| Item 1. | Security and Issuer |
| (a) | Title of Class of Securities:
Common Stock, par value $0.001 per share |
| (b) | Name of Issuer:
Avalyn Pharma Inc. |
| (c) | Address of Issuer's Principal Executive Offices:
105 W First Street, Boston,
MASSACHUSETTS
, 02127. |
Item 1 Comment:
This statement on Schedule 13D (this "Statement") relates to the shares of common stock, par value $0.001 per share ("Common Stock") of Avalyn Pharma Inc. (the "Issuer"). |
| Item 2. | Identity and Background |
|
| (a) | SR One Capital Management, LLC ("SR One Capital Management"); SR One Capital Fund II Aggregator, LP ("SR One Fund II Aggregator"); SR One Capital Partners II, LP ("SR One Partners II"); AMZL, LP ("AMZL"); SR One Capital SMA Partners, LP ("SMA Partners"); and Simeon George, M.D. ("Dr. George").
SR One Fund II Aggregator is directly controlled by its general partner, SR One Partners II. AMZL is directly controlled by its general partner, SMA Partners. SR One Partners II and SMA Partners are directly controlled by their general partners, SR One Capital Management, and Dr. George controls SR One Capital Management. Accordingly, each of SR One Capital Management and Dr. George may be deemed to have voting and dispositive power with respect to the SR One Fund II Aggregator Shares and the AMZL Shares (each as defined below).
The persons named in this Item 2 are referred to individually herein as a "Reporting Person" and collectively as the "Reporting Persons." SR One Fund II Aggregator and AMZL are referred to collectively as the "Funds." |
| (b) | The address of each Reporting Person for purposes of this filing is c/o SR One Capital Management, LP, 929 Main Street, Suite 200, Redwood City, CA 94063. |
| (c) | The principal business of the Funds is to invest in and assist growth-oriented businesses. The principal business of SR One Partners II is to act as the sole general partner of SR One Fund II Aggregator. The principal business of SMA Partners is to act as the general partner of AMZL. The principal business of SR One Capital Management is to act as the sole general partner of SR One Partners II, SMA Partners and a number of affiliated partnerships with similar businesses. The principal business of Dr. George is to manage SR One Capital Management. |
| (d) | During the five years prior to the date hereof, none of the Reporting Persons has been convicted in a criminal proceeding or has been a party to a civil proceeding ending in a judgment, decree or final order enjoining future violations of, or prohibiting activities subject to, federal or state securities laws or finding any violation with respect to such laws. |
| (e) | During the five years prior to the date hereof, none of the Reporting Persons has been convicted in a criminal proceeding or has been a party to a civil proceeding ending in a judgment, decree or final order enjoining future violations of, or prohibiting activities subject to, federal or state securities laws or finding any violation with respect to such laws. |
| (f) | SR One Fund II Aggregator, SR One Partners II, AMZL, and SMA Partners are limited partnerships organized under the laws of the State of Delaware. SR One Capital Management is a limited liability company organized under the laws of the State of Delaware. Dr. George is a United States citizen. |
| Item 3. | Source and Amount of Funds or Other Consideration |
| | On April 29, 2026, the Registration Statement on Form S-1 filed with the Securities and Exchange Commission (the "SEC") by the Issuer (File No. 333-294932) in connection with its initial public offering of 19,166,667 shares of Common Stock of the Issuer (inclusive of 2,500,000 shares based on the underwriters exercising their option to purchase additional shares in full) (the "IPO") was declared effective. The closing of the IPO took place on May 1, 2026 (the "Closing"), and in connection with the Closing, SR One Fund II Aggregator purchased 277,778 shares of Common Stock and AMZL purchased 277,777 shares of Common Stock, each at the IPO price of $18.00 per share.
Prior to the Closing, SR One Fund II Aggregator purchased from the Issuer in a series of private transactions 27,309,719 shares of Series C-1 Convertible Preferred Stock (the "SR One Fund II Aggregator Series C-1 Preferred Stock") for an aggregate purchase price of $19,998,907.22; and 9,418,561 shares of Series D Convertible Preferred Stock (the "SR One Fund II Aggregator Series D Preferred Stock") for an aggregate purchase price of $7,500,000.12. Immediately prior to the Closing, the SR One Fund II Aggregator Series C-1 Preferred Stock automatically converted into 1,419,298 shares of Common Stock and the SR One Fund II Aggregator Series D Preferred Stock automatically converted into 489,486 shares of Common Stock, each on a 19.2417-for-1 basis. SR One Fund II Aggregator now holds a total of 2,186,562 shares of Common Stock (the "SR One Fund II Aggregator Shares").
