Talkspace, Inc. (NASDAQ: TALK), today reported fourth quarter and
2022 full year financial results.
|
|
Three Months |
|
|
Full Year |
|
Year Ended December 31, 2022 (Unaudited) |
|
Results |
|
|
Variance from Prior Year % |
|
|
Results |
|
|
Variance from Prior Year % |
|
(In thousands unless otherwise noted) |
|
|
|
|
|
|
|
|
|
|
|
|
Number of B2B eligible lives at year end (in millions) |
|
|
92 |
|
|
|
33% |
|
|
|
92 |
|
|
|
33% |
|
Number of
completed B2B sessions |
|
|
128.4 |
|
|
|
57% |
|
|
|
426.4 |
|
|
|
56% |
|
Number of
B2C active members at year end |
|
|
15.4 |
|
|
|
(35)% |
|
|
|
15.4 |
|
|
|
(35)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
revenue |
|
$ |
30,241 |
|
|
|
4% |
|
|
$ |
119,567 |
|
|
|
5% |
|
Gross
profit |
|
$ |
16,175 |
|
|
|
1% |
|
|
$ |
60,338 |
|
|
|
(10)% |
|
Gross margin
% |
|
|
53.5% |
|
|
(1.2) pts |
|
|
|
50.5% |
|
|
(8.2) pts |
|
Operating
expenses 2 |
|
$ |
37,206 |
|
|
|
(16)% |
|
|
$ |
143,496 |
|
|
|
(11)% |
|
Net
loss |
|
$ |
(18,307 |
) |
|
|
13% |
|
|
$ |
(79,672 |
) |
|
|
(27)% |
|
Adjusted
EBITDA 3 |
|
$ |
(8,869 |
) |
|
|
50% |
|
|
$ |
(58,671 |
) |
|
|
4% |
|
Cash and
cash equivalents at year end |
|
$ |
138,545 |
|
|
|
(30)% |
|
|
$ |
138,545 |
|
|
|
(30)% |
|
(1) Q4 2022 run-rate operating expenses exclude
a non-recurring goodwill impairment charge and other non-recurring
litigation expenses, partially offset by one-time savings related
to marketing expenses.
(2) Includes a non-recurring goodwill impairment
charge of $6.1 million and non-recurring litigation expenses of
$5.5 million.
(3) Adjusted EBITDA is a non-GAAP financial
measure. For a definition of the measure and a reconciliation to
the most directly comparable GAAP measure, see “Reconciliation of
Non-GAAP Results to GAAP Results.”
Dr. Jon Cohen, CEO of Talkspace, said, “We are
pleased with our fourth quarter and full year results showing
progress against our strategic priorities, as we continue to expand
the business-to-business (“B2B”) payor and direct-to-enterprise
(“DTE”) categories while further reducing our cost base and
realizing operational efficiencies through our integrated marketing
efforts. We are excited about the demand tailwinds we see in our
industry and the continued expansion of access to mental health
care. We have clearly defined our operational priorities to serve
this growing market and we have a clear operational focus on the
company’s path to profitability.”
Jennifer Fulk, CFO of Talkspace said, “Our fourth
quarter revenue was $30.2 million, with the growing payor and DTE
segments representing 64% of revenue in the quarter. We also made
important progress on reducing our cost structure and further
optimizing our media spend, positioning our company to support
strong growth with minimal investment going forward.”
Full Year 2022 Key Performance
Metrics
- Revenue grew 5% to $120 million, driven by a 65.5% growth in
B2B revenue, partially offset by a 26% consumer revenue decline.
B2B revenue performance was driven by growth in eligible lives,
payor session volume, and enterprise account growth. Consumer
revenue declined, as expected, due to our decision to continue to
optimize marketing spend.
- Gross Profit declined 10% to $60 million, and gross margin
declined to 50.5% primarily driven by revenue mix shift from
consumer to B2B categories and an increase in clinician
compensation.
