Advaxis (ADXS) 10-Q 10 Aug 23 2023 Q2 Quarterly report Financial data

Cover

Cover - shares	6 Months Ended
	Jun. 30, 2023	Aug. 10, 2023
Cover [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Quarterly Report	true
Document Transition Report	false
Document Period End Date	Jun. 30, 2023
Document Fiscal Period Focus	Q2
Document Fiscal Year Focus	2023
Current Fiscal Year End Date	--12-31
Entity File Number	001-36138
Entity Registrant Name	AYALA PHARMACEUTICALS, INC.
Entity Central Index Key	0001100397
Entity Tax Identification Number	02-0563870
Entity Incorporation, State or Country Code	DE
Entity Address, Address Line One	9 Deer Park Drive
Entity Address, Address Line Two	Suite K-1
Entity Address, City or Town	Monmouth Junction
Entity Address, State or Province	NJ
Entity Address, Postal Zip Code	08852
City Area Code	(609)
Local Phone Number	452-9813
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		4,838,321

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands		Jun. 30, 2023	Dec. 31, 2022
CURRENT ASSETS:
Cash and cash equivalents		$ 7,079	$ 2,408
Short-term restricted bank deposits		106	110
Trade receivables			234
Prepaid expenses and other current assets		2,371	436
Total current assets		9,556	3,188
LONG-TERM ASSETS:
Deferred issuance costs			1,953
Operating lease right of use asset		1,390	1,462
Intangible assets, net		115
Property and equipment, net		882	960
Other assets		208	206
Total long-term assets		2,595	4,581
Total assets		12,151	7,769
CURRENT LIABILITIES:
Trade payable		4,420	4,080
Operating lease liabilities		542	419
Accrued expenses		1,905	551
Accrued payroll and employee benefits		1,401	994
Other accounts payable		159	169
Total current liabilities		8,427	6,213
LONG TERM LIABILITIES:
Long-term warrant liability		67
Uncertain tax position		1,648	1,323
Long-term operating lease liabilities		1,000	1,332
Total long-term liabilities		2,715	2,655
STOCKHOLDERS’ EQUITY:
Common Stock of $0.001 par value per share; 170,000,000 and 37,480,000 shares authorized on June 30, 2023 and on December 31, 2022, respectively; 4,838,321 and 2,775,906 shares issued and on June 30, 2023 and December 31, 2022, respectively; 4,779,826 and 2,695,067 shares outstanding at June 30, 2023 and December 31, 2022, respectively.	[1]	5	3
Additional paid-in capital	[1]	166,218	148,052
Accumulated deficit		(165,214)	(149,154)
Total stockholders’ equity		1,009	(1,099)
Total liabilities and stockholders’ equity		$ 12,151	$ 7,769
[1]Common Stock, additional paid-in capital and per share data have been retroactively adjusted for the impact of the merger, see note 1. 1

Condensed Consolidated Balanc_2

Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares	Jun. 30, 2023	Dec. 31, 2022
Statement of Financial Position [Abstract]
Common Stock, Par or Stated Value Per Share	$ 0.001	$ 0.001
Common Stock, Shares Authorized	170,000,000	37,480,000
Common Stock, Shares, Issued	4,838,321	2,775,906
Common Stock, Shares, Outstanding	4,779,826	2,695,067

Condensed Consolidated Statemen

Condensed Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands		3 Months Ended		6 Months Ended
		Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Income Statement [Abstract]
Revenues from licensing agreement and others		$ 9	$ 38	$ 13	$ 496
Cost of services		(9)	(38)	(13)	(406)
Gross profit					90
Operating expenses:
Research and development		5,723	5,580	12,988	13,083
General and administrative		2,763	2,272	7,367	4,705
Operating loss		(8,486)	(7,852)	(20,355)	(17,698)
Financial (loss) income, net		(86)	(42)	215	40
Loss before income tax		(8,572)	(7,894)	(20,140)	(17,658)
Taxes on income		(127)	(214)	4,080	(403)
Net loss		$ (8,699)	$ (8,108)	$ (16,060)	$ (18,061)
Net Loss per share attributable to common stockholders, basic		$ (1.82)	$ (2.83)	$ (3.51)	$ (6.30)
Net loss per share, basic and diluted		$ (1.82)	$ (2.83)	$ (3.51)	$ (6.30)
Weighted average common shares outstanding, basic	[1]	4,776,344	2,869,612	4,580,661	2,868,499
Weighted average common shares outstanding, diluted	[1]	4,776,344	2,869,612	4,580,661	2,868,499
[1]Common Stock, additional paid-in capital and per share data have been retroactively adjusted for the impact of the merger, see notes 1. 2

Condensed Consolidated Statem_2

Condensed Consolidated Statements of Changes in Stockholders' Equity (Unaudited) - USD ($) $ in Thousands		Common Stock [Member]	Additional Paid-in Capital [Member]	[1]	Retained Earnings [Member]	Total
Balance at Dec. 31, 2021		$ 3	$ 145,296		$ (111,141)	$ 34,158
Balance, shares at Dec. 31, 2021	[1]	2,615,360
Share based compensation			1,398			1,398
Stock-based compensation, shares	[1]	4,438
Proceeds from issuance of common stock, net of issuance cost of $3			44			44
Proceeds from issuance of common stock, net of issuance cost of $3, shares	[1]	918
Net loss					(18,061)	(18,061)
Balance at Jun. 30, 2022		$ 3	146,738		(129,202)	17,539
Balance, shares at Jun. 30, 2022	[1]	2,620,716
Balance at Mar. 31, 2022		$ 3	145,983		(121,094)	24,892
Balance, shares at Mar. 31, 2022	[1]	2,618,497
Share based compensation			755			755
Stock-based compensation, shares	[1]	2,219
Net loss					(8,108)	(8,108)
Balance at Jun. 30, 2022		$ 3	146,738		(129,202)	17,539
Balance, shares at Jun. 30, 2022	[1]	2,620,716
Balance at Dec. 31, 2022		$ 3	148,052		(149,154)	(1,099)
Balance, shares at Dec. 31, 2022	[1]	2,695,067
Share based compensation			1,219			$ 1,219
Stock-based compensation, shares	[1]	22,616
Proceeds from issuance of common stock, net of issuance cost of $3, shares						0.1874
Net loss					(16,060)	$ (16,060)
Issuance of shares upon Merger, net of issuance costs of $3,153		$ 2	16,947			16,949
Issuance of shares upon Merger, net of issuance costs of $3,153, shares	[1]	2,062,143
Balance at Jun. 30, 2023		$ 5	166,218		(165,214)	1,009
Balance, shares at Jun. 30, 2023	[1]	4,779,826
Balance at Mar. 31, 2023		$ 5	166,185		(156,515)	9,675
Balance, shares at Mar. 31, 2023	[1]	4,772,740
Share based compensation			33			33
Stock-based compensation, shares	[1]	7,086
Net loss					(8,699)	(8,699)
Balance at Jun. 30, 2023		$ 5	$ 166,218		$ (165,214)	$ 1,009
Balance, shares at Jun. 30, 2023	[1]	4,779,826
[1]All of the Common Stocks and per share data have been retroactively adjusted for the impact of the merger, see notes 1. 3

Condensed Consolidated Statem_3

Condensed Consolidated Statements of Changes in Stockholders' Equity (Unaudited) (Parenthetical) $ in Thousands	6 Months Ended
	Jun. 30, 2023 USD ($)
Statement of Stockholders' Equity [Abstract]
Merger, net of issuance costs	$ 3,153

