SCHEDULE: Affinity Funds Adjust Avalo Therapeutics Stake Amid Dilution

Affinity Healthcare Fund and Affinity Asset Advisors disclose a 7.65% beneficial ownership in Avalo Therapeutics, which has since decreased to 6.01% due to share dilution.

Summary

• Affinity Healthcare Fund, LP and Affinity Asset Advisors, LLC reported beneficial ownership of Avalo Therapeutics, Inc. common stock.
• As of September 30, 2025, they beneficially owned an aggregate of 1,006,217 shares, representing 7.65% of the outstanding common stock.
• This initial percentage was calculated based on 13,152,356 shares outstanding as of August 6, 2025, as reported in Avalo Therapeutics' Form 10-Q.
• As of the filing date (November 13, 2025), the Fund beneficially owned 1,090,158 shares, which now represents 6.01% of the outstanding shares.
• The updated percentage is based on 18,133,968 shares outstanding as of November 3, 2025, as reported in Avalo Therapeutics' subsequent Form 10-Q.
• Both reporting persons have shared voting and dispositive power over these shares.
• The filing certifies that the securities were not acquired for the purpose of changing or influencing control of the issuer, except for activities solely in connection with a nomination under Rule 14a-11.

Sentiment

Score: 4

Explanation: While the fund increased its absolute share count, the significant dilution experienced by Avalo Therapeutics, Inc. resulted in a lower percentage ownership for the fund, which is generally negative for existing shareholders.

Positives

• Affinity Healthcare Fund and Affinity Asset Advisors increased their absolute shareholding in Avalo Therapeutics, Inc. from 1,006,217 to 1,090,158 shares.

Negatives

• Beneficial ownership percentage decreased from 7.65% to 6.01% due to a significant increase in Avalo Therapeutics' outstanding shares from 13,152,356 to 18,133,968 between August 6, 2025, and November 3, 2025.

Risks

• Significant share dilution has occurred, as evidenced by the increase in outstanding shares from 13,152,356 to 18,133,968 between August 6, 2025, and November 3, 2025, which reduced the reporting persons' percentage ownership despite an increase in their absolute share count.

Future Outlook

NA

Management Comments

• Andrew Weinstein, Chief Financial Officer and Chief Compliance Officer for both Affinity Healthcare Fund, LP and Affinity Asset Advisors, LLC, certified that the securities were not acquired and are not held for the purpose of or with the effect of changing or influencing the control of the issuer, nor in connection with or as a participant in any transaction having that purpose or effect, other than activities solely in connection with a nomination under Rule 14a-11.

Industry Context

NA

Stakeholder Impact

• Shareholders: Existing shareholders experienced significant dilution, as evidenced by the increase in outstanding shares, which reduced the percentage ownership of the reporting persons despite their increased absolute share count.

Key Dates

Recommendation

The filing primarily discloses a change in beneficial ownership and significant share dilution. While the reporting entity increased its absolute share count, the percentage ownership decreased due to the issuer's increased outstanding shares. This dilution is a concern, but without further operational or financial details from Avalo Therapeutics, a definitive 'buy' or 'sell' is not warranted based solely on this ownership disclosure. A 'hold' position allows for further evaluation of the company's strategic use of the capital raised (implied by the dilution) and its impact on future performance.

Keywords

Avalo Therapeutics, AVTX, Affinity Healthcare Fund, Affinity Asset Advisors, Schedule 13G, beneficial ownership, common stock, institutional ownership, SEC filing, share dilution