- Net loss was $(80) million compared to $(63) million in the
prior year driven primarily by a reduction in financial income
related to the warrant revaluation, lower margins from the shift in
revenue mix and an increase in clinician compensation, a
non-recurring goodwill impairment charge and other non-recurring
litigation expenses, offset by lower operating expenses.
Fourth Quarter 2022 Key Performance
Metrics
- Revenue increased 4% over the prior-year period to $30 million,
driven by a 52% increase in B2B revenue year-over-year and 15%
increase sequentially, partially offset by a 13% sequential
consumer revenue decline.
- Gross profit remained relatively flat at $16 million, while
gross margin declined slightly to 53.5% from the same period a year
ago, driven by revenue mix shift.
- Operating expenses were $37 million, down 16% year-over-year,
driven by a reduction in our cost base, partially offset by a
non-recurring goodwill impairment charge of $6.1 million and other
non-recurring litigation expenses in the fourth quarter 2022.
- Net Loss was $(18) million, an improvement from $(21) million
in the fourth quarter of 2021, primarily driven by lower operating
expenses, offset by a non-recurring goodwill impairment charge and
other non-recurring litigation expenses.
Financial Outlook
The following guidance is based on current market
conditions and expectations and what we know today.
For the Fiscal Year 2023, we expect:
- Revenue to be in the range of $125 million to $135 million
- Adjusted EBITDA loss to be in the range of $(32) million to
$(28) million
Conference Call, Presentation Slides,
and Webcast Details
The conference call will be available via audio
webcast at investors.talkspace.com and can also accessed by dialing
(888) 330-2391 for U.S. participants, or +1 (240) 789-2702 for
international participants, and referencing participant code
2348878. A replay will be available shortly after the call’s
completion and remain available for approximately 90 days.
About Talkspace
Talkspace (Nasdaq: TALK) is a leading virtual
behavioral healthcare company committed to helping people lead
healthier, happier lives through access to high-quality mental
healthcare. At Talkspace, we believe that mental healthcare is core
to overall healthcare and should be available to everyone.
Talkspace pioneered the ability to text with a
licensed therapist from anywhere and now offers a comprehensive
suite of mental health services from self-guided products to
individual and couples therapy, in addition to psychiatric
treatment and medication management. With Talkspace’s core
psychotherapy offering, members are matched with one of thousands
of licensed providers across all 50 states and can choose from a
variety of subscription plans including live video, text or audio
chat sessions and/or asynchronous text messaging.
All care offered at Talkspace is delivered through
an easy-to-use, fully-encrypted web and mobile platform that meets
HIPAA, federal, and state regulatory requirements. Talkspace
covered approximately 92 million lives at December 31, 2022,
through our partnerships with employers, health plans, and paid
benefits programs.
For more information, visit www.talkspace.com.
Forward Looking Statements
This press release contains certain
forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995, as amended. All
statements contained in this press release that do not relate to
matters of historical fact should be considered forward-looking,
including statements regarding our financial condition, anticipated
financial performance, achieving profitability, business strategy
and plans, market opportunity and expansion and objectives of our
management for future operations. These forward-looking statements
generally are identified by the words “anticipate,” “believe,”
“contemplate,” “continue,” “could,” “estimate,” “expect,”
“forecast”, “future”, “intend,” “may,” “might”, “opportunity”,
“plan,” “possible”, “potential,” “predict,” “project,” “should,”
“strategy”, “strive”, “target,” “will,” or “would”, the negative of
these words or other similar terms or expressions. The absence of
these words does not mean that a statement is not forward-looking.
