According to the lawsuit, in an attempt to secure shareholder support for the Merger, on May 28, 2021, defendants issued a materially false and misleading Preliminary Proxy on Schedule 14A (the “Proxy”). The Proxy, which recommended that HEIC shareholders vote in favor of the Merger, misrepresented Talkspace’s business, financials, and prospects, by omitting, among other things, that:

• Talkspace was experiencing significantly increased online advertising costs in its business-to-consumer (“B2C”) channel since the start of 2021;
• Talkspace was experiencing lower conversion rates in its online advertising in its B2C business;
• Talkspace was experiencing increased customer acquisition costs and more tepid B2C demand than represented to investors;
• Talkspace was suffering from ballooning customer acquisition costs and worsening growth and gross margin trends;
• Talkspace had overvalued its accounts receivables from certain of its health plan clients in its business-to-business channel, which amounts required adjustment downward; and
• as a result of the foregoing, Talkspace’s 2021 financial guidance was not achievable and lacked any reasonable basis in fact.

The complaint alleges that after the Merger closed the Proxy was revealed to be materially false and misleading, causing the price of Talkspace common stock to substantially decline and Talkspace investors to suffer damages under the Exchange Act.

No Class Has Been Certified. Until a class is certified, you are not represented by counsel unless you retain one. You may select counsel of your choice. You may also remain an absent class member and do nothing at this point. An investor’s ability to share in any potential future recovery is not dependent upon serving as lead plaintiff.

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