Avalyn Pharma (AVLN) 10% Holder Converts Preferred to Common

What Happened
Wellington Biomedical Innovation Master Investors (Cayman) II L.P., reported as a 10% owner of Avalyn Pharma (AVLN), converted derivative/preferred securities into common stock on 2026-05-01. The filing shows an acquisition of 1,275,486 common shares (reporting price N/A) and the disposition/cancellation of derivative positions totaling 24,542,548 shares (reported at $0.00). The $0.00 amounts indicate these were non-cash conversions of derivative/preferred instruments, not open-market sales.

Key Details

• Transaction date: 2026-05-01 (reported on Form 4 filed 2026-05-01). Filing appears timely.
• Reported transactions:
  • Acquired: 1,275,486 common shares (Conversion of derivative security; price N/A).
  • Disposed: 20,482,289 shares (Conversion of derivative security; $0.00) and 4,060,259 shares (Conversion of derivative security; $0.00).
• Ownership after transaction: not specified in the provided excerpt; filer is identified as a 10% owner.
• Footnote: Immediately prior to Avalyn’s IPO, each share of Series C-1 and Series D Convertible Preferred Stock automatically converted into common stock on a 19.2417-for-1 basis; the preferred had no expiration (see F1).
• Interpretation: reported disposals at $0 reflect conversion/cancellation of derivative/preferred holdings, not market sales.

Context

• This was an institutional conversion of preferred/derivative securities into common stock (not a purchase or open-market sale by an insider). For retail investors, such conversions reflect capitalization changes (preferred → common) rather than a signal of buying or selling in the market.
• As a 10% institutional holder, Wellington Biomedical’s filing documents changes in instrument form and share count; it is not an executive stock trade.