Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
Unless the context otherwise requires, all references in this section as to “Talkspace,” the “Company,” “we,” “us” or “our” refer to the business of Talkspace, Inc. and its consolidated subsidiaries.
The following discussion and analysis of our financial condition and results of operations should be read together with the financial statements and the related notes contained in this Quarterly Report and the financial statements and related notes contained in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2022. This discussion contains forward-looking statements that reflect our plans, estimates, and beliefs that involve risks and uncertainties. As a result of many factors, such as those discussed in Part I, Item 1A, “Risk Factors” of the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2022 and “Forward-Looking Statements” sections and elsewhere in this Quarterly Report, our actual results may differ materially from those anticipated in these forward-looking statements.
The purpose of this section is to discuss and analyze our consolidated financial condition, liquidity and capital resources and results of operations for the three months ended March 31, 2023 and 2022. For a discussion of our results of operations, liquidity and capital resources for the three months ended March 31, 2021, see "Management's Discussion and Analysis of Financial Condition and Results of Operations" in Part I, Item 2 of our Quarterly Report on Form 10-Q for the three months ended March 31, 2022.
Overview
Talkspace is a healthcare company offering its members convenient and affordable access to a fully-credentialed network of highly qualified providers. We are a leading virtual behavioral health company and, since Talkspace’s founding in 2012, we have connected millions of patients with licensed mental health providers across a wide and growing spectrum of care through virtual counseling, psychotherapy and psychiatry. We created a purpose-built platform to address the vast, unmet and growing demand for mental health services of our members, serving our business-to-business (“B2B”) channel, comprised of large health plans and employee assistance programs (“Payors”) such as Aetna, Cigna, Premera and Optum and large enterprise clients (“DTE”) such as Google and Expedia (collectively, our “clients”), who offer their insured members and employees access to our platform at in-network reimbursement rates, or while their employer is under an active contract with Talkspace, where applicable, and our business-to-consumer (“Consumer”) channel, comprised of individual consumers who subscribe directly to our platform.
As of March 31, 2023, we had approximately 98 million B2B eligible lives and over 15,100 consumer active members. For the three months ended March 31, 2023, our clinicians completed 171,700 B2B sessions related to members covered under our health plan clients, as compared to 90,600 completed B2B sessions for the three months ended March 31, 2022. Please refer to the “Key Business Metrics” section below for a description of active members and B2B eligible lives.
Operating Segments
The Company operates as a single segment and as one reporting unit, which is how the chief operating decision maker (who is the chief executive officer) reviews financial performance and allocates resources.
Key Business Metrics
We monitor the following key metrics to help us evaluate our business, identify trends affecting our business, formulate business plans and make strategic decisions. We believe the following metrics are useful in evaluating our business:
|
|
|
|
|
|
|
|
|
Unaudited |
|
Three Months Ended March 31, |
|
(in thousands except number of health plan and enterprise clients or otherwise indicated) |
|
2023 |
|
|
2022 |
|
Number of B2B eligible lives at period end (in millions) |
|
|
98 |
|
|
|
77 |
|
Number of completed B2B sessions |
|
|
171.7 |
|
|
|
90.6 |
|
Number of health plan clients at period end |
|
|
20 |
|
|
|
16 |
|
Number of enterprise clients at period end |
|
|
227 |
|
|
|
189 |
|
Number of Consumer active members at period end |
|
|
15.1 |
|
|
|
22.2 |
|
14
Table of Contents
B2B Eligible Lives: We consider B2B lives “eligible” if such persons are eligible to receive treatment on the Talkspace platform, in the case of our 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 behavioral health paid benefit program. There may be instances where a person may be covered through multiple solutions, typically through behavioral health plans and employee assistance programs. In these instances, the person is counted each time they are covered in the B2B eligible lives calculation, which may cause this amount to reflect a higher number of B2B eligible lives than we actually serve.
Active Members: We consider members “active” (i) 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 a satisfaction or progress report survey or signing up for our platform, and (ii) in the case of our consumer members, commencing on the date such member initiates contact with a provider on our platform until the term of their monthly, quarterly or bi-annual subscription plan expires, unless terminated early. 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.
