SCHEDULE: FIGS Amends Stockholders Pact, Baron Group Adjusts Holdings

FIGS, Inc. and Baron Capital Group amended their stockholders agreement to allow Baron to replace distributed shares, while Baron entities adjusted their beneficial ownership through market purchases and distributions.

Summary

• FIGS, Inc., Baron Capital Management, Inc., and BAMCO, Inc. entered into Amendment No. 1 to their Stockholders Agreement on March 2, 2026.
• The amendment permits the Stockholder Group (Baron entities) to acquire Class A Common Stock solely to replace an equal number of shares previously distributed in-kind or sold to investors.
• A cap of 59,959,449 shares of Class A Common Stock is set, meaning the Stockholder Group cannot acquire shares if it would result in beneficial ownership exceeding this amount.
• Baron Capital Management, Inc. distributed 858,367 Class A shares in-kind to clients on February 10, 2026.
• Baron Focused Growth Fund purchased 436,869 Class A shares between $10.4876 and $10.5145 per share on February 10-11, 2026.
• BAMCO, Inc. purchased 416,465 Class A shares between $10.3016 and $10.5008 per share on February 10-11, 2026.
• Baron Capital Management, Inc. purchased 5,033 Class A shares between $10.377 and $10.5009 per share on February 11, 2026.
• The total outstanding Class A Common Stock as of February 13, 2026, was 158,093,481 shares.

Sentiment

Score: 6

Explanation: StockSavvy.ai views this filing as moderately positive. The amendment clarifies operational flexibility for a major investor, and continued market purchases by Baron entities suggest ongoing confidence, though the in-kind distribution could be seen as a slight reduction in direct management holding.

Positives

• The amendment clarifies the ability of the Stockholder Group to maintain their investment level in FIGS following distributions to their own investors, which could signal continued long-term interest.
• Baron entities made market purchases of FIGS Class A Common Stock, indicating continued investment at current price levels.

Negatives

• Baron Capital Management, Inc. distributed a significant number of shares (858,367) to clients, which could be perceived as a reduction in direct beneficial ownership by the management entity, although it's an in-kind distribution to investors.

Risks

• The Stockholder Group's ability to acquire shares is capped at 59,959,449 shares, limiting their potential for increased beneficial ownership beyond this threshold.
• Investor Redemptions (distributions or sales by the Stockholder Group) could lead to fluctuations in the publicly available float of FIGS shares.

Future Outlook

The filing does not contain explicit forward-looking statements or guidance from FIGS, Inc. It primarily details an amendment to a stockholders agreement and past transactions by the Baron entities.

Management Comments

• The Company, BCM and BAMCO desire to enter into this Amendment to permit the Stockholder Group to acquire shares of Class A Common Stock solely to replace an equal number of shares of Class A Common Stock subject to an Investor Redemption.

Industry Context

StockSavvy.ai notes that amendments to stockholders agreements, particularly those involving significant institutional investors like Baron Capital, are common mechanisms to adjust governance and ownership rules as circumstances evolve. The clarification regarding share acquisitions to replace distributed shares reflects a practical need for large asset managers to manage their portfolio holdings while adhering to pre-existing agreements. The continued market purchases by Baron entities suggest ongoing confidence in FIGS within the apparel and healthcare uniform industry, which has seen increased competition and evolving consumer preferences.

Comparison to Industry Standards

• The beneficial ownership percentage of Baron Capital Group (37.93%) in FIGS is substantial, indicating a significant strategic investment, which is higher than typical passive institutional holdings in many publicly traded companies. For example, a typical large institutional investor might hold 5-10% of a company's stock, whereas Baron's stake suggests a more influential position, comparable to a strategic partner or a major activist investor.
• The amendment's provision allowing replacement of distributed shares while maintaining a cap is a tailored agreement, not a standard industry practice, reflecting specific negotiations between FIGS and Baron Capital. This contrasts with general market purchases where no such pre-negotiated terms exist.
• The share purchase prices by Baron entities (around $10.30-$10.51) provide a recent valuation point from a major investor, which can be benchmarked against peer companies in the direct-to-consumer healthcare apparel sector, such as Lululemon (though a broader apparel company) or smaller, specialized medical uniform providers, to assess relative valuation.

Corporate Governance

Stakeholder Impact

• Shareholders: The amendment provides clarity on how a major institutional shareholder (Baron Capital Group) can manage its stake, potentially reducing uncertainty about large-scale selling pressure from distributions. Continued purchases by Baron entities may signal confidence to other investors.
• Company (FIGS, Inc.): The agreement helps manage the relationship with a significant investor and sets clear boundaries for their ownership activities.

Next Steps

• The Stockholders Agreement, as amended, will continue to govern the relationship between FIGS and the Baron Stockholder Group regarding equity ownership and transfers.
• The Stockholder Group will continue to manage its beneficial ownership within the terms of the amended agreement, including potential future acquisitions to replace distributed shares, up to the specified cap.

Key Dates

Recommendation

The filing primarily details an amendment to a stockholders agreement and routine adjustments to beneficial ownership by a major institutional investor. While the market purchases by Baron entities show continued confidence, the overall information does not present new fundamental drivers for significant price movement, nor does it suggest a deterioration of the company's prospects. Therefore, a "hold" recommendation is appropriate as investors await more substantive operational or financial updates.

Keywords

FIGS Inc., Baron Capital, Stockholders Agreement, Schedule 13D, Beneficial Ownership, Class A Common Stock, SEC Filing, Investment Management, Share Purchases, Equity Distribution