What changed in Talkspace, Inc.'s 2024 10-K compared to 2023?

Across the narrative sections we track, Talkspace, Inc. (TALK) added 261 paragraphs, removed 256, and edited 193 between the 2023 and 2024 10-K filings. The biggest movers are Item 5. Market for Registrant's Common Equity (+249/−242), Item 1C. Cybersecurity (+12/−14).

Did Talkspace, Inc. update its Cybersecurity disclosure (Item 1C) in 2024?

Item 1C Cybersecurity has 12 paragraph-level changes between the 2023 and 2024 filings.

Where does this TALK 10-K diff come from?

The source filings are Talkspace, Inc.'s official 2023 and 2024 Form 10-K annual reports from SEC EDGAR. 10q10k.net parses each filing, aligns paragraphs by section (Item 1, 1A, 1C, 2, 3, 7, 7A), and highlights every added, removed and edited sentence side-by-side.

What changed in Talkspace, Inc.'s 10-K — 2023 vs 2024

Paragraph-level year-over-year comparison of Talkspace, Inc.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+261 added−256 removedSource: 10-K (2025-03-12) vs 10-K (2024-03-13)

Top changes in Talkspace, Inc.'s 2024 10-K

261 paragraphs added · 256 removed · 193 edited across 2 sections

Item 5. Market for Registrant's Common Equity+249 / −242 · 182 edited
Item 1C. Cybersecurity+12 / −14 · 11 edited

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

11 edited+1 added−3 removed16 unchanged

2023 filing

2024 filing

Biggest changeWe have implemented the following activities (among others) to mitigate risk: • Periodic risk assessments to identify and assess cybersecurity risks and vulnerabilities in our information technology systems; • Running simulated cybersecurity drills, which are performed both in-house and by the third-party service provider, including vulnerability scanning, penetration testing and disaster recovery exercises; • background checks prior to hire; • encryption of data at rest and in transit; • logging and event monitoring; • threat detection to monitor for malicious activity and anomalous behavior; • malware protection and restricting connections to malicious websites; • data loss protection mechanisms; • third party penetration testing; • cybersecurity risk assessments of our third-party vendors; • reviews by internal and external audit of the effectiveness of information security-related internal controls; • closely monitor emerging data protection laws and implement changes to our processes designed to comply as needed; and • carry information security risk insurance that provides protection against the potential losses arising from a cybersecurity incident. 41 Table of Contents Our incident response plan, as effected by management, coordinates the activities we take to prepare for, detect, contain, eradicate, and recover from cybersecurity incidents as well as to comply with potentially applicable legal obligations and mitigate brand and reputational damage.

Biggest changeWe have implemented the following activities (among others) to mitigate risk: • Periodic risk assessments to identify and assess cybersecurity risks and vulnerabilities in our information technology systems; • Background checks prior to hire; • Encryption of data at rest and in transit; • Logging and event monitoring; • Threat detection to monitor for malicious activity and anomalous behavior; • Malware protection and restricting connections to malicious websites; • Data loss protection mechanisms; • Third party penetration testing and internal vulnerability assessments; • Cybersecurity risk assessments of our third-party vendors; • Reviews by internal and external audit of the effectiveness of information security-related internal controls; • Closely monitor emerging data protection laws and implement changes to our processes designed to comply as needed; and • Carry information security risk insurance that provides protection against the potential losses arising from a cybersecurity incident. 39 Table of Contents Our incident response plan, as implemented by management, coordinates the activities we take to prepare for, detect, contain, eradicate, and recover from cybersecurity incidents as well as to comply with potentially applicable legal obligations and mitigate brand and reputational damage.

The CISO and the Senior Director Information Security are responsible for our overall network security and assessing and managing cybersecurity risks and threats. The CISO has over 20 years of information security, privacy, auditing and compliance experience and holds numerous certifications. The Senior Director of Information Security has over 15 years of experience in information security, and holds numerous certifications.

The CISO and the Senior Director Information Security are responsible for our overall security and assessing and managing cybersecurity risks and threats. The CISO has over 20 years of information security, privacy, auditing and compliance experience and holds numerous certifications. The Senior Director of Information Security has over 15 years of experience in information security, and holds numerous certifications.

The incident response plan also outlines the appropriate communication flow and response for certain categories of potential cybersecurity incidents. The Chief Technology Officer escalates material events, including to the Chief Executive Officer and Board. We require all employees to participate in cybersecurity awareness, privacy, security training annually and provide system-wide mechanisms to report potential threats.

These members of management are informed about and monitor the prevention, mitigation, detection, and remediation of cybersecurity incidents through their management of, and participation in, the cybersecurity risk management and strategy processes described above. 42 Table of Contents It em 2. PROPERTIES The Company's headquarters are located in New York, NY.

These members of management are informed about and monitor the prevention, mitigation, detection, and remediation of cybersecurity incidents through their management of, and participation in, the cybersecurity risk management and strategy processes described above. 40 Table of Contents It em 2. PROPERTIES The Company's headquarters are located in New York, NY.

In addition, even where a loss is possible or an exposure to loss exists in excess of the liability already accrued with respect to a previously recognized loss contingency, it is often not possible to reasonably estimate the size of the possible loss or range of loss or possible additional losses or range of additional losses. It em 4.