Components of Results of Operations
Revenues
We contract with health insurance plans, employee assistance organizations and enterprises to provide services to individuals who are qualified to receive access to the Company’s services through the Company’s commercial arrangements. We generate revenues from payments from insured members and claims paid by their respective insurance companies and from contracted platform access fees paid to us by our enterprise clients for the delivery of therapy services to their members or employees. We recognize revenues from services provided to insured members at a point in time, as virtual therapy or psychiatry session is rendered. We recognize revenue from our enterprise clients ratably over the contractual term based primarily on a per-member-per month access fee model.
We also generate revenues from the sale of monthly, quarterly, bi-annual and annual membership subscriptions to the Company's therapy platform as well as supplementary a la carte offerings directly to individual consumers through a subscription plan. We recognize member subscription revenues ratably over the subscription period, beginning when therapy services commence. We recognize revenues from supplementary a la carte offerings at a point in time, as virtual therapy session is rendered. Members may cancel their subscription at any time and will receive a pro-rata refund for the subscription price.
Revenue growth is generated from increasing our eligible covered lives through contracting with health plans, increasing utilization within eligible covered lives, expanding enterprise clients, and increasing membership subscriptions.
Cost of Revenues
Cost of revenues is comprised primarily of therapist payments. Cost of revenues is largely driven by the size of our provider network that is required to service the growth of our health plan and enterprise clients, in addition to the growth of our customer base.
We designed our business model and our provider network to be scalable and to leverage a hybrid model of both employee providers and independently contracted providers to support multiple growth scenarios. The compensation paid to our independently contracted providers is variable, and the amount paid to a provider is generally based on the amount of time committed by such provider to our members. In addition, our network supervisors have authority to approve the payment of incentive bonuses to providers with certain licenses during periods of higher demand for providers with such licenses. For our employee providers, they receive a fixed-salary and discretionary bonuses, where applicable, all of which is included in cost of revenues.
While we expect to make increased investments to support accelerated growth and the required investment to scale our provider network, we also expect increased efficiencies and economies of scale. Our cost of revenues as a percentage of revenues is expected to fluctuate from period to period depending on the interplay of these factors as well as pricing fluctuations.
15
Table of Contents
Operating Expenses
Operating expenses consist of research and development, clinical operations, sales and marketing, and general and administrative expenses.
Research and Development Expenses
Research and development expenses include personnel and related expenses for software development and engineering, information technology infrastructure, security, privacy compliance and product development (inclusive of stock-based compensation for our research and development employees), third-party services and contractors related to research and development, information technology and software-related costs.
Clinical Operations Expenses
Clinical operations expenses are associated with the management of our provider network of therapists. Such costs are comprised of costs related to recruiting, onboarding, credentialing, training and ongoing quality assurance activities (inclusive of stock-based compensation for our clinical operations employees), costs of third-party services and contractors related to recruiting and training and software-related costs.
Sales and Marketing Expenses
Sales expenses consist primarily of employee-related expenses, including salaries, benefits, commissions, travel and stock-based compensation costs for our employees engaged in sales and account management. We expect our sales expenses to increase as we continue to invest in the expansion of our health plan and enterprise business.
Marketing expenses consist primarily of advertising and marketing expenses for member acquisition and engagement, as well as personnel costs, including salaries, benefits, bonuses, stock-based compensation expense for marketing employees, third-party services and contractors. Marketing expenses also include third-party software subscription services, third-party independent research, participation in trade shows, brand messaging and costs of communications materials that are produced for our clients to generate greater awareness and utilization of our platform among our health plan and enterprise clients.
General and Administrative Expenses
General and administrative expenses consist primarily of personnel costs, including salaries, benefits, bonuses and stock-based compensation expense for certain executives, finance, accounting, legal and human resources functions, as well as professional fees, occupancy costs, and other general overhead costs. We expect to incur additional general and administrative expenses in compliance, legal, investor relations, director’s and officer’s insurance, and professional services related to our compliance and reporting obligations as a public company, however we expect further incremental increases to be minimal.
Financial income, net
Financial income, net includes the impact from (i) non-cash changes in the fair value of our warrant liabilities, (ii) interest earned on cash equivalents deposited in our money market accounts and (iii) other financial expenses in connection with bank charges.
Taxes on income
Our taxes on income consists primarily of foreign income taxes related to income generated by our subsidiary organized under the laws of Israel.
We have a full valuation allowance for our U.S. deferred tax assets, including federal and state NOLs. We expect to maintain this valuation allowance until it becomes more likely than not that the benefit of our federal and state deferred tax assets will be realized through expected future taxable income in the United States.
