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Talkspace, Inc. - Quarter Report: 2023 June (Form 10-Q)

10-Q

Table of Contents

first quarter

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 10-Q

 

(Mark One)

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

For the quarterly period ended June 30, 2023

OR

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

For the transition period from to

Commission File Number: 001-39314

 

TALKSPACE, INC.

(Exact Name of Registrant as Specified in its Charter)

 

 

Delaware

84-4636604

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer
Identification No.)

622 Third Avenue, New York, New York

10017

(Address of principal executive offices)

(Zip Code)

(212) 284-7206

(Registrant’s telephone number, including area code)

N/A

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

 

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

 

Title of each class

 

Trading

Symbol(s)

 

Name of each exchange on which registered

Common stock, par value $0.0001 per share

 

TALK

 

Nasdaq Stock Market

Warrants to purchase common stock

 

TALKW

 

Nasdaq Stock Market

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

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

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

 

Large accelerated filer

 

Accelerated filer

 

 

 

 

Non-accelerated filer

 

Smaller reporting company

 

 

 

 

 

 

 

Emerging growth company

 

 

 

 

 

 

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

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

As of July 28, 2023, the registrant had 166,510,245 shares of common stock, $0.0001 par value per share, outstanding.

 

 

 

 


Table of Contents

Table of Contents

 

Page

PART I.

FINANCIAL INFORMATION

Item 1.

Financial Statements (Unaudited)

3

Condensed Consolidated Balance Sheets as of June 30, 2023 (unaudited) and December 31, 2022

3

Condensed Consolidated Statements of Operations (unaudited) for the three and six months ended June 30, 2023 and 2022

4

Condensed Consolidated Statements of Stockholder’s Equity (unaudited) for the three and six months ended June 30, 2023 and 2022

5

Condensed Consolidated Statements of Cash Flows (unaudited) for the six months ended June 30, 2023 and 2022

6

Notes to Unaudited Condensed Consolidated Financial Statements

7

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

14

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

22

Item 4.

Controls and Procedures

23

PART II.

OTHER INFORMATION

Item 1.

Legal Proceedings

24

Item 1A.

Risk Factors

24

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

24

Item 3.

Defaults Upon Senior Securities

24

Item 4.

Mine Safety Disclosures

24

Item 5.

Other Information

24

Item 6.

Exhibits

25

Signatures

26

 

 

 

2


Table of Contents

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements.

 

TALKSPACE, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

 

 

 

June 30, 2023

 

 

December 31, 2022

 

(U.S. dollars in thousands, except share and per share data)

 

(Unaudited)

 

 

 

 

ASSETS

 

 

 

 



 

CURRENT ASSETS:

 



 

 



 

Cash and cash equivalents

 

$

126,104

 

 

$

138,545

 

Accounts receivable, net

 

 

8,420

 

 

 

9,640

 

Other current assets

 

 

2,920

 

 

 

4,372

 

Total current assets

 

 

137,444

 

 

 

152,557

 

Property and equipment, net

 

 

456

 

 

 

677

 

Intangible assets, net

 

 

2,157

 

 

 

2,529

 

Other long-term assets

 

 

464

 

 

 

491

 

Total assets

 

$

140,521

 

 

$

156,254

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 



 

 



 

CURRENT LIABILITIES:

 



 

 



 

Accounts payable

 

$

5,484

 

 

$

6,461

 

Deferred revenues

 

 

3,683

 

 

 

4,355

 

Accrued expenses and other current liabilities

 

 

10,444

 

 

 

16,502

 

Total current liabilities

 

 

19,611

 

 

 

27,318

 

Warrant liabilities

 

 

820

 

 

 

939

 

Other long-term liabilities

 

 

295

 

 

 

461

 

Total liabilities

 

 

20,726

 

 

 

28,718

 

Commitments and contingencies (Note 5)

 

 

 

 

 

 

STOCKHOLDERS’ EQUITY:

 



 

 



 

Common stock of $0.0001 par value — Authorized: 1,000,000,000 shares at June 30, 2023 and December 31, 2022; Issued and outstanding: 166,204,295 and 161,155,030 shares at June 30, 2023 and December 31, 2022, respectively

 

 

16

 

 

 

16

 

Additional paid-in capital

 

 

384,443

 

 

 

378,722

 

Accumulated deficit

 

 

(264,664

)

 

 

(251,202

)

Total stockholders’ equity

 

 

119,795

 

 

 

127,536

 

Total liabilities and stockholders’ equity

 

$

140,521

 

 

$

156,254

 

 

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

 

3


Table of Contents

 

TALKSPACE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

June 30,

 

 

June 30,

 

(U.S. dollars in thousands, except share and per share data)

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Revenues

 

$

35,645

 

 

$

29,844

 

 

$

68,981

 

 

$

59,994

 

Cost of revenues

 

 

17,833

 

 

 

15,297

 

 

 

34,421

 

 

 

30,426

 

Gross profit

 

 

17,812

 

 

 

14,547

 

 

 

34,560

 

 

 

29,568

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Research and development, net

 

 

4,171

 

 

 

5,576

 

 

 

9,524

 

 

 

10,611

 

Clinical operations, net

 

 

1,675

 

 

 

2,316

 

 

 

3,276

 

 

 

4,092

 

Sales and marketing

 

 

13,045

 

 

 

18,931

 

 

 

26,514

 

 

 

40,339

 

General and administrative

 

 

5,329

 

 

 

8,792

 

 

 

10,693

 

 

 

16,802

 

Total operating expenses

 

 

24,220

 

 

 

35,615

 

 

 

50,007

 

 

 

71,844

 

Operating loss

 

 

(6,408

)

 

 

(21,068

)

 

 

(15,447

)

 

 

(42,276

)

Financial (income) expense, net

 

 

(1,712

)

 

 

1,865

 

 

 

(2,136

)

 

 

996

 

Loss before taxes on income

 

 

(4,696

)

 

 

(22,933

)

 

 

(13,311

)

 

 

(43,272

)

Taxes on income

 

 

8

 

 

 

89

 

 

 

151

 

 

 

110

 

Net loss

 

$

(4,704

)

 

$

(23,022

)

 

$

(13,462

)

 

$

(43,382

)

Net loss per share:

 

 

 

 

 

 

 

 

 

 

 

 

Basic and Diluted

 

$

(0.03

)

 

$

(0.15

)

 

$

(0.08

)

 

$

(0.28

)

Weighted average number of common shares used in computing basic and diluted net loss per share:

 

 

 

 

 

 

 

 

 

 

 

 

Basic and Diluted

 

 

164,195,697

 

 

 

155,709,901

 

 

 

163,003,363

 

 

 

154,901,165

 

 

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

4


Table of Contents

 

TALKSPACE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(U.S. dollars in thousands, except share data)

 

Common Stock

 

 

 

 

 

 

 

 

 

 

Three and Six Months Ended June 30, 2023

 

Number of Shares
Outstanding

 

 

Amount

 

 

Additional paid-in
capital

 

 

Accumulated
deficit

 

 

Total

 

Balance as of December 31, 2022

 

 

161,155,030

 

 

$

16

 

 

$

378,722

 

 

$

(251,202

)

 

$

127,536

 

Exercise of stock options

 

 

1,739,265

 

 

*)

 

 

 

621

 

 

 

 

 

 

621

 

Restricted stock units vested, net of tax

 

 

225,050

 

 

*)

 

 

 

(65

)

 

 

 

 

 

(65

)

