Talkspace, Inc. (TALK) 2021年年度報告「NASDAQ」.pdf

1、Table of Contents UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington,D.C.20549 FORM 10-K (Mark One)ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31,2021OR TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIE

2、S EXCHANGE ACT OF 1934For the transition period from to Commission File Number 001-39314 TALKSPACE,INC.(Exact name of Registrant as specified in its Charter)Delaware84-4636604(State or other jurisdiction ofincorporation or organization)(I.R.S.EmployerIdentification No.)Not applicableNot applicable(A

3、ddress of principal executive offices)(Zip Code)Registrants telephone number,including area code:(212)284-7206 Securities registered pursuant to Section 12(b)of the Act:Title of each class TradingSymbol(s)Name of each exchange on which registeredCommon stock,par value$0.0001 per share TALK The NASDA

4、Q Stock Market LLCWarrants to purchase common stock TALKW The NASDAQ Stock Market LLCSecurities registered pursuant to Section 12(g)of the Act:NoneIndicate by check mark if the Registrant is a well-known seasoned issuer,as defined in Rule 405 of the Securities Act.YES NO Indicate by check mark if th

5、e Registrant is not required to file reports pursuant to Section 13 or 15(d)of the Act.YES No 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 pe

6、riod 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 Regulatio

7、n 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

8、 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

9、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 has fi

10、led a report on and attestation to its managements assessment of the effectiveness of its internal control over financial reporting under Section 404(b)of the Sarbanes-Oxley Act(15 U.S.C.7262(b)by the registered public accounting firm that prepared or issued its audit report.Indicate by check mark w

11、hether the Registrant is a shell company(as defined in Rule 12b-2 of the Act).YES NO The aggregate market value of the voting common stock held by non-affiliates as of the last business day of the registrants most recently completed second fiscal quarter was$789.8 million based on the per share clos

12、ing price of the registrants common stock on June 30,2021 of$8.31.The number of shares of common stock outstanding as of February 21,2022 was 153,973,930.DOCUMENTS INCORPORATED BY REFERENCENone.Auditor Firm Id:1281Auditor Name:Kost Forer Gabbay&Kasierer,a member of Ernst&Young GlobalAuditor Location

13、:Tel-Aviv,Israel Table of ContentsTable of Contents PagePART I Item 1.Business5Item 1A.Risk Factors19Item 1B.Unresolved Staff Comments55Item 2.Properties55Item 3.Legal Proceedings55Item 4.Mine Safety Disclosures55 PART II Item 5.Market for Registrants Common Equity,Related Stockholder Matters and Is

14、suer Purchases of Equity Securities56Item 6.Reserved58Item 7.Managements Discussion and Analysis of Financial Condition and Results of Operations59Item 7A.Quantitative and Qualitative Disclosures About Market Risk70Item 8.Financial Statements and Supplementary Data71Item 9.Changes in and Disagreemen

15、ts with Accountants on Accounting and Financial Disclosure99Item 9A.Controls and Procedures99Item 9B.Other Information101Item 9C.Disclosure Regarding Foreign Jurisdictions that Prevent Inspections101 PART III Item 10.Directors,Executive Officers and Corporate Governance102Item 11.Executive Compensat

16、ion106Item 12.Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters121Item 13.Certain Relationships and Related Transactions,and Director Independence123Item 14.Principal Accounting Fees and Services124 PART IV Item 15.Exhibits and Financial Statement Schedul

17、es126Item 16.Form 10-K Summary126 Exhibit Index127Signatures129 iTable of Contents FORWARD-LOOKING STATEMENTS This Annual Report on Form 10-K contains forward-looking statements.We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements conta

18、ined 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 Annual Report on Form 10-K may be forward-looking statemen

19、ts.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 simila

20、r expressions.Forward-looking statements contained in this Annual Report on Form 10-K 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 mark

21、et growth.The forward-looking statements in this Annual Report on Form 10-K are only predictions.We have based 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

22、 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

23、-looking statements,including,but not limited to,the important factors discussed in Part I,Item 1A,“Risk Factors”in this Annual Report on Form 10-K for the fiscal year ended December 31,2021.The forward-looking statements in this Annual Report on Form 10-K are based upon information available to us

24、as of the date of this Annual Report on Form 10-K,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 pote

25、ntially available relevant information.These statements are inherently uncertain and investors are cautioned not to unduly rely upon these statements.You should read this Annual Report on Form 10-K and the documents that we reference in this Annual Report on Form 10-K and have filed as exhibits to t

26、his Annual Report on Form 10-K 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

27、only as of the date of this Annual Report on Form 10-K.Except as required by applicable law,we do not plan to publicly update or revise any forward-looking statements contained in this Annual Report on Form 10-K,whether as a result of any new information,future events or otherwise.2Table of Contents

28、 SUMMARY RISK FACTORS Our business is subject to numerous risks and uncertainties,including those described in Part I,Item 1A.“Risk Factors”in this Annual Report on Form 10-K.You should carefully consider the following risk factors together with all other information included in this Form 10-K and o

29、ur other publicly filed documents when investing in our common stock.The principal risks and uncertainties affecting our business include the following:We have a history of losses,which we expect to continue,and we may never achieve or sustain profitability.Our business and the markets we operate in

30、 are new and rapidly evolving which makes it difficult to evaluate our future prospects and the risks and challenges we may encounter.We may not grow at the rates we historically have achieved or at all,even if our key metrics may indicate growth,which could have a material adverse effect on the mar

31、ket price of our common stock.The virtual behavioral health market is immature and volatile,and if it does not develop,if it develops more slowly than we expect,if it encounters negative publicity or if our services are not competitive,the growth of our business will be harmed.The outbreak of the no

32、vel coronavirus(COVID-19)and its impact on business and economic conditions could adversely affect our business,results of operations and financial condition,and the extent and duration of those effects will be uncertain.We operate in a competitive industry,and if we are not able to compete effectiv

33、ely,our business,financial condition and results of operations will be harmed.If growth in the number of clients and members or providers on our platform decreases,or the number of products or services that we are able to sell to our clients and members decreases,due to legal,economic or business de

34、velopments,our business,financial condition and results of operations will be harmed.We may be unsuccessful in achieving broad market education and changing consumer purchasing habits.Our growth depends in part on the success of our strategic relationships with third parties that we provide services

35、 to.Our virtual behavioral healthcare strategies depend on our ability to maintain and expand our network of therapists,psychiatrists and other providers.If we are unable to do so,our future growth would be limited and our business,financial condition and results of operations would be harmed.Develo

36、pments affecting spending by the healthcare industry could adversely affect our business.Our business could be adversely affected by legal challenges to our business model or by actions restricting our ability to provide the full range of our services in certain jurisdictions.We are dependent on our

37、 relationships with affiliated professional entities,which we do not own,to provide physician and other professional services,and our business,financial condition and our ability to operate in certain jurisdictions would be adversely affected if those relationships were disrupted or if our arrangeme

38、nts with our providers or clients are found to violate state laws prohibiting the corporate practice of medicine or fee splitting.The impact on us of recent healthcare legislation and other changes in the healthcare industry and in healthcare spending is currently unknown,but may adversely affect ou

39、r business,financial condition and results of operations.Changes in consumer sentiment or laws,rules or regulations regarding the use of cookies and other tracking technologies and other privacy matters could have a material adverse effect on our ability to generate net revenues and could adversely

40、affect our ability to collect proprietary data on consumer behavior.3Table of ContentsOur use and disclosure of personal information,including PHI,personal data,and other health information,is subject to state,federal or other privacy and security regulations,and our failure to comply with those reg

41、ulations or to adequately secure the information we hold could result in significant liability or reputational harm and,in turn,a material adverse effect on our client base and member bases and revenue.Any failure to protect,enforce or defend our intellectual property rights could impair our ability

42、 to protect our technology and our brand.Legal proceedings could cause us to incur unforeseen expenses and could occupy a significant amount of our managements time and attention.4Table of Contents PART IItem 1.BUSINESSOur Mission Our mission is to democratize access to high quality behavioral healt

43、hcare,so that those in need live a happier and healthier life.Overview Talkspace,Inc.(together with its consolidated subsidiaries,the“Company”,“we,“our”,“us”or“Talkspace”)is a leading behavioral healthcare company enabled by a purpose-built technology platform.Talkspace provides individuals and lice

44、nsed therapists,psychologists and psychiatrists with an online platform for one-on-one therapy delivered via messaging,audio and video.Talkspace offers convenient and affordable access to a fully-credentialed network of highly qualified providers.We are a leading virtual behavioral health company an

45、d,since Talkspaces founding in 2012,we have connected millions of patients,who we refer to as our members,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,u

46、nmet and growing demand for mental health services of our members,serving our business-to-consumer(“B2C”)channel,comprised of individual consumers who subscribe directly to our platform,and our business-to-business(“B2B”)channel,comprised of large enterprise clients such as Google and Expedia and la

47、rge health plans and employee assistance programs(collectively,“health plan clients”)such as Aetna,Cigna,Premera and Optum(collectively,our“clients”),who offer their employees and insured members access to our platform while their employer is under an active contract with Talkspace,or at in-network

48、reimbursement rates,where applicable.For the year ended December 31,2021,approximately 280,000 members were registered on our platform,as compared to approximately 200,000 members for the year ended December 31,2020.As of December 31,2021,we had approximately 56,000 active members receiving care thr