Condensed Consolidated Statem_4

Condensed Consolidated Statement of Cash Flows (Unaudited) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$ (16,060)	$ (18,061)
Adjustments to reconcile net loss to net cash used in operating activities:
Shared based compensation	1,219	1,398
Depreciation and Amortization	99	81
Asset write-downs	28
Remeasurement of long term warrant liability	(136)
Loss from exchange rate fluctuation	41
(Increase) decrease in prepaid expenses and other assets	(1,635)	321
Decrease (increase) in trade receivables	234	(262)
Increase in trade payables	588	40
Decrease in operating lease right-of-use assets	137	171
Decrease in operating lease liabilities	(275)	(439)
Decrease in accrued expenses	(224)	(15)
Increase (decrease) in accrued payroll and employee benefits	367	(578)
Changes in uncertain tax position	325	387
Decrease in other accounts payable	(10)	(50)
Net cash used in operating activities	(15,302)	(17,007)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of shares, net of issuance cost of $3		44
Issuance of shares upon merger, net of issuance costs	20,001
Net cash provided by financing activities	20,001	44
Effect of exchange rate changes on cash, cash equivalents and restricted cash	(41)
Increase (decrease) in cash and cash equivalents and restricted cash	4,658	(16,963)
Cash and cash equivalents and restricted cash at beginning of the period	2,724	37,339
Cash and cash equivalents and restricted cash at end of the period	7,382	20,376
SUPPLEMENTAL DISCLOSURE OF NON-CASH ACTIVITIES
Lease liabilities arising from new right-of-use assets		537
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Tax paid in cash	284	182
Cash and cash equivalents	7,079	20,059
Restricted bank deposits	106	111
Restricted bank deposits in other assets	197	206
Cash and cash equivalents and restricted cash at end of the period	$ 7,382	$ 20,376

Condensed Consolidated Statem_5

Condensed Consolidated Statement of Cash Flows (Unaudited) (Parenthetical) $ in Thousands	6 Months Ended
	Jun. 30, 2022 USD ($)
Statement of Cash Flows [Abstract]
Common stock issuance cost	$ 3

SIGNIFICANT ACCOUNTING POLICIES

SIGNIFICANT ACCOUNTING POLICIES	6 Months Ended
	Jun. 30, 2023
Accounting Policies [Abstract]
SIGNIFICANT ACCOUNTING POLICIES	NOTE 1— SIGNIFICANT ACCOUNTING POLICIES In these financial statements, unless otherwise stated or the context otherwise indicates, references to “New Ayala,” the “Company,” “we,” “us,” “our” and similar references refer to Ayala Pharmaceuticals, Inc., a Delaware corporation, which prior to the change of its name effected on January 19, 2023, was known as Advaxis, Inc. The name change was affected in connection with the Merger, as described below. References to “former Advaxis” refer to our company solely in the period prior to the Merger. Prior to the Merger, we were a clinical-stage biotechnology company focused on the development and commercialization of proprietary Listeria monocytogenes Lm Lm formulation of attenuated Lm Lm TM Following the Merger, we are primarily a clinical-stage oncology company focused on developing and commercializing small molecule therapeutics for patients suffering from rare and aggressive cancers, primarily in genetically defined patient populations. Our differentiated development approach is predicated on identifying and addressing tumorigenic drivers of cancer, through a combination of our bioinformatics platform and next-generation sequencing to deliver targeted therapies to underserved patient populations. Our current portfolio of product candidates, AL101 and AL102, targets the aberrant activation of the Notch pathway using gamma secretase inhibitors. Gamma secretase is the enzyme responsible for Notch activation and, when inhibited, turns off the Notch pathway activation. Aberrant activation of the Notch pathway has long been implicated in multiple solid tumor and hematological cancers and has often been associated with more aggressive cancers. In cancers, Notch is known to serve as a critical facilitator in processes such as cellular proliferation, survival, migration, invasion, drug resistance and metastatic spread, all of which contribute to a poorer patient prognosis. AL101 and AL102 are designed to address the underlying key drivers of tumor growth, and our initial Phase 2 clinical data of AL101 suggest that our approach may address shortcomings of existing treatment options. We believe that our novel product candidates, if approved, have the potential to transform treatment outcomes for patients suffering from rare and aggressive cancers. We also continue to conduct certain operations relating to former Advaxis’ operations as a clinical-stage biotechnology company focused on the development and commercialization of proprietary Listeria monocytogenes Lm Lm In 2017, the Company entered into an exclusive worldwide license agreement with respect to AL101 and AL102. See note 5. Merger with Ayala Pharmaceuticals, Inc. On October 18, 2022, the Company, which at the time was named Advaxis, Inc., entered into a Merger Agreement (the “Merger Agreement”), with an entity then known as Ayala Pharmaceuticals, Inc., with the Ayala Pharmaceuticals, Inc. shortly prior to the closing of the merger in January 2023 changing its name to Old Ayala, Inc., (“Old Ayala”) and Doe Merger Sub, Inc. (“Merger Sub”), a direct, wholly-owned subsidiary of the Company. Under the terms of the Merger Agreement, Merger Sub merged with and into Old Ayala, with Old Ayala continuing as the surviving company and a wholly-owned subsidiary of the Company (the “Merger”). Immediately after the Merger, former Advaxis stockholders as of immediately prior to the Merger own approximately 37.5% 62.5% At the effective time of the Merger (the “Effective Time”), each share of share capital of Old Ayala issued and outstanding immediately prior to the Effective Time was converted into the right to receive a number of shares of the Company’s common stock, par value $0.001 0.1874 The Merger has been accounted for as a reverse merger with Old Ayala as the accounting acquirer and former Advaxis as the accounting acquiree. In identifying Old Ayala as the accounting acquirer, the companies considered ASC 805-10-55 including the structure of the Merger, relative outstanding share ownership at closing and the composition of the combined Company’s board of directors and senior management. The financial reporting reflects the accounting from the perspective of Old Ayala (“accounting acquirer”), except for the legal capital, which has been retroactively adjusted to reflect the capital of former Advaxis (“accounting acquiree”) in accordance with ASC 805-40-45. As such, the historical financial information presented is that of Old Ayala as the accounting acquirer in the Merger. Because most of the value of the assets of former Advaxis was in cash and cash equivalents, the Merger is treated primarily as a financing transaction for accounting purposes with a small component as a business acquisition. Therefore, no gain or loss is recorded as a result of the Merger. Old Ayala’s transaction costs were capitalized and offset against the shareholder’s equity upon the Merger, and former Advaxis’ transaction costs were expensed as merger costs. The consolidated financial statements from the closing date of the Merger include the assets, liabilities, and results of operations of the combined company. AYALA PHARMACEUTICALS, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS NOTE 1—SIGNIFICANT ACCOUNTING POLICIES (continued): Fair Value Allocation The following sets forth the fair value of acquired identifiable assets and assumed liabilities of former Advaxis which includes preliminary adjustments to reflect the fair value of intangible assets acquired (in thousands) as of January 19, 2023: SCHEDULE OF FAIR VALUE OF INTANGIBLE ASSETS ACQUIRED Amounts Cash and cash equivalents $ 22,539 Prepaid expenses and other current assets 300 Property and equipment, net 34 Intangible assets 130 Operating right-of-use asset 5 Other assets 11 Total assets 23,019 Common stock warrant liability (203 ) Other current liabilities and trade payables (2,714 ) Total liabilities (2,917 ) Net assets acquired $ 20,102 The fair value estimate for all identifiable assets and liabilities assumed is preliminary and is based on assumptions that market participants would use in pricing an asset, based on the most advantageous market for the asset (i.e., its highest and best use). This preliminary fair value estimate could include assets that are not intended to be used, may be sold, or are intended to be used in a manner other than their best use. Such estimates are subject to change during the measurement period, which is not expected to exceed one year. Any adjustments identified during the measurement period will be recognized in the period in which the adjustments are determined. The Company recognized intangible assets related to the Merger, which consist of the Patents and License agreements valued at $ 130 These intangible assets are classified as Level 3 measurements within the fair value hierarchy. The following unaudited table provides certain pro forma financial information for the Company as if the Merger occurred on January 1, 2022 (in thousands except per share amounts): SCHEDULE OF PRO FORMA FINANCIAL INFORMATION Six months Six months Unaudited Unaudited Revenue $ 13 $ 746 Net loss $ (15,591 ) $ (23,405 ) Three months Three months Unaudited Unaudited Revenue $ 9 $ 288 Net loss $ (8,699 ) $ (13,087 ) *The pro forma amounts above are derived from historical numbers of the Company and Old Ayala. The results of operations for the three and six months ended June 30, 2022 include the operations of the Company for the period from January 31, 2022 to April 31, 2022 and November 1, 2021 to April 31, 2022, respectively which was the first six months of fiscal year 2022 prior to the change in our fiscal year end from October 31 to December 31, which change was effected in January 2023. The unaudited pro forma results have been prepared based on estimates and assumptions, which we believe are reasonable; however, they are not necessarily indicative of the consolidated results of operations had the acquisition occurred on January 1, 2022, or of future results of operations. AYALA PHARMACEUTICALS, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS NOTE 1—SIGNIFICANT ACCOUNTING POLICIES (continued): Going Concern The Company has incurred recurring losses since inception as a research and development organization and has an accumulated deficit of $ 165.2 15.3 7.1 The unaudited condensed consolidated financial statements have been prepared assuming that the Company will continue as a going concern. Therefore, the unaudited condensed consolidated financial statements for the six months ended June 30, 2023, do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from uncertainty related to the Company’s ability to continue as a going concern. Basis of Presentation The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information. Accordingly, they do not include all the information and notes required by GAAP for annual financial statements. In the opinion of management, all adjustments (of a normal recurring nature) considered necessary for a fair statement of the results for the interim periods presented have been included. Operating results for the interim period are not necessarily indicative of the results that may be expected for the full year. These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements for the year ended December 31, 2022, included in the Annual Report on Form 10-K of Old Ayala filed for the year ended December 31, 2022 (the “Old Ayala 2022 Form 10-K”) with the Securities and Exchange Commission (the “SEC”) on March 31, 2023 and the Annual Report on Form 10-K of the Company filed for the year ended October 31, 2022 (the “Form 10-K”) with the SEC on February 10, 2023. The Company’s significant accounting policies have not changed materially from those included in note 2 of the Company’s consolidated financial statements for the year ended December 31, 2022, included in the Old Ayala 2022 Form 10-K and the Form 10-K, unless otherwise stated. Use of estimates The preparation of the unaudited condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates, judgments and assumptions that affect the amounts reported in the unaudited condensed consolidated financial statements and accompanying notes. The Company’s management believes that the estimates, judgment and assumptions used are reasonable based upon information available at the time they are made. These estimates, judgments and assumptions can affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the unaudited condensed consolidated financial statements. Actual results could differ from those estimates. AYALA PHARMACEUTICALS, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS NOTE 1—SIGNIFICANT ACCOUNTING POLICIES (continued): Net Loss per Share Basic loss per share is computed by dividing the net loss by the weighted average number of shares of Common Stock outstanding during the period. Diluted loss per share is computed by dividing the net loss by the weighted average number of shares of Common Stock outstanding together with the number of additional shares of Common Stock that would have been outstanding if all potentially dilutive shares of Common Stock had been issued. Diluted net loss per share is the same as basic net loss per share in periods when the effects of potentially dilutive shares of Common Stock are anti-dilutive. All of the Common Stock, exercise prices and per share data have been retroactively adjusted for the impact of the Merger. The shares have been adjusted to the merger ratio of 0.1874 Fair value of financial instruments The Company measures and discloses the fair value of financial assets and liabilities in accordance with ASC Topic 820, “Fair Value Measurement.” Fair value is based on the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Restricted bank deposits, trade receivables, trade payables are stated at their carrying value, which approximates fair value due to the short time to the expected receipt or payment date. Warrants liabilities are stated at fair value on a recurring basis. Recently Adopted Accounting Pronouncements In June 2016, the FASB issued ASU No. 2016-13 (Topic 326), Financial Instruments—Credit Losses: Measurement of Credit Losses on Financial Instruments, which replaces the existing incurred loss impairment model with an expected credit loss model and requires a financial asset measured at amortized cost to be presented at the net amount expected to be collected. The new guidance was effective for the Company on January 1, 2023 and the adoption did not have a material impact on the Company’s consolidated financial statements. In October 2021, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2021-08, Accounting for Contract Assets and Contract Liabilities from Contracts with Customers (Topic 805). This ASU requires an acquirer in a business combination to recognize and measure contract assets and contract liabilities (deferred revenue) from acquired contracts using the revenue recognition guidance in Topic 606. At the acquisition date, the acquirer applies the revenue model as if it had originated the acquired contracts. The ASU is effective for annual periods beginning after December 15, 2022, including interim periods within those fiscal years. The Company adopt ASU 2021-08 on January 1, 2023, and will apply this new guidance to all business combinations consummated subsequent to this date. Currently, this ASU has no impact on the Company’s consolidated financial statements. AYALA PHARMACEUTICALS, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