Stock-based compensation

 

 

 

 

 

 

 

 

2,303

 

 

 

 

 

 

2,303

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

(8,758

)

 

 

(8,758

)

Balance as of March 31, 2023 (unaudited)

 

 

163,119,345

 

 

$

16

 

 

$

381,581

 

 

$

(259,960

)

 

$

121,637

 

Exercise of stock options

 

 

1,837,734

 

 

*)

 

 

 

869

 

 

 

 

 

 

869

 

Restricted stock units vested, net of tax

 

 

1,247,216

 

 

*)

 

 

 

(136

)

 

 

 

 

 

(136

)

Stock-based compensation

 

 

 

 

 

 

 

 

2,129

 

 

 

 

 

 

2,129

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

(4,704

)

 

 

(4,704

)

Balance as of June 30, 2023 (unaudited)

 

 

166,204,295

 

 

$

16

 

 

$

384,443

 

 

$

(264,664

)

 

$

119,795

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common Stock

 

 

 

 

 

 

 

 

 

 

Three and Six Months Ended June 30, 2022

 

Number of Shares
Outstanding

 

 

Amount

 

 

Additional paid-in
capital

 

 

Accumulated
deficit

 

 

Total

 

Balance as of December 31, 2021

 

 

152,862,447

 

 

$

15

 

 

$

363,788

 

 

$

(171,530

)

 

$

192,273

 

Exercise of stock options

 

 

2,164,870

 

 

*)

 

 

 

2,063

 

 

 

 

 

 

2,063

 

Restricted stock units vested, net of tax

 

 

77,338

 

 

*)

 

 

 

(67

)

 

 

 

 

 

(67

)

Stock-based compensation

 

 

 

 

 

 

 

 

2,368

 

 

 

 

 

 

2,368

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

(20,360

)

 

 

(20,360

)

Balance as of March 31, 2022 (unaudited)

 

 

155,104,655

 

 

$

15

 

 

$

368,152

 

 

$

(191,890

)

 

$

176,277

 

Exercise of stock options

 

 

1,092,515

 

 

*)

 

 

 

286

 

 

 

 

 

 

286

 

Restricted stock units vested, net of tax

 

 

1,175,446

 

 

*)

 

 

 

(126

)

 

 

 

 

 

(126

)

Stock-based compensation

 

 

 

 

 

 

 

 

3,839

 

 

 

 

 

 

3,839

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

(23,022

)

 

 

(23,022

)

Balance as of June 30, 2022 (unaudited)

 

 

157,372,616

 

 

$

15

 

 

$

372,151

 

 

$

(214,912

)

 

$

157,254

 

*) Represents an amount lower than $1

 

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

5


Table of Contents

TALKSPACE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

 

 

 

Six Months Ended
June 30,

 

(U.S. dollars in thousands)

 

2023

 

 

2022

 

Cash flows from operating activities:

 

 

 

 

 

 

Net loss

 

$

(13,462

)

 

$

(43,382

)

Adjustments to reconcile net loss to net cash used in operating activities:

 

 

 

 

 

 

Depreciation and amortization

 

 

608

 

 

 

697

 

Stock-based compensation

 

 

4,432

 

 

 

6,207

 

Remeasurement of warrant liabilities

 

 

(119

)

 

 

1,217

 

Decrease (increase) in accounts receivable

 

 

1,220

 

 

 

(1,650

)

Decrease in other current assets

 

 

1,452

 

 

 

5,622

 

(Decrease) increase in accounts payable

 

 

(977

)

 

 

381

 

Decrease in deferred revenues

 

 

(672

)

 

 

(1,236

)

Decrease in accrued expenses and other current liabilities

 

 

(6,058

)

 

 

(1,145

)

Other

 

 

(172

)

 

 

178

 

Net cash used in operating activities

 

 

(13,748

)

 

 

(33,111

)

Cash flows from investing activities:

 

 

 

 

 

 

Purchase of property and equipment

 

 

(10

)

 

 

(160

)

Proceeds from sale of property and equipment

 

 

28

 

 

 

 

Net cash provided by (used in) investing activities

 

 

18

 

 

 

(160

)

Cash flows from financing activities:

 

 

 

 

 

 

Proceeds from exercise of stock options

 

 

1,490

 

 

 

2,349

 

Payments for employee taxes withheld related to vested stock-based awards

 

 

(201

)

 

 

(67

)

(Payments) proceeds from reverse capitalization, net of transaction costs

 

 

 

 

 

(645

)

Net cash provided by financing activities

 

 

1,289

 

 

 

1,637

 

Net decrease in cash and cash equivalents

 

 

(12,441

)

 

 

(31,634

)

Cash and cash equivalents at the beginning of the period

 

 

138,545

 

 

 

198,256

 

Cash and cash equivalents at the end of the period

 

$

126,104

 

 

$

166,622

 

Supplemental cash flow data:

 

 

 

 

 

 

Cash paid during the period for income taxes

 

$

176

 

 

$

97

 

 

 

 

 

 

 

 

 

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

6


Table of Contents

TALKSPACE, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

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 its inception, 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.

 

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 10, “Variable Interest Entities,” in these notes to the condensed consolidated financial statements for further details.

NOTE 2. SIGNIFICANT ACCOUNTING POLICIES

Basis of presentation

The unaudited condensed consolidated financial statements and accompanying notes have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”). In management’s opinion, the unaudited condensed consolidated financial statements reflect all adjustments of a normal recurring nature that are necessary for a fair presentation of the results for the interim periods presented. The Company’s interim period results do not necessarily indicate the results that may be expected for any other interim period or for the full fiscal year. These condensed consolidated financial statements should be read in conjuction with the consolidated financial statements as of and for the year ended December 31, 2022 included in the Company's Annual Report on Form 10-K for the year ended December 31, 2022. The significant accounting policies applied in the annual consolidated financial statements of the Company as of December 31, 2022, have been applied consistently in these unaudited condensed consolidated financial statements, unless otherwise stated.

 

Intercompany transactions and balances have been eliminated in the preparation of the condensed 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 condensed consolidated financial statements. The Company’s significant estimates and assumptions used in these condensed consolidated financial statements include, but are not limited to, the recognition and disclosure of contingent liabilities, revenue recognition, stock-based compensation awards and the fair value of warrant liabilities. The Company bases its estimates on historical factors, current circumstances and the experience and judgment of management. The Company evaluates its assumptions on an ongoing basis. The Company’s management believes that the estimates, judgments, and assumptions used are reasonable based on information available at the time they are made. Estimates, by their nature, are based on judgment and available information, therefore, actual results could be materially different from these estimates.

 

Reclassification

Certain prior year amounts have been reclassified to conform to current year presentation.

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 condensed consolidated financial statements as a result of their future adoption.

 

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Table of Contents

NOTE 3. 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. 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.

 

Through its platform, Talkspace serves its business-to-business (“B2B”) channel, comprised of large health insurance plans and employee assistance programs (“Payors”), and large enterprise clients (“DTE”) who offer their insured members and employees access to the Company's platform at in-network reimbursement rates, or while their employer is under an active contract with Talkspace, where applicable, and its business-to-consumer (“Consumer”) channel, comprised of individual consumers who subscribe directly to the Company's platform.

 

The Company contracts with 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 primarily based on historical collection experience for each insurance payor. Revenue from Payors is presented net of implicit price concessions. Contracts with Payors include annual evergreen clauses and generally may be terminated by either party typically upon a minimum 60-day advance notice.