Members of the Audit Committee are also encouraged to regularly engage in ad hoc conversations with management on cybersecurity-related news and discuss any updates to our cybersecurity risk management and strategy programs. Material cybersecurity risks are also considered during separate Board meeting discussions of important matters like risk management, business continuity planning, and other relevant matters.

As of December 31, 2023, the majority of the Company’s employees are still working remotely. The Company has limited operations outside the United States. The Company has one foreign subsidiary located in Israel which leases its operating facilities under a month-to-month operating lease agreement. The Company does not view any of its leased facilities as material to its business.

As of December 31, 2024, the majority of the Company’s employees are working remotely. The Company has limited operations outside the United States. The Company has one foreign subsidiary located in Israel which leases its operating facilities under a month-to-month operating lease agreement. The Company does not view any of its leased facilities as material to its business.

For additional information regarding risks from cybersecurity threats, please refer to Item 1A, “Risk Factors,” in this annual report on Form 10-K. We also have a cybersecurity specific risk assessment process, which helps identify residual risk from cybersecurity threats. We have adopted the HITRUST CSF Assurance Program for Cloud assessment to inform this risk assessment process.

The CTO has over 20 years of experience and has been a leader of our Company’s information systems and technological advancements for the past nine (9) years. The SVP of Engineering has over 20 years of experience in IT and has specialized knowledge in systems and network infrastructure.

The CTO has over 20 years of experience and leads our Company’s information systems and technological advancements. The SVP of Engineering has over 20 years of experience in IT and has specialized knowledge in systems and network infrastructure.

The Director of SRE and Security has eight (8) years of experience and has principal responsibility for our network operations and system administration.

The Director of Site Reliability Engineering and Security has nine years of experience and has principal responsibility for our network operations and system administration.

In addition to the foregoing, the Company may in the future be involved in various legal proceedings, claims and litigation that arise in the normal course of business.

Ite m 3. LEGAL PROCEEDINGS The Company has no material pending legal proceedings as of December 31, 2024, however the Company may in the future be involved in various legal proceedings, claims and litigation that arise in the normal course of business.

Removed

Ite m 3. LEGAL PROCEEDINGS We reached settlements for certain class action lawsuits in February 2023 ending ongoing litigation. The court granted final approval to these settlements in all respects in the third and fourth quarter of 2023.

Added

See Note 8, “Commitments and Contingencies,” in the notes to consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K, which is incorporated herein by reference. It em 4. MINE SAFETY DISCLOSURES Not applicable. 41 Table of Contents PART II

Removed

The Company has not admitted any liability of wrongdoing in connection with these settlements and has entered into these settlements solely to avoid the costs, risks, distraction, and uncertainties of continued litigation. See Note 6, “Commitments and Contingent Liabilities” in the notes to the consolidated financial statements for further details.

Removed

MINE SAFETY DISCLOSURES Not applicable. 43 Table of Contents PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

182 edited+67 added−60 removed100 unchanged

2023 filing

2024 filing

Biggest changeTreasury bonds with an equivalent term to the time to maturity of the warrants . 71 Table of Contents Assets and Liabilities Measured at Fair Value The Company's assets and liabilities, recorded at fair value on a recurring basis, as of December 31, 2023 and 2022, have been categorized based upon the fair value hierarchy as follows: Fair Value Measurements as of December 31, 2023 (in thousands) Level 1 Level 2 Level 3 Total Assets Cash $ 1,078 $ — $ — $ 1,078 Cash equivalents Money market funds 122,830 — — 122,830 Total cash and cash equivalents $ 123,908 $ — $ — $ 123,908 Liabilities Private Placement Warrants — — 1,842 1,842 Total Warrant Liabilities $ — $ — $ 1,842 $ 1,842 Fair Value Measurements as of December 31, 2022 (in thousands) Level 1 Level 2 Level 3 Total Assets Cash $ 118,038 $ — $ — $ 118,038 Cash equivalents Money market funds 20,507 — — 20,507 Total cash and cash equivalents $ 138,545 $ — $ — $ 138,545 Liabilities Private Placement Warrants — — 939 939 Total Warrant Liabilities $ — $ — $ 939 $ 939 The following table presents changes in Level 3 liabilities measured at fair value on a recurring basis for the years ended December 31, 2023 and 2022: Level 3 Liabilities Year Ended December 31, 2023 (in thousands) Beginning Balance Change in Fair Value Ending Balance Private Placement Warrants $ 939 $ 903 $ 1,842 Level 3 Liabilities Year Ended December 31, 2022 (in thousands) Beginning Balance Change in fair Value Ending Balance Private Placement Warrants $ 4,070 $ ( 3,131 ) $ 939 NOTE 6.