49、ough our B2C and B2B channels,including approximately 24,000 B2C active members,and approximately 69 million B2B eligible lives.We consider members“active”(i)in the case of our B2C members,commencing on the date such member initiates contact with a provider on our platform until the term of their mo

50、nthly,quarterly or bi-annual subscription plan expires,unless terminated early,and(ii)in the case of our B2B members,if such members have engaged on our platform during the preceding 25 days,such as sending a text,video or audio message to,or participating in a video call with,a provider,completing

51、a satisfaction or progress report survey or signing up for our platform.While a growth in active members typically highlights strong engagement with our members,not all active members are associated with revenue in that particular period.We consider B2B lives“eligible”if such persons are eligible to

52、 receive treatment on the Talkspace platform,in the case of our enterprise clients,while their employer is under an active contract with Talkspace,or,in the case of health plan clients,at an agreed upon reimbursement rate through insurance under an employee assistance program or other network behavi

53、oral 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

54、may cause this amount to reflect a higher number of members than we actually serve.For the year ended December 31,2021,our clinicians completed 273,700 B2B sessions related to members covered under our health plan clients,as compared to 114,600 completed B2B sessions for the year ended December 31,2

55、020.The behavioral health market has traditionally been underserved for a number of reasons,including as a result of inadequate access,a limited universe of qualified providers,high cost and social stigma.We believe virtual is the ideal modality for mental health treatment because it removes or redu

56、ces these burdens associated with traditional face-to-face mental health services by improving convenience through 24/7 access to our platform,providing more accessible entry level price points,and reducing associated stigmas by promoting transparency,increasing ease of access and preserving privacy

57、.Our platform connects consumers in need,including many of whom have never had an opportunity to benefit from high-quality behavioral healthcare,with experienced providers across all 50 U.S.states.Through our psychotherapy offerings,our licensed therapists and counselors treat mental health conditio

58、ns in over 21 specializations,such as depression,anxiety,trauma and other human challenges.Through our psychiatry offerings,our board-certified psychiatrists and prescription-eligible nurse practitioners treat a higher acuity patient demographic,including those who may have pharmacological needs.Lik

59、e the traditional face-to-face models,Talkspace providers are able to treat a wide range of mental health conditions,such as schizophrenia-spectrum disorders,bipolar disorders and depression,including through 5Table of Contentsprescription medication and management from psychiatrists,up and until th

60、e point that the provider,in their discretion,feels it prudent to refer the member to a face-to-face psychiatrist to address potential needs for“controlled substances”under the federal Controlled Substances Act,which generally prohibits the prescribing and dispensing of controlled substances via tel

61、ehealth without performing an in-person examination.While optimizing consumers access to care,we believe our platform also provides benefits to providers through expanded reach,steady access to member leads,reduced administrative burdens,more efficient time utilization and data-driven insights.These

62、 features,together with continuous training and professional growth opportunities we offer,empower providers to deliver what we believe will enable an enhanced care journey,higher member lifetime engagement,meaningful outcomes and greater margins when compared to face-to-face treatment.The current s

63、tate of behavioral health is characterized by the following key factors:Growing incidence:There are rapidly rising occurrences of behavioral health conditions across the entire global population.Limited access due to factors such as stigma,physical hurdles and prohibitive cost:According to the Natio

64、nal Alliance on Mental Illness,only approximately 46%of U.S.adults with a mental illness received treatment in 2020.Inability to match demand for mental health services with therapists supply:Patients face difficulties accessing providers,despite there being approximately 600,000 licensed providers

65、in the United States.Poor clinical outcomes and lack of care continuity.Enormous societal cost.Elevated healthcare system spend.We believe virtual is the ideal modality for mental health treatment,and our platform is purpose-built to address the traditional constraints through a full range of virtua

66、l services exclusively focused on behavioral health.Our offering is highly differentiated,and we believe we are well-positioned to address the unmet needs in behavioral health,delivering significantly enhanced access at attractive price points and delivering meaningful clinical outcomes.We believe t

67、here is significant total global addressable market opportunity for our services,driven in part by the access we believe our model provides to unlock unaddressed patient populations.In the United States alone,it is estimated that one in every five Americans suffer from mental illness every year,spre

68、ad across all ethnic,socio-economic and age ranges,and that less than half of those in need receive care.This mental health pandemic has only been exacerbated by the COVID-19 pandemic,with a 2020 study finding that the prevalence of depression symptoms grew three-fold since the COVID-19 pandemic beg

69、an.We believe this market opportunity exists due in part to structural limitations in the traditional behavioral healthcare model such as slow adoption of technology to treat and monitor patients,reactive-to-care delivery that can lead to inconsistent outcomes,difficulties quantifying outcomes,and l

70、ack of reimbursement and insurance coverage leading to misaligned incentives.To overcome these hurdles and achieve our mission of providing more people with convenient access to quality,affordable behavioral healthcare,we built a technology platform with the belief that the right solution can make c

71、are more personalized and effective.Our position as innovators in behavioral health is demonstrated by a series of major achievements since our formation in 2012:A leading consumer brand in behavioral healthcare:Our brand awareness continues to be instrumental in driving patient penetration and enga

72、gement.Addressing a wide spectrum of care:We offer virtual psychotherapy and psychiatry services at scale across B2C and B2B channels.Cost-effective solution:We offer affordable care with a transparent pricing model and a clear commitment to high-quality service,providing behavioral care access to u

73、nderserved populations.Integrated technology platform:Our proprietary matching algorithm and machine-learning tools provide real-time engagement insights,inform treatment and track clinical progress.Machine-learning powered clinicians sourcing and credentialing:This process has allowed us to build a

74、 national network of high-quality licensed providers.6Table of ContentsNo overhead and administrative costs for clinicians:Our platform enables providers to spend less time in administrative tasks associated with scheduling,invoicing and taking notes,vis-a-vis private practices,and spend more time t

75、reating patients.Privacy and stigma-free access:Talkspace data is fully encrypted,consistent with HIPAA and other state regulatory requirements and assessed annually by external privacy and security advisors.Collaborations with mental health champions:Our collaborations with Michael Phelps draw awar

76、eness and seek to humanize the day-to-day battle with mental illness.Our platform is purpose-built to personalize treatment and drive outcomes with technology encompassing every step of our members treatment journey,which we believe is critical to drive care continuity and impact.Beginning with our

77、secure mobile app,members are able to seamlessly provide information so that we can assess their condition and incorporate their preferences.We then leverage our proprietary algorithm to match members and providers,allowing for an optimized start of the relationship,which we believe is a key factor

78、in delivering care continuity.Communication then occurs via live video and private messaging in a fully-encrypted virtual chat room.If deemed necessary,providers can decide to administer standardized tests to diagnose the disease and identify the best treatment plan.Throughout these patient interact

79、ions,our providers have access to our exclusive care delivery platform built for improving outcomes,featuring provider tools for case management,enhanced diagnosis,treatment planning,stress and resilience programming,risk mitigation,and clinical progress tracking.Providing multilayer insights throug

80、h our data dashboards,providers can make informed,outcome-driven decisions to enhance the quality of care.In addition,since inception,we have expanded to support medication management and a variety of behavioral conditions for adults,adolescents,and couples.We believe that,through our platform,our p

81、roviders are empowered with unique insights and capabilities that enable meaningful clinical outcomes.Additionally,our technology analyzes and manages our scaled provider network through a host of outcomes and satisfaction-focused metrics,providing an opportunity to chart both the patient and provid

82、er simultaneously in order to drive meaningful outcomes.Our platform capabilities also enable and continuously enhance evidence of care,care continuity,outcomes metrics and data-based learnings,built into a robust electronic health record(“EHR”)network.The depth of capabilities of this EHR network a

83、re only possible in part because of our virtual delivery model,whereas we believe much of this would be unachievable in traditional behavioral care settings.We have a vast nationwide network of fully-credentialed providers,consisting of both psychotherapists and psychiatrists,across all 50 U.S.state

84、s.To ensure a high degree of success with our initial provider and member matching,we have built a diverse network inclusive of over 21 clinical specialties,over 30 languages spoken,approximately 30%people of color,and approximately 20%at or under the age of 35.Our network is sustained and enhanced

85、by an attractive value proposition to our providers,including flexibility,convenience,efficiency,professional development opportunities and income.We designed our provider network to be scalable and to leverage a hybrid model of both employee providers and independently contracted providers to suppo

86、rt multiple growth scenarios.We believe another differentiating feature of our value proposition is that it aligns the incentives of all stakeholders across members,providers,plans and employers by simultaneously delivering(1)meaningful clinical outcomes and improved access to care;(2)affordable tre

87、atment with a platform designed to elevate member experience and engagement;(3)expanded reach to patients,providing lower administrative costs and flexibility to providers and(4)lower overall public healthcare costs through improved chronic-disease and co-morbidity incidence.Our revenues were$113.7

88、million and$76.2 million for the years ended December 31,2021 and 2020,respectively,representing a period-over-period increase of 49.2%.In recent periods,we have seen an improvement in our utilization rates for our services and expect this trend to continue post-COVID-19.We incurred net losses of$62

