,780,000 |
Property and Equipment, Net - S
Property and Equipment, Net - Summary of Property and Equipment, Net (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Property Plant And Equipment [Line Items] | ||
Computer equipment and software | $ 1,319 | $ 926 |
Less accumulated depreciation | (642) | (302) |
Property and equipment, net | $ 677 | $ 624 |
Property and Equipment, Net - A
Property and Equipment, Net - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
General and Administrative Expense | |||
Property Plant And Equipment [Line Items] | |||
Depreciation | $ 0.4 | $ 0.2 | $ 0.1 |
Leases (Additional Information)
Leases (Additional Information) (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Nov. 30, 2022 | |
Leases [Abstract] | ||||
Operating lease expires | 2 years | |||
Weighted-average remaining lease term | 1 year 9 months 29 days | |||
Weighted average discount rate | 7.17% | |||
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible Enumeration] | Other Assets, Noncurrent | |||
Operating lease, right-of-use asset | $ 400 | |||
Operating lease liability | 466 | |||
Rent expense | 200 | $ 100 | $ 500 | |
Long-term portion of the lease liability | 300 | |||
Short-term portion of the lease liability | $ 200 |
Leases - Schedule of outlines m
Leases - Schedule of outlines maturities of the Company's lease liabilities (Details) $ in Thousands | Dec. 31, 2022 USD ($) |
Leases [Abstract] | |
2023 | $ 270 |
2024 | 225 |
Total undiscounted lease payments | 495 |
Less interest | $ (29) |
Operating Lease, Liability, Statement of Financial Position [Extensible Enumeration] | Liabilities |
Present value of operating lease liability | $ 466 |
Share-Based Compensation - Addi
Share-Based Compensation - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Exercise of stock options, share | 5,331,634 | |||
Stock option award granted | 4,175,212 | |||
Total unrecognized compensation cost, non-vested options | $ 11,500 | |||
Total unrecognized compensation cost non-vested options to be recognized, period | 5 years 2 months 12 days | |||
Share based compensation expense | $ 12,116 | $ 27,405 | $ 2,977 | |
Options Outstanding, Options Exercisable | [1] | $ 1,135 | ||
Restricted Stock Units (RSUs) | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Stock option award granted | 11,699,481 | |||
Share-based compensation, vesting period | 4 years | |||
Weighted average grant date fair value | $ 1.21 | |||
Total unrecognized compensation cost, non-vested options | $ 12,600 | |||
Total unrecognized compensation cost non-vested options to be recognized, period | 5 years 2 months 12 days | |||
Share-based Payment Arrangement, Option | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Weighted average grant date fair value | $ 0.88 | $ 3.81 | ||
Additional stock compensation expense related to modification of stock options as a result of the Business Combination | $ 15,200 | |||
Conversion of Vested and Unvested Stock Options, Exchange Ratio | $ 1.134140 | |||
Number of shares excluded from aggregate intrinsic value of options outstanding | 11,861,426 | |||
Number of Shares excluded from Options Exercisable Aggregate Intrinsic Value | 6,626,765 | |||
Common Stock | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Exercise of stock options, share | 5,331,634 | 3,627,127 | 189,759 | |
Mr. and Ms. Frank [Member] | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Share based compensation expense | $ 3,800 | |||
[1] The aggregate intrinsic value of options outstanding at end of the year and options exercisable at end of the year does not include 11,861,426 and 6,626,765 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, 2022 | Dec. 31, 2021 | |||
Share-Based Payment Arrangement, Disclosure [Abstract] | ||||
Number of options, Outstanding at the beginning of the period | 19,494,202 | |||
Stock option award granted | 4,175,212 | |||
Exercise of stock options, share | 5,331,634 | |||
Number of options, Forfeited | 1,461,454 | |||
Number of options, Outstanding at the end of the period | 16,876,326 | [1] | 19,494,202 | |
Number of options, Exercisable at the end of the period | 11,641,663 | |||
Weighted average exercise price, Outstanding at the beginning of the period | $ 1.95 | |||
Weighted average exercise price, Granted | 1.29 | |||
Weighted average exercise price, Exercised | 0.57 | |||
Weighted average exercise price, Forfeited | 4.04 | |||
Weighted average exercise price, Outstanding at the end of the period | 2.03 | [1] | $ 1.95 | |
Weighted average exercise price, Exercisable at the end of the period | $ 1.44 | |||
Weighted average remaining contractual term (in years) | 7 years 3 months 3 days | [1] | 6 years 10 months 17 days | |
