Form 4: Theodore Leonsis Reports Beneficial Ownership Changes in Tempus AI, Inc. Following IPO

Theodore Leonsis, a director of Tempus AI, Inc., reports changes in beneficial ownership following the company's initial public offering, including the conversion of preferred stock and vesting of restricted stock units.

Summary

• Theodore Leonsis, a director of Tempus AI, Inc., filed a Form 4 detailing changes in his beneficial ownership of the company's stock.
• The earliest transaction reported is dated June 13, 2024, involving the acquisition of 13,514 shares of Class A Common Stock through a restricted stock unit (RSU) award.
• These RSUs vest in 20 substantially equal quarterly installments starting September 13, 2024.
• On June 17, 2024, a series of conversions occurred related to the company's IPO, including the conversion of Series C, D, E, and F Preferred Stock into Class A Common Stock.
• These conversions resulted in Leonsis indirectly owning 3,263,060 shares through Revolution Growth III, LP.
• Additionally, 397,888 shares of Class A Common Stock were issued as accrued and unpaid dividends on the preferred stock.
• Leonsis is a member of the investment committee of the ultimate general partner of Revolution Growth III, LP (RG III) and may be deemed to share dispositive power over the shares held by RG III.

Sentiment

Score: 7

Explanation: The sentiment is neutral to positive. The filing reflects standard post-IPO transactions and insider alignment with company performance through equity awards. There are no immediate red flags.

Positives

• The conversion of preferred stock to common stock simplifies the capital structure following the IPO.
• The issuance of RSUs aligns the director's interests with the long-term performance of the company.
• The reporting person's indirect ownership through Revolution Growth III, LP indicates continued investment and confidence in the company.

Future Outlook

The vesting of RSUs over the next five years suggests an expectation of continued growth and value creation at Tempus AI.

Industry Context

Form 4 filings are standard practice following an IPO, providing transparency into the ownership structure and insider transactions of the newly public company. This filing indicates the conversion of preferred shares held by early investors and the vesting of equity awards to key personnel.

Comparison to Industry Standards

• Similar to other tech companies post-IPO, Tempus AI's insiders are converting preferred stock to common stock.
• The vesting schedule of the RSUs is typical, aligning with industry standards for incentivizing long-term performance.
• The level of insider ownership is comparable to other venture-backed companies going public.

Stakeholder Impact

• Shareholders: Provides transparency into insider ownership and alignment of interests.
• Employees: The vesting of RSUs incentivizes employees to contribute to the company's success.
• Investors: Offers insights into the company's capital structure and insider activity.

Next Steps

• Monitor future Form 4 filings to track changes in insider ownership.
• Observe the vesting of RSUs and any potential impact on the stock price.
• Analyze the performance of Tempus AI following the IPO to assess the effectiveness of the equity incentives.

Key Dates