89、.7 million and$22.4 million for the year ended December 31,2021 and 2020,respectively,primarily due to our investments in growth initiatives.Our Offerings Through our platform,we provide psychotherapy and psychiatry services to individuals,employers and health plans through both B2C and B2B channels

90、.In psychotherapy,or“talk therapy”,members work with a licensed therapist or counselor to treat specific mental health conditions like depression or anxiety,trauma and other human challenges,including by developing positive thinking and coping skills.In psychiatry,members receive personalized,expert

91、 care from a prescriber who specializes in mental healthcare and prescription management.7Table of ContentsBy seeking to eliminate barriers in accessing and utilizing mental healthcare and offering providers technology-enabled tools to provide high-quality clinical care with a data-driven approach t

92、o treatment,we offer our members a robust ecosystem for end-to-end behavioral healthcare.Psychotherapy:We offer text,audio and video-based psychotherapy from licensed therapists directly to consumers in the B2C channel.Individual subscribers sign up for individual plans(i.e.,Unlimited Messaging Ther

93、apy Plus,Unlimited Messaging Therapy Premium,Unlimited Messaging Therapy Ultimate,Talkspace Couples Therapy and Talkspace Teens Therapy)inclusive of text,video and audio messaging.In the B2B channel,psychotherapy services are offered through both employers and health plans.Through Talkspace for Busi

94、ness,employees access our platform services on a benefit plan paid by the employer.Through Talkspace Employee Assistance Program(“EAP”)and Talkspace Behavioral Health plan(“BH”),we contract with a number of U.S.health plans to provide online therapy to employees through EAP and behavioral health ben

95、efits.These programs provide support and resources to enhance employees well-being and productivity,such as mental health,financial planning and work/life balance.Talkspace is also an accepted provider of behavioral health services by several large healthcare payors,including Aetna,Cigna,Premera and

96、 Optum.Psychiatry:Services are provided both to B2C consumers via the Talkspace platform,and through B2B health plans and employers.In both the B2C and B2B channels,typical packages include one initial video consultation,with follow-up video appointments as needed.Like the traditional face-to-face m

97、odel,Talkspace providers can prescribe medication they deem necessary up and until the point,that in the providers discretion,the member requires a face-to-face provider for potential need of those prescriptions labeled a“controlled substance”under the federal Controlled Substances Act.Our psychiatr

98、y services are comprised of board-certified psychiatrists,as well as prescription-eligible nurse practitioners who may supplement the psychiatrist in follow-up visits and act in a medication management capacity.Our Customers In pursuit of our mission to expand access to all individuals in need of be

99、havioral services,we strive to deliver effective care to a broad range of customers through both our B2C and B2B channels.Within our B2C channel,we serve a diverse customer base,with our members coming from all socioeconomic backgrounds,ages,genders,ethnicities,geographies and income level.Further,w

100、ith both psychotherapy and psychiatry professionals,along with a comprehensive suite of self-help tools,our platform is designed to address the needs of members across a broad range of acuities.Our provider base has a diverse range of clinical expertise,with over 21 specializations,and is able to pr

101、ovide high quality care to all behavioral conditions.As of December 31,2021,we had approximately 24,000 B2C active members located across all 50 U.S.states and select international markets.In our B2B channel,we serve our health plan clients and enterprise clients and their respective employees and m

102、embers through multiple offerings.Health Plan Clients:Through our EAP offering,we contract with major payor clients who are contracted with employers to deliver care.Through this solution,we are able to provide therapy and psychiatry services for our clients employees,who then pay a flat rate per se

103、ssion or interaction,of which we receive a portion of the fee.Through our BH offering,our members receive care directly covered through their individual health plan where our providers are considered in-network.Our members pay a flat co-pay per session or interaction,of which we receive a portion of

104、 the fee.A representative sample of our health plan clients include Aetna,Cigna,Optum and Premera.Enterprise Clients:Through our direct-to-employer offering,we contract directly with employers to provide their employees unlimited asynchronous care primarily on a per-member-per-month(“PMPM”)basis.A r

105、epresentative sample of our enterprise clients include Accenture,Blackstone,Expedia and Google.In addition,we are increasingly chosen as a preferred vendor for higher education and government clients.Through our contracts with colleges,universities and Greek letter organizations,we provide mental he

106、alth solutions to students and student athletes across the United States.We additionally hold a number of employer benefits and EAP relationships with municipalities across the United States.As of December 31,2021,we had approximately 69 million eligible lives within our B2B channel.Technology Platf

107、orm We believe that virtual therapy offers an attractive opportunity to improve behavioral health through data science and machine learning.Through digital phenotyping and predictive modeling,the data imprint left by interactions on our platform opens a new,8Table of Contentsquantitative viewpoint i

108、nto the behavioral condition of our members.By securely leveraging our unique dataset to identify patterns,which is augmented by advanced,data-driven tools to personalize care,we believe we are able to optimize clinical outcomes.We have designed our technology platform and information practices to a

109、chieve and maintain compliance with HIPAA and other legal requirements regarding the confidentiality of patient information.We maintain a written privacy and information security management program,led by designated subject matter experts,in order to(i)limit how we will use and disclose the protecte

110、d health information of the members who utilize our technology platform or therapeutic services,(ii)implement reasonable administrative,physical,and technical safeguards to protect such information from misuse,and(iii)assist our customers with certain duties such as access to information under the p

111、rivacy standards,among other program elements.We require our agents and subcontractors who have access to such information to enter into written agreements to meet the same standards for security and privacy.We obtain third-party examinations of our controls relating to security and data privacy.Cer

112、tain examinations are conducted under Statement on Standards for Attestation Engagements,or SSAE,No.16(Reporting on Controls at a Service Organization).In particular,we regularly obtain a Type II Service Organization Control SOC 2 report(Reporting on Controls at a Service Organization relevant to se

113、curity,availability and privacy),most recently in August 2021,which noted we had effective controls over our platform.We also retain outside consultants to regularly assess our compliance with the HIPAA Security Rule,including performing assessments of our risks and vulnerabilities.The following tab

114、le depicts the technology-enabled process flow that supports our platform:9Table of ContentsMatching algorithm:We utilize machine learning to predict a providers efficacy at onboarding.Our matching algorithm combines information from both structured and unstructured sources to predict which therapis

115、ts have the greatest chance of success with each patient.Our matching model concurrently gathers client and therapist data and screens the therapists population to match the patients characteristics,clinical needs and preferences.Our machine learning technology also enables us to track the frequency

116、 and quality of clinical interactions,allowing us to provide a better therapist match should the patient request a new clinician.Robust data ecosystem:We have a closed-loop data ecosystem providing a multi-dimensional view of the individuals who seek treatment on our platform.This data provides a ho

117、listic picture of each user the problems they manifest,diagnoses,treatment plans,medical history,personal history,and clinical outcomes.Our data contain over 5 billion words sent by millions of users over 100 million anonymized messages.We have over 1 million completed psychological assessments.Our

118、data contain information about members collected by therapists,including over 500,000 diagnoses and 800,000 progress and psychotherapy notes.Our data also contains information about therapists reported by members,including over 800,000 therapist ratings.We believe the size and depth of our clinical

119、data is vast relative to the industry and is a differentiating element of our digitally-native modality.Empowering providers to deliver enhanced care:Our providers are equipped with tools that allow them to optimize time utilization and improve clinical efficacy.One of the leading challenges in beha

120、vioral healthcare is a patients premature termination of engagement with the provider and,thus,a core focus of our machine learning strategy is to drive member engagement and increase care continuity,helping members to continue treatment long enough to reap its benefits.In order to extend the lifeti

121、me duration of our member base,we provide our providers insights on their patients needs and behaviors and offer techniques and suggestions that we believe are likely to maximize their patients satisfaction and engagement.These insights,delivered through our fully-integrated artificial intelligence

122、platform,help providers to deliver effective treatments to their patients,and raise members awareness when tracking their own clinical progress.Performance tracking and feedback:Our“Intro and Expectations”system detects whether providers have followed best practices in the crucial introductory phase

123、 of the therapy relationship and reminds them to do so if they have not.Our“Crisis Risk system”monitors all incoming members messages for linguistic features associated with potential danger or self-harm and draws providers attention to these cases.Our“Session Highlights system”provides a weekly dig

124、est of patient messages and helps therapists draft notes on clinical progress.Our“Patient Engagement Monitor system”processes each new message sent on the platform and updates the projected probability of patient engagement based on previous behavior and the content of each message.Competition We vi

125、ew as competitors those companies whose primary business is developing and marketing telehealth and virtual behavioral health platforms and services.Competition focuses on,among other factors,technology,breadth and depth of functionality,range of associated services,operational experience,customer s

126、upport,extent of client and member bases,and reputation.Our key 10Table of Contentscompetitors in the telehealth and teletherapy markets are American Well Corporation,Teladoc,Included Health,MDLive,BetterHelp,Lyra Health and Headspace,among other small industry participants.In addition,large,well-fi

127、nanced health systems and health plans have in some cases developed their own virtual behavioral health tools and may provide these solutions to their consumer at discounted prices.Competition may also increase from large technology companies,such as Apple,Amazon,Meta,Verizon,or Microsoft,who may wi