Forward-looking statements are predictions, projections and other
statements about future events that are based on current
expectations and assumptions and, as a result, are subject to risks
and uncertainties. Many important factors could cause actual future
events to differ materially from the forward-looking statements in
this press release, including but not limited to factors and the
other risks and uncertainties described under the caption “Risk
Factors” in our Annual Report on Form 10-K for the year ended
December 31, 2021 filed with the Securities and Exchange Commission
(“SEC”) on February 25, 2022, and our other documents filed from
time to time with the SEC. These filings identify and address other
important risks and uncertainties that could cause actual events
and results to differ materially from those contained in the
forward-looking statements. Forward-looking statements speak only
as of the date they are made. Readers are cautioned not to put
undue reliance on forward-looking statements, and we assume no
obligation and do not intend to update or revise these
forward-looking statements, whether as a result of new information,
future events, or otherwise unless required to do so under
applicable law. We do not give any assurance that we will achieve
our expectations.
Contacts
For Investors: Sloane & Co. Neal Nagarajan
(301) 273-5662 nnagarajan@sloanepr.com
For Media: SKDK John Kim (310) 997-5963
jkim@skdknick.com
Talkspace, Inc.
Consolidated Statements of Operations
|
|
For the Three Months Ended December
31, |
|
|
|
|
|
For the Year Ended December
31, |
|
|
|
|
|
|
2022 |
|
|
2021 |
|
|
% Change |
|
|
2022 |
|
|
2021 |
|
|
% Change |
|
(in
thousands, except percentages, share and per share data) |
|
(unaudited) |
|
|
(unaudited) |
|
|
|
|
|
(unaudited) |
|
|
|
|
|
|
|
B2B revenue |
|
$ |
19,280 |
|
|
$ |
12,701 |
|
|
|
51.8 |
|
|
$ |
64,409 |
|
|
$ |
38,914 |
|
|
|
65.5 |
|
B2C
revenue |
|
|
10,961 |
|
|
|
16,471 |
|
|
|
(33.5 |
) |
|
|
55,158 |
|
|
|
74,757 |
|
|
|
(26.2 |
) |
Total
revenue |
|
|
30,241 |
|
|
|
29,172 |
|
|
|
3.7 |
|
|
|
119,567 |
|
|
|
113,671 |
|
|
|
5.2 |
|
Cost of
revenues |
|
|
14,066 |
|
|
|
13,201 |
|
|
|
6.6 |
|
|
|
59,229 |
|
|
|
46,899 |
|
|
|
26.3 |
|
Gross
profit |
|
|
16,175 |
|
|
|
15,971 |
|
|
|
1.3 |
|
|
|
60,338 |
|
|
|
66,772 |
|
|
|
(9.6 |
) |
Operating
expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and
development, net |
|
|
4,866 |
|
|
|
3,896 |
|
|
|
24.9 |
|
|
|
21,659 |
|
|
|
15,919 |
|
|
|
36.1 |
|
Clinical
operations, net |
|
|
277 |
|
|
|
3,479 |
|
|
|
(92.0 |
) |
|
|
6,591 |
|
|
|
9,365 |
|
|
|
(29.6 |
) |
Sales and
marketing |
|
|
14,128 |
|
|
|
25,516 |
|
|
|
(44.6 |
) |
|
|
72,842 |
|
|
|
100,641 |
|
|
|
(27.6 |
) |
General and
administrative |
|
|
11,801 |
|
|
|
11,658 |
|
|
|
1.2 |
|
|
|
36,270 |
|
|
|
34,770 |
|
|
|
4.3 |
|
Impairment
of goodwill |
|
|
6,134 |
|
|
|
— |
|
|
|
100.0 |
|
|
|
6,134 |
|
|
|
— |
|
|
|
100.0 |
|
Total
operating expenses |
|
|
37,206 |
|
|
|
44,549 |
|
|
|
(16.5 |
) |
|
|
143,496 |
|
|
|
160,695 |
|
|
|
(10.7 |
) |
Operating
loss |
|
|
(21,031 |
) |
|
|
(28,578 |
) |
|
|
26.4 |
|
|
|
(83,158 |
) |
|
|
(93,923 |
) |
|
|
11.5 |
|
Financial
(income), net |
|
|
(2,851 |
) |
|
|
(7,528 |
) |
