{ "docId": "019dd923-622c-750b-8b99-4b92274d3e76", "docSlug": "0a0319cd79cc", "documentTitle": "FIGS, Inc. (FIGS)", "authorId": "54_Spruce_Point_Capital", "authorName": "Spruce Point Capital Management", "documentKindSlug": "activist-deck", "documentKindLabel": "Activist deck", "sourceTypeSlug": "short_seller", "sourceTypeLabel": "Short seller", "presentationDate": "2022-09-07 00:00:00", "orientation": "landscape", "aspectRatio": 1.3333334, "pageNumber": 97, "pageCount": 113, "prevPage": 96, "nextPage": 98, "slideType": "appendix_disclosure", "function": "preempt_rebuttal", "density": "dense", "nDataPoints": 0, "notes": "This slide serves as a legal disclaimer and framing device to justify using potentially biased or unproven legal discovery materials.", "elementsJson": [ "paragraph" ], "metadataConfidence": 1, "imagePath": null, "slideHref": "/slides/019dd923-622c-750b-8b99-4b92274d3e76/97", "deckHref": "/decks/019dd923-622c-750b-8b99-4b92274d3e76", "deckJsonHref": "/decks/019dd923-622c-750b-8b99-4b92274d3e76.json", "deckAnchorHref": "/decks/019dd923-622c-750b-8b99-4b92274d3e76#slide-97", "components": [ { "bbox": { "h": 0.15, "w": 0.9, "x": 0.05, "y": 0.62 }, "kind": "paragraph", "text": "The record of this lawsuit contains significant conflicts between the parties as it regards the discovery process. Recognizing the case remains unresolved, we believe it relevant to note that SPI accused FIGS on numerous occasions of discovery misconduct, and the court has sanctioned FIGS for discovery violations at least twice. As recently as September 2021, new information came to light that suggested FIGS withheld material evidence. Unfortunately, this new information, including email evidence, has been redacted.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "3ac535c6-5034-47d9-b8f7-3ddf5cb0ae53", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.1, "w": 0.9, "x": 0.05, "y": 0.51 }, "kind": "paragraph", "text": "The legal case has progressed for three years, so the record is long and complex. We, and most investors, are not lawyers. However, we do believe that the case materials include numerous important insights that, while perhaps not meeting a specific legal standard, present materially negative information about FIGS management and operations.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "454360ac-495b-47d3-8228-c715f5bb45f7", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.2, "w": 0.9, "x": 0.05, "y": 0.18 }, "kind": "paragraph", "text": "Launched in February 2019 and amended multiple times, Strategic Partners (SPI, now named Careismatic Brands) filed suit against FIGS alleging false advertising in violation of the Lanham Act, 15 U.S.C. § 1125(a); unfair business practices in violation of Cal. Bus. & Prof. Code § 17200; untrue and misleading advertising in violation of Cal. Bus. & Prof. Code § 17500; intentional interference with prospective economic relations; conversion; breach of fiduciary duty; and aiding and abetting breach of fiduciary duty. FIGS has denied the allegations and is defending its case. In assessing some elements of our thesis, we rely, in part, on documentation surfaced as part of this lawsuit.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "9a3de7d7-c027-4904-967b-2d74c5078b26", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.12, "w": 0.9, "x": 0.05, "y": 0.38 }, "kind": "paragraph", "text": "We openly acknowledge that this case remains unsettled in the courts (trial is scheduled for October 2022). However, we assume that some, if not most, investors have failed to thoroughly review the claims made by SPI, perhaps accepting unquestioningly the FIGS narrative that the lawsuit amounts to a disrupted incumbent simply seeking to harm an upstart competitor.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "d32b1fc7-5316-4291-a61c-941226811027", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.12, "w": 0.9, "x": 0.05, "y": 0.78 }, "kind": "paragraph", "text": "We highlight internal communications and other materials from FIGS that we believe sheds insights into management and the Company's operations, irrespective of the legal matters at issue. The court of investor opinion is not wholly bound by the strict parameters imposed on formal legal judgments. Therefore, we publish these materials confident that our audience can make their own decisions on their credibility, relevance, and materiality.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "d6ad0a86-22a6-46e0-86c7-e00fc6c4d7d8", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.12, "w": 0.65, "x": 0.31, "y": 0.05 }, "kind": "title", "text": "We Reference Records From The Strategic Partners (SPI) Lawsuit With Appropriate Caveats", "attrs": null, "subkind": "headline", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "69b1c558-1892-4b05-9a32-5d59a32376ff", "frameworkName": null, "frameworkSlug": null } ], "metrics": [], "tools": [], "frameworks": [ { "name": "preempt_rebuttal", "slug": null, "matchId": "2ba0e08a-029a-4fd1-b7ef-b23e3714f34f", "evidence": "The slide explicitly addresses potential counter-arguments regarding the validity of the lawsuit materials.", "confidence": 0.9 } ], "arcBeats": [ { "to": 113, "from": 88, "beatId": "b694edb1-a263-47ef-bdd9-574fde1c863c", "arcName": "Overcoming the Monster", "arcSlug": "overcoming-monster", "beatName": "The Victory", "beatSlug": "overcoming-monster-the-victory", "evidence": "Conclusion and downside risk assessment", "position": 2, "confidence": 0.8, "parentBeatName": "Turn", "parentBeatSlug": "turn" } ], "loops": [], "imagePathAlt": null, "thumbSrc": null, "thumbSrcAlt": null, "locked": true }