REVENUES

REVENUES	6 Months Ended
	Jun. 30, 2023
Revenue from Contract with Customer [Abstract]
REVENUES	NOTE 2— REVENUES The Company recognizes revenue in accordance with ASC Topic 606, Revenue from Contracts with Customers, which applies to all contracts with customers. At contract inception, once the contract is determined to be within the scope of Topic 606, the Company assesses the goods or services promised within the contract and determines those that are performance obligations and assesses whether each promised good or service is distinct. Revenue is recognized when control of the promised goods or services is transferred to the customers, in an amount that reflects the consideration the Company expects to be entitled to receive in exchange for those goods or services. In December 2018, the Company entered into an evaluation, option and license agreement (the “Novartis Agreement”) with Novartis International Pharmaceutical Limited (“Novartis”) for which the Company is paid for its research and development costs. The Company concluded that there is one distinct performance obligation under the Novartis Agreement: Research and development services, an obligation which is satisfied over time. Revenue associated with the research and development services in the amount of approximately $ 13 9 Revenue associated with the research and development services in the amount of approximately $ 496 38 The Company concluded that progress towards completion of the research and development performance obligation related to the Novartis Agreement is best measured in an amount proportional to the expenses relative to the total estimated expenses. The Company periodically reviews and updates its estimates, when appropriate, which may adjust revenue recognized for the period. Most of the company’s revenues derive from the Novartis Agreement, for which revenues consist of reimbursable research and development costs. On June 2, 2022, Novartis informed the Company that Novartis does not intend to exercise its option to obtain an exclusive license for AL102, thereby terminating the agreement. AYALA PHARMACEUTICALS, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

TAX

TAX	6 Months Ended
	Jun. 30, 2023
Income Tax Disclosure [Abstract]
TAX	NOTE 3— TAX The Company has reviewed the tax positions taken, or to be taken, in its tax returns for all tax years currently open to examination by a taxing authority. As of June 30, 2023 and December 31, 2022, the Company has recorded an uncertain tax position liability exclusive of interest and penalties of $ 1.6 1.3 90 79 SCHEDULE OF RECONCILIATION OF COMPANY’S UNRECOGNIZED TAX BENEFITS Six months Year (In thousands) (In thousands) Uncertain tax position at the beginning of the period $ 1,323 $ 858 Additions for uncertain tax position of prior years (foreign exchange and interest) 24 36 Subtractions for tax positions of previous period (7 ) Additions for tax positions of current period 308 429 Uncertain tax position at the end of the period $ 1,648 $ 1,323 The Company files U.S. federal, various U.S. state and Israeli income tax returns. The associated tax filings remain subject to examination by applicable tax authorities for a certain length of time following the tax year to which those filings relate. In the United States and Israel, the 2018 and subsequent tax years remain subject to examination by the applicable taxing authorities as of June 30, 2023. In March 2023, the Company received $ 4,675