|
|
(62.1 |
) |
|
|
(3,740 |
) |
|
|
(31,228 |
) |
|
|
(88.0 |
) |
Loss before
taxes on income |
|
|
(18,180 |
) |
|
|
(21,050 |
) |
|
|
13.6 |
|
|
|
(79,418 |
) |
|
|
(62,695 |
) |
|
|
(26.7 |
) |
Taxes on
income |
|
|
127 |
|
|
|
18 |
|
|
|
605.6 |
|
|
|
254 |
|
|
|
47 |
|
|
|
440.4 |
|
Net
loss |
|
$ |
(18,307 |
) |
|
$ |
(21,068 |
) |
|
|
13.1 |
|
|
$ |
(79,672 |
) |
|
$ |
(62,742 |
) |
|
|
(27.0 |
) |
Net loss per
share: |
|
|
|
|
|
|
|
|
|
|
|
Basic and
Diluted |
|
$ |
(0.11 |
) |
|
$ |
(0.14 |
) |
|
|
21.4 |
|
|
$ |
(0.51 |
) |
|
$ |
(0.72 |
) |
|
|
29.2 |
|
Weighted average number of common shares: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and
Diluted |
|
|
159,343,311 |
|
|
|
152,467,361 |
|
|
|
|
|
|
156,885,256 |
|
|
|
86,775,948 |
|
|
|
|
Talkspace, Inc.
Consolidated Balance Sheets
|
|
December 31, |
|
|
|
2022 |
|
|
2021 |
|
(in
thousands) |
|
(unaudited) |
|
|
|
|
ASSETS |
|
|
|
|
|
|
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 |
|
|
— |
|
|
|
6,134 |
|
Other
assets |
|
|
491 |
|
|
|
82 |
|
Total assets |
|
$ |
156,254 |
|
|
$ |
223,606 |
|
LIABILITIES
AND STOCKHOLDERS’ EQUITY |
|
|
|
|
|
|
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 |
|
|
|
|
|
|
STOCKHOLDERS’ EQUITY: |
|
|
|
|
|
|
Common
stock |
|
|
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 |
|
Talkspace, Inc.
Consolidated Statements of Cash Flows
|
|
For the Year Ended December 31, |
|
|
|
2022 |
|
|
2021 |
|
|
2020 |
|
(in
thousands) |
|
(unaudited) |
|
|
|
|
|
|
|
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 |
|
|
— |
|
|
|
175 |
|
|
|
— |
|
Stock-based
compensation |
|
|
12,116 |
|
|
|
27,405 |
|
|
|
2,977 |
|
Warrant
issuance costs and change in fair value |
|
|
(3,131 |
) |
|
|
(31,784 |
) |
|
|
— |
|
Impairment
of goodwill |
|
|
6,134 |
|
|
|
— |
|
|
|
— |
|
(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 |
|
|
|
— |
|
|
|
— |
|
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 |
|
|
|
— |
|
|
|
— |
|
Acquisition
of business |
|
|
— |
|
|
|
— |
|
|
|
(10,685 |
) |
Purchase of
an intangible asset |
|
|
— |
|
|
|
— |
|
|
|
(939 |
) |
Proceeds
from restricted long-term bank deposit |
|
|
— |
|
|
|
— |
|
|
|
447 |
|
Net cash
used in investing activities |
|
|
(317 |
) |
|
|
(663 |
) |
|
|
(11,303 |
) |
Cash
flows from financing activities: |
|
|
|
|
|
|
|
|
|
(Payments)
proceeds from reverse capitalization, net of transaction costs |
|
|
(645 |
) |
|
|
249,334 |
|
|
|
— |
|
Proceeds
from exercise of stock options |
|
|
3,181 |
|
|
|
2,098 |
|
|
|
94 |
|
Payments for
employee taxes withheld related to vested stock-based awards |
|
|
(853 |
) |
|
|
— |
|
|
|
— |
|
Proceeds
from borrowings |
|
|
— |
|
|
|
6,000 |
|
|
|
— |
|
Repayment of
borrowings |
|
|
— |
|
|
|
(6,000 |
) |
|
|
— |
|
Payment of
debt issuance cost |
|
|
— |
|
|
|
(50 |
) |
|
|
— |
|
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 |
|
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 do not
provide a forward-looking reconciliation Adjusted EBITDA guidance
as the amount and significance of the reconciling items required to
develop meaningful comparable GAAP financial measures cannot be
estimated at this time without unreasonable efforts. These
reconciling items could be meaningful.