Weighted average remaining contractual term (in years) Exercisable at the end of the period | 6 years 6 months | |||
Aggregate intrinsic value, Outstanding | [2] | $ 1,135 | [1] | $ 19,214 |
Aggregate intrinsic value, Exercisable at the end of the period | [2] | $ 1,135 | ||
[1] Excludes 650,000 fully-vested options with an exercise price of $ 11.50 issued in June 2021 to a consultant in connection with the Business Combination. The aggregate intrinsic value of options outstanding at end of the year and options exercisable at end of the year does not include 11,861,426 and 6,626,765 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) - Share-Based Payment Arrangement, Option [Member] - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Jun. 30, 2021 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Number of shares excluded from aggregate intrinsic value of options outstanding | 11,861,426 | |
Number of Shares excluded from Options Exercisable Aggregate Intrinsic Value | 6,626,765 | |
Fully-vested options | $ 650,000 | |
Exercise price | $ 11.50 |
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, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Dividend yield | [1] | 0% | 0% | 0% |
Expected volatility rate, minimum | [2] | 66.80% | 65% | 53.96% |
Expected volatility rate, maximum | [2] | 86.13% | 75.23% | 66.55% |
Risk free interest rate, minimum | [3] | 1.76% | 0.66% | 0.25% |
Risk free interest rate, maximum | [3] | 4.11% | 1.39% | 1.45% |
Minimum [Member] | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Expected term (years) | [4] | 5 years 25 days | 5 years 3 months 7 days | 5 years 3 months 7 days |
Maximum | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Expected term (years) | [4] | 6 years 3 months | 6 years 3 months | 6 years 29 days |
[1] No dividends were paid during the years ending December 31, 2022, 2021 and 2020. The expected volatility was calculated based upon historical stock price movements of the Company and 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. 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 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, 2022 | Dec. 31, 2021 | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Stock option award granted | 4,175,212 | |||
Weighted average remaining contractual term (in years) | 7 years 3 months 3 days | [1] | 6 years 10 months 17 days | |
Aggregate intrinsic value, Outstanding at the ending of the period | [2] | $ 1,135 | [1] | $ 19,214 |
Restricted Stock Units (RSUs) | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Nonvested at beginning of year | 2,330,094 | |||
Stock option award granted | 11,699,481 | |||
Vested and settled | 3,253,792 | |||
Forfeited | 1,648,732 | |||
Nonvested at end of year | 9,127,051 | 2,330,094 | ||
Weighted average fair value, beginning balance | $ 3.58 | |||
Weighted average grant date fair value | 1.21 | |||
Weighted average fair value vested | 1.60 | |||
Weighted average fair value forfeited | 2.37 | |||
Weighted average fair value, ending balance | $ 1.46 | $ 3.58 | ||
[1] Excludes 650,000 fully-vested options with an exercise price of $ 11.50 issued in June 2021 to a consultant in connection with the Business Combination. The aggregate intrinsic value of options outstanding at end of the year and options exercisable at end of the year does not include 11,861,426 and 6,626,765 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, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | |||
Share based compensation expense | $ 12,116 | $ 27,405 | $ 2,977 |
Research and development, net | |||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | |||
Share based compensation expense | 2,550 | 3,102 | 229 |
Clinical Operations | |||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | |||
Share based compensation expense | 549 | 1,711 | 102 |
Sales and Marketing | |||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | |||
Share based compensation expense | 3,090 | 6,089 | 1,568 |
General and administrative | |||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | |||
Share based compensation expense | $ 5,927 | $ 16,503 | $ 1,078 |
Net Loss Per Share - Schedule o
Net Loss Per Share - Schedule of Computation of Basic and Diluted Net Income Loss Per Share Attributable to Common Stockholders (Detail) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Numerator: | |||
Net loss | $ (79,672) | $ (62,742) | $ (22,370) |
Denominator: | |||
Weighted average number of common shares used in computing basic net loss per share | 156,885,256 | 86,775,948 | 13,359,350 |
Weighted average number of common shares used in computing diluted net loss per share | 156,885,256 | 86,775,948 | 13,359,350 |