COMMON STOCK PURCHASE WARRANTS

COMMON STOCK PURCHASE WARRANTS AND WARRANT LIABILITY	6 Months Ended
	Jun. 30, 2023
Common Stock Purchase Warrants And Warrant Liability
COMMON STOCK PURCHASE WARRANTS AND WARRANT LIABILITY	NOTE 4 – COMMON STOCK PURCHASE WARRANTS AND WARRANT LIABILITY Common Stock Rights The Common Stock Rights confer upon the holders the right to vote in annual and special meetings of the Company, and to participate in the distribution of the surplus assets of the Company upon liquidation of the Company. Warrants As of June 30, 2023, there were 465,271 290,206 2.79 224.00 337,320 0.05 96.58 SCHEDULE OF WARRANTS OUTSTANDING Exercise Price Number of Expiration Date Type of Financing $ 2.79 879 September 2024 September 2018 Public Offering $ 224.00 4,092 July 2024 July 2019 Public Offering $ 28.00 57,230 November 2025 November 2020 Public Offering $ 56.00 140,552 April 2026 April 2021 Registered Direct Offering (Accompanying Warrants) $ 56.00 175,065 5 years April 2021 Private Placement (Private Placement Warrants) $ 96.58 87,453 * February 2024 February 2021 Private Placement (issued by Old Ayala) Grand Total 465,271 * Exercise price and warrant numbers of Old Ayala’s warrants have been retroactively adjusted for the impact of the Merger, see note 1. AYALA PHARMACEUTICALS, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS NOTE 4 – COMMON STOCK PURCHASE WARRANTS AND WARRANT LIABILITY (continued): As of June 30, 2023, the Company had 289,327 465,271 A summary of warrant activity was as follows (in thousands, except share and per share data): Shares Weighted Weighted Aggregate Outstanding and exercisable warrants at December 31, 2022 337,320 $ 25.08 1.14 $ 86,613 Issuance of warrants upon Merger 377,818 * 53.45 * Exercised (249,867 ) * 0.05 * Outstanding warrants at June 30, 2023 465,271 * $ 61.56 * 3.15 $ - Exercisable warrants at June 30, 2023 290,206 $ 64.92 2.29 $ - * Exercise price and warrant numbers have been retroactively adjusted for the impact of the Merger, see note 1. Shares Issued for Warrants Exercises During the six months ended June 30, 2023, pre-funded warrant holders from the Old Ayala’s February 2019 Offering automatically net exercised 249,867 246,192 Warrant Liability The warrants issued in the April 2021 Private Placement will become exercisable only on such day, if ever, that is 14 days after the Company files an amendment to the Company’s Amended and Restated Certificate of Incorporation to increase the number of authorized shares of common stock, $ 0.001 170,000,000 300,000,000 The September 2018 Public Offering warrants contain a down round feature, except for exempt issuances as defined in the warrant agreement, in which the exercise price would immediately be reduced to match a dilutive issuance of common stock, options, convertible securities and changes in option price or rate of conversion. As of June 30, 2023, the down round feature was triggered five times and the exercise price of the warrants were reduced from $ 1,800.00 2.79 In measuring the warrant liability for the warrants issued in the April 2021 Private Placement and September 2018 Public Offering at June 30, 2023, the Company used the following inputs in its Black Scholes model: SCHEDULE OF ASSUMPTIONS USED IN WARRANT LIABILITY June 30, 2023 January 19, 2023 Exercise Price $ 55.73 $ 55.73 Stock Price $ 1.00 $ 2.95 Expected Term 4.98 4.98 Volatility % 125 % 117 % Risk Free Rate 4.14 % 3.60 % For the six months ended June 30, 2023, the Company reported a gain of approximately $ 136

FAIR VALUE MESUREMENTS

FAIR VALUE MESUREMENTS	6 Months Ended
	Jun. 30, 2023
Fair Value Disclosures [Abstract]
FAIR VALUE MESUREMENTS	NOTE 5— FAIR VALUE MESUREMENTS The company did not have any fair value measurements in June 30, 2022 :. The following table provide the liabilities carried at fair value measured on a recurring basis as of June 30, 2023 SCHEDULE OF FAIR VALUE, ASSETS AND LIABILITIES MEASURED ON RECURRING BASIC Fair Value Measured at June 30, 2023 Level 1 Level 2 Level 3 Total Financial liabilities at fair value: Long term warrant liablity $ - $ - $ 67 $ 67 Total financial liabilities at fair value $ - $ - $ 67 $ 67 AYALA PHARMACEUTICALS, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