Biggest changeGovernment securities 1,439 2 — 1,441 — 1,441 Certificates of deposit 2,920 1 — 2,921 — 2,921 Corporate debt securities 29,791 7 ( 13 ) 29,785 — 29,785 Total level 2 41,382 12 ( 13 ) 41,381 6,494 34,887 $ 117,808 $ 15 $ ( 13 ) $ 117,810 $ 76,692 $ 41,118 Fair Value Measurements as of December 31, 2023 (in thousands) Adjusted Cost Basis Unrealized Gains Unrealized Losses Fair Value Cash and Cash Equivalents Marketable Securities Cash $ 1,078 $ — $ — $ 1,078 $ 1,078 $ — Level 1: Money market funds 122,830 — — 122,830 122,830 — $ 123,908 $ — $ — $ 123,908 $ 123,908 $ — Contractual Maturities The following table summarizes the remaining contractual maturities of our marketable securities as of December 31, 2024: As of December 31, 2024 (in thousands) Fair Value Due within one year $ 29,499 Due after one year through two years 11,619 Total $ 41,118 72 Table of Contents Level 3 The following table presents changes in Level 3 liabilities measured at fair value on a recurring basis for the years ended December 31, 2024 and 2023: Level 3 Liabilities Year Ended December 31, 2024 (in thousands) Beginning Balance Change in Fair Value Ending Balance Private Placement Warrants $ 1,842 $ ( 152 ) $ 1,690 Level 3 Liabilities Year Ended December 31, 2023 (in thousands) Beginning Balance Change in fair Value Ending Balance Private Placement Warrants $ 939 $ 903 $ 1,842 The following were the inputs utilized in determining the fair value of the Private Placement Warrants as of December 31, 2024 and 2023: Year Ended December 31, 2024 2023 Dividend yield (1) 0 % 0 % Expected volatility (2) 68.80 % 61.10 % Risk-free interest rate (3) 4.20 % 4.13 % Time to maturity (years) 1.47 2.47 (1 ) No dividends were paid for the years ending December 31, 2024 and 2023 .

Adjusted EBITDA should not be considered as an alternative to loss before income taxes, net loss, loss per share, or any other performance measures derived in accordance with U.S. GAAP. When evaluating our performance, you should consider adjusted EBITDA alongside other financial performance measures, including our net loss and other GAAP results.

Adjusted EBITDA should not be considered as an alternative to income (loss) before income taxes, net income (loss), income (loss) per share, or any other performance measures derived in accordance with U.S. GAAP. When evaluating our performance, you should consider adjusted EBITDA alongside other financial performance measures, including our net income (loss) and other GAAP results.

Talkspace LLC is party to various Management Services Agreements (“MSAs”) with TPN as well the PC entities as part of this transition.

Talkspace LLC is party to various Management Services Agreements (“MSAs”) with TPN as well as the PC entities as part of this transition.

Estimation of transaction price and variable consideration for revenue recognition Description of the Matter As discussed in Note 2 of the consolidated financial statements, the Company recognizes revenues from contracted insurance payors and employee assistance organizations ("Payor") at a point in time based on contracted rates, net of implicit price concessions, as virtual therapy or psychiatry session is rendered ("payor revenues").

Estimation of transaction price and variable consideration for revenue recognition Description of the Matter As discussed in Note 2 of the consolidated financial statements, the Company recognizes revenues from contracted insurance payors and employee assistance organizations (“Payor”) at a point in time based on contracted rates, net of implicit price concessions, as virtual therapy or psychiatry session is rendered ("payor revenues").

Payor The Company contracts with health insurance plans and employee assistance programs to provide therapy and psychiatry services to their eligible covered members. Revenue is recognized at a point in time, as virtual therapy or psychiatry sessions are rendered. The transaction price is determined based on contracted rates and includes variable consideration in the form of implicit price concessions.

Payor The Company contracts with health insurance plans and employee assistance programs to provide therapy and psychiatry services to their eligible members. Revenue is recognized at a point in time, as virtual therapy or psychiatry sessions are rendered. The transaction price is determined based on contracted rates and includes variable consideration in the form of implicit price concessions.

Our future capital requirements will depend on many factors including our growth rate, contract renewal activity, the timing and extent of investments to support product development efforts, our expansion of sales and marketing activities, the introduction of new and enhanced service offerings and the continuing market acceptance of virtual behavioral services.

Net loss per share The Company’s basic net loss per share is calculated by dividing net loss attributable to ordinary shareholders by the weighted-average number of shares of common stock outstanding for the period, without consideration of potentially dilutive securities.

Net Income (Loss) Per Share The Company’s basic net income (loss) per share is calculated by dividing net income (loss) attributable to ordinary shareholders by the weighted-average number of shares of common stock outstanding for the period, without consideration of potentially dilutive securities.

The Company believes the transition to a structure where it operates under various MSAs with professional associations and professional corporations authorized by state law to contract with affiliated professionals to delivery teletherapy services to its members, helps ensure the Company is able to comply with all applicable regulatory requirements, including the corporate practice of medicine and fee-splitting laws, that are necessarily implicated by engaging in telehealth care that can only be delivered by physicians.

The Company believes the transition to a structure where it operates under various MSAs with professional associations and professional corporations authorized by state law to contract with affiliated professionals to deliver teletherapy services to its members, helps ensure the Company is able to comply with all applicable regulatory requirements, including the corporate practice of medicine and fee-splitting laws, that are necessarily implicated by engaging in telehealth care that can only be delivered by physicians.

Forward-looking statements involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements, including, but not limited to, the important factors discussed in Part I, Item 1A, “Risk Factors” in this Annual Report on Form 10-K for the fiscal year ended December 31, 2023.

We may also be subject to indemnification obligations by law with respect to the actions of our employees under certain circumstances and in certain jurisdictions. 53 Table of Contents Off-Balance Sheet Arrangements We do not invest in any off-balance sheet vehicles that provide liquidity, capital resources, market or credit risk support, or engage in any activities that expose us to any liability that is not reflected in our consolidated financial statements.