The working capital of SR One Fund II Aggregator is the source of the funds for the purchase of the SR One Fund II Aggregator Shares. No part of the purchase price of the SR One Fund II Aggregator Shares is represented by funds or other consideration borrowed or otherwise obtained for the purpose of acquiring, holding, trading or voting the SR One Fund II Aggregator Shares.
Prior to the Closing, AMZL purchased from the Issuer in a series of private transactions 6,827,429 shares of Series C-1 Convertible Preferred Stock (the "AMZL Series C-1 Preferred Stock") for an aggregate purchase price of $4,999,726.26; and 9,418,560 shares of Series D Convertible Preferred Stock (the "AMZL Series D Preferred Stock") for an aggregate purchase price of $7,499,999.33. Immediately prior to the Closing, the AMZL Series C-1 Preferred Stock automatically converted into 354,824 shares of Common Stock and the AMZL Series D Preferred Stock automatically converted into 489,486 shares of Common Stock, each on a 19.2417-for-1 basis. AMZL now holds a total of 1,122,087 shares of Common Stock (the "AMZL Shares").
The working capital of AMZL is the source of the funds for the purchase of the AMZL Shares. No part of the purchase price of the AMZL Shares is represented by funds or other consideration borrowed or otherwise obtained for the purpose of acquiring, holding, trading or voting the AMZL Shares.
Collectively, the Funds now hold a total of 3,308,649 shares of the Issuer's Common Stock (the "Fund Shares"). |
| Item 4. | Purpose of Transaction |
| | The Funds acquired their respective shares for investment purposes. Depending on market conditions, its continuing evaluation of the business and prospects of the Issuer and other factors, the Funds and other Reporting Persons may dispose of or acquire additional shares of the Issuer. Except as set forth above, none of the Reporting Persons has any present plans which relate to or would result in:
(a) The acquisition by any person of additional securities of the Issuer, or the disposition of securities of the Issuer;
(b) An extraordinary corporate transaction, such as a merger, reorganization or liquidation, involving the Issuer or any of its subsidiaries;
(c) A sale or transfer of a material amount of assets of the Issuer or any of its subsidiaries;
(d) Any change in the present board of directors or management of the Issuer, including any plans or proposals to change the number or term of directors or to fill any existing vacancies on the board;
(e) Any material change in the present capitalization or dividend policy of the Issuer;
(f) Any other material change in the Issuer's business or corporate structure;
(g) Changes in the Issuer's charter, bylaws or instruments corresponding thereto or other actions which may impede the acquisition of control of the Issuer by any person;
(h) Causing a class of securities of the Issuer to be delisted from a national securities exchange or to cease to be authorized to be quoted in an inter-dealer quotation system of a registered national securities association;
(i) A class of equity securities of the Issuer becoming eligible for termination of registration pursuant to Section 12(g)(4) of the Securities Exchange Act of 1934; or
(j) Any action similar to any of those enumerated above. |
| Item 5. | Interest in Securities of the Issuer |
| (a) | SR One Fund II Aggregator is the record owner of the SR One Fund II Aggregator Shares. As the general partner of SR One Fund II Aggregator, SR One Partners II may be deemed to beneficially own the SR One Fund II Aggregator Shares. As the general partner of SR One Partners II, SR One Capital Management may be deemed to beneficially own the SR One Fund II Aggregator Shares. As the managing member of SR One Capital Management, Dr. George may be deemed to beneficially own the SR One Fund II Aggregator Shares.
AMZL is the record owner of the AMZL Shares. As the general partner of AMZL, SMA Partners may be deemed to beneficially own the AMZL Shares. As the general partner of SMA Partners, SR One Capital Management may be deemed to beneficially own the AMZL Shares. As the managing member of SR One Capital Management, Dr. George may be deemed to beneficially own the AMZL Shares.
Each Reporting Person disclaims beneficial ownership of the Fund Shares other than those shares which such person owns of record.