 

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 generally non-cancelable during the initial contractual term.

 

The Company also 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 consumer 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 condensed consolidated balance sheets. Revenue from individual consumers is presented net of refunds.

 

The following table presents the Company’s revenues from sales to unaffiliated customers disaggregated by revenue source:

 

Unaudited

 

Three Months Ended June 30,

 



Six Months Ended June 30,

 

(in thousands)

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Revenues from sales to unaffiliated customers:

 

 

 

 

 

 



 

 

 

 

 

   Payor revenue

 

$

18,539

 

 

$

7,880

 

 

$

33,350

 

 

$

15,990

 

   DTE revenue

 

 

8,039

 

 

 

6,685

 

 

 

16,715

 

 

 

12,346

 

Total B2B revenue

 

 

26,578

 

 

 

14,565

 

 

 

50,065

 

 

 

28,336

 

Consumer revenue

 

 

9,067

 

 

 

15,279

 



 

18,916

 

 

 

31,658

 

Total revenue

 

$

35,645

 

 

$

29,844

 



$

68,981

 

 

$

59,994

 

 

 

8


Table of Contents

Accounts Receivable and Allowance for Credit Losses

Accounts receivables are stated net of credit losses allowance. The Company is exposed to credit losses primarily through its contracts with health insurance plans, employee assistance programs and enterprise clients. The Company’s methodology for estimating credit loss 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 was immaterial as of June 30, 2023 and December 31, 2022.

 

Deferred Revenue

The Company records deferred revenues when cash payments from customers are received in advance of the Company's performance obligation to provide services. As of June 30, 2023, deferred revenue related mainly to the Company’s consumer channel. The Company expects to satisfy the majority of its performance obligations associated with deferred revenue within one year or less.

NOTE 4. FAIR VALUE MEASUREMENT

The carrying value of the Company’s cash equivalents, accounts receivable, 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 are accounted for as liabilities in accordance with ASC 815-40 and are presented within warrant liabilities in the accompanying condensed 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 condensed 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 implied volatility from the trading prices of the Public Warrants.

The following table presents the changes in the fair value of warrant liabilities during the three and six months ended June 30, 2023 and 2022:

 

 

Level 3 Liabilities (unaudited)

 

 

 

For the Three Months Ended June 30, 2023

 

(in thousands)

 

Beginning Balance

 

 

Change in Fair Value

 

 

Ending Balance

 

Private Placement Warrants

 

$

1,128

 

 

$

(308

)

 

$

820

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Six Months Ended June 30, 2023

 

(in thousands)

 

Beginning Balance

 

 

Change in Fair Value

 

 

Ending Balance

 

Private Placement Warrants

 

$

939

 

 

$

(119

)

 

$

820

 

 

 

 

 

 

 

 

 

 

 

 

 

Level 3 Liabilities (unaudited)

 

 

 

For the Three Months Ended June 30, 2022

 

(in thousands)

 

Beginning Balance

 

 

Change in Fair Value

 

 

Ending Balance

 

Private Placement Warrants

 

$

3,195

 

 

$

2,092

 

 

$

5,287

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Six Months Ended June 30, 2022

 

(in thousands)

 

Beginning Balance

 

 

Change in Fair Value

 

 

Ending Balance

 

Private Placement Warrants

 

$

4,070

 

 

$

1,217

 

 

$

5,287

 

 

 

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NOTE 5. COMMITMENTS AND CONTINGENT LIABILITIES

Litigation

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.), which were subsequently consolidated under the caption In re Talkspace, Inc. Securities Litigation, No. 22-cv-00163 (S.D.N.Y) (the “Securities Action”). The Securities Action asserts 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 Hudson Executive Investment Corp. (“HEIC”).

 

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., C.A. No. 2022-1148 (Del. Ch.) (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 HEIC, among other things, based on many of the same facts at issue in the 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 HEIC.

 

In February 2023, the Company resolved the Securities Action and the Delaware Action through mediation. The settlement resolves these litigations with respect to all named defendants. The settlement will have to be approved by the court, which the Company expects will occur in the third quarter of 2023.

 

In June and July 2022, two individuals filed stockholder derivative lawsuits 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 under the caption In re Talkspace Stockholder Derivative Litigation, No. 22-cv-05016 (S.D.N.Y.) in September 2022 (the “Derivative Action”). The Derivative Action named certain of the Company’s current and former officers and directors as defendants and the Company as a nominal defendant. The Derivative Action asserted claims for violations of federal securities laws, breach of fiduciary duty, and aiding and abetting breaches of fiduciary duty relating to the merger with HEIC, among other things, based on many of the same facts at issue in the Securities Action.

 

In February 2023 the parties reached an agreement in principle to resolve the Derivative Action with respect to all named defendants in exchange for certain changes to the Company’s Corporate Governance environment, including the declassification of the Company’s board of directors, creation of a management-level disclosure committee, enhancements to the responsibilities and duties of the Company’s Audit Committee, the addition of independent directors, enhancements to employee compliance training and retention of an internal controls consultant. In addition, the Company agreed to pay or cause to be paid $550,000 in attorney’s fees and expenses. On May 18, 2023, the parties entered into a Stipulation of Settlement and Release Agreement (the “Stipulation”) that sets forth the terms and conditions for the proposed settlement and dismissal with prejudice of the Derivative Action (the “Settlement”). On June 30, 2023, the court entered an order preliminarily approving the Stipulation and proposed Settlement of the Derivative Action and scheduling a hearing for August 16, 2023 to determine whether to give final approval to the Settlement. The defendants have not admitted any liability or wrongdoing in connection with the Settlement and have entered into the Settlement solely to avoid the costs, risks, distraction, and uncertainties of continued litigation of the Derivative Action.

 

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.

 

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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.

NOTE 6. CAPITAL STOCK

 

As of June 30, 2023 and December 31, 2022 there were outstanding 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 June 30, 2023 and December 31, 2022, no shares of preferred stock were issued or outstanding.

NOTE 7. SHARE-BASED COMPENSATION

In June 2021, 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 June 2021, the Company also adopted the 2021 Employee Stock Purchase Plan (the “2021 ESPP”) under which employees of the Company 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 June 30, 2023, 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 condensed consolidated statement of operations over the period during which the employee is required to perform services in exchange for the award (generally requiring a four-year vesting period).

The following table sets forth the total stock-based compensation expense related to stock options and restricted stock units included in the respective components of operating expenses in the condensed consolidated statements of operations:

 

 

 

Three Months Ended June 30,

 

 

Six Months Ended June 30,

 

Unaudited

 

2023

 

 

2022

 

 

2023

 

 

2022

 

(in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

Research and development, net

 

$

546

 

 

$

662

 

 

$

1,220

 

 

$

1,208

 

Clinical operations, net

 

 

126

 

 

 

79

 

 

 

246

 

 

 

201

 

Sales and marketing

 

 

445

 

 

 

816

 

 

 

836

 

 

 

1,593

 

General and administrative

 

 

1,012

 

 

 

2,282

 

 

 

2,130

 

 

 

3,205

 

Total stock-based compensation expense

 

$

2,129

 

 

$

3,839

 

 

$

4,432

 

 

$

6,207

 

 

 

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NOTE 8. 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 periods presented:

 

 

Three Months Ended June 30,

 

 

Six Months Ended June 30,

 

Unaudited

 

2023

 

 

2022

 

 

2023

 

 

2022

 

(in thousands, except share and per share data)

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

$

(4,704

)

 

$

(23,022

)

 

$

(13,462

)

 

$

(43,382

)

Weighted-average shares used to compute net loss per share:

 

 

 

 

 

 

 

 

 

 

 

 

Basic and Diluted

 

 

164,195,697

 

 

 

155,709,901

 

 

 

163,003,363

 

 

 

154,901,165

 

Net loss per share:

 

 

 

 

 

 

 

 

 

 

 

 

Basic and Diluted

 

$

(0.03

)

 

$

(0.15

)

 

$

(0.08

)

 

$

(0.28

)

For the three and six months ended June 30, 2023, the following were excluded from the calculation of diluted net loss per share since each would have had an anti-dilutive effect given the Company's net loss: 12,365,441 non-vested stock options, 10,179,411 non-vested restricted stock units, 12,780,000 Private Placement Warrants and 21,350,000 Public Warrants to purchase the Company’s common stock.