We may also be subject to indemnification obligations by law with respect to the actions of our employees under certain circumstances and in certain jurisdictions. 52 Table of Contents Off-Balance Sheet Arrangements We do not invest in any off-balance sheet vehicles that provide liquidity, capital resources, market or credit risk support, or engage in any activities that expose us to any liability that is not reflected in our consolidated financial statements.

CONTROLS AND PROCEDURES EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES In connection with the preparation of this report, an evaluation was carried out by certain members of Company management, with the participation of the Chief Executive Officer and our Chief Financial Officer of the effectiveness of the Company’s disclosure controls and procedures (as defined in Securities and Exchange Commission’s (“SEC”) Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (“Exchange Act”)), as of December 31, 2023.

We assessed the historical accuracy of management’s estimate and performed sensitivity analyses to evaluate the changes in variable consideration that would result from changes in the expected collection rates used and the corresponding effect on revenues. /s/ Kost Forer Gabbay & Kasierer A Member of EY Global We have served as the Company’s auditor since 2014.

We assessed the historical accuracy of management’s estimate and performed sensitivity analysis to evaluate the changes in variable consideration that would result from changes in the expected collection rates used and the corresponding effect on revenues. /s/ Kost Forer Gabbay & Kasierer A Member of EY Global We have served as the Company’s auditor since 2014.

A reconciliation is provided below for adjusted EBITDA to net loss, the most directly comparable financial measure stated in accordance with GAAP.

A reconciliation is provided below for adjusted EBITDA to net income (loss), the most directly comparable financial measure stated in accordance with GAAP.

Additionally, we may in the future enter into arrangements to acquire or invest in complementary businesses, services and technologies. We currently anticipate to be able to fund our cash needs for at least the next twelve months and thereafter for the foreseeable future using available cash and cash equivalent balances as of December 31, 2023.

Revenue is presented net of refunds. The Company estimates the refund liability for the variable consideration portion of the transaction price primarily based on historical experience. The refund liability is recorded within the “Accrued expenses and other current liabilities” line item in the consolidated balance sheets. The refund liability was immaterial as of December 31, 2023 and 2022.

To the extent the transaction price includes variable consideration, revenue is recognized using the variable consideration allocation exception, or, if the allocation exception is not met, the Company recognizes revenue ratably based on estimates of the variable consideration to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequent resolved.

To the extent the transaction price includes variable consideration, revenue is recognized using the variable consideration allocation exception, or, if the allocation exception is not met, the Company recognizes revenue ratably over the period based on estimates of the variable consideration to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequent resolved.

Recent Accounting Pronouncements See Note 2, “Summary of Significant Accounting Policies and Estimates” in the notes to the consolidated financial statements for information regarding recent accounting developments and their impact on our results. 54 Table of Contents FORWARD-LOOKING STATEMENTS This Annual Report on Form 10-K contains forward-looking statements.

Recent Accounting Pronouncements See Note 2, “Summary of Significant Accounting Policies and Estimates” in the notes to the consolidated financial statements for information regarding recent accounting developments and their impact on our results. 53 Table of Contents FORWARD-LOOKING STATEMENTS This Annual Report on Form 10-K contains forward-looking statements.

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2023, in conformity with U.S. generally accepted accounting principles.

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2024, in conformity with U.S. generally accepted accounting principles.

Under the supervision of and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we assessed the effectiveness of our internal control over financial reporting as of December 31, 2023, using the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in Internal Control—Integrated Framework (2013) .

Under the supervision of and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we assessed the effectiveness of our internal control over financial reporting as of December 31, 2024, using the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in Internal Control—Integrated Framework (2013) .

The Company has elected not to record operating lease ROU assets and lease liabilities for leases with an initial term of 12 months or less. The Company also elected the practical expedient to not separate lease and non-lease components for its leases. The Company's lease assets and liabilities were immaterial as of December 31, 2023 and 2022.

OTHER INFORMATION During the fiscal quarter ended December 31, 2023, no director or officer of the Company adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as the terms are defined in Item 408(a) of Regulation S-K.

OTHER INFORMATION During the fiscal quarter ended December 31, 2024, no director or officer of the Company adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as the terms are defined in Item 408(a) of Regulation S-K.

We do not provide a forward-looking reconciliation of adjusted EBITDA guidance as the amount and significance of the reconciling items required to develop meaningful comparable GAAP financial measures cannot be estimated at this time without unreasonable efforts.

The NOL carryforwards begin to expire in 2032 and may become subject to annual limitation in the event of certain cumulative changes in the ownership interest of significant stockholders over a three-year period in excess of 50 %, as defined under I.R.C. Section 382 .

Opinion on Internal Control Over Financial Reporting We have audited Talkspace Inc.'s internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). In our opinion, Talkspace Inc.

Opinion on Internal Control Over Financial Reporting We have audited Talkspace, Inc.'s internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). In our opinion, Talkspace, Inc.

The Company also determined that it is able to direct the activities of TPN and the PC entities that most significantly impact their economic performance and it funds and absorbs all losses of these VIEs resulting in the Company being the primary beneficiary of these entities. Accordingly, the Company consolidates these VIEs.

Most of our revenue in any given quarter is derived from contracts entered into with our clients during previous quarters. Consequently, a decline in new or renewed contracts in any one quarter may not be fully reflected in our revenue for that quarter.

Most of our revenue in any given quarter is derived from contracts entered into with our customers during previous quarters. Consequently, a decline in new or renewed contracts in any one quarter may not be fully reflected in our revenue for that quarter.