COMMITMENTS AND CONTINGENT LIAB

COMMITMENTS AND CONTINGENT LIABILITIES	6 Months Ended
	Jun. 30, 2023
Commitments and Contingencies Disclosure [Abstract]
COMMITMENTS AND CONTINGENT LIABILITIES	NOTE 6— COMMITMENTS AND CONTINGENT LIABILITIES In January 2019, the Company’s wholly owned Israeli subsidiary, Ayala-Oncology Israel Ltd. (the “Subsidiary”), signed a new lease agreement. The term of the lease is for 63 months and includes an option to extend the lease for an additional 60 months. As part of the agreement, the lessor also provided the Company an amount of approximately $ 0.5 The Subsidiary obtained a bank guarantee in the amount of approximately $ 0.2 On March 25, 2021, the Company entered into a one-year lease agreement for its corporate office/lab with base rent of approximately $ 29 March 31, 2023 36 65 The Company has the following operating ROU assets and lease liabilities: SCHEDULE OF OPERATING RIGHT OF USE ASSETS AND LEASE LIABILITIES June 30, 2023 ROU assets Lease liabilities Offices $ 1,266 $ 1,454 Cars 124 88 Total operating leases $ 1,390 $ 1,542 December 31, 2022 ROU assets Lease liabilities Offices $ 1,273 $ 1,612 Cars 189 139 Total operating leases $ 1,462 $ 1,751 June 30, December 31, 2022 Lease liabilities Lease liabilities Current lease liabilities $ 542 $ 419 Non-current lease liabilities 1,000 1,332 Total lease liabilities $ 1,542 $ 1,751 The following table summarizes the lease costs recognized in the condensed consolidated statement of operations: SUMMARY OF LEASE COSTS For six months ended For six months ended June 30, June 30, Operating lease cost $ 269 $ 221 Variable lease cost 6 10 Total lease cost $ 275 $ 231 For three months ended For three months ended June 30, June 30, Operating lease cost $ 143 $ 109 Variable lease cost 2 - Total lease cost $ 145 $ 109 As of June 30, 2023, the weighted-average remaining lease term and weighted-average discount rate for operating leases are 2.7 7.4% AYALA PHARMACEUTICALS, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS NOTE 6—COMMITMENTS AND CONTINGENT LIABILITIES (continued): The following table summarizes the future payments of the Company for its operating lease liabilities: SCHEDULE OF FUTURE PAYMENTS OF OPERATING LEASE LIABILITIES June 30, 2023 (from July 1) $ 225 2024 380 2025 318 2026 308 2027 308 After 2027 411 Total undiscounted lease payments $ 1 ,950 Less: Interest 408 Total lease liabilities – operating $ 1,542 Asset Transfer and License Agreement with Bristol-Myers Squibb Company. In November 2017, the Company entered into a license agreement, or the BMS License Agreement, with Bristol-Myers Squibb Company, or BMS, under which BMS granted the Company a worldwide, non-transferable, exclusive, sublicensable license under certain patent rights and know-how controlled by BMS to research, discover, develop, make, have made, use, sell, offer to sell, export, import and commercialize AL101 and AL102, or the BMS Licensed Compounds, and products containing AL101 or AL102, or the BMS Licensed Products, for all uses including the prevention, treatment or control of any human or animal disease, disorder or condition. Under the BMS License Agreement, the Company is obligated to use commercially reasonable efforts to develop at least one BMS Licensed Product. The Company has sole responsibility for, and bear the cost of, conducting research and development and preparing all regulatory filings and related submissions with respect to the BMS Licensed Compounds and/or BMS Licensed Products. BMS has assigned and transferred all INDs for the BMS Licensed Compounds to the Company. The Company is also required to use commercially reasonable efforts to obtain regulatory approvals in certain major market countries for at least one BMS Licensed Product, as well as to affect the first commercial sale of and commercialize each BMS Licensed Product after obtaining such regulatory approval. The Company has sole responsibility for, and bear the cost of, commercializing BMS Licensed Products. For a limited period of time, the Company may not engage directly or indirectly in the clinical development or commercialization of a Notch inhibitor molecule that is not a BMS Licensed Compound. AYALA PHARMACEUTICALS, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS NOTE 6—COMMITMENTS AND CONTINGENT LIABILITIES (continued): The Company is required to make payment to BMS upon the achievement of certain development or regulatory milestone events of up to $ 95 47 50 The Company accounted for the acquisition of the rights granted by BMS as an asset acquisition because it did not meet the definition of a business. The Company recorded the total consideration transferred and value of shares issued to BMS as research and development expense in the consolidated statement of operations as incurred since the acquired rights granted by BMS represented in-process research and development and had no alternative future use. The Company accounts for contingent consideration payable upon achievement of sales milestones in such asset acquisitions when the underlying contingency is resolved. The BMS License Agreement remains in effect, on a country-by-country and BMS Licensed Product-by-BMS Licensed Product basis, until the expiration of royalty obligations with respect to a given BMS Licensed Product in the applicable country. Royalties are paid on a country-by-country and BMS Licensed Product-by-BMS Licensed Product basis from the first commercial sale of a particular BMS Licensed Product in a country until the latest of 10 years after the first commercial sale of such BMS Licensed Product in such country, (b) when such BMS Licensed Product is no longer covered by a valid claim in the licensed patent rights in such country, or (c) the expiration of any regulatory or marketing exclusivity for such BMS Licensed Product in such country. Any inventions, and related patent rights, invented solely by either party pursuant to activities conducted under the BMS License Agreement shall be solely owned by such party, and any inventions, and related patent rights, conceived of jointly by the Company and BMS pursuant to activities conducted under the BMS License Agreement shall be jointly owned by the Company and BMS, with BMS’s rights thereto included in the Company’s exclusive license. The Company has the first right—with reasonable consultation with, or participation by, BMS—to prepare, prosecute, maintain and enforce the licensed patents, at the Company’s expense. BMS has the right to terminate the BMS License Agreement in its entirety upon written notice to the Company (a) for insolvency-related events involving the Company, (b) for the Company’s material breach of the BMS License Agreement if such breach remains uncured for a defined period of time, for the Company’s failure to fulfill its obligations to develop or commercialize the BMS Licensed Compounds and/or BMS Licensed Products not remedied within a defined period of time following written notice by BMS, or (d) if the Company or its affiliates commence any action challenging the validity, scope, enforceability or patentability of any of the licensed patent rights. The Company has the right to terminate the BMS License Agreement (a) for convenience upon prior written notice to BMS, the length of notice dependent on whether a BMS Licensed Project has received regulatory approval, (b) upon immediate written notice to BMS for insolvency-related events involving BMS, (c) for BMS’s material breach of the BMS License Agreement if such breach remains uncured for a defined period of time, or (d) on a BMS Licensed Compound-by-BMS Licensed Compound and/or BMS Licensed Product-by-BMS Licensed Product basis upon immediate written notice to BMS if the Company reasonably determine that there are unexpected safety and public health issues relating to the applicable BMS Licensed Compounds and/or BMS Licensed Products. Upon termination of the BMS License Agreement in its entirety by the Company for convenience or by BMS, the Company grants an exclusive, non-transferable, sublicensable, worldwide license to BMS under certain of its patent rights that are necessary to develop, manufacture or commercialize BMS Licensed Compounds or BMS Licensed Products. In exchange for such license, BMS must pay the Company a low single-digit percentage royalty on net sales of the BMS Licensed Compounds and/or BMS Licensed Products by it or its affiliates, licensees or sublicensees, provided that the termination occurred after a specified developmental milestone for such BMS Licensed Compounds and/ or BMS Licensed Products. Option and License Agreement with Novartis International Pharmaceutical Ltd. In December 2018, the Company entered into an evaluation, option and license agreement, or the Novartis Option Agreement, with Novartis International Pharmaceutical Limited, or Novartis, pursuant to which Novartis agreed to conduct certain studies to evaluate AL102 in combination with its B-cell maturation antigen, or BCMA, therapies in multiple myeloma, and the Company agreed to supply AL102 for such studies. All supply and development costs associated with such evaluation studies were fully borne by Novartis. AYALA PHARMACEUTICALS, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS NOTE 6—COMMITMENTS AND CONTINGENT LIABILITIES (continued): Under the Novartis Option Agreement, the Company granted Novartis an exclusive option to obtain an exclusive (including as to the Company and its affiliates), sublicensable (subject to certain terms and conditions), worldwide license and sublicense (as applicable) under certain patent rights and know-how controlled by the Company (including applicable patent rights and know-how that are licensed from BMS pursuant to the BMS License Agreement) to research, develop, manufacture (subject to the Company’s non-exclusive right to manufacture and supply AL102 or the Novartis Licensed Product for Novartis) and commercialize AL102 or any pharmaceutical product containing AL102 as the sole active ingredient, or the Novartis Licensed Product, for the diagnosis, prophylaxis, treatment, or prevention of multiple myeloma in humans. The Company also granted Novartis the right of first negotiation for the license rights to conduct development or commercialization activities with respect to the use of AL102 for indications other than multiple myeloma. Additionally, from the exercise by Novartis of its option until the termination of the Novartis Option Agreement, the Company was not able to, either itself or through its affiliates or any other third parties, directly or indirectly research, develop or commercialize certain BCMA-related compounds for the treatment of multiple myeloma. Novartis owned any inventions, and related patent rights, invented solely by it or jointly with the Company in connection with activities conducted pursuant to the Novartis Option Agreement. The Company maintained first right to prosecute and maintained any patents licensed to Novartis, both before and after its exercise of its option. The Company maintained the first right to defend and enforce its patents prior to Novartis’s exercise of its option, upon which Novartis gains such right with respect to patents included in the license. On June 2, 2022, Novartis informed the Company that Novartis does not intend to exercise its option to obtain an exclusive license for AL102, thereby terminating the agreement. Purported Stockholder Claims Purported Stockholder Claims Related to Proposed 2021 Transaction with Biosight During 2021, the Company and Biosight entered into an Agreement and Plan of Merger and Reorganization contemplating a combination of the two companies, which transaction was ultimately not consummated. Between September 16, 2021, and November 4, 2021, the Company received demand letters on behalf of six purported stockholders of the Company, alleging that the Company failed to disclose certain matters in the Registration Statement, and demanding that the Company disclose such information in a supplemental disclosure filed with the SEC. On October 14, 2021, the Company filed an amendment to the Registration Statement and on November 8, 2021, the Company made certain other additional disclosures that mooted the demands asserted in the above-referenced letters. The six plaintiffs have made settlement demands. On May 20, 2022, the Company and one of the plaintiffs reached a settlement agreement. The other plaintiffs have abandoned their claims and the Company will not make further disclosure regarding this matter absent a material change in circumstances. AYALA PHARMACEUTICALS, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS NOTE 6—COMMITMENTS AND CONTINGENT LIABILITIES (continued): In addition, the Company received certain additional demands from stockholders asserting that the proxy materials filed by the Company in connection with the Previously Proposed Merger contained alleged material misstatements and/or omissions. Certain stockholders also demanded books and records of the Company pursuant to Delaware law. In response to these demands, the Company agreed to make, and did make, certain supplemental disclosures to the proxy materials. The stockholders have made settlement demands. On July 18, 2022, the Company and the plaintiffs consummated settlement agreements. Purported Stockholder Claims Related to Merger with Old Ayala On December 15, 2022, a purported stockholder of Old Ayala filed a complaint in the U.S. District Court for the Southern District of New York against Old Ayala and the members of its Board, captioned Stephen Bushansky v. Ayala Pharmaceuticals, Inc., Case No.1:22-cv-10621 (S.D.N.Y.) (the “Complaint”). The Complaint asserts claims against all defendants under Section 14(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and Rule 14a-9 promulgated thereunder for omitting or misrepresenting material information from Old Ayala’s Proxy Statement and against the individual defendants under Section 20(a) of the Exchange Act for alleged “control person” liability with respect to such alleged omissions and misrepresentations. The allegations in the Complaint include that the Proxy Statement omitted material information regarding Old Ayala’s financial projections and the financial analyses of Old Ayala’s financial advisor for the Merger. The Complaint seeks, among other relief, (1) to enjoin defendants from consummating the Merger; (2) to enjoin a vote on the Merger; (3) to rescind the Merger Agreement or recover damages, if the Merger is completed; (4) a declaration that defendants violated Sections 14(a) or 20(a) and Rule 14a-9 of the Exchange Act; and (5) attorneys’ fees and costs. The complaint was never served on all defendants. In addition, approximately nine purported stockholders of Old Ayala sent letters to those noted in the above-referenced Complaint alleging similar deficiencies in Old Ayala’s Proxy Statement (collectively, the “Demand Letters”). At this time, the Company is unable to predict the likelihood of an unfavorable outcome with respect to the Complaint and the Demand Letters.