For the three and six months ended June 30, 2022, the following were excluded from the calculation of diluted income per share since each would have had an anti-dilutive effect given the Company's net loss: 18,042,701 non-vested stock options, 6,360,148 non-vested restricted stock units, 12,780,000 Private Placement Warrants and 21,350,000 Public Warrants to purchase the Company’s common stock.

NOTE 9. ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

The following table presents the amounts included within accrued expenses and other current liabilities as of June 30, 2023 and December 31, 2022:

 

 

June 30, 2023

 

 

December 31, 2022

 

(in thousands)

 

Unaudited

 

 

 

 

Employee compensation

 

$

3,821

 

 

$

5,290

 

User acquisition

 

 

1,913

 

 

 

2,256

 

Litigation costs

 

 

750

 

 

 

5,500

 

Professional fees

 

 

576

 

 

 

543

 

Other

 

 

3,384

 

 

 

2,913

 

Accrued expenses and other current liabilities

 

$

10,444

 

 

$

16,502

 

 

 

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NOTE 10. VARIABLE INTEREST ENTITIES ("VIEs")

 

The Company holds a variable interest in Talkspace Provider Network, PA (“TPN”) and certain affiliated professional entities (“PC entities”). TPN and the PC entities are VIEs. 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 has 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 Company's consolidated VIEs as of June 30, 2023 and December 31, 2022. The assets and liabilities in the table below are presented prior to consolidation and thus a portion of these assets and liabilities are eliminated in consolidation.

 

(in thousands)

 

June 30, 2023

 

 

December 31, 2022

 

ASSETS

 

Unaudited

 

 

 

 

Cash and cash equivalents

 

$

497

 

 

$

883

 

Accounts receivable

 

 

6,159

 

 

 

1,716

 

Other assets

 

 

 

 

 

4,813

 

Total Assets

 

$

6,656

 

 

$

7,412

 

LIABILITIES

 

 

 

 

 

 

Accrued expenses and other current liabilities

 

 

3,802

 

 

 

3,758

 

Total Liabilities

 

$

3,802

 

 

$

3,758

 

 

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Unless the context otherwise requires, all references in this section as to “Talkspace,” the “Company,” “we,” “us” or “our” refer to the business of Talkspace, Inc. and its consolidated subsidiaries.

The following discussion and analysis of our financial condition and results of operations should be read together with the financial statements and the related notes contained in this Quarterly Report and the financial statements and related notes contained in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2022. This discussion contains forward-looking statements that reflect our plans, estimates, and beliefs that involve risks and uncertainties. As a result of many factors, such as those discussed in Part I, Item 1A, “Risk Factors” of the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2022 and “Forward-Looking Statements” sections and elsewhere in this Quarterly Report, our actual results may differ materially from those anticipated in these forward-looking statements.

 

The purpose of this section is to discuss and analyze our consolidated financial condition, liquidity and capital resources and results of operations for the three and six months ended June 30, 2023 and 2022.

Overview

Talkspace is a healthcare company offering its members convenient and affordable access to a fully-credentialed network of highly qualified providers. We are a leading virtual behavioral health company and, since Talkspace’s founding in 2012, we have connected millions of patients with licensed mental health providers across a wide and growing spectrum of care through virtual counseling, psychotherapy and psychiatry. We created a purpose-built platform to address the vast, unmet and growing demand for mental health services of our members, serving our business-to-business (“B2B”) channel, comprised of large health plans and employee assistance programs (“Payors”) such as Aetna, Cigna, Premera and Optum and large enterprise clients (“DTE”) such as Google and Expedia (collectively, our “clients”), who offer their insured members and employees access to our platform at in-network reimbursement rates, or while their employer is under an active contract with Talkspace, where applicable, and our business-to-consumer (“Consumer”) channel, comprised of individual consumers who subscribe directly to our platform.

As of June 30, 2023, we had approximately 110 million B2B eligible lives and approximately 13,700 consumer active members compared to 77 million B2B eligible lives and 20,100 consumer active members as of June 30, 2022. For the three and six months ended June 30, 2023, our clinicians completed 200,500 and 372,200 B2B sessions, respectively, related to members covered under our health plan clients, as compared to 96,000 and 186,600 completed B2B sessions for the three and six months ended June 30, 2022. Please refer to the “Key Business Metrics” section below for a description of active members and B2B eligible lives.

Operating Segments

The Company operates as a single segment and as one reporting unit, which is how the chief operating decision maker (who is the chief executive officer) reviews financial performance and allocates resources.

Key Business Metrics

We monitor the following key metrics to help us evaluate our business, identify trends affecting our business, formulate business plans and make strategic decisions. We believe the following metrics are useful in evaluating our business:

 

Unaudited

 

Six Months Ended
June 30,

 

(in thousands except number of health plan and enterprise clients or otherwise indicated)

 

2023

 

 

2022

 

Number of B2B eligible lives at period end (in millions)

 

 

110

 

 

 

77

 

Number of completed B2B sessions during the period

 

 

372.2

 

 

 

186.6

 

Number of health plan clients at period end

 

 

20

 

 

 

16

 

Number of enterprise clients at period end

 

 

217

 

 

 

205

 

Number of Consumer active members at period end

 

 

13.7

 

 

 

20.1

 

 

 

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B2B Eligible Lives: We consider B2B lives “eligible” if such persons are eligible to receive treatment on the Talkspace platform, in the case of our health plan clients, at an agreed upon reimbursement rate through insurance under an employee assistance program or other network behavioral health paid benefit program. There may be instances where a person may be covered through multiple solutions, typically through behavioral health plans and employee assistance programs. In these instances, the person is counted each time they are covered in the B2B eligible lives calculation, which may cause this amount to reflect a higher number of B2B eligible lives than we actually serve.

 

Active Members: We consider members “active”, in the case of our Consumer members, commencing on the date such member initiates contact with a provider on our platform until the term of their monthly, quarterly or bi-annual subscription plan expires, unless terminated early.

 

Components of Results of Operations

Revenues

We contract with health insurance plans, employee assistance organizations and enterprises to provide services to individuals who are qualified to receive access to the Company’s services through the Company’s commercial arrangements. We generate revenues from payments from insured members and claims paid by their respective insurance companies and from contracted platform access fees paid to us by our enterprise clients for the delivery of therapy services to their members or employees. We recognize revenues from services provided to insured members at a point in time, as virtual therapy or psychiatry session is rendered. We recognize revenue from our enterprise clients ratably over the contractual term based primarily on a per-member-per month access fee model.

We also generate 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. We recognize member subscription revenues ratably over the subscription period, beginning when therapy services commence. We recognize 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.