Our subscription model also makes it difficult for us to rapidly increase our total revenue through additional sales in any period, as revenue from new clients must be recognized over the applicable term of the contract.

Our subscription model also makes it difficult for us to rapidly increase our total revenue through additional sales in any period, as revenue from new customers must be recognized over the applicable term of the contract.

The diluted net loss per share is calculated by giving effect to all potentially dilutive securities outstanding for the period using the treasury share method or the if-converted method based on the nature of such securities.

The diluted net income (loss) per share is calculated by giving effect to all potentially dilutive securities outstanding for the period using the treasury stock method or the if-converted method based on the nature of such securities.

VARIABLE INTEREST ENTITIES ("VIEs") In the second quarter of 2022, the Company completed a transition with respect to its relationship with its providers, transitioning to a structure whereby Talkspace LLC has entered into various agreements with a Texas professional association entity (Talkspace Provider Network, PA or “TPN”), which in turn contracts with our other affiliated professional entities ("PC entities"), physicians, therapists, and other licensed professionals for clinical and professional services provided to the Company's members.

VARIABLE INTEREST ENTIT IES (“VIEs”) In the second quarter of 2022, the Company completed a transition with respect to its relationship with its providers, transitioning to a structure whereby Talkspace LLC has entered into various agreements with a Texas professional association entity (Talkspace Provider Network, PA or “TPN”), which in turn contracts with our other affiliated professional entities ("PC entities"), physicians, therapists, and other licensed professionals for clinical and professional services provided to the Company's members.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated March 13, 2024 expressed an unqualified opinion thereon.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework)and our report dated March 12, 2025 expressed an unqualified opinion thereon.

The purpose of this section is to discuss and analyze our consolidated financial condition, liquidity and capital resources and results of operations for the years ended December 31, 2023 and 2022.

The purpose of this section is to discuss and analyze our consolidated financial condition, liquidity and capital resources and results of operations for the years ended December 31, 2024 and 2023.

In the future, we may choose to focus on international expansion, which may increase our exposure to foreign currency exchange risk. 55 Table of Contents Ite m 8.

In the future, we may choose to focus on international expansion, which may increase our exposure to foreign currency exchange risk. 54 Table of Contents Ite m 8.

FAIR VALUE MEASUREMENT The carrying value of the Company’s cash, cash equivalents, accounts receivable, other current assets, accounts payable, and accrued liabilities approximate fair value because of the relatively short-term nature of the underlying assets or liabilities.

FAIR VALUE MEASUREMENTS The carrying value of the Company’s cash, cash equivalents, accounts receivable, other current assets, accounts payable, and accrued liabilities approximate fair value because of the relatively short-term nature of the underlying assets or liabilities.

The compensation paid to our independently contracted providers is variable, and the amount paid to a provider is generally based on the amount of time committed by such provider to our members. Our employee providers receive a fixed-salary and discretionary bonuses, where applicable, all of which is included in cost of revenues.

The compensation paid to our 46 Table of Contents independently contracted providers is variable, and the amount paid to a provider is generally based on the amount of time committed by such provider to our members. Our employee providers receive a fixed-salary and discretionary bonuses, where applicable, all of which is included in cost of revenues.

The right-of-use ("ROU") asset represents the Company’s right to use an underlying asset for the lease term and the lease liability represents an obligation to make payments based on the present value of lease payments over the lease term.

The right-of-use (“ROU”) asset represents the Company’s right to use an underlying asset for the lease term and the lease liability represents an obligation to make payments based on the present value of lease payments over the lease term.

A valuation allowance has been recorded for the net deferred tax assets at December 31, 2023 and 2022. The Company maintains a full valuation allowance on its net deferred tax assets.

A valuation allowance has been recorded for the net deferred tax assets at December 31, 2024 and 2023. The Company maintains a full valuation allowance on its net deferred tax assets.

(the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2023, based on the COSO criteria.

(the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2024, based on the COSO criteria.

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

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

Components of Results of Operations Revenues We generate revenues from services provided to individuals who are qualified to receive access to the Company's services through our commercial arrangements with health insurance plans, employee assistance organizations and enterprises.

Components of Results of Operations Revenues We generate revenues from services provided to individuals who are qualified to receive access to the Company's services through our arrangements with health insurance plans, employee assistance programs and enterprises.

Such purchases will be at times and in amounts as the Company deems appropriate, based on factors such as price, market conditions, corporate and regulatory requirements, constraints specified in any Rule 10b5-1 trading plans, alternative investment opportunities and other business considerations.

All stock-based awards are measured based on the grant date fair value and are recognized on a straight-line basis in the Company’s consolidated statement of operations over the requisite service period (generally requiring a four-year vesting period). Stock Options Stock options generally vest over a four-year period and are exercisable a maximum period of ten years.

All stock-based awards are measured based on the grant date fair value and are recognized on a straight-line basis in the Company’s consolidated statements of income over the requisite service period (generally requiring a four-year vesting period). Stock Options Stock options generally vest over a four-year period and are exercisable a maximum period of ten years.

Based upon that evaluation, our management concluded that our internal control over financial reporting was effective as of December 31, 2023.

Based upon that evaluation, our management concluded that our internal control over financial reporting was effective as of December 31, 2024.

Deferred Revenue For the year ended December 31, 2023 and 2022, the Company recognized revenues of $2 .8 million and $ 6.2 million, respectively, that were included in deferred revenues at the beginning of the year. As of December 31, 2023, deferred revenue mainly related to the Company’s Consumer subscription business. NOTE 4.

