Company: TALK
Filing Date: 2025-03-12
Form Type: 10-K
Source: 0000950170-25-038107
Chunk: 165

Company: Talkspace, Inc.
Filing Date: 2025-03-12
Form: 10-K
Item: Item 8
Chunk 165
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 December 31, 2024, 2023 and 2022.

68

Fair Value of Financial InstrumentsThe Company applies ASC 820, “Fair Value Measurements and Disclosures”. 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. Accounting guidance for the fair value measurement establishes a framework for measuring fair value, establishes a fair value measurement hierarchy, and requires certain fair value measurement disclosures. The fair value hierarchy established by this accounting guidance prioritizes the inputs used in valuation techniques into the following three categories (highest to lowest priority):Level 1:      Quoted prices in active markets for identical assets or liabilities.Level 2:      Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.Level 3:      Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.The Company's marketable securities are recorded at fair value and are generally classified within Level 1 or Level 2 of the fair value hierarchy using quoted market prices or quotes from market makers or broker-dealers. Marketable securities classified within Level 1 are valued based on quoted market prices in active markets and consist of money market funds and commercial paper. Level 2 marketable securities primarily consist of investment grade and high-yield corporate debt, U.S. Treasury securities, U.S. Government securities, certificates of deposit and commercial paper. Financial instruments classified as Level 2 are valued based on quoted market prices for similar assets of liabilities or quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.In June 2021, the Company assumed and also issued Private Placement Warrants. Private Placement Warrants are accounted for as liabilities in accordance with ASC 815-40 and are presented within warrant liabilities in the accompanying consolidated balance sheets. The warrants were measured at fair value at inception and thereafter on a recurring, quarterly basis, with changes in fair value presented within financial income, net, in the consolidated statements of income. Private Placement Warrants are classified within Level 3 in the fair value hierarchy. These warrants were valued using the Black