Revenue growth is generated from increasing our eligible covered lives through contracting with health plans, increasing utilization within eligible covered lives, expanding enterprise clients, and increasing membership subscriptions.

Cost of Revenues

Cost of revenues is comprised primarily of therapist payments. Cost of revenues is largely driven by number of sessions and the size of our provider network that is required to service the growth of our health plan and enterprise clients, in addition to the growth of our customer base.

We designed our business model and our provider network to be scalable and to leverage a hybrid model of both employee providers and independently contracted providers to support multiple growth scenarios. The compensation paid to our independently contracted providers is variable, and the amount paid to a provider is generally based on the amount of time committed by such provider to our members. In addition, our network supervisors have authority to approve the payment of incentive bonuses to providers with certain licenses during periods of higher demand for providers with such licenses. For our employee providers, they receive a fixed-salary and discretionary bonuses, where applicable, all of which is included in cost of revenues.

While we expect to make increased investments to support accelerated growth and the required investment to scale our provider network, we also expect increased efficiencies and economies of scale. Our cost of revenues as a percentage of revenues is expected to fluctuate from period to period depending on the interplay of these factors as well as pricing fluctuations.

 

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Table of Contents

Operating Expenses

Operating expenses consist of research and development, clinical operations, sales and marketing, and general and administrative expenses.

Research and Development Expenses

Research and development expenses include personnel and related expenses for software development and engineering, information technology infrastructure, security, privacy compliance and product development (inclusive of stock-based compensation for our research and development employees), third-party services and contractors related to research and development, information technology and software-related costs.

Clinical Operations Expenses

Clinical operations expenses are associated with the management of our network of therapists. This item is comprised of costs related to recruiting, onboarding, credentialing, training and ongoing quality assurance activities (inclusive of stock-based compensation for our clinical operations employees), costs of third-party services and contractors related to recruiting and training and software-related costs.

Sales and Marketing Expenses

Sales expenses consist primarily of employee-related expenses, including salaries, benefits, commissions, travel and stock-based compensation costs for our employees engaged in sales and account management.

Marketing expenses consist primarily of advertising and marketing expenses for member acquisition and engagement, as well as personnel costs, including salaries, benefits, bonuses, stock-based compensation expense for marketing employees, third-party services and contractors. Marketing expenses also include third-party software subscription services, third-party independent research, participation in trade shows, brand messaging and costs of communications materials that are produced for our clients to generate greater awareness and utilization of our platform among our health plan and enterprise clients.

General and Administrative Expenses

General and administrative expenses consist primarily of personnel costs, including salaries, benefits, bonuses and stock-based compensation expense for certain executives, finance, accounting, legal and human resources functions, as well as professional fees, occupancy costs, and other general overhead costs.

Financial income, net

Financial income, net includes the impact from (i) non-cash changes in the fair value of our warrant liabilities, (ii) interest earned on cash equivalents deposited in our money market accounts and (iii) other financial expenses in connection with bank charges.

Taxes on income

Our taxes on income consists primarily of foreign income taxes related to income generated by our subsidiary organized under the laws of Israel.

We have a full valuation allowance for our U.S. deferred tax assets, including federal and state NOLs. We expect to maintain this valuation allowance until it becomes more likely than not that the benefit of our federal and state deferred tax assets will be realized through expected future taxable income in the United States.

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Table of Contents

Results of Operations

The following table presents our results of operations for the three and six months ended June 30, 2023 and 2022 and the dollar and percentage change between the respective periods:

 

(in thousands, except percentages)

 

Three Months Ended
June 30,

 

Variance

 

Six Months Ended
June 30,

 

Variance

Unaudited

 

2023

 

2022

 

$

 

%

 

2023

 

2022

 

$

 

%

Revenue:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

      Payor revenue

 

$18,539

 

$7,880

 

10,659

 

135.3

 

$33,350

 

$15,990

 

17,360

 

108.6

      DTE revenue

 

8,039

 

6,685

 

1,354

 

20.3

 

16,715

 

12,346

 

4,369

 

35.4

  Total B2B revenue

 

26,578

 

14,565

 

12,013

 

82.5

 

50,065

 

28,336

 

21,729

 

76.7

  Consumer revenue

 

9,067

 

15,279

 

(6,212)

 

(40.7)

 

18,916

 

31,658

 

(12,742)

 

(40.2)

Total revenue

 

35,645

 

29,844

 

5,801

 

19.4

 

68,981

 

59,994

 

8,987

 

15.0

Cost of revenue

 

17,833

 

15,297

 

2,536

 

16.6

 

34,421

 

30,426

 

3,995

 

13.1

Gross profit

 

17,812

 

14,547

 

3,265

 

22.4

 

34,560

 

29,568

 

4,992

 

16.9

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Research and development, net

 

4,171

 

5,576

 

(1,405)

 

(25.2)

 

9,524

 

10,611

 

(1,087)

 

(10.2)

Clinical operations, net

 

1,675

 

2,316

 

(641)

 

(27.7)

 

3,276

 

4,092

 

(816)

 

(19.9)

Sales and marketing

 

13,045

 

18,931

 

(5,886)

 

(31.1)

 

26,514

 

40,339

 

(13,825)

 

(34.3)

General and administrative

 

5,329

 

8,792

 

(3,463)

 

(39.4)

 

10,693

 

16,802

 

(6,109)

 

(36.4)

Total operating expenses

 

24,220

 

35,615

 

(11,395)

 

(32.0)

 

50,007

 

71,844

 

(21,837)

 

(30.4)

Operating loss

 

(6,408)

 

(21,068)

 

14,660

 

69.6

 

(15,447)

 

(42,276)

 

26,829

 

63.5

Financial (income) expense, net

 

(1,712)

 

1,865

 

(3,577)

 

*

 

(2,136)

 

996

 

(3,132)

 

*

Loss before taxes on income

 

(4,696)

 

(22,933)

 

18,237

 

79.5

 

(13,311)

 

(43,272)

 

29,961

 

69.2

Taxes on income

 

8

 

89

 

(81)

 

(91.0)

 

151

 

110

 

41

 

37.3

Net loss

 

$(4,704)

 

$(23,022)

 

$18,318

 

79.6

 

$(13,462)

 

$(43,382)

 

$29,920

 

69.0

* Percentage not meaningful

 

Revenues. Revenues increased by $5.8 million, or 19.4% to $35.6 million for the three months ended June 30, 2023 from $29.8 million for the three months ended June 30, 2022. The increase was principally due to a 82.5% growth in B2B revenue driven by a higher number of completed B2B sessions and an increase in covered lives from health plan clients ("Payors") and new enterprise clients ("DTE"), partially offset by a 40.7% decline in consumer subscription revenue. Revenue from our health plan clients increased by $10.7 million, or 135.3%, to $18.5 million for the three months ended June 30, 2023 from $7.9 million for the three months ended June 30, 2022. Enterprise client contracts increased by 12 clients, or 5.9%, to 217 clients as of June 30, 2023 from 205 clients as of June 30, 2022. This increase in the number of enterprise clients drove DTE revenue to increase by $1.4 million, or 20.3% to $8.0 million for the three months ended June 30, 2023 from $6.7 million for the three months ended June 30, 2022. Consumer subscriptions revenue decreased by $6.2 million, or 40.7%, to $9.1 million for the three months ended June 30, 2023 from $15.3 million for the three months ended June 30, 2022, due to the Company's intentional and strategic decision to reduce marketing spend related to this service.

