Girard Sharp LLP and Malmfeldt Law Group P.C. announce an investigation of potential breach of fiduciary duty claims on behalf of stockholders of Talkspace, Inc. (“Talkspace” or the “Company”) (Nasdaq:TALK). Talkspace began as Hudson Executive Investment Corporation (“HEIC”), a blank check company (also known as a special purpose acquisition company, or SPAC). Prior to the Company’s June 2021 merger with Talkspace, the Company’s directors issued a proxy which urged stockholders to vote in favor of the merger. The proxy may have misrepresented the Company’s business, financials, and prospects. Additionally, in recommending the merger, the Company’s directors had conflicting interests because they held non-redeemable founder shares in the Company that would only convert to valuable Class A Company shares if the Company completed a merger.

If you purchased stock in the Company before the merger with Talkspace and wish to discuss your recovery options, please provide your information by clicking here. You can also contact attorney Adam Polk of Girard Sharp by calling (415) 981-4800 or via email at apolk@girardsharp.com, or attorney Paul Malmfeldt of Malmfeldt Law Group by calling (312) 606-8625 or via email at pdm@malmfeldt.com.

Investigation: Girard Sharp and Malmfeldt Law Group are investigating whether the final proxy statement soliciting stockholder approval of the merger with Talkspace may have misrepresented its business, financials, and prospects, by omitting, among other things, that: (i) Talkspace was experiencing significantly increased online advertising costs in its B2C business since the start of 2021; (ii) Talkspace was experiencing lower conversion rates in its online advertising in its B2C business; (iii) Talkspace was experiencing increased customer acquisition costs and more tepid B2C demand than represented to investors; (iv) Talkspace was suffering from increasing customer acquisition costs and worsening growth and gross margin trends; and (v) Talkspace had overvalued its accounts receivables from certain of its health plan clients in its B2B business, which amounts required adjustment downward.

On August 9, 2021, Talkspace revealed some issues relating to increased customer acquisition costs due to rising digital advertising costs while downplaying their impact, and confirmed a material increase in customer acquisition costs since the beginning of the year. On this news, Talkspace's stock price fell by nearly 19%. Subsequently, on November 15, 2021, Talkspace issued a press release announcing Talkspace's financial results for the third quarter of 2021 and revealing, among other things, that "[i]n the third quarter we increased the allowance for credit losses on receivables by $3.4 million, of which $2.8 million related to prior quarters" and that "Q3 Net Revenue came in below management expectations due to a lower number of B2C customers and a one-time non-cash reserve adjustment for credit losses on receivables related to prior periods." Talkspace also announced that day that effective immediately Talkspace's co-founder, CEO, and board member, defendant Oren Frank, was stepping down. Likewise, his wife Roni Frank would also be stepping down from her position as Head of Clinical Services and board member. On this news, Talkspace's stock price fell by more than 36%, further damaging investors.

By December 30, 2021, the price of Talkspace common stock was trading below $2 per share, 80% below the price shareholders would have received if they had redeemed their shares instead of approving the merger less than one year earlier.

ABOUT GIRARD SHARP LLP: Girard Sharp LLP is a national litigation firm representing plaintiffs in class and collective actions in federal and state courts. The firm serves individuals, institutions and business clients in cases involving securities, antitrust, consumer protection, and whistleblower laws. Our clients range from individual consumers and small businesses to Fortune 100 corporations and public pension funds. Our attorneys have recovered over a billion dollars for our clients against some of the nation’s largest corporations, such as Raymond James, Peregrine Financial Group, and Oppenheimer Funds, in cases arising from securities fraud, false advertising and other unfair business practices. Girard Sharp has been distinguished as a Tier 1 law firm for plaintiffs’ class action litigation in the “Best Law Firms” list in the survey published in U.S. News & World Report’s Money Issue. Law360 named Girard Sharp as one of its Product Liability Groups of the Year for 2021. In 2020, Girard Sharp was honored with the Daily Journal’s “Top Boutiques in California” award. The National Law Journal (NLJ) also has named Girard Sharp to its elite “Plaintiffs’ Hot List,” a selection of top U.S. plaintiffs’ firms recognized for wins in high-profile cases.

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