128、sh to develop their own virtual behavioral health solutions,as well as from large retailers like Amazon or Walmart.With the emergence of COVID-19,and in particular the relaxation of privacy and security requirements under the Health Insurance Portability and Accountability Act of 1996(“HIPAA”),we ha

129、ve also seen increased competition from consumer-grade video solutions,such as Zoom Video and Twilio.We believe that the breadth of our existing client and member bases,the depth of our technology platform,and our business-to-business focus on promoting existing healthcare brands and integrating fre

130、ely with multiple platforms increases the likelihood that stakeholders seeking to develop virtual behavioral healthcare solutions will choose instead to collaborate with Talkspace.Therapists,Physicians and Healthcare Professionals We are completing the transition of our structure with respect to our

131、 relationships with healthcare providers,transitioning to a structure where Talkspace LLC and Talkspace Network LLC have entered into various agreements with a Texas professional association entity,TPN,which in turn is contracting with our affiliated professional entities and physicians,therapists,a

132、nd other licensed professionals for clinical and professional services provided to our members.We expect to conclude the transition by the third quarter of 2022,understanding that tax and accounting functions will continue to update for the rest of the fiscal year.This transition is in response to o

133、ur expansion of service offerings to include telepsychiatry services provided through licensed physicians.Our business initially began with arranging the delivery of virtual counseling and psychotherapy services,which are predominantly provided by non-physician professionals.Currently,all telepsychi

134、atry services are being provided through independent contractor arrangements with our network licensed physicians who maintain exclusive control and responsibility over all medical aspects of the services provided to our members during the period prior to the completion of the transition.Although we

135、 believe we were operating in compliance with applicable regulatory laws,including laws that prohibit business entities,such as us,from providing professional services,employing certain healthcare professionals and exercising control over professional judgment(such activities generally referred to a

136、s the“corporate practice of medicine”),with the addition of telepsychiatry as a service offering,we decided to transition our provider network structure to a model that was well-understood and common in jurisdictions that prohibit the corporate practice of medicine.We believe the transition to a str

137、ucture where we would enter into various management services agreements(“MSA”)with TPN,or an entity authorized by state law to contract with our affiliated professionals to delivery teletherapy services to our members,will better ensure we will be able to comply with additional regulatory requiremen

138、ts,including the corporate practice of medicine and fee-splitting laws,that are necessarily implicated by engaging in telehealth care that can only be delivered by physicians.Notably,because certain activities other than those directly related to the delivery of healthcare may be considered an eleme

139、nt of the practice of medicine in certain states,we believe we have structured the MSA in each state so as to not violate any of these unique restrictions.We will have the power to direct the activities of TPN and the other authorized entities in each state that will most significantly impact TPNs a

140、nd such other authorized entities economic performance as well as have the obligation to absorb significant losses and receive the benefits of TPN and the authorized entities.TPN is wholly owned by an independent Texas-licensed physician.Due to the prevalence of the corporate practice of medicine do

141、ctrine,including in the states where we predominantly conduct our business,we are finalizing certain agreements with TPN,including the MSA under which we will provide exclusive administrative,management and other business support services to TPN in exchange for a management fee.The non-medical funct

142、ions and services we will provide under the MSA include billing,scheduling and other non-clinical services and staffing,the maintenance of medical,billing and accounting records,legal,human resources and the administration of quality assurance,and administration of a risk management program on behal

143、f of TPN,as well as a license to use Talkspace technology and branding.TPN reserves exclusive control and responsibility for all aspects of the practice of medicine and the delivery of medical services.TPN will also directly employ or contract other professional entities,physicians,therapists and ot

144、her licensed professionals who will provide clinical and professional services to our members.These affiliated providers will also retain exclusive control and responsibility for all aspects of medical services provided to our members.Additionally,TPN is required to maintain medical malpractice insu

145、rance for covered providers as well as appropriate general liability,directors and officers,workers compensation and employment practices insurance.The MSA will have a long multi-year term unless earlier terminated upon mutual agreement of the parties or unilaterally by a party following a material

146、default under the MSA by the non-terminating party.11Table of ContentsWe intend to sign MSAs with other TPN affiliated entities to provide similar administrative and management services for a management fee consistent with applicable corporate practice of medicine,fee-splitting and foreign entity re

147、quirements in each state.We are also in the process of finalizing a stock transfer restriction agreement between TPN and its current owner,which outlines the conditions under which we can ensure a transfer of the ownership of TPN to a different licensed provider.Once the transition with TPN is compl

148、ete,TPN and its affiliated professional entities will collect revenue from(i)patients directly,(ii)patients health plans or(iii)enterprise clients for each consultation performed on Talkspace telehealth and teletherapy platforms by its employed or contracted physicians,therapists and other licensed

149、professionals.TPN in turn will pay the providers a per consult fee,or via an hourly or annual rate.Although the contracting party under our current agreements with clients,members,providers and other business partners may change from Talkspace to TPN or an affiliated professional entity as a result

150、of this transition,we do not anticipate that this transition will have a material financial impact on our operations.Through the mechanics set out in the MSAs and the management fee for administrative and management services set forth in our agreements with TPN,we do not expect there will be a mater

151、ial change in the overall economics of the business relationships we previously held with our clients,members,providers and other business partners.However,if there are regulatory challenges to our arrangements with TPN,we may have to restructure arrangements or enter into new agreements with other

152、professional entities,which could result in changes to the economic relationships.Human Capital Resources 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 Companys workfor

153、ce is critical to the creation and delivery of its services and the success of the company.Our ability to attract,develop and retain talented employees with the skills and capabilities needed by its business is a key component of our long-term growth and our mission of providing more people with con

154、venient access to quality,affordable behavioral healthcare.As of December,2021,we had 496 employees,of whom 480 were located in the U.S.and 16 were located abroad.None of our employees are represented by a labor union or party to a collective bargaining agreement.We have never experienced any work s

155、toppages or strikes as a result of labor disputes.During the COVID-19 pandemic,the Company transitioned over 95%of its employees to remote working while implementing additional safety measures for employees continuing on-site work.The capabilities of the Companys workforce have continued to evolve a

156、long with the Companys business and strategy.During the COVID-19 pandemic,the pace of this evolution increased,as changing consumer behavior accelerated the shift towards digital products and services.As the company has grown,we have also created new internal processes and systems,which the Company

157、expects to increase collaboration across its employees and optimize the productivity and efficiency of its workforceCulture and ValuesWe are committed to maintaining a respectful,secure and supportive workplace culture with open communication and accessible,safe channels for feedback.In addition,all

158、 employees are required to complete training and affirm compliance with the Talkspace Code of Business Conduct and Ethics(the“Code”),which confirms the Companys policy to conduct its affairs in compliance with all applicable laws and regulations and observe the highest standards of business ethics.T

159、he Code is reviewed regularly by the Audit Committee and approved by the Board of Directors,and is complemented by other policies and training.Any violations of our Code are encouraged to be immediately reported and are kept anonymously.Diversity and InclusionTalkspace is committed to creating and m

160、aintaining a workplace in which all employees have an opportunity to participate and contribute to the success of the business.Talkspace provides equal employment opportunities to all employees and applicants for employment without regard to race,color,ancestry,national origin,gender,sexual orientat

161、ion,marital status,religion,age,disability,gender identity,results of genetic testing,or service in the military.Equal employment opportunity applies to all terms and conditions of employment,including hiring,placement,promotion,separation,transfers,compensation,and training.The Company is committed

162、 to cultivating diversity and broadening opportunities for inclusion across its business through its recruitment practices,employee development and mentoring and inclusivity programs.12Table of ContentsCompensation and BenefitsThe Company is committed to hiring the most qualified candidates to fill

163、open positions.Whenever appropriate and possible,open positions are filled with internal candidates to help team members in their career development and enrich a culture of growth.Compensation and benefits programs are focused on attracting,retaining and motivating the top talent necessary to achiev

164、e the Companys mission in ways that reflect its diverse workforces needs and priorities.In addition to competitive salaries,the Company and its businesses have established short and long-term incentive programs including stock-based compensation awards and cash-based performance bonus awards,which a

165、re designed to motivate and reward performance against key business objectives and facilitate retention.Performance bonus allocations are provided based on the organization meeting its financial goals,the employee achieving goals set by their supervisor,and per the employment agreements and/or any o

166、ther written agreement.In addition,the Company provides a range of retirement benefits and other comprehensive benefit options to meet the needs of its employees,including healthcare benefits,tax advantaged savings vehicles,life and disability insurance,paid time off,flexible working arrangements,ge

167、nerous parental leave policies and access to wellness programs.Training and DevelopmentOur growth mindset culture begins with valuing learning over knowing seeking out new ideas,driving innovation,embracing challenges,learning from failure,and improving over time.The Company strives to provide mento

168、rship and career development to existing employees to help everyone on the team reach their full potential and employees are encouraged to reach out to their supervisors,if further development training is needed.Whenever possible,the Companys policy is to promote current employees rather than hiring

169、 external people.When position vacancies occur,the supervisor or manager will determine whether there are eligible candidates within the Company.U.S.Government RegulationOur operations are subject to comprehensive United States federal,state and local and international regulation in the jurisdiction

170、s in which we do business.Our ability to operate profitably will depend in part upon our ability,and that of our affiliated providers,to maintain all necessary licenses and to operate in compliance with applicable laws and rules.Those laws and rules continue to evolve,and we therefore devote signifi