 

Revenues increased by $9.0 million, or 15.0% to $69.0 million for the six months ended June 30, 2023 from $60.0 million for the six months ended June 30, 2022. The increase was principally due to a 76.7% growth in B2B revenue driven by a higher number of completed B2B sessions and an increase in covered lives from Payors and new DTE clients, partially offset by a 40.2% decline in consumer subscription revenue. Revenue from our health plan clients increased by $17.4 million, or 108.6%, to $33.4 million for the six months ended June 30, 2023 from $16.0 million for the six months ended June 30, 2022. Enterprise client contracts increased by 12 clients, or 5.9%, to 217 clients as of June 30, 2023 from 205 clients as of June 30, 2022. This increase in the number of enterprise clients drove DTE revenue to increase by $4.4 million, or 35.4% to $16.7 million for the six months ended June 30, 2023 from $12.3 million for the six months ended June 30, 2022. Consumer subscriptions revenue decreased by $12.7 million, or 40.2%, to $18.9 million for the six months ended June 30, 2023 from $31.7 million for the six months ended June 30, 2022, due to the Company's intentional and strategic decision to reduce marketing spend related to this service.

Costs of revenues. Cost of revenues increased by $2.5 million, or 16.6%, to $17.8 million for the three months ended June 30, 2023 from $15.3 million for the three months ended June 30, 2022, and increased by $4.0 million, or 13.1%, to $34.4 million for the six months ended June 30, 2023 from $30.4 million for the six months ended June 30, 2022. The increase in cost of revenues for the three and six months ended June 30, 2023, was primarily due to increased hours worked by therapists to meet strong customer engagement.

 

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Table of Contents

Gross profit. Gross profit increased by $3.3 million, or 22.4%, to $17.8 million for the three months ended June 30, 2023 from $14.5 million for the three months ended June 30, 2022. Gross profit increased by $5.0 million, or 16.9%, to $34.6 million for the six months ended June 30, 2023 from $29.6 million for the six months ended June 30, 2022. The increase in gross profit for the three and six months ended June 30, 2023 was primarily driven by higher revenue and provider network productivity.

Gross margin was 50.0% for the three months ended June 30, 2023, compared to 48.7% during the three months ended June 30, 2022. Gross margin was 50.1% for the six months ended June 30, 2023, compared to 49.3% during the six months ended June 30, 2022. The increase in gross margin for the three and six months ended June 30, 2023 was primarily due to higher revenue and provider network productivity, partially offset by the revenue shift mix towards B2B revenue.

Operating expenses

Overall, our operating expenses for the three and six months ended June 30, 2023 have decreased due to our efficiency initiatives in order to optimize for profitability.

Research and development expenses. Research and development expenses decreased by $1.4 million, or 25.2% to $4.2 million for the three months ended June 30, 2023 from $5.6 million for the three months ended June 30, 2022, and decreased by $1.1 million, or 10.2% to $9.5 million for the six months ended June 30, 2023 from $10.6 million for the six months ended June 30, 2022. The decrease in research and development expenses for the three and six months ended June 30, 2023 was primarily due to a decrease in employee-related costs, inclusive of non-cash stock compensation expense.

Clinical operations expenses. Clinical operations expenses decreased by $0.6 million, or 27.7% to $1.7 million for the three months ended June 30, 2023 from $2.3 million for the three months ended June 30, 2022, and decreased by $0.8 million, or 19.9% to $3.3 million for the six months ended June 30, 2023 from $4.1 million for the six months ended June 30, 2022. The decrease in clinical operations expenses for the three and six months ended June 30, 2023 was primarily due to lower provider recruitment costs.

Sales and marketing expenses. Sales and marketing expenses decreased by $5.9 million, or 31.1%, to $13.0 million for the three months ended June 30, 2023 from $18.9 million for the three months ended June 30, 2022, and decreased by $13.8 million, or 34.3%, to $26.5 million for the six months ended June 30, 2023 from $40.3 million for the six months ended June 30, 2022. The decrease in sales and marketing expenses for the three and six months ended June 30, 2023 was primarily driven by a decrease in direct marketing and promotional costs.

General and administrative expenses. General and administrative expenses decreased by $3.5 million, or 39.4%, to $5.3 million for the three months ended June 30, 2023 from $8.8 million for the three months ended June 30, 2022, and decreased by $6.1 million, or 36.4%, to $10.7 million for the six months ended June 30, 2023 from $16.8 million for the six months ended June 30, 2022. The decrease in general and administrative expenses for the three and six months ended June 30, 2023 was primarily due to a decrease in professional fees, subcontractor costs and employee-related costs, inclusive of non-cash stock compensation expense.

Financial income, net. Financial income, net was $1.7 million for the three months ended June 30, 2023, compared to financial expense, net of $1.9 million for the three months ended June 30, 2022. For the three months ended June 30, 2023 financial income, net was primarily driven by interest income earned on our money market accounts of $1.5 million and $0.3 million in non-cash gains resulting from the remeasurement of warrant liabilities. For the three months ended June 30, 2022 financial expense, net primarily consisted of $2.1 million in non-cash losses resulting from the remeasurement of warrant liabilities.

Financial income, net was $2.1 million for the six months ended June 30, 2023, compared to financial expense, net of $1.0 million for the six months ended June 30, 2022. For the six months ended June 30, 2023 financial income, net was primarily driven by interest income earned on our money market accounts of $2.1 million. For the six months ended June 30, 2022 financial expense, net was primarily driven by $1.2 million of non-cash losses resulting from the remeasurement of warrant liabilities.

 

Taxes on income. Taxes on income consists primarily of foreign income taxes related to income generated by our subsidiary organized under the laws of Israel.

 

 

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Non-GAAP Financial Measures

In addition to our financial results determined in accordance with GAAP, we believe adjusted EBITDA, a non-GAAP measure, is useful in evaluating our operating performance and is a key performance measure that our management uses to assess our operating performance. Because adjusted EBITDA facilitates internal comparisons of our historical operating performance on a more consistent basis, we use this measure for business planning purposes and in evaluating acquisition opportunities. We also use adjusted EBITDA to evaluate our ongoing operations and for internal planning and forecasting purposes. We believe that this non-GAAP financial measure, when taken together with the corresponding GAAP financial measures, provides meaningful supplemental information regarding our performance by excluding certain items that may not be indicative of our business, results of operations or outlook. We believe that the use of adjusted EBITDA is helpful to our investors as it is a metric used by management in assessing the health of our business and our operating performance. However, non-GAAP financial information is presented for supplemental informational purposes only, has limitations as an analytical tool and should not be considered in isolation or as a substitute for financial information presented in accordance with GAAP.

Some of the limitations of adjusted EBITDA include (i) adjusted EBITDA does not necessarily reflect capital commitments to be paid in the future and (ii) although depreciation and amortization are non-cash charges, the underlying assets may need to be replaced and adjusted EBITDA does not reflect these requirements. In evaluating adjusted EBITDA, you should be aware that in the future we will incur expenses similar to the adjustments described herein. Our presentation of adjusted EBITDA should not be construed as an inference that our future results will be unaffected by these expenses or any unusual or non-recurring items. Our adjusted EBITDA may not be comparable to similarly titled measures of other companies because they may not calculate adjusted EBITDA in the same manner as we calculate the measure, limiting its usefulness as a comparative measure. Adjusted EBITDA should not be considered as an alternative to loss before income taxes, net loss, loss per share, or any other performance measures derived in accordance with U.S. GAAP. When evaluating our performance, you should consider adjusted EBITDA alongside other financial performance measures, including our net loss and other GAAP results.