16
Table of Contents
Results of Operations
The following table presents our results of operations for the three months ended March 31, 2023 and 2022 and the dollar and percentage change between the respective periods:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31, |
|
|
Variance |
|
Unaudited |
|
2023 |
|
|
2022 |
|
|
$ |
|
|
% |
|
(in thousands, except percentages, share and per share data) |
|
|
|
|
|
|
|
|
Revenues |
|
$ |
33,336 |
|
|
$ |
30,150 |
|
|
$ |
3,186 |
|
|
|
10.6 |
|
Cost of revenues |
|
|
16,588 |
|
|
|
15,129 |
|
|
|
1,459 |
|
|
|
9.6 |
|
Gross profit |
|
|
16,748 |
|
|
|
15,021 |
|
|
|
1,727 |
|
|
|
11.5 |
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
Research and development, net |
|
|
5,353 |
|
|
|
5,035 |
|
|
|
318 |
|
|
|
6.3 |
|
Clinical operations, net |
|
|
1,601 |
|
|
|
1,776 |
|
|
|
(175 |
) |
|
|
(9.9 |
) |
Sales and marketing |
|
|
13,469 |
|
|
|
21,408 |
|
|
|
(7,939 |
) |
|
|
(37.1 |
) |
General and administrative |
|
|
5,364 |
|
|
|
8,010 |
|
|
|
(2,646 |
) |
|
|
(33.0 |
) |
Total operating expenses |
|
|
25,787 |
|
|
|
36,229 |
|
|
|
(10,442 |
) |
|
|
(28.8 |
) |
Operating loss |
|
|
(9,039 |
) |
|
|
(21,208 |
) |
|
|
12,169 |
|
|
|
57.4 |
|
Financial income, net |
|
|
(424 |
) |
|
|
(869 |
) |
|
|
445 |
|
|
|
(51.2 |
) |
Loss before taxes on income |
|
|
(8,615 |
) |
|
|
(20,339 |
) |
|
|
11,724 |
|
|
|
57.6 |
|
Taxes on income |
|
|
143 |
|
|
|
21 |
|
|
|
122 |
|
|
|
581.0 |
|
Net loss |
|
$ |
(8,758 |
) |
|
$ |
(20,360 |
) |
|
$ |
11,602 |
|
|
|
57.0 |
|
Revenues. Revenues increased by $3.2 million, or 10.6% to $33.3 million for the three months ended March 31, 2023 from $30.2 million for the three months ended March 31, 2022. The increase was principally due to a 70.6% growth in B2B revenue driven by a higher number of completed B2B sessions and an increase in covered lives from health plan clients and new enterprise clients, partially offset by a 39.9% decline in consumer subscription revenue. Revenue from our health plan clients increased by $6.7 million, or 82.7%, to $14.8 million for the three months ended March 31, 2023 from $8.1 million for the three months ended March 31, 2022. Enterprise client contracts increased by 38 clients, or 20.1%, to 227 clients as of March 31, 2023 from 189 clients as of March 31, 2022. This increase in the number of enterprise clients drove revenue to increase by $3.0 million, or 52.6% to $8.7 million for the three months ended March 31, 2023 from $5.7 million for the three months ended March 31, 2022. Consumer subscriptions revenue decreased by $6.6 million, or 39.9%, to $9.8 million for the three months ended March 31, 2023 from $16.4 million for the three months ended March 31, 2022, due to the Company's intentional and strategic decision to reduce marketing spend related to this service.
Costs of revenues. Cost of revenues increased by $1.5 million, or 9.6%, to $16.6 million for the three months ended March 31, 2023 from $15.1 million for the three months ended March 31, 2022, primarily due to increased hours worked by therapists to meet strong customer engagement.
Gross profit. Gross profit increased by $1.7 million, or 11.5%, to $16.7 million for the three months ended March 31, 2023 from $15.0 million for the three months ended March 31, 2022. Gross margin was 50.2% for the three months ended March 31, 2023, compared to 49.8% during the three months ended March 31, 2022. The increase in gross margin was primarily driven by higher network productivity.
Research and development expenses. Research and development expenses increased by $0.3 million, or 6.3% to $5.3 million for the three months ended March 31, 2023 from $5.0 million for the three months ended March 31, 2022. This was primarily due to higher investments in our technology platform.
Clinical operations expenses. Clinical operations expenses decreased by $0.2 million, or 9.9% to $1.6 million for the three months ended March 31, 2023 from $1.8 million for the three months ended March 31, 2022. This was primarily due to a decrease in provider recruitment costs.
