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  "documentTitle": "Hims & Hers Health, Inc. (HIMS)",
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  "authorName": "Spruce Point Capital Management",
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  "presentationDate": "2023-07-13 00:00:00",
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  "notes": "Uses legal excerpts from California, Kansas, and Nevada to support the thesis of regulatory non-compliance.",
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      "kind": "callout",
      "text": "The Restrictive Stock Transfer Agreements HIMS Executes With AMG “Owners” Are On Shaky Ground (Excerpts From States Where You Health Entities Are Incorporated; Other States Have Similar Provisions)",
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      "text": "The Restrictive Stock Transfer Agreements HIMS Executes With AMG “Owners” Are On Shaky Ground",
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      "text": "Nevada: “No owner may enter into a voting trust agreement or any other type of agreement vesting another person with the authority to exercise the voting power of any or all of his or her owner's interest, unless the other person is licensed to render the same specific professional services as those for which the professional entity was formed.”",
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      "text": "Kansas: “No shareholder shall enter into any voting trust agreement, proxy, or any other type of agreement vesting another person, other than another shareholder of the same corporation, with authority to exercise the voting power of any or all of their stock.”",
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      "text": "California: “...A shareholder of a professional corporation or of a foreign professional corporation qualified to render professional services in this state shall not enter into a voting trust, proxy, or any other arrangement vesting another person (other than another person who is a shareholder of the same corporation) with the authority to exercise the voting power of any or all of the shareholder's shares, and any purported voting trust, proxy, or other arrangement shall be void.”",
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      "kind": "paragraph",
      "text": "As noted, the Friendly PC owners enter into restrictive stock transfer agreements with HIMS so that HIMS can retain control of the entities. However, our review of state corporate codes suggests the stock transfer agreements HIMS signs with “owners” place HIMS on shaky ground with respect to state laws governing professional corporations.",
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      "kind": "quote",
      "text": "…A shareholder of a professional corporation or of a foreign professional corporation qualified to render professional services in this state shall not enter into a voting trust, proxy, or any other arrangement vesting another person (other than another person who is a shareholder of the same corporation) with the authority to exercise the voting power of any or all of the shareholder's shares, and any purported voting trust, proxy, or other arrangement shall be void. — California Corporations Code",
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      "kind": "source-note",
      "text": "Source: Moscone-Knox Professional Corporation Act, Kansas State Board of Healing Arts Administrative Regulations, Nevada Professional Entities and Associations Act, Spruce Point Research",
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      "text": "Stock Transfer Agreements With PC \"Owners\"",
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