171、cant resources to monitoring developments in healthcare and medical practice regulation.As the applicable laws and rules change,we are likely to make conforming modifications in our business processes from time to time.In some jurisdictions where we operate,neither our current nor our anticipated bu

172、siness model has been the subject of formal judicial or administrative interpretation.We cannot be assured that a review of our business by courts or regulatory authorities will not result in determinations that could adversely affect our operations or that the healthcare regulatory environment will

173、 not change in a way that impacts our operations.In response to the COVID-19 pandemic,state and federal regulatory authorities loosened or removed a number of regulatory requirements in order to increase the availability of telehealth and teletherapy services.For example,many state governors issued

174、executive orders permitting physicians and other health care professionals to practice in their state without any additional licensure or by using a temporary,expedited or abbreviated licensure process so long as they hold a valid license in another state.In addition,changes were made to the Medicar

175、e and Medicaid programs(through waivers and other regulatory authority)to increase access to telehealth and teletherapy services by,among other things,increasing reimbursement,permitting the enrollment of out of state providers and eliminating prior authorization requirements.It is uncertain how lon

176、g these COVID-19 related regulatory changes will remain in effect and whether they will continue beyond this public health emergency period.We believe that a return to the status quo would not have a material negative impact on any commercial agreements we have entered into during 2021 and 2020.Each

177、 of these agreements has a defined term and generally do not allow for immediate termination for convenience by the client in question.For many healthcare companies engaging in telehealth and teletherapy,the most significant potential concern about returning to the status quo is the restrictions on

178、the reimbursement of telehealth and teletherapy visits to federal or state healthcare program beneficiaries,such as when a patient presents to a medical professional from a rural area or at a clinical site.Currently,TPN and our affiliated network providers does not perform these kinds of consultatio

179、ns.All patients who experienced a first-time visit with any network provider during the pandemic would be able to continue using the platform.In light of that,we do not believe that the visit volume on our platform or visit revenue will materially decrease based on a return to the status quo from a

180、regulatory perspective.In fact,we believe that such a return would benefit the Company as the renewed enforcement of HIPAA regulations may force many marginal telehealth platforms out of the marketplace,thereby lessening our competition.13Table of ContentsTelehealth and Teletherapy Provider Licensin

181、g,Medical Practice,Certification and Related Laws and Guidelines The practice of medicine,including the provision of therapy services,is subject to various federal,state and local certification and licensing laws,regulations,approvals and standards,relating to,among other things,the adequacy of medi

182、cal care,the practice of medicine and licensed professional services(including the provision of remote care),equipment,personnel,operating policies and procedures and the prerequisites for the prescription of medication and ordering of tests.The application of some of these laws to telehealth and te

183、letherapy is unclear and subject to differing interpretation.Physicians,therapists and other licensed professionals who provide professional medical and therapy services to a patient via telehealth and teletherapy must,in most instances,hold a valid license to practice medicine or another licensed p

184、rofession in the state in which the patient is located.We have established systems for ensuring that TPN and our affiliated professionals are appropriately licensed under applicable state law and that their provision of telehealth and teletherapy to our members occurs in each instance in compliance

185、with applicable rules governing telehealth and teletherapy.Failure to comply with these laws and regulations could result in licensure actions against the professionals,our services being found to be non-reimbursable,or prior payments being subject to recoupments and can give rise to civil,criminal

186、or administrative penalties.Corporate Practice of Medicine Laws in the U.S.;Fee Splitting We contract with physicians or physician owned professional associations and professional corporations and therapists to provide access to our platform to them and their patients.We are in the process of finali

187、zing a MSA with TPN and may enter into direct management services contracts with other TPN affiliated entities pursuant to which we provide them with billing,scheduling and a wide range of other administrative and management services,and they pay us for those services via management and other servic

188、e fees.These contractual relationships are subject to various state laws that prohibit fee splitting or the corporate practice of medicine or professional services by lay entities or persons and that are intended to prevent unlicensed persons from interfering with or influencing a physicians or anot

189、her licensed professionals clinical judgment.Activities other than those directly related to the delivery of healthcare may be considered an element of the practice of medicine in many states.Under the corporate practice of medicine and other licensed profession restrictions of certain states,decisi

190、ons and activities such as contracting,setting rates and the hiring and management of personnel may implicate the restrictions on the corporate practice of medicine or a licensed profession.State corporate practice of medicine or other licensed profession and fee splitting laws and rules vary from s

191、tate to state.In addition,these requirements are subject to broad interpretation and enforcement by state regulators.Some of these requirements may apply to us even if we do not have a physical presence in the state,based solely on our engagement of a provider licensed in the state or the provision

192、of telehealth and teletherapy to a resident of the state.Thus,regulatory authorities or other parties,including our providers,may assert that,despite these arrangements,we are engaged in the corporate practice of medicine or a licensed profession or that our contractual arrangements with affiliated

193、providers constitute unlawful fee splitting.In such event,failure to comply could lead to adverse judicial or administrative action against us and/or our affiliated providers,civil,criminal or administrative penalties,receipt of cease and desist orders from state regulators,loss of provider licenses

194、,the need to make changes to the terms of engagement of our providers that interfere with our business,and other materially adverse consequences.U.S.Federal and State Fraud and Abuse Laws Although our services are not currently reimbursed by government healthcare programs such as Medicare or Medicai

195、d,any future reimbursement from federal and/or state healthcare programs could expose our business to broadly applicable fraud and abuse laws and other healthcare laws and regulations that would regulate the business.Applicable and potentially applicable U.S.federal and state healthcare laws and reg

196、ulations include,but are not limited,to the following.Federal Stark Law If in the future some of our revenues come from federal health care programs,we will be subject to the federal self-referral prohibitions,commonly known as the Stark Law.Where applicable,this law prohibits a physician from refer

197、ring Medicare patients for“designated health services”such as laboratory and other diagnostic services and prescription drugs that are furnished at an entity if the physician or a member of such physicians immediate family has a“financial relationship”with the entity,unless an exception applies.Sanc

198、tions for violating the Stark Law include denial of payment,civil monetary penalties of up to$26,125 per claim submitted and exclusion from the federal health care programs.Failure to refund amounts received as a result of a prohibited referral on a timely basis may constitute a false or fraudulent

199、claim and may result in civil penalties and additional penalties under the federal False Claims Act(“FCA”).The statute also provides for a penalty of up to$174,172 for a circumvention scheme.The Stark Law is a strict liability statute,which means proof of specific intent to violate the law is not re

200、quired.In addition,the government and some courts have taken the position that claims presented in violation of the various 14Table of Contentsstatutes,including the Stark Law,can be considered a violation of the FCA(described below)based on the contention that a provider impliedly certifies complia

201、nce with all applicable laws,regulations and other rules when submitting claims for reimbursement.A determination of liability under the Stark Law for TPN or our affiliated physicians could have a material adverse effect on our business,financial condition and results of operations.Federal Anti-Kick

202、back Statute We will also be subject to the federal Anti-Kickback Statute if any of our services become reimbursable by government healthcare programs.The Anti-Kickback Statute is broadly worded and prohibits the knowing and willful offer,payment,solicitation or receipt of any form of remuneration i

203、n return for,or to induce,(i)the referral of a person covered by Medicare,Medicaid or other governmental programs,(ii)the furnishing or arranging for the furnishing of items or services reimbursable under Medicare,Medicaid or other governmental programs or(iii)the purchasing,leasing or ordering or a

204、rranging or recommending purchasing,leasing or ordering of any item or service reimbursable under Medicare,Medicaid or other governmental programs.Certain federal courts have held that the Anti-Kickback Statute can be violated if“one purpose”of a payment is to induce referrals.In addition,a person o

205、r entity does not need to have actual knowledge of this statute or specific intent to violate it to have committed a violation,making it easier for the government to prove that a defendant had the requisite state of mind or“scienter”required for a violation.Moreover,the government may assert that a

206、claim including items or services resulting from a violation of the Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the FCA,as discussed below.Violations of the federal Anti-Kickback Statute may result in civil monetary penalties up to$105,563 for each violation,plus up

207、 to three times the remuneration involved.Civil penalties for such conduct can further be assessed under the FCA.Violations of the federal Anti-Kickback Statute can also result in criminal penalties,including criminal fines of more than$100,000 and imprisonment of up to 10 years.Similarly,violations

208、 can result in exclusion from participation in government healthcare programs,including Medicare and Medicaid.Imposition of any of these remedies could have a material adverse effect on our business,financial condition and results of operations,if in the future we provide services reimbursable by go

209、vernment healthcare programs.In addition to a few statutory exceptions,the Office of Inspector General(“OIG”)has published safe-harbor regulations that outline categories of activities that are deemed protected from prosecution under the Anti-Kickback Statute provided all applicable criteria are met

210、.The failure of a financial relationship to meet all of the applicable safe harbor criteria does not necessarily mean that the particular arrangement violates the Anti-Kickback Statute.However,conduct and business arrangements that do not fully satisfy each applicable safe harbor may result in incre

211、ased scrutiny by government enforcement authorities,such as the OIG.False Claims Act Both federal and state government agencies have continued civil and criminal enforcement efforts as part of numerous ongoing investigations of healthcare companies and their executives and managers.Although there ar

