Fairmount Funds holds 19.99% of Alaunos after Velaris deal
The fund’s stake includes common stock and Series C conversion rights, with preferred conversions capped at the 19.99% beneficial-ownership limit.
Fairmount Funds Management LLC and its affiliates reported a 19.99% stake in Alaunos Therapeutics, Inc. (TCRT), a position that includes common stock and Series C conversion rights while excluding preferred conversions that would breach a 19.99% beneficial-ownership cap.
The Reporting Persons own 19.99% of the Company in the aggregate, based upon the Company's aggregate outstanding shares as of September 30, 2026, plus the shares of Common Stock issued in the Financing (as defined below). The Reporting Persons' securities include (i) 687,789 shares of Common Stock and (ii) 171,000 shares of Common Stock issuable upon conversion of 171 shares of Series C Preferred Stock held directly by Co-Invest and exclude (i) 105,286,000 shares of Common Stock issuable upon conversion of 105,286 shares of Series B Preferred Stock held directly by Fund II, (ii) 52,239,000 shares of Common Stock issuable upon conversion of 52,239 shares of Series C Preferred Stock held directly by Fund II and (iii) 16,554,000 shares of Common Stock issuable upon conversion of 16,554 shares of Series C Preferred Stock held directly by Co-Invest. The conversion of the shares of Series B Preferred Stock and Series C Preferred Stock is each subject to a beneficial ownership limitation of 19.99% of the outstanding shares of Common Stock. The securities exclude shares of Common Stock issuable upon conversion of the shares of Series B Preferred Stock and Series C Preferred Stock in excess of such beneficial ownership limitations. At such time as Fairmount and its affiliates beneficially own 9.0% or less of the shares of Common Stock, the beneficial ownership limitations with respect to the Series B Preferred Stock and Series C Preferred Stock will automatically reduce to 9.99%.
The preferred stack sits behind the October 13, 2026 acquisition of Velaris Therapeutics, Inc. Under the merger agreement, at closing the Company issued to Velaris stockholders 105,286 shares of Series B Preferred Stock and 33,054 shares of Series C Preferred Stock, each convertible into 1,000 shares of Common Stock, subject to certain conditions. Fund II had bought 20,000,000 shares of Velaris preferred stock in July 2026 at $0.01 a share.
Mr. Harwin serves as a member of the board of directors of the Company (the "Board") and, in such capacity, may have influence over the Company's corporate activities, including activities that may relate to items described in subparagraphs (a) through (j) of Item 4 of Schedule 13D. Except as described in this Schedule 13D, the Reporting Persons do not have any present plans or proposals that relate to or would result in any of the actions described in subparagraphs (a) through (j) of Item 4 of Schedule 13D, although the Reporting Persons may, at any time and from time to time, review, reconsider, and change their position and/or purpose and/or develop such plans, seek to influence management or the Board with respect to the Company's business and affairs, and from time to time consider pursuing or proposing such matters with advisors, the Company, or other persons.
The cap is the operative constraint: conversions of the Series B and Series C Preferred Stock are limited so the group does not exceed 19.99% of outstanding Common Stock, and the limit steps down to 9.99% once Fairmount and its affiliates own 9.0% or less of the Common Stock.