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  "documentTitle": "Heska Corporation (HSKA)",
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  "authorName": "Spruce Point Capital Management",
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  "presentationDate": "2021-10-25 00:00:00",
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      "text": "We believe Heska is un-investable for any funds with an Environmental, Social, and Governance (“ESG”) focus",
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      "text": "Spruce Point believes Heska Corp (Nasdaq: HSKA or “the Company”), a $2.8 billion market cap animal health equipment distributor, has been struggling to grow organically and has been using low-quality acquisitions as a means to deflect market share loss and margin erosion and to generate investor enthusiasm.",
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      "text": "Governance: Heska’s CEO Kevin Wilson has been the source of a long history of conflicts of interest and poor governance, and we believe investors are overlooking these facts surrounding both him and the Board",
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      "text": "Environmental: We believe Heska failed to disclose to investors a massive mercury chemical disposal related to its Tri-Heart business. This incident involved a large product return from a major customer. As such, we question if Heska avoided a large asset impairment related to nearly $15 million of returned product. Of note, Heska has says it generally does not accept returns",
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      "text": "Social: We believe Heska misportrays itself to the public as an innovative developer of new products, when in reality, it is largely a distributor of others’ products. We view Heska’s level of financial disclosure, particularly as it relates to its recent acquisition spree, to be inadequate compared with industry norms. We are uncomfortable with Heska’s historical auditor, who also served as audit partner of MusclePharm, an SEC-charged company. A new auditor appointment is coincident with a major acquisition and a change in segment reporting. Heska’s CFO has a prior disciplinary record with the Colorado State Board of Accountancy and has already made reporting errors. Heska has inexplicably elevated two lawyers with no operating or domain expertise to key operating roles. Management was actively selling stock before its recent run, and sales have continued",
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      "text": "downside risk: 50% - 60%",
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      "text": "Spruce Point believes Heska Corp (Nasdaq: HSKA or “the Company”), a $2.8 billion market cap animal health equipment distributor, has been struggling to grow organically and has been using low-quality acquisitions as a means to deflect market share loss and margin erosion and to generate investor enthusiasm. Our forensic financial investigation into the Company reveals a broad range of environmental, social, and governance (“ESG”) concerns that make it difficult for us to justify its industry premium 9x 2022E sales multiple. We see 50% - 60% downside risk (to $90 - $115 per share).",
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      "text": "CEO Wilson Wants Investors To Believe Heska Is An Innovative And Transformed Company With Upside: Our Polar Opposite View Points To 50% - 60% Downside",
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