Deferred Revenues For the year ended December 31, 2024 and 2023, the Company recognized revenues of $ 2.0 million and $ 2.8 million, respectively, that were included in deferred revenues at the beginning of the year. As of December 31, 2024, deferred revenue mainly related to the Company’s Consumer subscription business. NOTE 4.

The Company maintains director and officer liability insurance coverage that would generally enable it to recover a portion of any future amounts paid. The Company may also be subject to indemnification obligations by law with respect to the actions of its employees under certain circumstances and in certain jurisdictions. 73 Table of Contents NOTE 7.

This could limit the amount of tax attributes that can be utilized annually to offset future taxable income or future tax liabilities. The federal losses generated from 2018 onward do not expire. The Company is subject to U.S. federal and state and Israeli income taxes with varying statutes of limitations.

Section 382 . 78 Table of Contents This could limit the amount of tax attributes that can be utilized annually to offset future taxable income or future tax liabilities. The federal losses generated from 2018 onward do not expire. The Company is subject to U.S. federal and state and Israeli income taxes with varying statutes of limitations.

The second step is to measure the tax benefit as the largest amount that is more than 50% likely to be realized upon ultimate settlement. The Company's policy is to recognize interest related to unrecognized tax benefits as interest expense and penalties as operating expenses.

Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. /s/ Kost Forer Gabbay & Kasierer A Member of EY Global Tel-Aviv, Israel March 13, 2024 59 Table of Contents TALKSPACE, INC.

Impairment of long-lived assets and intangible assets subject to amortization, including ROU lease asset Property and equipment, intangible assets and ROU lease assets are reviewed for impairment in accordance with ASC 360, “Accounting for the Impairment or Disposal of Long-Lived Assets”, whenever events or changes in circumstances indicate that the carrying amount of an asset group may not be recoverable.

Impairment of Long-Lived Assets and Intangible Assets subject to Amortization, including ROU Lease Asset Fixed assets, internal-use software, intangible assets and ROU lease assets are reviewed for impairment in accordance with ASC 360, “Accounting for the Impairment or Disposal of Long-Lived Assets”, whenever events or changes in circumstances indicate that the carrying amount of an asset group may not be recoverable.

For a discussion of our results of operations, liquidity and capital resources for the year ended December 31, 2021, see "Management's Discussion and Analysis of Financial Condition and Results of Operations" in Part II, Item 7 of our Annual Report on Form 10-K for the fiscal year ended December 31, 2022.

For a discussion of our results of operations, liquidity and capital resources for the year ended December 31, 2022, see “Management's Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of our Annual Report on Form 10-K for the fiscal year ended December 31, 2023.

We do not have any indebtedness for borrowed money outstanding. We do not believe that a hypothetical increase or decrease of 100 basis points in interest rates would have a material effect on our business, financial condition or results of operations. However, our earnings on cash equivalents are subject to market risk due to changes in interest rates.

We do not believe that a hypothetical increase or decrease of 100 basis points in interest rates would have a material effect on our business, financial condition or results of operations. However, our earnings on cash equivalents are subject to market risk due to changes in interest rates.

The Company’s independent registered public accounting firm, Kost Forer Gabbay & Kasierer, A Member of EY Global, which audited our consolidated financial statements included in this Form 10-K, has audited the effectiveness of the Company’s internal control over financial reporting as of December 31, 2023, and has issued an attestation, which appears in their report above.

The Company’s independent registered public accounting firm, Kost Forer Gabbay & Kasierer, a member of EY Global, which audited our consolidated financial statements included in this Form 10-K, has audited the effectiveness of the Company’s internal control over financial reporting as of December 31, 2024, and has issued an attestation, which appears in their report in Item 8 Financial Statements and Supplementary Data of this form 10-K.

The decrease in sales and marketing expenses was primarily driven by a decrease in direct marketing and promotional costs, subcontractor costs, and employee-related costs, inclusive of non-cash stock compensation expense.

The decrease in sales and marketing expenses was primarily driven by a decrease in subcontractor costs and employee-related costs, inclusive of non-cash stock compensation expense, partially offset by an increase in direct marketing and promotional costs.

Under this standard, fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (i.e., the “exit price”) in an orderly transaction between market participants at the measurement date. In determining fair value, the Company uses various valuation approaches.

The Company estimates the amount of variable consideration that is included in the transaction price mainly by estimating claims denials by insurance payor, primarily based on actual historical collection experience by insurance payor. For the year ended December 31, 2023, payor revenues were $80.8 million.

Cash and cash equivalents Cash equivalents are short-term, highly liquid investments that are readily convertible to cash, with original maturities of three months or less at the date a cquired. The Company’s cash and cash equivalents generally consist of bank deposits and investments in money market funds.

Cash and Cash Equivalents Cash equivalents are short-term, highly liquid investments that are readily convertible to cash, with original maturities of three months or less at the date a cquired. The Company’s cash and cash equivalents generally consist of bank deposits and investments in money market funds, U.S. treasury securities and commercial paper.

The Company's matching contributions to participants’ accounts were immaterial for the years ended December 31, 2023, 2022 and 2021. Fair value of financial instruments The Company applies ASC 820, “Fair Value Measurements and Disclosures”.