A reconciliation is provided below for adjusted EBITDA to net loss, the most directly comparable financial measure stated in accordance with GAAP. Investors are encouraged to review our financial statements prepared in accordance with GAAP and the reconciliation of our non-GAAP financial measure to its most directly comparable GAAP financial measure, and not to rely on any single financial measure to evaluate our business.

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

 

The following table presents a reconciliation of adjusted EBITDA from the most comparable GAAP measure, net loss for the three and six months ended June 30, 2023 and 2022:

 

 

 

Three Months Ended
June 30,

 

 

Six Months Ended
June 30,

 

Unaudited

 

2023

 

 

2022

 

 

2023

 

 

2022

 

(in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

$

(4,704

)

 

$

(23,022

)

 

$

(13,462

)

 

$

(43,382

)

Add:

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

302

 

 

 

268

 

 

 

608

 

 

 

697

 

Financial (income) expense, net (1)

 

 

(1,712

)

 

 

1,865

 

 

 

(2,136

)

 

 

996

 

Taxes on income

 

 

8

 

 

 

89

 

 

 

151

 

 

 

110

 

Stock-based compensation

 

 

2,129

 

 

 

3,839

 

 

 

4,432

 

 

 

6,207

 

Adjusted EBITDA

 

$

(3,977

)

 

$

(16,961

)

 

$

(10,407

)

 

$

(35,372

)

(1) For the three months ended June 30, 2023, financial (income), net, primarily consisted of $1.5 million of interest income from our money market accounts and $0.3 million in gains resulting from the remeasurement of warrant liabilities. For the six months ended June 30, 2023, financial (income), net, primarily consisted of $2.1 million of interest income from our money market accounts. For the three and six months ended June 30, 2022, financial expense, net primarily consisted of $2.1 million and $1.2 million, respectively, in losses resulting from the remeasurement of warrant liabilities.

 

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Liquidity and Capital Resources

As of June 30, 2023, we had $126.1 million of cash and cash equivalents ($138.5 million as of December 31, 2022), which we use to finance our operations and support a variety of growth initiatives and investments. We had no debt as of June 30, 2023.

Our primary cash needs are to fund operating activities. Our future capital requirements will depend on many factors including our growth rate, contract renewal activity, the timing and extent of investments to support product development efforts, our expansion of sales and marketing activities, the introduction of new and enhanced service offerings, and the continuing market acceptance of virtual behavioral services. Additionally, we may in the future enter into arrangements to acquire or invest in complementary businesses, services and technologies.

We currently anticipate to be able to fund our cash needs for at least the next 12 months and thereafter for the foreseeable future using available cash and cash equivalent balances as of June 30, 2023. However, in the future we may require additional capital to respond to technological advancements, competitive dynamics, customer demands, business and investment opportunities, acquisitions or unforeseen circumstances and we may determine to engage in equity or debt financings for other reasons. We may not be able to timely secure additional debt or equity financing on favorable terms, or at all. If we raise additional funds through the issuance of equity or convertible debt or other equity-linked securities, our existing stockholders could experience significant dilution. Any debt financing obtained by us in the future could involve restrictive covenants relating to our capital raising activities and other financial and operational matters, which may make it more difficult for us to obtain additional capital and to pursue business opportunities, including potential acquisitions. If we cannot raise capital when needed, we may be forced to undertake asset sales or similar measures to ensure adequate liquidity.

Cash Flows from Operating, Investing and Financing Activities

The following table presents the summary condensed consolidated cash flow information for the periods presented:

Cash Flows

Unaudited

 

Six Months Ended
June 30,

 

(in thousands)

 

2023

 

 

2022

 

Net cash used in operating activities

 

$

(13,748

)

 

$

(33,111

)

Net cash provided by (used in) investing activities

 

 

18

 

 

 

(160

)

Net cash provided by financing activities

 

 

1,289

 

 

 

1,637

 

Net decrease in cash and cash equivalents

 

$

(12,441

)

 

$

(31,634

)

Operating Activities

The decrease in net cash used in operating activities was driven primarily by the positive impact of lower operating expenses, favorable timing of collections on receivables and an increase in interest income from our money market accounts offset by unfavorable timing of payments of account payables and accrued expenses.

Investing Activities

The increase in net cash provided by investing activities was driven primarily by an increase in the proceeds from the sale of computer equipment and a decrease in the purchases of computer equipment and software.

Financing Activities

The decrease in net cash provided by financing activities was primarily driven by a decrease in the proceeds from the exercise of stock options.

Contractual Obligations, Commitments and Contingencies

As of June 30, 2023, we did not have any short-term or long-term debt, or significant long-term liabilities.

As of June 30, 2023, we have a non-material long-term operating lease for our office space in New York, NY.

A settlement was reached in February 2023 for certain class action lawsuits ending an ongoing litigation, see Note 5, “Commitments and Contingent Liabilities” in the notes to the condensed consolidated financial statements for further details.

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In addition, we may in the future be involved in various legal proceedings, claims and litigation that arise in the normal course of business. We accrue for estimated loss contingencies related to legal matters when available information indicates that it is probable a liability had been incurred and we 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. Should any of our estimates and assumptions change or prove to be incorrect, it could have a material impact on our results of operations, financial position, and cash flows. See Note 5, “Commitments and Contingent Liabilities” in the notes to the condensed consolidated financial statements for further details.

Our commercial contract arrangements generally include certain provisions requiring us to indemnify clients against liabilities if there is a breach of a client’s data or if our service infringes a third party’s intellectual property rights. To date, we have not incurred any material costs as a result of such indemnifications.

We have also agreed to indemnify our officers and directors 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 us, arising out of that person’s services as our director or officer or that person’s services provided to any other company or enterprise at our request. We maintain director and officer liability insurance coverage that would generally enable us to recover a portion of any future amounts paid. We may also be subject to indemnification obligations by law with respect to the actions of our employees under certain circumstances and in certain jurisdictions.

Off-Balance Sheet Arrangements

We do not invest in any off-balance sheet vehicles that provide liquidity, capital resources, market or credit risk support, or engage in any activities that expose us to any liability that is not reflected in our condensed consolidated financial statements.

Inflation Risk

We do not believe that inflation has had a material effect on our business, financial condition or results of operations. If our costs were to become subject to significant inflationary pressures, we may not be able to fully offset such higher costs through price increases. Our inability or failure to do so could harm our business, financial condition or results of operations.

Critical Accounting Policies and Estimates

The Company’s condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America. Reference is also made to the Company’s consolidated financial statements and notes thereto found in its Annual Report on Form 10-K for the year ended December 31, 2022.

The Company’s accounting policies are essential to understanding and interpreting the financial results reported on the condensed consolidated financial statements. The significant accounting policies used in the preparation of the Company’s consolidated financial statements are summarized in Note 2 to those financial statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022. Certain of those policies are considered to be particularly important to the presentation of the Company's financial results because they require management to make difficult, complex or subjective judgments, often as a result of matters that are inherently uncertain.

During the six months ended June 30, 2023, there were no material changes to matters discussed under the heading “Critical Accounting Policies and Estimates” in Part II, Item 7 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2022.