212、e a number of civil and criminal statutes that can be applied to healthcare providers,a significant number of these investigations involve the FCA.These investigations can be initiated not only by the government but also by a private party asserting direct knowledge of fraud.These“qui tam”whistleblo

213、wer lawsuits may be initiated against any person or entity alleging such person or entity has knowingly or recklessly presented,or caused to be presented,a false or fraudulent request for payment from the federal government,or has made a false statement or used a false record to get a claim approved

214、.In addition,the improper retention of an overpayment for 60 days or more is also a basis for an FCA action,even if the claim was originally submitted appropriately.Penalties for FCA violations include fines ranging from$11,803 to$23,607 for each false claim,plus up to three times the amount of dama

215、ges sustained by the federal government.An FCA violation may provide the basis for exclusion from the federally funded healthcare programs.State Fraud and Abuse Laws Several states in which we operate have also adopted or may adopt similar self-referral,anti-kickback,fraud,whistleblower and false cl

216、aims laws as described above.The scope of these laws and the interpretations of them vary by jurisdiction and are enforced by local courts and regulatory authorities,each with broad discretion.Some state fraud and abuse laws apply to items or services reimbursed by Medicaid programs and any third-pa

217、rty payer,including commercial insurers or to any payer,including to funds paid out of pocket by a patient.A determination of liability under such state fraud and abuse laws could result in fines and penalties and restrictions on our ability to operate in these jurisdictions.Other Healthcare Laws HI

218、PAA established several separate criminal penalties for making false or fraudulent claims to insurance companies and other non-governmental payers of healthcare services.15Table of ContentsUnder HIPAA,these two additional federal crimes are:“Healthcare Fraud”and“False Statements Relating to Healthca

219、re Matters.”The Healthcare Fraud statute prohibits knowingly and recklessly executing a scheme or artifice to defraud any healthcare benefit program,including private payers.A violation of this statute is a felony and may result in fines,imprisonment,or exclusion from government sponsored programs.T

220、he False Statements Relating to Healthcare Matters statute prohibits knowingly and willfully falsifying,concealing,or covering up a material fact by any trick,scheme or device or making any materially false,fictitious,or fraudulent statement in connection with the delivery of or payment for healthca

221、re benefits,items,or services.A violation of this statute is a felony and may result in fines or imprisonment.This statute could be used by the government to assert criminal liability if a healthcare provider knowingly fails to refund an overpayment.These provisions are intended to punish some of th

222、e same conduct in the submission of claims to private payers as the federal False Claims Act covers in connection with governmental health programs.In addition,the Civil Monetary Penalties Law imposes civil administrative sanctions for,among other violations,inappropriate billing of services to fede

223、rally funded healthcare programs and employing or contracting with individuals or entities who are excluded from participation in federally funded healthcare programs.Moreover,a person who offers or transfers to a Medicare or Medicaid beneficiary any remuneration,including waivers of copayments and

224、deductible amounts(or any part thereof),that the person knows or should know is likely to influence the beneficiarys selection of a particular provider,practitioner or supplier of Medicare or Medicaid payable items or services may be liable for civil monetary penalties of up to$10,000 for each wrong

225、ful act.Furthermore,in certain cases,providers who routinely waive copayments and deductibles for Medicare and Medicaid beneficiaries can also be held liable under the Anti-Kickback Statute and civil False Claims Act,which can impose additional penalties associated with the wrongful act.One of the s

226、tatutory exceptions to the prohibition is non-routine,unadvertised waivers of copayments or deductible amounts based on individualized determinations of financial need or exhaustion of reasonable collection efforts.The OIG emphasizes,however,that this exception should only be used occasionally to ad

227、dress special financial needs of a particular patient.Although this prohibition applies only to federal healthcare program beneficiaries,the routine waivers of copayments and deductibles offered to patients covered by commercial payers may implicate applicable state laws related to,among other thing

228、s,unlawful schemes to defraud,excessive fees for services,tortious interference with patient contracts,and statutory or common law fraud.U.S.State and Federal Health Information Privacy and Security Laws There are numerous U.S.federal and state laws and regulations related to the privacy and securit

229、y of personal information,including health information.In particular,HIPAA imposes a number of requirements on covered entities and their business associates relating to the use,disclosure and safeguarding of protected health information.These requirements include uniform standards of common electro

230、nic healthcare transactions;privacy and security regulations;and unique identifier rules for employers,health plans and providers.In addition,the Health Information Technology for Economic and Clinical Health Act,or HITECH,provisions of the American Recovery and Reinvestment Act of 2009 and correspo

231、nding implementing regulations have imposed additional requirements on the use and disclosure of protected health information such as additional breach notification and reporting requirements,contracting requirements for HIPAA business associate agreements,strengthened enforcement mechanisms and inc

232、reased penalties for HIPAA violations.Federal consumer protection laws may also apply in some instances to privacy and security practices related to personal information.Violations of HIPAA may result in civil and criminal penalties.However,a single breach incident can result in violations of multip

233、le standards.Our management responsibilities to TPN include assisting it with its obligations under HIPAAs breach notification rule.Under the breach notification rule,covered entities must notify affected individuals without unreasonable delay in the case of a breach of unsecured protected health in

234、formation(“PHI”),which may compromise the privacy,security or integrity of the PHI.In addition,notification must be provided to U.S.Department of Health and Human Services(“HHS”)and the local media in cases where a breach affects more than 500 individuals.Breaches affecting fewer than 500 individual

235、s must be reported to HHS on an annual basis.HIPAA also requires a business associate to notify its covered entity clients of breaches by the business associate.State attorneys general also have the right to prosecute HIPAA violations committed against residents of their states.While HIPAA does not

236、create a private right of action that would allow individuals to sue in civil court for a HIPAA violation,its standards have been used as the basis for the duty of care in state civil suits,such as those for negligence or recklessness in misusing personal information.In addition,HIPAA mandates that

237、HHS conduct periodic compliance audits of HIPAA covered entities and their business associates for compliance.It also tasks HHS with establishing a methodology whereby harmed individuals who were the victims of breaches of unsecured PHI may receive a percentage of the civil monetary penalty fine pai

238、d by the violator.In light of the HIPAA Omnibus Final Rule,recent enforcement activity,and statements from HHS,we expect increased federal and state HIPAA privacy and security enforcement efforts.16Table of ContentsHIPAA also required HHS to adopt national standards for electronic transactions that

239、all healthcare providers must use when submitting or receiving certain healthcare transactions electronically.On January 16,2009,HHS released the final rule mandating that everyone covered by HIPAA must implement ICD 10 for medical coding on October 1,2013,which was subsequently extended to October

240、1,2015 and is now in effect.Many states in which we operate and in which our patients reside also have laws that protect the privacy and security of sensitive and personal information,including health information.Moreover,state laws may be similar to or even more protective than HIPAA and other fede

241、ral privacy laws.For example,the laws of the State of California,in which we operate,are more restrictive than HIPAA.Where state laws are more protective than HIPAA,we must comply with the state laws we are subject to,in addition to HIPAA.In certain cases,it may be necessary to modify our planned op

242、erations and procedures to comply with these more stringent state laws.Not only may some of these state laws impose fines and penalties upon violators,but,unlike HIPAA,some may afford private rights of action to individuals who believe their personal information has been misused.In addition,state la

243、ws are changing rapidly,and there is discussion of a new federal privacy law or federal breach notification law,to which we may be subject.In addition to HIPAA and state health information privacy laws,we may be subject to other state and federal privacy laws,including laws that prohibit unfair priv

244、acy and security acts or practices and deceptive statements about privacy and security and laws that place specific requirements on certain types of activities,such as data security and texting.The FTC and states attorneys general have brought enforcement actions and prosecuted some data breach case

245、s as unfair and/or deceptive acts or practices under the FTC Act and similar state laws.Further,the California Consumer Protection Act of 2018(the“CCPA”),which took effect in 2020 and to which we are subject,imposes obligations and restrictions on businesses regarding their collection,use,and sharin

246、g of personal information and provides new and enhanced data privacy rights to California residents,such as affording them the right to access and delete their personal information and to opt out of certain sharing of personal information.In recent years,there have been a number of well publicized d

247、ata breaches involving the improper use and disclosure of personal information and PHI.Many states have responded to these incidents by enacting laws requiring holders of personal information to maintain safeguards and to take certain actions in response to a data breach,such as providing prompt not

248、ification of the breach to affected individuals and state officials and provide credit monitoring services and/or other relevant services to impacted individuals.In addition,under HIPAA and pursuant to the related contracts that we enter into with our clients who are covered entities,we must report

249、breaches of unsecured PHI to our clients following discovery of the breach.Notification must also be made in certain circumstances to affected individuals,federal authorities and others.International Regulation We expect over time to continue to expand our operations in foreign countries through bot

250、h organic growth and acquisitions.In such a case,our international operations will be subject to different,and sometimes more stringent,legal and regulatory requirements,which vary widely by jurisdiction,including anti-corruption laws;economic sanctions laws;various data security insurance,tax,tarif

251、f and trade laws and regulations;corporate governance;various data security and data protection laws(including the EU General Data Protection Regulation and UK data privacy regime);labor and employment,intellectual property,consumer protection and investment laws and regulations;discriminatory licen