Adjusted EBITDA
We calculate adjusted EBITDA as net loss adjusted
to exclude (i) interest and other expenses (income), net, (ii) tax
benefit and expense, (iii) depreciation and amortization, (iv)
stock-based compensation expense, (v) goodwill impairment charge
and (vi) certain non-recurring expenses that do not represent our
on-going operations, where applicable.
Talkspace, Inc.
Reconciliation of Non-GAAP Results to GAAP
Results
Unaudited
|
|
For the Three Months Ended December
31, |
|
|
For the Year Ended December
31, |
|
|
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
(in
thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss |
|
$ |
(18,307 |
) |
|
$ |
(21,068 |
) |
|
$ |
(79,672 |
) |
|
$ |
(62,742 |
) |
Add: |
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation
and amortization |
|
|
351 |
|
|
|
515 |
|
|
|
1,357 |
|
|
|
1,973 |
|
Financial
(income), net (1) |
|
|
(2,851 |
) |
|
|
(7,528 |
) |
|
|
(3,740 |
) |
|
|
(31,228 |
) |
Taxes on
income |
|
|
127 |
|
|
|
18 |
|
|
|
254 |
|
|
|
47 |
|
Stock-based
compensation |
|
|
2,730 |
|
|
|
6,821 |
|
|
|
12,116 |
|
|
|
27,405 |
|
Impairment
of goodwill |
|
|
6,134 |
|
|
|
— |
|
|
|
6,134 |
|
|
|
— |
|
Non-recurring expenses (2) |
|
|
2,947 |
|
|
|
3,677 |
|
|
|
4,880 |
|
|
|
3,677 |
|
Adjusted
EBITDA |
|
$ |
(8,869 |
) |
|
$ |
(17,565 |
) |
|
$ |
(58,671 |
) |
|
$ |
(60,868 |
) |
1) For the
three months ended December 31, 2022, financial income, net,
primarily consisted of $2.7 million in gains resulting from the
revaluation of warrant liabilities. For the year ended December 31,
2022, financial income, net, primarily consisted of $3.1 million in
gains resulting from the revaluation of warrant liabilities. |
For the
three months ended December 31, 2021, financial income, net
primarily consisted of $7.9 million in gains resulting from the
revaluation of warrant liabilities. For the year ended December 31,
2021, financial income, net primarily consisted of $36.0 million in
gains resulting from the revaluation of warrant liabilities,
partially offset by $4.2 million in warrant issuance costs in
connection with the closing of the Business Combination. |
2) For the
three months ended December 31, 2022, non-recurring expenses
primarily consisted of a $5.5 million accrual for estimated
litigation expenses, partially offset by one-time savings related
to marketing expenses. For the year ended December 31, 2022,
non-recurring expenses primarily consisted of a $5.5 million
accrual for estimated litigation expenses; such accrual represents
our best estimate of the total cost the Company may incur for
settling the outstanding shareholder litigation claims, including
federal, state and derivative actions, pursuant to binding
agreements reached with the relevant parties, net of insurance
proceeds.For the three months and year ended December 31, 2021,
non-recurring expenses primarily consisted of severance costs
related to the separation of Oren Frank and Roni Frank, co-founders
and former executives of the Company, in November 2021. |
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