Net loss per share: Basic | $ (0.51) | $ (0.72) | $ (1.67) |
Net loss per share: Diluted | $ (0.51) | $ (0.72) | $ (1.67) |
Net Loss Per Share - Additional
Net Loss Per Share - Additional Information (Detail) - shares | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
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 | 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 | 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 | ||
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 | ||
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 | 17,526,326 | 19,494,861 | 18,097,815 |
Restricted Stock | |||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 9,127,051 | 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 |
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, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Effective Income Tax Rate Reconciliation, Percent [Abstract] | |||
Loss before taxes on income | $ (79,418) | $ (62,695) | $ (22,346) |
Statutory tax rate | 21% | 21% | 21% |
Theoretical tax benefit | $ 16,678 | $ 13,166 | $ 4,693 |
Increase (decrease) in effective tax rate due to: | |||
State taxes, net of federal benefit | 4,079 | 2,500 | 1,125 |
Impairment of goodwill | (1,288) | ||
Permanent differences | (83) | 1,492 | (586) |
Other Adjustments | 7,177 | 0 | 0 |
Valuation Allowance | (26,309) | (17,111) | (5,208) |
Actual income taxes | $ 254 | $ 47 | $ 24 |
Taxes on Income - Summary of In
Taxes on Income - Summary of Income Before Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |||
Domestic | $ (79,788) | $ (62,902) | $ (22,415) |
Foreign | 370 | 207 | 69 |
Loss before taxes on income | $ (79,418) | $ (62,695) | $ (22,346) |
Taxes on Income - Summary of De
Taxes on Income - Summary of Deferred Tax Assets (Detail) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Components of Deferred Tax Assets [Abstract] | ||
Net operating loss carryforwards | $ 64,644 | $ 49,906 |
Stock based compensation | 4,098 | 3,150 |
Fixed assets | 375 | 340 |
Other | 1,378 | 45 |
Total gross deferred tax assets, net | 70,495 | 53,441 |
Valuation allowance | (70,495) | (44,186) |
Warrants | 0 | (9,255) |
Net deferred tax assets | $ 0 | $ 0 |
Taxes on Income -Additional Inf
Taxes on Income -Additional Information (Detail) $ in Millions | 12 Months Ended |
Dec. 31, 2022 USD ($) | |
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 | $ 26.3 |
Operating Loss Carry forwards Percentage | 50% |
Federal [Member] | |
Operating Loss Carryforwards [Line Items] | |
Operating Loss Carryforwards | $ 255.1 |
State [Member] | |
Operating Loss Carryforwards [Line Items] | |
Operating Loss Carryforwards | $ 224.3 |
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, 2022 | Dec. 31, 2021 |
Accrued Expense and Other Current Liabilities [Abstract] | ||
Litigation costs | $ 5,500 | $ 0 |
Employee compensation | 5,290 | 5,988 |
User acquisition | 2,256 | 2,680 |
Professional fees | 543 | 1,303 |
Other | 2,913 | 2,591 |
Accrued expenses and other current liabilities | $ 16,502 | $ 12,562 |
Variable Interest Entities (Add
Variable Interest Entities (Additional Information) (Detail) | 12 Months Ended |
Dec. 31, 2022 | |
Recourse [Member] | |
Variable Interest Entity [Line Items] | |
Variable Interest Entity, Financial or Other Support, Reasons | The Company holds a variable interest in TPN and the PC entities. The Company evaluates whether an entity in which it has a variable interest is considered a VIE. VIEs are generally entities that have either a total equity investment that is insufficient to permit the entity to finance its activities without additional subordinated financial support, or whose equity investors lack the characteristics of a controlling financial interest (i.e., ability to direct the activities of the entity that most significantly impact the entity's economic performance through voting rights and a right to receive the expected residual returns of the entity or an obligation to absorb the expected losses of the entity). |
Variable Interest Entities - As
Variable Interest Entities - Assets and liabilities of the VIEs (Detail) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
ASSETS | ||
Cash and cash equivalents | $ 138,545 | $ 198,256 |
Accounts receivable | 9,640 | 5,512 |
Total assets | 156,254 | 223,606 |
LIABILITIES | ||
Accrued expenses and other current liabilities | 16,502 | $ 12,562 |
Variable Interest Entity [Member] | ||
ASSETS | ||
Cash and cash equivalents | 883 | |
Accounts receivable | 1,716 | |
Other Assets | 4,813 | |
Total assets | 7,412 | |
LIABILITIES | ||
Accrued expenses and other current liabilities | 3,758 | |
Total Liabilities | $ 3,758 |