The Company's matching contributions to participants’ accounts were immaterial for the years ended December 31, 2024, 2023 and 2022. 68 Table of Contents Fair Value of Financial Instruments The Company applies ASC 820, “Fair Value Measurements and Disclosures”.

The Company evaluates its assumptions on an ongoing basis. The Company's management believes that the estimates, judgments, and assumptions used are reasonable based on the information available at the time they are made. Estimates, by their nature, are based on judgment and available information, therefore, actual results could be materially different from these estimates.

The Company’s management believes that the estimates, judgments, and assumptions used are reasonable based on information available at the time they are made. Estimates, by their nature, are based on judgment and available information, therefore, actual results could be materially different from these estimates.

Thus, the dollar is the Company’s functional and reporting currency. Accordingly, non-dollar denominated transactions and balances have been re-measured into the functional currency in accordance with ASC 830, “Foreign Currency Matters”. These transactions were not material for the years ended December 31, 2023, 2022 and 2021.

Accordingly, non-dollar denominated transactions and balances have been re-measured into the functional currency in accordance with ASC 830, “Foreign Currency Matters”. These transactions were not material for the years ended December 31, 2024, 2023 and 2022.

Restricted Stock Units Restricted Stock Units ("RSUs") typically vest over a four-year period.

Restricted Stock Units Restricted Stock Units (“RSUs” ) typically vest over a four-year period.

MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING Management of the Company is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act.

Generally Accepted Accounting Principles (“US GAAP”). MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING Management of the Company is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act.

The assessment regarding whether a valuation allowance is required considers both positive and negative evidence when determining whether it is more likely than not that deferred tax assets are recoverable. In making this assessment, significant weight is given to evidence that can be objectively verified.

No such advances have been made by the Manager to TPN or the PC entities for years ended December 31, 2023 and 2022. The Company holds a variable interest in TPN and the PC entities. The Company evaluates whether an entity in which it has a variable interest is considered a VIE.

No such advances have been made by the Manager to TPN or the PC entities as of December 31, 2024 and 2023. The Company holds a variable interest in TPN and the PC entities. The Company evaluates whether an entity in which it has a variable interest is considered a VIE.

The weighted average grant-date fair value of stock options granted to employees during the years ended December 31, 2023 was $ 0.74 per share ($ 0.88 and $ 3.81 per share for the years ended December 31, 2022 and 2021, respectively).

The weighted average grant-date fair value of stock options granted to employees during the years ended December 31, 2024 was $ 1.48 per share ($ 0.74 per share and $ 0.88 per share for the years ended December 31, 2023 and 2022, respectively).

A reconciliation of the Company’s statutory income tax rate to the Company’s effective income tax rate is as follows: Year ended December 31, (in thousands) 2023 2022 2021 Loss before income taxes $ ( 18,964 ) $ ( 79,418 ) $ ( 62,695 ) Statutory tax rate 21 % 21 % 21 % Federal taxes ( 3,982 ) ( 16,678 ) ( 13,166 ) Increase (decrease) in effective tax rate due to: State taxes, net of federal benefit 276 ( 4,079 ) ( 2,500 ) Impairment of goodwill — 1,288 — Permanent differences 897 83 ( 1,492 ) Other Adjustments ( 373 ) ( 6,669 ) 94 Valuation allowance 3,400 26,309 17,111 Actual income taxes $ 218 $ 254 $ 47 The main reconciling item between the statutory tax rate of the Company and the effective tax rate is the recognition of valuation allowance in respect of deferred taxes relating to accumulated net operating losses carried forward due to the uncertainty of the realization of such deferred taxes.

A reconciliation of the Company’s statutory income tax rate to the Company’s effective income tax rate is as follows: Year Ended December 31, (in thousands) 2024 2023 2022 Income (loss) before income taxes $ 1,242 $ ( 18,964 ) $ ( 79,418 ) Statutory tax rate 21 % 21 % 21 % Federal taxes 261 ( 3,982 ) ( 16,678 ) Increase (decrease) in effective tax rate due to: State taxes, net of federal benefit ( 164 ) 276 ( 4,079 ) Impairment of goodwill — — 1,288 Permanent differences 683 897 83 Other Adjustments ( 648 ) ( 373 ) ( 6,669 ) Valuation allowance ( 38 ) 3,400 26,309 Actual income taxes $ 94 $ 218 $ 254 The main reconciling item between the statutory tax rate of the Company and the effective tax rate is the recognition of valuation allowance in respect of deferred taxes relating to accumulated net operating losses carried forward due to the uncertainty of the realization of such deferred taxes.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Talkspace Inc. as of December 31, 2023 and 2022, the related consolidated statements of operations, shareholders’ equity (deficit) and cash flows for each of the three years in the period ended December 31, 2023, and the related notes and our report dated March 13, 2024 expressed an unqualified opinion thereon.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Talkspace, Inc. as of December 31, 2024 and 2023, the related consolidated statements of income, comprehensive income (loss), stockholders’ equity and cash flows for each of the three years in the period ended December 31, 2024, and the related notes and our report dated March 12, 2025 expressed an unqualified opinion thereon.

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 eligible lives calculation, which may cause this amount to reflect a higher number of eligible lives than we actually serve.

There may be instances where a person may be covered through multiple solutions. In these instances, the person is counted each time they are covered in the eligible lives calculation, which may cause this amount to reflect a higher number of eligible lives than we actually serve.

