Form 4: Major Shareholders Convert Preferred Stock to Common Shares Ahead of Caris Life Sciences IPO

ADAPT I Ltd. and Carisome I, L.P., significant shareholders and directors of Caris Life Sciences, Inc., converted 14 million shares of Series A Preferred Stock into 3,500,003 shares of Common Stock on June 20, 2025, coinciding with the company's initial public offering.

Summary

• ADAPT I Ltd. and Carisome I, L.P., entities associated with David D. Halbert, converted 14,000,000 shares of Caris Life Sciences, Inc. Series A Preferred Stock into 3,500,003 shares of Common Stock.
• The conversion occurred on June 20, 2025, at a price of $0 per share, as it was an automatic conversion triggered by the closing of the Issuer's initial public offering (IPO).
• Following this transaction, the reporting persons beneficially own 16,943,232 shares of Common Stock indirectly.
• This indirect ownership includes 8,528,805 shares held by ADAPT I Ltd. and 8,414,427 shares held of record by Carisome I, L.P.
• David D. Halbert, as trustee of the family trusts that are general partners of these entities, holds voting and investment power over these shares.

Sentiment

Score: 7

Explanation: The Form 4 reports a routine and expected conversion of preferred stock to common stock by significant shareholders upon the company's initial public offering. This is a procedural step in becoming a publicly traded company and does not inherently indicate positive or negative operational performance, but rather a progression in the company's corporate structure.

Positives

• The conversion of preferred stock to common stock by significant shareholders indicates a transition to a more liquid and publicly traded equity structure, often a positive step for a company going public.
• The transaction is a standard procedure for preferred shareholders upon an IPO, aligning their interests with common shareholders.

Future Outlook

The conversion is tied to the closing of the Issuer's initial public offering, indicating the company is transitioning to being publicly traded.

Management Comments

• Each share of preferred stock automatically converted into 0.25 shares of Common Stock of the Issuer upon the closing of the initial public offering of the Issuer's Common Stock.
• The Common Stock reported herein includes 8,528,805 shares of Common Stock held of record by ADAPT I Ltd. and 8,414,427 shares of Common Stock held of record by Carisome I, L.P.
• David D. Halbert is the trustee of each of the two family trusts, and in such capacities, has voting and investment power with respect to the shares held of record by each of the foregoing entities. Mr. Halbert disclaims beneficial ownership except to the extent of his pecuniary interest therein.

Industry Context

This transaction is a typical event for a company undergoing an Initial Public Offering (IPO), where pre-IPO preferred shares held by early investors or founders convert into common stock, making them tradable on public exchanges. This aligns the capital structure for public trading.

Comparison to Industry Standards

• The conversion ratio of 0.25 shares of Common Stock per preferred share is specific to Caris Life Sciences' capital structure and terms of its Series A Preferred Stock.
• Automatic conversion of preferred stock upon an IPO is a standard clause in venture capital and private equity investment agreements, common across various industries for companies transitioning to public markets.
• The disclosure of beneficial ownership by significant shareholders and directors, including the underlying control by individuals like David D. Halbert, is standard practice for transparency in public markets, comparable to disclosures by major shareholders in other biotech or life sciences IPOs.

Related Party Transactions

• ADAPT I Ltd. and Carisome I, L.P., the reporting persons, are 10% owners and directors of Caris Life Sciences, Inc.
• David D. Halbert, a trustee of family trusts, is the general partner of ADAPT I Ltd. and the managing general partner of Carisome I, L.P., and has voting and investment power over the shares held by these entities. This establishes a related party relationship for the reported stock conversion.

Stakeholder Impact

• Shareholders: Existing preferred shareholders (ADAPT I Ltd. and Carisome I, L.P.) now hold common stock, which is typically more liquid post-IPO. New common shareholders will see a significant portion of the company's equity held by these large, related-party entities.
• Company: The conversion simplifies the capital structure by reducing preferred shares and increasing common shares, which is typical for a public company.

Next Steps

• David Halbert and Caris Halbert, L.P. are filing a separate Form 4 with respect to the reported transactions, indicating further disclosures related to this event.

Key Dates

Keywords

Caris Life Sciences, ADAPT I Ltd., Carisome I, L.P., Form 4, SEC filing, Preferred Stock conversion, Common Stock, Initial Public Offering, IPO, Insider transaction, Beneficial ownership, David D. Halbert