Sales and marketing expenses. Sales and marketing expenses decreased by $7.9 million, or 37.1%, to $13.5 million for the three months ended March 31, 2023 from $21.4 million for the three months ended March 31, 2022. The decrease in sales and marketing expenses was primarily driven by a decrease in direct marketing and promotional costs in order to optimize for profitability.
General and administrative expenses. General and administrative expenses decreased by $2.6 million, or 33.0%, to $5.4 million for the three months ended March 31, 2023 from $8.0 million for the three months ended March 31, 2022. This was primarily due to a decrease in professional fees and subcontractor costs in connection with our path to profitability.
17
Table of Contents
Financial income, net. Financial income, net was $0.4 million for the three months ended March 31, 2023, compared to financial income, net of $0.9 million for the three months ended March 31, 2022. For the three months ended March 31, 2023 financial income, net was primarily driven by interest income earned on our money market accounts of $0.6 million partially offset by non-cash losses resulting from the remeasurement of warrant liabilities of $0.2 million. For the three months ended March 31, 2022 financial income, net was primarily driven by non-cash gains resulting from the remeasurement of warrant liabilities.
Taxes on income. Taxes on income consists primarily of foreign income taxes related to income generated by our subsidiary organized under the laws of Israel.
Non-GAAP Financial Measures
In addition to our financial results determined in accordance with GAAP, we believe adjusted EBITDA, a non-GAAP measure, is useful in evaluating our operating performance and is a key performance measure that our management uses to assess our operating performance. Because adjusted EBITDA facilitates internal comparisons of our historical operating performance on a more consistent basis, we use this measure for business planning purposes and in evaluating acquisition opportunities. We also use adjusted EBITDA to evaluate our ongoing operations and for internal planning and forecasting purposes. We believe that this non-GAAP financial measure, when taken together with the corresponding GAAP financial measures, provides meaningful supplemental information regarding our performance by excluding certain items that may not be indicative of our business, results of operations or outlook. We believe that the use of adjusted EBITDA is helpful to our investors as it is a metric used by management in assessing the health of our business and our operating performance. However, non-GAAP financial information is presented for supplemental informational purposes only, has limitations as an analytical tool and should not be considered in isolation or as a substitute for financial information presented in accordance with GAAP.
Some of the limitations of adjusted EBITDA include (i) adjusted EBITDA does not necessarily reflect capital commitments to be paid in the future and (ii) although depreciation and amortization are non-cash charges, the underlying assets may need to be replaced and adjusted EBITDA does not reflect these requirements. In evaluating adjusted EBITDA, you should be aware that in the future we will incur expenses similar to the adjustments described herein. Our presentation of adjusted EBITDA should not be construed as an inference that our future results will be unaffected by these expenses or any unusual or non-recurring items. Our adjusted EBITDA may not be comparable to similarly titled measures of other companies because they may not calculate adjusted EBITDA in the same manner as we calculate the measure, limiting its usefulness as a comparative measure. Adjusted EBITDA should not be considered as an alternative to loss before income taxes, net loss, loss per share, or any other performance measures derived in accordance with U.S. GAAP. When evaluating our performance, you should consider adjusted EBITDA alongside other financial performance measures, including our net loss and other GAAP results.
A reconciliation is provided below for adjusted EBITDA to net loss, the most directly comparable financial measure stated in accordance with GAAP. Investors are encouraged to review our financial statements prepared in accordance with GAAP and the reconciliation of our non-GAAP financial measure to its most directly comparable GAAP financial measure, and not to rely on any single financial measure to evaluate our business.
We calculate adjusted EBITDA as net loss income adjusted to exclude (i) depreciation and amortization, (ii) interest and other expenses (income), net, (iii) tax benefit and expense, and (iv) stock-based compensation expense.
