SCHEDULE: TCG Crossover Discloses 7.9% Stake in Avalo Therapeutics

TCG Crossover Fund II, L.P. and associated entities have reported a 7.9% beneficial ownership stake in Avalo Therapeutics, Inc. following a recent underwritten offering.

Summary

• TCG Crossover Fund II, L.P., TCG Crossover GP II, LLC, and Chen Yu have filed a Schedule 13G reporting beneficial ownership of 3,017,120 shares of Avalo Therapeutics common stock.
• The reported stake represents 7.9% of the company's outstanding common stock.
• The ownership calculation is based on 38,242,757 shares outstanding as of May 5, 2026.
• The filing excludes 2,900,662 shares issuable upon conversion of Series C preferred stock due to a 4.99% beneficial ownership limitation.

Sentiment

Score: 5

Explanation: StockSavvy.ai views this as a neutral regulatory disclosure confirming institutional participation in a recent capital raise without indicating a change in control strategy.

Positives

• Institutional investor maintains a significant 7.9% equity position, signaling long-term interest in the company.
• The reporting persons have certified that the shares were not acquired for the purpose of changing or influencing the control of the issuer.

Negatives

• The filing highlights a significant overhang of 2,900,662 shares of Series C preferred stock that are currently restricted from conversion due to ownership limitations.

Risks

• Potential future dilution if the 4.99% beneficial ownership limitation on Series C preferred stock is waived or modified.
• Market volatility associated with the recent underwritten offering mentioned in the filing.

Future Outlook

The filing does not provide specific forward-looking guidance regarding the company's operations, but notes the existence of convertible preferred stock that could impact future share counts.

Industry Context

StockSavvy.ai notes that institutional filings of this nature are standard following biotech capital raises, reflecting the participation of crossover funds in supporting clinical-stage development pipelines.

Comparison to Industry Standards

• The 7.9% stake is consistent with typical positions held by specialized healthcare crossover funds in small-cap biotechnology companies.
• The use of beneficial ownership limitations (4.99%) is a standard protective measure in private placement and preferred stock agreements to avoid triggering change-in-control provisions.

Stakeholder Impact

• Shareholders should note the potential for future dilution from the conversion of Series C preferred stock.
• The presence of a major institutional investor may provide a degree of stability to the share price.

Next Steps

• Monitoring of future SEC filings for potential conversion of Series C preferred stock.
• Observation of any changes in the reporting persons' holdings via subsequent 13G or 13F filings.

Key Dates

Keywords

Avalo Therapeutics, TCG Crossover, Schedule 13G, Beneficial Ownership, Biotech Investment, Equity Stake