Avalo Therapeutics, Inc. 8-K

What Happened
Avalo Therapeutics, Inc. (AVTX) announced on April 26, 2026 that it entered into a Milestone Buyout Option Agreement amending its March 27, 2024 merger agreement with AlmataBio, Inc. The original merger included a contingent $15.0 million milestone payment upon the first patient being dosed in a Phase 3 trial (the “Milestone Event”). Under the new agreement Avalo will pay $2.25 million within five business days of the April 26, 2026 effective date and has a 90‑day option to pay $5.125 million (cash, common stock, or combo) in full satisfaction of the $15.0 million milestone. If Avalo does not exercise the option, it remains obligated to pay $12.75 million (cash or stock) upon achievement of the Milestone Event. Avalo furnished a press release on April 28, 2026.

Key Details

• Effective date: April 26, 2026; press release dated April 28, 2026.
• Original contingent milestone: $15.0 million payable upon first patient dosed in a Phase 3 trial.
• Immediate payment: $2.25 million payable within five business days of the effective date.
• Buyout option: Avalo has 90 days to elect to pay $5.125 million (cash, common stock, or combination) in lieu of the $15.0 million milestone; if not elected, Avalo owes $12.75 million upon the Milestone Event.

Why It Matters
The amendment gives Avalo a near‑term choice to substantially reduce its potential future cash (or stock) payout tied to the Phase 3 dosing milestone. If Avalo exercises the buyout option, total consideration related to this milestone would be $7.375 million ($2.25M paid now plus $5.125M), versus the original $15.0 million contingent payment — lowering future cash obligations but potentially increasing dilution if paid in stock. If Avalo declines the option, its original financial exposure remains (totaling $15.0M when combining the $2.25M paid and $12.75M owed at milestone). This change affects contingent obligations from the AlmataBio merger and is material to investors tracking Avalo’s merger-related liabilities and potential dilution.