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS	6 Months Ended
	Jun. 30, 2023
Subsequent Events [Abstract]
SUBSEQUENT EVENTS	NOTE 7— SUBSEQUENT EVENTS On July 26, 2023, the Company and its wholly owned subsidiary organized under the laws of the State of Israel, Advaxis Israel Ltd. (“Merger Sub”), entered into an Agreement and Plan of Merger and Reorganization (the “Merger Agreement”) signed a merger agreement with Biosight Ltd. (“Biosight”), a privately-held Israeli pharmaceutical company developing innovative therapeutics for hematological malignancies and disorders. Under the terms of the Merger Agreement, Merger Sub will merge (the “Biosight Merger”) with and into Biosight, with Biosight being the surviving entity as a wholly owned subsidiary of the Company. Upon completion of the Biosight Merger, ownership of the combined company will be split, with 55% 45% On August 7, 2023, the Company entered into a convertible note agreement (the “Note”) with ISRAEL BIOTECH FUND I, L.P. The Note provides for the borrowing by the Company of up to $ 2.0 15 65

SIGNIFICANT ACCOUNTING POLICI_2

SIGNIFICANT ACCOUNTING POLICIES (Policies)	6 Months Ended
	Jun. 30, 2023
Accounting Policies [Abstract]
Going Concern	Going Concern The Company has incurred recurring losses since inception as a research and development organization and has an accumulated deficit of $ 165.2 15.3 7.1 The unaudited condensed consolidated financial statements have been prepared assuming that the Company will continue as a going concern. Therefore, the unaudited condensed consolidated financial statements for the six months ended June 30, 2023, do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from uncertainty related to the Company’s ability to continue as a going concern.
Basis of Presentation	Basis of Presentation The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information. Accordingly, they do not include all the information and notes required by GAAP for annual financial statements. In the opinion of management, all adjustments (of a normal recurring nature) considered necessary for a fair statement of the results for the interim periods presented have been included. Operating results for the interim period are not necessarily indicative of the results that may be expected for the full year. These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements for the year ended December 31, 2022, included in the Annual Report on Form 10-K of Old Ayala filed for the year ended December 31, 2022 (the “Old Ayala 2022 Form 10-K”) with the Securities and Exchange Commission (the “SEC”) on March 31, 2023 and the Annual Report on Form 10-K of the Company filed for the year ended October 31, 2022 (the “Form 10-K”) with the SEC on February 10, 2023. The Company’s significant accounting policies have not changed materially from those included in note 2 of the Company’s consolidated financial statements for the year ended December 31, 2022, included in the Old Ayala 2022 Form 10-K and the Form 10-K, unless otherwise stated.
Use of estimates	Use of estimates The preparation of the unaudited condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates, judgments and assumptions that affect the amounts reported in the unaudited condensed consolidated financial statements and accompanying notes. The Company’s management believes that the estimates, judgment and assumptions used are reasonable based upon information available at the time they are made. These estimates, judgments and assumptions can affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the unaudited condensed consolidated financial statements. Actual results could differ from those estimates. AYALA PHARMACEUTICALS, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS NOTE 1—SIGNIFICANT ACCOUNTING POLICIES (continued):
Net Loss per Share	Net Loss per Share Basic loss per share is computed by dividing the net loss by the weighted average number of shares of Common Stock outstanding during the period. Diluted loss per share is computed by dividing the net loss by the weighted average number of shares of Common Stock outstanding together with the number of additional shares of Common Stock that would have been outstanding if all potentially dilutive shares of Common Stock had been issued. Diluted net loss per share is the same as basic net loss per share in periods when the effects of potentially dilutive shares of Common Stock are anti-dilutive. All of the Common Stock, exercise prices and per share data have been retroactively adjusted for the impact of the Merger. The shares have been adjusted to the merger ratio of 0.1874
Fair value of financial instruments	Fair value of financial instruments The Company measures and discloses the fair value of financial assets and liabilities in accordance with ASC Topic 820, “Fair Value Measurement.” Fair value is based on the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Restricted bank deposits, trade receivables, trade payables are stated at their carrying value, which approximates fair value due to the short time to the expected receipt or payment date. Warrants liabilities are stated at fair value on a recurring basis.
Recently Adopted Accounting Pronouncements	Recently Adopted Accounting Pronouncements In June 2016, the FASB issued ASU No. 2016-13 (Topic 326), Financial Instruments—Credit Losses: Measurement of Credit Losses on Financial Instruments, which replaces the existing incurred loss impairment model with an expected credit loss model and requires a financial asset measured at amortized cost to be presented at the net amount expected to be collected. The new guidance was effective for the Company on January 1, 2023 and the adoption did not have a material impact on the Company’s consolidated financial statements. In October 2021, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2021-08, Accounting for Contract Assets and Contract Liabilities from Contracts with Customers (Topic 805). This ASU requires an acquirer in a business combination to recognize and measure contract assets and contract liabilities (deferred revenue) from acquired contracts using the revenue recognition guidance in Topic 606. At the acquisition date, the acquirer applies the revenue model as if it had originated the acquired contracts. The ASU is effective for annual periods beginning after December 15, 2022, including interim periods within those fiscal years. The Company adopt ASU 2021-08 on January 1, 2023, and will apply this new guidance to all business combinations consummated subsequent to this date. Currently, this ASU has no impact on the Company’s consolidated financial statements.

