Form 4: Fairmount Funds Converts Preferred Stock to Common in Oruka Therapeutics

Fairmount Funds Management converted 160 shares of Series A Preferred Stock into 160,000 shares of Oruka Therapeutics common stock following shareholder approval.

Summary

• Fairmount Funds Management LLC, along with related entities, converted 160 shares of Series A Non-Voting Convertible Preferred Stock into 160,000 shares of common stock of Oruka Therapeutics, Inc.
• The conversion was triggered by the approval of Oruka's stockholders on November 14, 2024, which allowed the conversion of the preferred stock.
• The conversion occurred at 5:00 pm Eastern Time on November 19, 2024.
• Fairmount Funds Management LLC is the investment manager for Fairmount Healthcare Fund II L.P. and Fairmount Healthcare Co-Invest III L.P.
• Following the conversion, Fairmount Healthcare Fund II L.P. beneficially owns 798,614 shares of common stock, and Fairmount Healthcare Co-Invest III L.P. beneficially owns 2,573,308 shares of common stock.
• Peter Harwin and Tomas Kiselak, managing members of Fairmount Funds Management GP LLC, disclaim beneficial ownership of the securities except to the extent of their pecuniary interest.

Sentiment

Score: 7

Explanation: The document reflects a routine transaction following a shareholder vote, indicating a positive step in the company's capital structure. There are no negative implications, and the conversion was expected.

Positives

• The conversion of preferred stock to common stock simplifies the capital structure of Oruka Therapeutics.
• The conversion reflects the successful completion of a key step in the company's financing plan.

Management Comments

• Fairmount, Fairmount GP, Mr. Harwin, and Mr. Kiselak disclaim beneficial ownership of any of the reported securities, except to the extent of their pecuniary interest therein.

Industry Context

This transaction is a standard conversion of preferred stock to common stock, often seen in companies that have received venture capital or private equity funding. It is a common step in the lifecycle of a company as it matures.

Comparison to Industry Standards

• The conversion of preferred stock to common stock is a typical event for companies that have raised capital through preferred equity.
• Similar conversions are common in the biotech and pharmaceutical industries, where companies often use preferred stock to attract early-stage investors.
• The conversion ratio of 1,000 common shares for each preferred share is within the typical range for such transactions.

Stakeholder Impact

• The conversion of preferred stock to common stock may have a minor dilutive effect on existing common shareholders.
• The conversion simplifies the capital structure, which is generally positive for all stakeholders.

Key Dates

Keywords

Fairmount Funds Management, Oruka Therapeutics, Series A Preferred Stock, Common Stock, Stock Conversion, Beneficial Ownership, SEC Form 4