Fairmount Funds Management LLC → Alaunos Therapeutics, Inc. TCRT

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 the 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%. 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 corporate activities of the Company, including activities which 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, at any time and from time to time, may review, reconsider and change their position and/or change their purpose and/or develop such plans and may seek to influence management or the Board with respect to the business and affairs of the Company and may from time to time consider pursuing or proposing such matters with advisors, the Company or other persons. Initial Financing In July 2026, Velaris Therapeutics, Inc., a Delaware corporation ("Velaris"), issued and sold an aggregate of 20,000,000 shares of Velaris preferred stock to Fund II at a purchase price of $0.01 per share. Agreement and Plan of Merger On October 13, 2026, the Company acquired Velaris in accordance with the terms of the Agreement and Plan of Merger, dated October 13, 2026 (the "Merger Agreement"), by and among the Company, Valkyrie Merger Sub I, Inc., a Delaware corporation and a wholly owned subsidiary of the Company ("First Merger Sub"), Valkyrie Merger Sub II, LLC, a Delaware limited liability company and wholly owned subsidiary of the Company ("Second Merger Sub"), and Velaris. Pursuant to the Merger Agreement, First Merger Sub merged with and into Velaris, pursuant to which Velaris was the surviving corporation and became a wholly owned subsidiary of the Company (the "First Merger"). Immediately following the First Merger, Velaris merged with and into Second Merger Sub, pursuant to which Second Merger Sub was the surviving entity (together with the First Merger, the "Merger"). Under the terms of the Merger Agreement, at the closing of the Merger (the "Closing"), the Company issued to the stockholders of Velaris (i) 105,286 shares of Series B Preferred Stock and (ii) 33,054 shares of Series C Preferred Stock, each share of which is convertible into 1,000 shares of Common Stock, subject to certain conditions. Pursuant to the Merger Agreement and the Purchase Agreement (as defined below), the Company has agreed to hold a stockholders' meeting to submit the following matters to its stockholders for their consideration: (i) the approval of the conversion of the Series B Preferred Stock and the Series C Preferred Stock into shares of Common Stock in accordance with certain of the rules of the Nasdaq Stock Market LLC (the "Conversion Proposal"), (ii) the approval of an amendment to the certificate of incorporation of the Company to (A) change the name of the Company to "Velaris Therapeutics, Inc.", (B) effectuate the redomestication of the Company, (C) effectuate a reverse stock split of all outstanding shares of Common Stock at a reverse stock split ratio to be determined by the Board with the consent of the Lead Investor (as defined below), (D) increase the number of authorized shares of Common Stock sufficient to permit the conversion in full of all then outstanding shares of Series B Preferred Stock and Series C Preferred Stock (the "Authorized Share Increase") and (E) such other changes as are mutually agreeable to the Com