SIGNIFICANT ACCOUNTING POLICI_3

SIGNIFICANT ACCOUNTING POLICIES (Tables)	6 Months Ended
	Jun. 30, 2023
Accounting Policies [Abstract]
SCHEDULE OF FAIR VALUE OF INTANGIBLE ASSETS ACQUIRED	The following sets forth the fair value of acquired identifiable assets and assumed liabilities of former Advaxis which includes preliminary adjustments to reflect the fair value of intangible assets acquired (in thousands) as of January 19, 2023: SCHEDULE OF FAIR VALUE OF INTANGIBLE ASSETS ACQUIRED Amounts Cash and cash equivalents $ 22,539 Prepaid expenses and other current assets 300 Property and equipment, net 34 Intangible assets 130 Operating right-of-use asset 5 Other assets 11 Total assets 23,019 Common stock warrant liability (203 ) Other current liabilities and trade payables (2,714 ) Total liabilities (2,917 ) Net assets acquired $ 20,102
SCHEDULE OF PRO FORMA FINANCIAL INFORMATION	The following unaudited table provides certain pro forma financial information for the Company as if the Merger occurred on January 1, 2022 (in thousands except per share amounts): SCHEDULE OF PRO FORMA FINANCIAL INFORMATION Six months Six months Unaudited Unaudited Revenue $ 13 $ 746 Net loss $ (15,591 ) $ (23,405 ) Three months Three months Unaudited Unaudited Revenue $ 9 $ 288 Net loss $ (8,699 ) $ (13,087 )

TAX (Tables)

TAX (Tables)	6 Months Ended
	Jun. 30, 2023
Income Tax Disclosure [Abstract]
SCHEDULE OF RECONCILIATION OF COMPANY’S UNRECOGNIZED TAX BENEFITS	SCHEDULE OF RECONCILIATION OF COMPANY’S UNRECOGNIZED TAX BENEFITS Six months Year (In thousands) (In thousands) Uncertain tax position at the beginning of the period $ 1,323 $ 858 Additions for uncertain tax position of prior years (foreign exchange and interest) 24 36 Subtractions for tax positions of previous period (7 ) Additions for tax positions of current period 308 429 Uncertain tax position at the end of the period $ 1,648 $ 1,323

COMMON STOCK PURCHASE WARRANT_2

COMMON STOCK PURCHASE WARRANTS AND WARRANT LIABILITY (Tables)	6 Months Ended
	Jun. 30, 2023
Common Stock Purchase Warrants And Warrant Liability
SCHEDULE OF WARRANTS OUTSTANDING	SCHEDULE OF WARRANTS OUTSTANDING Exercise Price Number of Expiration Date Type of Financing $ 2.79 879 September 2024 September 2018 Public Offering $ 224.00 4,092 July 2024 July 2019 Public Offering $ 28.00 57,230 November 2025 November 2020 Public Offering $ 56.00 140,552 April 2026 April 2021 Registered Direct Offering (Accompanying Warrants) $ 56.00 175,065 5 years April 2021 Private Placement (Private Placement Warrants) $ 96.58 87,453 * February 2024 February 2021 Private Placement (issued by Old Ayala) Grand Total 465,271 * Exercise price and warrant numbers of Old Ayala’s warrants have been retroactively adjusted for the impact of the Merger, see note 1. Shares Weighted Weighted Aggregate Outstanding and exercisable warrants at December 31, 2022 337,320 $ 25.08 1.14 $ 86,613 Issuance of warrants upon Merger 377,818 * 53.45 * Exercised (249,867 ) * 0.05 * Outstanding warrants at June 30, 2023 465,271 * $ 61.56 * 3.15 $ - Exercisable warrants at June 30, 2023 290,206 $ 64.92 2.29 $ - * Exercise price and warrant numbers have been retroactively adjusted for the impact of the Merger, see note 1.
SCHEDULE OF ASSUMPTIONS USED IN WARRANT LIABILITY	In measuring the warrant liability for the warrants issued in the April 2021 Private Placement and September 2018 Public Offering at June 30, 2023, the Company used the following inputs in its Black Scholes model: SCHEDULE OF ASSUMPTIONS USED IN WARRANT LIABILITY June 30, 2023 January 19, 2023 Exercise Price $ 55.73 $ 55.73 Stock Price $ 1.00 $ 2.95 Expected Term 4.98 4.98 Volatility % 125 % 117 % Risk Free Rate 4.14 % 3.60 %

FAIR VALUE MESUREMENTS (Tables)

FAIR VALUE MESUREMENTS (Tables)	6 Months Ended
	Jun. 30, 2023
Fair Value Disclosures [Abstract]
SCHEDULE OF FAIR VALUE, ASSETS AND LIABILITIES MEASURED ON RECURRING BASIC	The company did not have any fair value measurements in June 30, 2022 :. The following table provide the liabilities carried at fair value measured on a recurring basis as of June 30, 2023 SCHEDULE OF FAIR VALUE, ASSETS AND LIABILITIES MEASURED ON RECURRING BASIC Fair Value Measured at June 30, 2023 Level 1 Level 2 Level 3 Total Financial liabilities at fair value: Long term warrant liablity $ - $ - $ 67 $ 67 Total financial liabilities at fair value $ - $ - $ 67 $ 67

COMMITMENTS AND CONTINGENT LI_2

COMMITMENTS AND CONTINGENT LIABILITIES (Tables)	6 Months Ended
	Jun. 30, 2023
Commitments and Contingencies Disclosure [Abstract]
SCHEDULE OF OPERATING RIGHT OF USE ASSETS AND LEASE LIABILITIES	The Company has the following operating ROU assets and lease liabilities: SCHEDULE OF OPERATING RIGHT OF USE ASSETS AND LEASE LIABILITIES June 30, 2023 ROU assets Lease liabilities Offices $ 1,266 $ 1,454 Cars 124 88 Total operating leases $ 1,390 $ 1,542 December 31, 2022 ROU assets Lease liabilities Offices $ 1,273 $ 1,612 Cars 189 139 Total operating leases $ 1,462 $ 1,751 June 30, December 31, 2022 Lease liabilities Lease liabilities Current lease liabilities $ 542 $ 419 Non-current lease liabilities 1,000 1,332 Total lease liabilities $ 1,542 $ 1,751
SUMMARY OF LEASE COSTS	The following table summarizes the lease costs recognized in the condensed consolidated statement of operations: SUMMARY OF LEASE COSTS For six months ended For six months ended June 30, June 30, Operating lease cost $ 269 $ 221 Variable lease cost 6 10 Total lease cost $ 275 $ 231 For three months ended For three months ended June 30, June 30, Operating lease cost $ 143 $ 109 Variable lease cost 2 - Total lease cost $ 145 $ 109
SCHEDULE OF FUTURE PAYMENTS OF OPERATING LEASE LIABILITIES	The following table summarizes the future payments of the Company for its operating lease liabilities: SCHEDULE OF FUTURE PAYMENTS OF OPERATING LEASE LIABILITIES June 30, 2023 (from July 1) $ 225 2024 380 2025 318 2026 308 2027 308 After 2027 411 Total undiscounted lease payments $ 1 ,950 Less: Interest 408 Total lease liabilities – operating $ 1,542

SCHEDULE OF FAIR VALUE OF INTAN

SCHEDULE OF FAIR VALUE OF INTANGIBLE ASSETS ACQUIRED (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Jan. 19, 2023
Accounting Policies [Abstract]
Cash and cash equivalents		$ 22,539
Prepaid expenses and other current assets		300
Property and equipment, net		34
Intangible assets	$ 130	130
Operating right-of-use asset		5
Other assets		11
Total assets		23,019
Common stock warrant liability		(203)
Other current liabilities and trade payables		(2,714)
Total liabilities		(2,917)
Net assets acquired		$ 20,102

SCHEDULE OF PRO FORMA FINANCIAL

SCHEDULE OF PRO FORMA FINANCIAL INFORMATION (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Accounting Policies [Abstract]
Revenue	$ 9	$ 288	$ 13	$ 746
Net loss	$ (8,699)	$ (13,087)	$ (15,591)	$ (23,405)