252、sing procedures;required localization of records and funds;and limitations on dividends and repatriation of capital.In addition,the expansion of our operations into foreign countries increases our exposure to the anti-bribery,anti-corruption and anti-money laundering provisions of U.S.law,including

253、the FCPA,and corresponding foreign laws,including the UK Bribery Act.The FCPA prohibits offering,promising or authorizing others to give anything of value to a foreign government official to obtain or retain business or otherwise secure a business advantage.We also are subject to applicable anti-cor

254、ruption laws of the jurisdictions in which we operate.Violations of the FCPA and other anti-corruption laws may result in severe criminal and civil sanctions as well as other penalties,and the SEC and the DOJ have increased their enforcement activities with respect to the FCPA.The UK Bribery Act is

255、an anti-corruption law that is broader in scope than the FCPA and applies to all companies with a nexus to the United Kingdom.Disclosures of FCPA violations may be shared with the UK authorities,thus potentially exposing companies to liability and potential penalties in multiple jurisdictions.We hav

256、e internal control policies and procedures and conduct training and compliance programs for our employees to deter prohibited practices.However,if our employees or agents fail to comply with applicable laws governing our international operations,we may face investigations,prosecutions and other lega

257、l proceedings and actions which could result in civil penalties,administrative remedies and criminal sanctions.We also are subject to regulation by OFAC.OFAC administers and enforces economic and trade sanctions based on U.S.foreign policy and national security goals against targeted foreign countri

258、es and regimes,terrorists,international narcotics traffickers,those engaged in activities related to the proliferation of weapons of mass destruction,and other threats to the national security,17Table of Contentsforeign policy or economy of the United States.In addition,we may be subject to similar

259、regulations in the non-U.S.jurisdictions in which we operate.Intellectual PropertyIt is important to our business that we establish,protect and enforce our intellectual property.We rely on a combination of patent,copyright,trademark and trade secret laws as well as confidentiality procedures,contrac

260、tual provisions and other legal rights to establish and enforce our brand,proprietary technology and other intellectual property rights.As of February 21,2022,the Company has been approved for one patent related to“System and Method in Monitoring Engagement”which relates to the tracking of therapeut

261、ic progress between therapist and client.We also have one patent that is pending and several other conditional applications in the United States.We intend to continue to apply for additional patents relating to our software and technology.We cannot assure you whether any of our patent applications w

262、ill result in the issuance of a patent or whether the examination process will require us to narrow our claims.We own and use trademarks and service marks on or in connection with our business and services,including both unregistered marks and registered trademarks in the United States.In addition,w

263、e rely on other forms of intellectual property protection including trade secrets,know-how and other unpatented proprietary processes,in each case in support of our business.We make efforts to maintain and protect our intellectual property and the proprietary aspects of our products and technologies

264、,including through the use of nondisclosure agreements and the monitoring of our competitors.Although we take steps to protect our trade secrets and know-how,third parties may independently develop or otherwise gain access to our trade secrets and know-how by lawful means.We require our employees,co

265、nsultants and certain of our contractors to execute confidentiality agreements in connection with their employment or consulting relationships with us but these agreements may not provide meaningful protection,and we cannot guarantee that we have executed such agreements with all applicable counterp

266、arties.Furthermore,these agreements also may be breached,and we may not have an adequate remedy for any such breach.We also require our employees and consultants to disclose and assign to us inventions conceived during the term of their employment or engagement while using our property or which rela

267、te to our business.We also license certain intellectual property rights that are used in our business from third parties.From time to time,we may become involved in legal proceedings relating to intellectual property arising in the ordinary course of our business,including oppositions to our applica

268、tions for patents,trademarks,challenges to the validity of our intellectual property rights,and claims of intellectual property infringement.We are not presently a party to any such legal proceedings that,in the opinion of our management,would individually or taken together have a material adverse e

269、ffect on our business,financial condition,results of operations or cash flows.Additional InformationTalkspace was originally incorporated as Hudson Executive Investment Corp.(“HEC”),a special purpose acquisition company,in Delaware on October 30,2019 for the purpose of entering into a merger,share e

270、xchange,asset acquisition,stock purchase,recapitalization or other similar business combination with one or more businesses or entities.On January 12,2021,HEC,entered into an Agreement and Plan of Merger,dated as of January 12,2021(the“Merger Agreement”),with Groop Internet Platform,Inc.(“Old Talksp

271、ace”),Tailwind Merger Sub I,Inc.,a Delaware corporation and a direct wholly owned subsidiary of HEC(“First Merger Sub”),and Tailwind Merger Sub II,LLC,a Delaware limited liability company(“Second Merger Sub”).On June 22,2021,as contemplated by the Merger Agreement,First Merger Sub merged with and in

272、to Old Talkspace(the“First Merger”)with Old Talkspace surviving the First Merger,and immediately following the First Merger and as part of the same overall transaction as the First Merger,Old Talkspace merged with and into Second Merger Sub,with Second Merger Sub surviving the merger as a wholly own

273、ed subsidiary of HEC(the“Second Merger”and,together with the First Merger,the“Business Combination”).In connection with the Business Combination,HEC filed the Certificate of Incorporation and changed its name to“Talkspace,Inc.”.Our website address is .We make available free of charge at the investor

274、s section of this website our Annual Reports on Form 10-K,Quarterly Reports on Form 10-Q,Current Reports on Form 8-K,other SEC filings and all amendments to those reports filed or furnished to the Securities and Exchange Commission(“SEC”)pursuant to Section 13(a)or 15(d)of the Exchange Act,as soon a

275、s reasonably practicable after we file or furnish such materials to the SEC.The information on our website is not,and will not be deemed to be,a part of this Annual Report on Form 10-K or incorporated into any of our other filings with the SEC,except where we expressly incorporated such information.

276、18Table of Contents Item 1A.RISK FACTORSIn the course of conducting our business operations,we are exposed to a variety of risks.These risks are generally inherent to the healthcare industry or otherwise generally impact virtual behavioral health companies like us.Any of the risk factors we describe

277、 below have affected or could materially adversely affect our business,financial condition and results of operations.The market price of shares of our common stock could decline,possibly significantly or permanently,if one or more of these risks and uncertainties occurs.Certain statements in“Risk Fa

278、ctors”are forward-looking statements.See“Forward-Looking Statements.”Unless the context otherwise requires,all references in this subsection to the“Company,”“we,”“us”or“our”refer to the business of Talkspace,Inc.and its subsidiaries.RISKS RELATED TO OUR OPERATING RESULTS AND EARLY STAGE OF GROWTH We

279、 have a history of losses,which we expect to continue,and we may never achieve or sustain profitability.We have incurred significant losses in each period since our inception.We incurred net losses of$62.7 million and$22.4 million for the years ended December 31,2021 and 2020,respectively.As of Dece

280、mber 31,2021,we had an accumulated deficit of$171.5 million.These losses and accumulated deficit reflect the substantial investments we made to acquire new clients and members and to develop our technology platform.To date,we have derived a substantial majority of our revenue from clients and member

281、s who pay for access to our virtual behavioral health platform,and our longer-term results of operations and continued growth will depend on our ability to successfully develop and market new virtual behavioral health products and services that our clients and members want and are willing to purchas

282、e.We intend to continue scaling our business to increase our client,member and provider bases,broaden the scope of services we offer,invest in research and development and expand the applications of our technology through which clients and members can access our services.Accordingly,we anticipate th

283、at cost of revenue and operating expenses will continue to increase in the foreseeable future.These efforts may prove more expensive than we currently anticipate,and we may not succeed in increasing our revenue sufficiently to offset these higher expenses.In addition,our results of operations would

284、also suffer if our innovations are not responsive to the needs of our clients and members,appropriately timed with market opportunity,effectively brought to market or do not achieve market acceptance.We cannot assure you that we will achieve profitability in the future or that,if we do become profit

285、able,we will be able to sustain or increase profitability.Our prior losses,combined with our expected future losses,have had and will continue to have an adverse effect on our stockholders equity and working capital.As a result of these factors,we may need to raise additional capital through debt or

286、 equity financings in order to fund our operations,and such capital may not be available on reasonable terms,if at all.Our business and the markets we operate in are new and rapidly evolving,which makes it difficult to evaluate our future prospects and the risks and challenges we may encounter.Our b

287、usiness and the markets we operate in are new and rapidly evolving which make it difficult to evaluate and assess the success of our business to date,our future prospects and the risks and challenges that we may encounter.These risks and challenges include our ability to:attract new clients and memb

288、ers to our platform and position our platform as a convenient and accepted way to access therapy and psychiatry;retain our clients and members and encourage them to continue to utilize our platform and services;attract new and existing clients and members to rapidly adopt new offerings on our platfo

289、rm;increase the number of clients and members that use our subscription offerings or the number of subscription programs that we manage;retain our clients and members that subscribe to our subscription offerings;gain market acceptance of our services and products with clients and members and maintai

290、n and expand such relationships;attract and retain providers for inclusion in our platform;19Table of Contentscomply with existing and new laws and regulations applicable to our business and in our industry;anticipate and respond to macroeconomic changes,and industry pricing benchmarks and changes i

291、n the markets in which we operate;react to challenges from existing and new competitors;maintain and enhance the value of our reputation and brand;effectively manage our growth and business operations;forecast our revenue and budget for,and manage,our expenses and capital expenditures;hire,integrate