Recent Accounting Pronouncements

Information regarding recent accounting developments and their impact on our results can be found in Note 2, “Summary of Significant Accounting Policies and Estimates” in the audited consolidated financial statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2022 and in Note 2, “Significant Accounting Policies” in the notes to the condensed consolidated financial statements of this Quarterly Report on Form 10-Q.

 

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FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q (the “Quarterly Report”) contains forward-looking statements. We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). All statements other than statements of historical facts contained in this Quarterly Report may be forward-looking statements. In some cases, you can identify forward-looking statements by terms such as “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “could,” “intends,” “targets,” “projects,” “contemplates,” “believes,” “estimates,” “forecasts,” “predicts,” “potential” or “continue” or the negative of these terms or other similar expressions. Forward-looking statements contained in this Quarterly Report include, but are not limited to, statements regarding our future results of operations and financial position, industry and business trends, stock-based compensation, revenue recognition, business strategy, plans and market growth.

The forward-looking statements in this Quarterly Report and other such statements we publicly make from time-to-time are only predictions. We base these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our business, financial condition, and results of operations. Forward-looking statements involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements, including, but not limited to, the important factors discussed in Part I, Item 1A, “Risk Factors” of the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2022. The forward-looking statements in this Quarterly Report are based upon information available to us as of the date of this Quarterly, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain and investors are cautioned not to unduly rely upon these statements.

 

You should read this Quarterly Report and the risk factors discussed in Part I, Item 1A, “Risk Factors” of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022 with the understanding that our actual future results, levels of activity, performance and achievements may be materially different from what we expect. We qualify all of our forward-looking statements by these cautionary statements. These forward-looking statements speak only as of the date of this Quarterly Report. Except as required by applicable law, we do not plan to publicly update or revise any forward-looking statements contained in this Quarterly Report on Form 10-Q or any forward-looking statements we may publicly make from time-to-time, whether as a result of any new information, future events or otherwise.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

During the six months ended June 30, 2023, there were no material changes to the information contained in Part II, Item 7A of the Company’s Annual Report on Form 10-K for the year ended December 31, 2022.

 

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Table of Contents

 

Item 4. Controls and Procedures.

In connection with the preparation of this report, an evaluation was carried out under the supervision, and with the participation of, our management including our Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act of 1934, as amended (the “Act”)) as of June 30, 2023. Based upon the evaluation and although management has made significant progress in the design and implementation of IT and business process controls, our CEO and CFO concluded our disclosure controls and procedures are not effective as of such date solely due to material weaknesses in internal controls over financial reporting that were disclosed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022 and are discussed below.

As previously described in Part II, Item 9A of our Annual Report on Form 10-K for the fiscal year ended December 31, 2022, we concluded that our internal control over financial reporting was not effective solely due to the existence of the following material weaknesses described in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022:

1.
Management was able to complete the design and establish effective information technology general controls (ITGCs) for the majority of tested ITGCs; however, some ineffective ITGC controls existed at December 31, 2022. As a result, business process controls (automated and IT-dependent manual controls) that are dependent on the ineffective ITGCs, or that use data produced from systems impacted by the ineffective ITGCs were deemed ineffective; and
2.
Management did not have an adequate process in place to monitor and provide oversight over the completion of its testing and assessment of the design and operating effectiveness of internal control over financial reporting in a timely manner.

The material weaknesses did not result in any identified misstatements to the financial statements, and there were no changes to previously released financial results.

Remediation Plan for the Material Weakness

Management is committed to the remediation of the material weakness described above, as well as the continued improvement of the Company’s internal control over financial reporting. Management has implemented and continues to implement measures designed to ensure that control deficiencies contributing to the material weakness are remediated, such that these controls are designed, implemented and operating effectively.

Remediation efforts include but are not limited to, (a) hiring additional personnel with appropriate technical skill sets, (b) developing an execution plan and resources to test controls and providing timely feedback of any deficiencies noted to complete remediation (c) establishing a training program for the entire organization to support ongoing execution of internal controls and adherence to control activities and (d) actively monitoring corrective actions and providing status reporting to leadership on the progress.

Management will test and evaluate the implementation of internal controls and revised processes to ascertain whether they are designed and operating effectively to provide reasonable assurance that they will prevent or detect a material error in our financial statements.

We believe that once these actions have been completed, it will remediate the material weakness. The material weakness will not be considered remediated, however, until the applicable controls operate for a sufficient period of time and management has concluded, through testing, that controls are operating effectively.

Changes in Internal Control Over Financial Reporting

There have been no changes in the Company’s internal control over financial reporting during the six months ended June 30, 2023 which have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

In order to enhance the Company's internal control over financial reporting, management has (a) hired additional personnel with appropriate technical skill sets, (b) developed an execution plan and engaged resources to test controls and provide timely feedback of any deficiencies noted, (c) provided training to the organization to support ongoing execution of internal controls and adherence to control activities, and (d) implemented status reporting to leadership on the progress of the assessment of the design and operating effectiveness of internal control over financial reporting.

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Table of Contents

PART II—OTHER INFORMATION

Item 1. Legal Proceedings.

The Company reached settlements for certain class action lawsuits in February 2023 ending on going securities and derivatives suits. The settlements for these lawsuits have received preliminary court approval and are expected to receive final court approval in the third quarter of 2023. See Note 5, “Commitments and Contingent Liabilities” in the notes to the condensed consolidated financial statements for further details.

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.

Item 1a. Risk Factors.

In addition to the other information set forth in this Quarterly Report, you should carefully consider the factors discussed under Part I, Item 1A. “Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022. These factors could materially adversely affect our business, financial condition, liquidity, results of operations and capital position, and could cause our actual results to differ materially from our historical results or the results contemplated by any forward-looking statements contained in this Quarterly Report. During the six months ended June 30, 2023, there were no material changes to the information contained in Part I, Item 1A of the Company's Annual Report on Form 10-K for the year ended December 31, 2022.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

Not applicable.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Mine Safety Disclosures.

Not applicable.

Item 5. Other Information.

None.

24


 

Item 6. Exhibits.

 

 

 

 

Filed/

Exhibit

Number

 

Exhibit Description

 

Furnished

Herewith

 

 

 

 

 

31.1

 

Certification of Chief Executive Officer pursuant to Rule 13a-14(a)/15d-14(a).

 

*

31.2

 

Certification of Chief Financial Officer pursuant to Rule 13a-14(a)/15d-14(a).

 

*

32.1

 

Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350.

 

**

32.2

 

Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350.

 

**

101.INS

 

Inline XBRL Instance Document - the instance document does not appear in the Interactive Data file because its XBRL tags are embedded within the Inline XBRL document.

 

*

101.SCH

 

Inline XBRL Taxonomy Extension Schema Document.

 

*

101.CAL

 

Inline XBRL Taxonomy Extension Calculation Linkbase Document.

 

*

101.DEF

 

Inline XBRL Taxonomy Extension Definition Linkbase Document.

 

*

101.LAB

 

Inline XBRL Taxonomy Extension Label Linkbase Document.

 

*

101.PRE

 

Inline XBRL Taxonomy Extension Presentation Linkbase Document.

 

*

104

 

Cover Page Interactive Data File (as formatted as Inline XBRL and contained in Exhibit 101).

 

*

* Filed herewith.

** Furnished herewith.

25


 

 

 

SIGNATURES

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

 

Talkspace, Inc.

Date: August 2, 2023

By:

/s/ Jon Cohen

Jon Cohen

Chief Executive Officer

 

Date: August 2, 2023

By:

/s/ Jennifer Fulk

Jennifer Fulk

Chief Financial Officer

 

26