18
Table of Contents
The following table presents a reconciliation of adjusted EBITDA from the most comparable GAAP measure, net loss for the three months ended March 31, 2023 and 2022:
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31, |
|
Unaudited |
|
2023 |
|
|
2022 |
|
(in thousands) |
|
|
|
|
|
|
Net loss |
|
$ |
(8,758 |
) |
|
$ |
(20,360 |
) |
Add: |
|
|
|
|
|
|
Depreciation and amortization |
|
|
306 |
|
|
|
429 |
|
Financial income, net (1) |
|
|
(424 |
) |
|
|
(869 |
) |
Taxes on income |
|
|
143 |
|
|
|
21 |
|
Stock-based compensation |
|
|
2,303 |
|
|
|
2,368 |
|
Adjusted EBITDA |
|
$ |
(6,430 |
) |
|
$ |
(18,411 |
) |
(1) For the three months ended March 31, 2023, financial income, net, primarily consisted of $0.6 million of interest income from our money market accounts partially offset by $0.2 million in losses resulting from the remeasurement of warrant liabilities. For the three months ended March 31, 2022, financial income, net primarily consisted of $0.9 million in gains resulting from the remeasurement of warrant liabilities.
Liquidity and Capital Resources
As of March 31, 2023, we had $125.1 million of cash and cash equivalents ($138.5 million as of December 31, 2022), which we use to finance our operations and support a variety of growth initiatives and investments. We had no debt as of March 31, 2023. We expect to generate operating losses for the foreseeable future.
Our primary cash needs are to fund operating activities. Our future capital requirements will depend on many factors including our growth rate, contract renewal activity, the timing and extent of investments to support product development efforts, our expansion of sales and marketing activities, the introduction of new and enhanced service offerings, and the continuing market acceptance of virtual behavioral services. Additionally, we may in the future enter into arrangements to acquire or invest in complementary businesses, services and technologies.
We currently anticipate to be able to fund our cash needs for at least the foreseeable future using available cash and cash equivalent balances as of March 31, 2023. However, in the future we may require additional capital to respond to technological advancements, competitive dynamics, customer demands, business opportunities, acquisitions or unforeseen circumstances and we may determine to engage in equity or debt financings or enter into credit facilities for other reasons. We may not be able to timely secure additional debt or equity financing on favorable terms, or at all. If we raise additional funds through the issuance of equity or convertible debt or other equity-linked securities, our existing stockholders could experience significant dilution. Any debt financing obtained by us in the future could involve restrictive covenants relating to our capital raising activities and other financial and operational matters, which may make it more difficult for us to obtain additional capital and to pursue business opportunities, including potential acquisitions. If we cannot raise capital when needed, we may be forced to undertake asset sales or similar measures to ensure adequate capital.
If we are unable to obtain adequate financing or financing on terms satisfactory to us, when we require it, our ability to continue to grow or support our business and to respond to business challenges could be significantly limited.
Cash Flows from Operating, Investing and Financing Activities
The following table presents the summary condensed consolidated cash flow information for the periods presented:
Cash Flows
|
|
|
|
|
|
|
|
|
Unaudited |
|
Three Months Ended March 31, |
|
(in thousands) |
|
2023 |
|
|
2022 |
|
Net cash used in operating activities |
|
$ |
(14,037 |
) |
|
$ |
(15,146 |
) |
Net cash provided by (used in) investing activities |
|
|
19 |
|
|
|
(88 |
) |
Net cash provided by financing activities |
|
|
556 |
|
|
|
1,505 |
|
Net decrease in cash and cash equivalents |
|
$ |
(13,462 |
) |
|
$ |
(13,729 |
) |
19
Table of Contents
Operating Activities
The decrease in net cash used in operating activities was driven primarily by the positive impact of lower operating expenses offset by unfavorable timing of collections on receivables and payments of account payables and accrued expenses.
Investing Activities
The increase in net cash provided by investing activities was driven primarily by an increase in the proceeds from the sale of computer equipment and a decrease in the purchases of computer equipment and software.
Financing Activities
The decrease in net cash provided by financing activities was primarily driven by a decrease in the proceeds from the exercise of stock options.
Contractual Obligations, Commitments and Contingencies
As of March 31, 2023, we did not have any short-term or long-term debt, or significant long-term liabilities.
As of March 31, 2023, we have a long-term operating lease for our office space in New York, NY. See Note 5, “Leases” in the notes to the condensed consolidated financial statements for further details.