292、 and retain talented people at all levels of our organization;maintain and improve the infrastructure underlying our platform,including our apps and websites and with respect to data protection,intellectual property and cybersecurity;and successfully update our platform,including expanding our platf

293、orm and offerings into different healthcare products and services,develop and update our software,apps,features,offerings and services to benefit our clients and members and enhance their experience.If we fail to understand fully or adequately address the challenges that we are currently encounterin

294、g or that we may encounter in the future,including those challenges described here and elsewhere in this“Risk Factors”section,our business,financial condition and results of operations could be adversely affected.If the risks and uncertainties that we plan for when operating our business are incorre

295、ct or change,or if we fail to manage these risks successfully,our results of operations could differ materially from our expectations and our business,financial condition and results of operations could be adversely affected.We may not grow at the rates we historically have achieved or at all,even i

296、f our key metrics may indicate growth,which could have a material adverse effect on the market price of our common stock.We have experienced significant growth in the last several years,and therefore our recent revenue growth rate and financial performance should not be considered indicative of our

297、future performance.For the year ended December 31,2021 and 2020,our revenue was$113.7 million and$76.2 million,respectively,representing a 49.2%growth rate.In addition,as a result of the COVID-19 pandemic,we have experienced a significant increase in revenue.The circumstances that have accelerated t

298、he growth of our business stemming from the effects of the COVID-19 pandemic may not continue in the future,and future revenues may not grow at these same rates or may decline.For example,during the quarter ended December 31,2021,revenues from our B2C business declined compared to the previous quart

299、er.You should not rely on our revenue or key business metrics for any previous quarterly or annual period as any indication of our revenue,revenue growth,key business metrics,or key business metrics growth in future periods.In particular,our revenue growth rate has fluctuated in prior periods.Our fu

300、ture growth will depend,in part,on our ability to grow our revenue from existing clients and members,to acquire potential future clients and members,to expand our client,member and provider bases,to develop new products and services and to expand internationally.We can provide no assurances that we

301、will be successful in executing on these growth strategies or that,even if our key metrics would indicate future growth,we will continue to grow our revenue or to generate net income.Our ability to execute on our existing sales pipeline,create additional sales pipelines,and expand our client and mem

302、ber bases depends on,among other things,the attractiveness of our services relative to those offered by our competitors,our ability to demonstrate the value of our existing and future services,and our ability to attract and retain a sufficient number of qualified sales and marketing leadership and s

303、upport personnel.In addition,our existing clients and members may be slower to adopt our services than we currently anticipate,which could adversely affect our results of operations and growth prospects.We may experience difficulties in managing our growth and expanding our operations.We expect to e

304、xperience significant growth in the scope of our operations.Our ability to manage our operations and future growth will require us to continue to improve our operational,financial and management controls,compliance programs and reporting systems.We may not be able to implement improvements in an eff

305、icient or timely manner and may discover deficiencies in existing controls,programs,systems and procedures,which could have an adverse effect on our business,reputation and financial results.Additionally,rapid growth in our business may place a strain on our human and capital resources.20Table of Co

306、ntentsRISKS RELATED TO OUR BUSINESS AND INDUSTRY The virtual behavioral health market is immature and volatile,and if it does not develop,if it develops more slowly than we expect,if we encounter negative publicity or if our services are not competitive,the growth of our business will be harmed.The

307、virtual behavioral health market is relatively new and unproven,and it is uncertain whether it will achieve and sustain high levels of demand,consumer acceptance and market adoption.Our success will depend to a substantial extent on the willingness of our clients and members to use,and to increase t

308、he frequency and extent of their utilization of,our services and products,as well as on our ability to demonstrate the value of virtual behavioral healthcare to employers,health plans,government agencies and other purchasers of healthcare for beneficiaries.Our market may depend on our clients and me

309、mbers ability to obtain reimbursement from third-party payors,such as health plans and government agencies,as well as our ability to expand our B2B business and contract for direct reimbursement of our services from employers and health plan clients.Third-party payors in the United States may declin

310、e or reduce reimbursement for telehealth and teletherapy services,especially those provided through text messaging or other means via technology,and compliance with administrative procedures or requirements of third-party payors may result in delays in processing approvals by those payors for member

311、s to obtain coverage for our services.Failure by our members to obtain or maintain coverage or our inability to secure adequate reimbursement for our services could have an adverse effect on our business,results of operations,and financial conditions.We derive a portion of our revenues from third-pa

312、rty payors,and we expect that this amount will continue to increase,so any reductions in reimbursement by third-party payors could have a material and adverse impact on our projected growth.In addition,negative publicity concerning our services or the virtual behavioral health market as a whole coul

313、d limit market acceptance of our services.If our clients and members do not perceive the benefits of our services and drive member engagement,or if our services are not competitive,then our market may not develop at all,or it may develop more slowly than we expect.Similarly,individual and healthcare

314、 industry concerns or negative publicity regarding patient confidentiality and privacy in the context of virtual behavioral healthcare could limit market acceptance of our services.If any of these events occurs,it could have a material adverse effect on our business,financial condition or results of

315、 operations.The outbreak of the novel coronavirus(COVID-19)and its impact on business and economic conditions could adversely affect our business,results of operations and financial condition,and the extent and duration of those effects will be uncertain.In March 2020,the World Health Organization d

316、eclared COVID-19 a global pandemic.This contagious outbreak,which has continued to spread,and the related adverse public health developments,including orders to shelter-in-place,travel restrictions and mandated business closures,have adversely affected workforces,organizations,consumers,economies an

317、d financial markets globally,leading to an economic downturn and increased market volatility.It has also disrupted the normal operations of many businesses,including ours.As a result of the COVID-19 pandemic,our personnel are working remotely,and it is possible that this could have a negative impact

318、 on the execution of our business plans and operations.If a natural disaster,power outage,connectivity issue,or other event occurred that impacted our employees ability to work remotely,it may be difficult or,in certain cases,impossible,for us to continue our business for a substantial period of tim

319、e.The increase in remote working may also result in consumer privacy,IT security and fraud concerns as well as increase our exposure to potential wage and hour issues.We cannot predict with any certainty whether and to what degree the impact caused by the COVID-19 pandemic and reactions thereto will

320、 continue which may contribute to difficulty accurately predicting our internal financial forecasts.The outbreak also presents challenges as our workforce is working remotely in helping new and existing clients,members and other consumers,many of whom are also generally working remotely.It is not po

321、ssible for us to accurately predict the duration or magnitude of the results of the COVID-19 and its effects on our business,results of operations or financial condition at this time,but such effects may be material.The COVID-19 pandemic may also have the effect of heightening many of the other risk

322、s identified elsewhere in this section.Rapid technological change in our industry presents us with significant risks and challenges.The virtual behavioral health market is characterized by rapid technological change,changing consumer requirements,short product lifecycles and evolving industry standa

323、rds.Our success will depend on our ability to enhance our solution with next-generation technologies and to develop or to acquire and market new services to access new client and member populations.There is no guarantee that we will possess the resources,either financial or personnel,for the researc

324、h,design and development of new applications or services,or that we will be able to utilize these resources successfully and avoid technological or market 21Table of Contentsobsolescence.Further,there can be no assurance that technological advances by one or more of our competitors or future competi

325、tors will not result in our present or future software-based products and services becoming uncompetitive or obsolete.We operate in a competitive industry,and if we are not able to compete effectively,our business,financial condition and results of operations will be harmed.While the virtual behavio

326、ral health market is in an early stage of development,it is competitive and we expect it to attract increased competition,which could make it difficult for us to succeed.We currently face competition from a range of companies,including specialized software and solution providers that offer similar s

327、olutions and that are continuing to develop additional products and becoming more sophisticated and effective.These competitors include American Well Corporation,Teladoc,Included Health,MDLive,BetterHelp,Lyra Health and Headspace.In addition,large,well-financed health systems and health plans have i

328、n some cases developed their own telehealth and teletherapy tools and may provide these solutions to their consumer at discounted prices.Competition may also increase from large technology companies,such as Apple,Amazon,Meta,Google,Verizon,or Microsoft,who may wish to develop their own virtual behav

329、ioral health solutions,as well as from large retailers like Amazon or Walmart.The surge in interest in virtual behavioral healthcare,including as a result of the COVID-19 pandemic,and in particular the relaxation of HIPAA privacy and security requirements,has also attracted new competition from prov

330、iders who utilize consumer-grade video conferencing platforms such as Zoom and Twilio.Competition from large software companies or other specialized solution providers,health systems and health plans,communication tools and other parties could result in continued pricing pressures,which is likely to

331、 lead to price declines in certain product segments,which could negatively impact our sales,profitability and market share.Some of our competitors may have greater name recognition,longer operating histories and significantly greater resources than we do.Further,our current or potential competitors

332、may be acquired by third parties with greater available resources.As a result,our competitors may be able to respond more quickly and effectively than we can to new or changing opportunities,technologies,standards or consumer requirements and may have the ability to initiate or withstand substantial

333、 price competition.In addition,current and potential competitors have established,and may in the future establish,cooperative relationships with vendors of complementary products,technologies or services to increase the availability of their solutions in the marketplace.Accordingly,new competitors or alliances may emerge that have greater market share,a larger consumer base,more widely adopted pro