The percentage of outstanding shares of Common Stock which may be deemed to be beneficially owned by each Reporting Person is set forth on Line 13 of such Reporting Person's cover sheet. Such percentage was calculated based on 44,312,047 shares of Common Stock reported by the Issuer to be outstanding as of May 1, 2026 (including the underwriters' exercise of their option to purchase additional shares in full) as reported in the Issuer's prospectus dated April 29, 2026 filed with the SEC on April 30, 2026 pursuant to Rule 424(b)(4) of the Securities Act of 1933, as amended (the "Securities Act"). |
| (b) | Regarding the number of shares as to which such person has:
(i) sole power to vote or to direct the vote: See line 7 of cover sheets
(ii) shared power to vote or to direct the vote: See line 8 of cover sheets
(iii) sole power to dispose or to direct the disposition: See line 9 of cover sheets
(iv) shared power to dispose or to direct the disposition: See line 10 of cover sheets. |
| (c) | Except as set forth in Item 3 above, none of the Reporting Persons has effected any transaction in shares of Common Stock during the last 60 days. |
| (d) | No other person is known to have the right to receive or the power to direct the receipt of dividends from, or any proceeds from the sale of, Common Stock beneficially owned by any of the Reporting Persons. |
| (e) | Not applicable. |
| Item 6. | Contracts, Arrangements, Understandings or Relationships With Respect to Securities of the Issuer |
| | On April 25, 2025, each Fund and certain other stockholders of the Issuer entered into an Amended and Restated Investors' Rights Agreement (the "Investors' Rights Agreement") with the Issuer. The Investors' Rights Agreement grants the parties thereto, including the Funds, certain registration rights in respect of registrable securities. The registration of shares of the Issuer's Common Stock pursuant to the exercise of these registration rights will enable the holders thereof to sell such shares without restriction under the Securities Act when the applicable registration statement is declared effective. Under the Investors' Rights Agreement, the Issuer will pay all registration expenses and the holders will pay all underwriting discounts, selling commissions and stock transfer taxes relating to the sale of their shares. The Investors' Rights Agreement also includes customary indemnification and procedural terms. These registration rights will expire on the earlier of (i) the closing of a "Deemed Liquidation Event" (as defined in the Issuer's amended and restated certificate of incorporation), (ii) such time after May 1, 2026 as Rule 144 or another similar exemption under the Securities Act is available for the sale of all of such holder's shares without limitation during a three-month period without registration and (iii) the fifth anniversary of the consummation of the IPO.
The Investors' Rights Agreement provides that at any time beginning 180 days after the April 29, 2026, the holders of at least 25% of the registrable securities then outstanding may request that the Issuer file a registration statement on Form S-1 with respect to outstanding registrable securities, if the aggregate offering price of the registrable securities requested to be registered, net of selling expenses, would be at least $5 million. Once the Issuer is eligible to use a registration statement on Form S-3, the holders of at least 15% of the registrable securities then outstanding may request that the Issuer file a registration statement on Form S-3 with respect to such holders' registrable securities then outstanding, if the aggregate offering price of the shares requested to be registered, net of selling expenses, would be at least $5 million.
Further, the Investors' Rights Agreement provides that whenever the Issuer proposes to file a registration statement under the Securities Act, either for its own account or for the account of other security holders, the stockholders party to the Investors' Rights Agreement will be entitled to certain "piggyback" registration rights allowing them to include their registrable securities in such registration, subject to certain marketing and other limitations.
In addition, each Fund entered into a lock-up agreement in connection with the IPO whereby each Fund has agreed, subject to certain exceptions, that without the prior written consent of Morgan Stanley & Co. LLC, Jefferies LLC, and Evercore Group L.L.C. on behalf of the underwriters, that for a period of 180 days after April 29, 2026, it will not (1) offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right, or warrant to purchase, lend, or otherwise transfer or dispose of, directly or indirectly, any shares of Common Stock or any securities convertible into or exercisable or exchangeable for Common Stock, (2) file any registration statement with the SEC relating to the offering of any shares of Common Stock or any securities convertible into or exercisable or exchangeable for Common Stock, (3) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of the Issuer's Common Stock or (4) make any demand for, or exercise any right with respect to, the registration of any shares of Common Stock or any security convertible into or exercisable or exchangeable for Common Stock. |
| Item 7. | Material to be Filed as Exhibits. |
| | Exhibit 1 - Agreement regarding filing of joint Schedule 13D.
Exhibit 2 - Power of Attorney regarding filings under the Securities Exchange Act of 1934, as amended. |