A settlement was reached in February 2023 for certain class action lawsuits ending the ongoing litigation, see Item 1, “Legal Proceedings” in Part II, “Other Information” for further details. In addition, we may in the future be involved in various legal proceedings, claims and litigation that arise in the normal course of business. We accrue for estimated loss contingencies related to legal matters when available information indicates that it is probable a liability had been incurred and we can reasonably estimate the amount of that loss. In many proceedings, however, it is inherently difficult to determine whether any loss is probable or even possible or to estimate the amount of any loss. In addition, even where a loss is possible or an exposure to loss exists in excess of the liability already accrued with respect to a previously recognized loss contingency, it is often not possible to reasonably estimate the size of the possible loss or range of loss or possible additional losses or range of additional losses. Should any of our estimates and assumptions change or prove to be incorrect, it could have a material impact on our results of operations, financial position, and cash flows. See Note 6, “Commitments and Contingent Liabilities” in the notes to the condensed consolidated financial statements for further details.
Our commercial contract arrangements generally include certain provisions requiring us to indemnify clients against liabilities if there is a breach of a client’s data or if our service infringes a third party’s intellectual property rights. To date, we have not incurred any material costs as a result of such indemnifications.
We have also agreed to indemnify our officers and directors for costs associated with any fees, expenses, judgments, fines and settlement amounts incurred by any of these persons in any action or proceeding to which any of those persons is, or is threatened to be, made a party by reason of the person’s service as a director or officer, including any action by us, arising out of that person’s services as our director or officer or that person’s services provided to any other company or enterprise at our request. We maintain director and officer liability insurance coverage that would generally enable us to recover a portion of any future amounts paid. We may also be subject to indemnification obligations by law with respect to the actions of our employees under certain circumstances and in certain jurisdictions.
Off-Balance Sheet Arrangements
We do not invest in any off-balance sheet vehicles that provide liquidity, capital resources, market or credit risk support, or engage in any activities that expose us to any liability that is not reflected in our condensed consolidated financial statements.
Inflation Risk
We do not believe that inflation has had a material effect on our business, financial condition or results of operations. If our costs were to become subject to significant inflationary pressures, we may not be able to fully offset such higher costs through price increases. Our inability or failure to do so could harm our business, financial condition or results of operations.
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Table of Contents
Critical Accounting Policies and Estimates
The Company’s condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America. Reference is also made to the Company’s consolidated financial statements and notes thereto found in its Annual Report on Form 10-K for the year ended December 31, 2022.
The Company’s accounting policies are essential to understanding and interpreting the financial results reported on the condensed consolidated financial statements. The significant accounting policies used in the preparation of the Company’s audited consolidated financial statements are summarized in Note 2 to those financial statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022. Certain of those policies are considered to be particularly important to the presentation of the Company's financial results because they require management to make difficult, complex or subjective judgments, often as a result of matters that are inherently uncertain.
During the three months ended March 31, 2023, there were no material changes to matters discussed under the heading “Critical Accounting Policies and Estimates” in Part II, Item 7 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2022.
Recent Accounting Pronouncements
Information regarding recent accounting developments and their impact on our results can be found in “Part I, Item 1. Financial Statements – Note 2 – Significant Accounting Policies” of this Quarterly Report.
21
Table of Contents
FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q (the “Quarterly Report”) contains forward-looking statements. We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). All statements other than statements of historical facts contained in this Quarterly Report may be forward-looking statements. In some cases, you can identify forward-looking statements by terms such as “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “could,” “intends,” “targets,” “projects,” “contemplates,” “believes,” “estimates,” “forecasts,” “predicts,” “potential” or “continue” or the negative of these terms or other similar expressions. Forward-looking statements contained in this Quarterly Report include, but are not limited to, statements regarding our future results of operations and financial position, industry and business trends, stock-based compensation, revenue recognition, business strategy, plans and market growth.
The forward-looking statements in this Quarterly Report and other such statements we publicly make from time-to-time are only predictions. We base these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our business, financial condition, and results of operations. Forward-looking statements involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements, including, but not limited to, the important factors discussed in Part I, Item 1A, “Risk Factors” of the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2022. The forward-looking statements in this Quarterly Report are based upon information available to us as of the date of this Quarterly, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain and investors are cautioned not to unduly rely upon these statements.
You should read this Quarterly Report and the risk factors discussed in Part I, Item 1A, “Risk Factors” of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022 with the understanding that our actual future results, levels of activity, performance and achievements may be materially different from what we expect. We qualify all of our forward-looking statements by these cautionary statements. These forward-looking statements speak only as of the date of this Quarterly Report. Except as required by applicable law, we do not plan to publicly update or revise any forward-looking statements contained in the Company's Annual Report on Form 10-K or any forward-looking statements we may publicly make from time-to-time, whether as a result of any new information, future events or otherwise.