See Note 8, “Share-based Compensation” in the notes to the consolidated financial statements and Part III, Item 12, which incorporates information by reference to the definitive Proxy Statement for our 2024 Annual Meeting of Stockholders, for further details. Recent Sales of Unregistered Securities; Use of Proceeds from Registered Securities None.

See Note 10 “Stock-based Compensation,” in the notes to the consolidated financial statements and Part III, Item 12, which incorporates information by reference to the definitive Proxy Statement for our 2025 Annual Meeting of Stockholders, for further details. Recent Sales of Unregistered Securities; Use of Proceeds from Registered Securities None.

Overview Talkspace is a healthcare company offering its members convenient and affordable access to a fully-credentialed network of highly qualified providers. We are a leading virtual behavioral health company and, since Talkspace’s founding in 2012, we have connected millions of patients with licensed mental health providers across a wide and growing spectrum of care through virtual counseling, psychotherapy and psychiatry.

Overview Talkspace is a healthcare company offering its members convenient and affordable access to a fully-credentialed network of highly qualified providers. We are a leading virtual behavioral healthcare company connecting millions of patients with licensed mental health providers across a wide and growing spectrum of care through virtual psychotherapy and psychiatry.

Contracts include annual evergreen clauses and generally may be terminated by either party typically upon a minimum 60-day advance notice. DTE The Company contracts with enterprises to provide access to the Company's therapist platform for their enterprise members, primarily based on a per-member-per-month access fee model.

There were no impairment charges related to long-lived assets for the years ended December 31, 2023, 2022 or 2021. Revenue recognition The Company recognizes revenue in accordance with ASC 606, “Revenue from Contracts with Customers”, when the Company satisfies its performance obligation to perform its defined contractual obligations to provide virtual behavioral healthcare services.

There were no impairment charges for the years ended December 31, 2024, 2023 or 2022. 66 Table of Contents Revenue Recognition The Company recognizes revenue in accordance with ASC 606, “Revenue from Contracts with Customers”, when the Company satisfies its performance obligation to perform its defined contractual obligations to provide virtual behavioral healthcare services.

NOTE 10. TAXES ON INCOME The Company and its subsidiaries file income tax returns in the U.S. federal, and various states and foreign jurisdictions. The Company assessed its uncertain tax positions and determined that it has no uncertain tax positions at December 31, 2023.

INCOME TAX EXPENSE The Company and its subsidiaries file income tax returns in the U.S. federal, and various states and foreign jurisdictions. The Company assessed its uncertain tax positions and determined that it has no uncertain tax positions at December 31, 2024.

SUBSEQUENT EVENT Share Repurchase Program On February 22, 2024, the Company announced that its Board of Directors has approved a share repurchase program which authorizes the repurchase of up to $ 15 million of the currently outstanding shares of the Company’s common stock over a period of twenty-four months beginning on March 1, 2024 (the “Repurchase Program”).

Share Repurchase Program On February 22, 2024, the Company announced that its Board of Directors approved a share repurchase program to authorize the repurchase of up to $15.0 million of the currently outstanding shares of the Company’s common stock over a period of twenty-four months beginning on March 1, 2024 (the “Share Repurchase Program”).

SHARE-BASED COMPENSATION In June 2021, the Company adopted the 2021 Incentive Award Plan (the “2021 Plan”) under which the Company may grant cash and equity incentive awards to officers, employees, directors, consultants and service providers in order to attract, motivate and retain the talent. The 2021 Plan replaced the Company's previous stock compensation plan.

STOCK-BASED COMPENSATION The Company may grant cash and equity incentive awards to officers, employees, directors, consultants and service providers in order to attract, motivate and retain talent under the Talkspace’s 2021 Incentive Award Plan (the “2021 Plan”).

Holders As of March 12, 2024, there were 78 holders of record of our common stock and 13 holders of record of our warrants. Dividends We have not paid any cash dividends on our common stock to date.

Holders As of March 10, 2025, there were 67 holders of record of our common stock and 12 holders of record of our warrants. Dividends We have not paid any cash dividends on our common stock to date.

The Company deposits may exceed federally insured limits, however management believes that the financial institutions that hold the Company’s and its subsidiaries’ cash and cash equivalents are institutions with high credit standing, and accordingly, minimal credit risk exists with respect to these assets . Property and equipment, net Property and equipment are stated at cost, net of accumulated depreciation.

The Israel subsidiary tax assessments filed by the Company thr ough the year 2017 are considered closed. NOTE 11.

The Israel subsidiary tax assessments filed by the Company thr ough the year 2019 are considered closed. NOTE 13.

The Company offers convenient and affordable access to a fully credentialed network of highly qualified providers. Since its inception, the Company has connected millions of patients with licensed behavioral health providers across a wide and growing spectrum of care through virtual counseling, psychotherapy, and psychiatry. Talkspace was originally incorporated as Hudson Executive Investment Corp.

The following table details the assets and liabilities of the VIEs as of December 31, 2023 and 2022. The assets and liabilities in the table below are presented prior to consolidation and thus a portion of these assets and liabilities are eliminated in consolidation.

Accordingly, the Company consolidates these VIEs. 79 Table of Contents The following table details the assets and liabilities of the VIEs as of December 31, 2024 and 2023. The assets and liabilities in the table below are presented prior to consolidation and thus a portion of these assets and liabilities are eliminated in consolidation.

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Top changes in Talkspace, Inc.'s 2024 10-K

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