SIGNIFICANT ACCOUNTING POLICI_4

SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) $ / shares in Units, $ in Thousands	6 Months Ended
	Jun. 30, 2023 USD ($) $ / shares shares	Jun. 30, 2022 USD ($)	Jan. 19, 2023 USD ($)	Dec. 31, 2022 USD ($) $ / shares	Oct. 18, 2022
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Common stock, par value | $ / shares	$ 0.001			$ 0.001
Stock issued during period, shares, new issues | shares	0.1874
Intangible assets	$ 130		$ 130
Accumulated deficit	165,214			$ 149,154
Net cash used in operating activities	15,302	$ 17,007
Cash and cash equivalents	$ 7,079	$ 20,059		$ 2,408
Common shares merger ratio	0.1874
Merger Agreement [Member] | Merger Sub Inc and Ayala Pharmaceuticals Inc [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Percentage of outstanding shares					37.50%
Merger Agreement [Member] | Ayala Pharmaceuticals Inc [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Percentage of outstanding shares					62.50%

REVENUES (Details Narrative)

REVENUES (Details Narrative) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Revenue from Contract with Customer [Abstract]
Revenues	$ 9	$ 38	$ 13	$ 496

SCHEDULE OF RECONCILIATION OF C

SCHEDULE OF RECONCILIATION OF COMPANY’S UNRECOGNIZED TAX BENEFITS (Details) - USD ($) $ in Thousands	6 Months Ended	12 Months Ended
	Jun. 30, 2023	Dec. 31, 2022
Income Tax Disclosure [Abstract]
Uncertain tax position at the beginning of the period	$ 1,323	$ 858
Additions for uncertain tax position of prior years (foreign exchange and interest)	24	36
Subtractions for tax positions of previous period	(7)
Additions for tax positions of current period	308	429
Uncertain tax position at the end of the period	$ 1,648	$ 1,323

TAX (Details Narrative)

TAX (Details Narrative) - USD ($) $ in Thousands	6 Months Ended	12 Months Ended
	Jun. 30, 2023	Dec. 31, 2022	Mar. 31, 2023
Income Tax Disclosure [Abstract]
Uncertain tax position liability	$ 1,600	$ 1,300
Interest related to uncertain tax positions	$ 90	$ 79
Proceeds form sale of discontinued operation			$ 4,675

SCHEDULE OF WARRANTS OUTSTANDIN

SCHEDULE OF WARRANTS OUTSTANDING (Details) - USD ($) $ / shares in Units, $ in Thousands		6 Months Ended	12 Months Ended
		Jun. 30, 2023	Dec. 31, 2022
Offsetting Assets [Line Items]
Number of shares underlying warrants		465,271
Warrants, Outstanding and exercisable warrants		337,320
Weighted Average Exercise Price, Outstanding and exercisable warrants		$ 25.08
Weighted Average Remaining Contractual Life In Years, Outstanding and exercisable warrants			1 year 1 month 20 days
Aggregate Intrinsic Value, Outstanding and exercisable		$ 86,613
Warrants, Issuance of warrants upon merger	[1]	377,818
Weighted Average Exercise Price, Issuance of warrants upon merger	[1]	$ 53.45
Warrants, Exercised	[1]	(249,867)
Weighted Average Exercise Price, Exercised	[1]	$ 0.05
Outstanding warrants, shares	[1]	465,271
Weighted Average Exercise Price, Outstanding warrants	[1]	$ 61.56
Weighted Average Remaining Contractual Life In Years, Outstanding warrants		3 years 1 month 24 days
Aggregate Intrinsic Value, Outstanding
Exercisable warrants, shares		290,206
Weighted Average Exercise Price, Exercisable warrants		$ 64.92
Weighted Average Remaining Contractual Life In Years, Exercisable warrants		2 years 3 months 14 days
Aggregate Intrinsic Value, Exercisable
Exercise Price Range One [Member]
Offsetting Assets [Line Items]
Exercise price		$ 2.79
Number of shares underlying warrants		879
Expected term		September 2024
Type of financing		September 2018 Public Offering
Exercise Price Range Two [Member]
Offsetting Assets [Line Items]
Exercise price		$ 224
Number of shares underlying warrants		4,092
Expected term		July 2024
Type of financing		July 2019 Public Offering
Exercise Price Range Three [Member]
Offsetting Assets [Line Items]
Exercise price		$ 28
Number of shares underlying warrants		57,230
Expected term		November 2025
Type of financing		November 2020 Public Offering
Exercise Price Range Four [Member]
Offsetting Assets [Line Items]
Exercise price		$ 56
Number of shares underlying warrants		140,552
Expected term		April 2026
Type of financing		April 2021 Registered Direct Offering (Accompanying Warrants)
Exercise Price Range Five [Member]
Offsetting Assets [Line Items]
Exercise price		$ 56
Number of shares underlying warrants		175,065
Expected term		5 years after the date such warrants become exercisable, if ever
Type of financing		April 2021 Private Placement (Private Placement Warrants)
Expected term		5 years
Exercise Price Range Six [Member]
Offsetting Assets [Line Items]
Exercise price		$ 96.58
Number of shares underlying warrants	[2]	87,453
Expected term		February 2024
Type of financing		February 2021 Private Placement (issued by Old Ayala)
[1]Exercise price and warrant numbers have been retroactively adjusted for the impact of the Merger, see note 1.[2]Exercise price and warrant numbers of Old Ayala’s warrants have been retroactively adjusted for the impact of the Merger, see note 1.

SCHEDULE OF ASSUMPTIONS USED IN

SCHEDULE OF ASSUMPTIONS USED IN WARRANT LIABILITY (Details) - Warrant Liability [Member] - Private Placement [Member]	Jun. 30, 2023 $ / shares	Jan. 19, 2023 $ / shares
Exercise Price	$ 55.73	$ 55.73
Stock Price	$ 1	$ 2.95
Measurement Input, Expected Term [Member]
Expected term	4 years 11 months 23 days	4 years 11 months 23 days
Measurement Input, Price Volatility [Member]
Measurement input percentage	125	117
Measurement Input, Risk Free Interest Rate [Member]
Measurement input percentage	4.14	3.60

COMMON STOCK PURCHASE WARRANT_3

COMMON STOCK PURCHASE WARRANTS AND WARRANT LIABILITY (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands		6 Months Ended
		Jun. 30, 2023	Dec. 31, 2022
Number of equity warrants		465,271
Number of warrants outstanding		289,327
Warrant exchanges of shares	[1]	249,867
Par value per share		$ 0.001	$ 0.001
Gain on fair value of warrant liability		$ 136
Minimum [Member]
Shares authorized		170,000,000
Maximum [Member]
Shares authorized		300,000,000
Warrant [Member]
Number of equity warrants		290,206
Warrant exchanges of shares		249,867
Warrant [Member] | Minimum [Member]
Warrant exercise price per share		$ 2.79
Warrant [Member] | Maximum [Member]
Warrant exercise price per share		$ 224
Common Stock [Member]
Number of equity warrants			337,320
Warrant exchanges of shares		246,192
Common Stock [Member] | Minimum [Member]
Warrant exercise price per share			$ 0.05
Common Stock [Member] | Maximum [Member]
Warrant exercise price per share			$ 96.58
Warrant Liability [Member] | Minimum [Member]
Warrant exercise price per share		$ 2.79
Warrant Liability [Member] | Maximum [Member]
Warrant exercise price per share		$ 1,800
[1]Exercise price and warrant numbers have been retroactively adjusted for the impact of the Merger, see note 1.

SCHEDULE OF FAIR VALUE, ASSETS

SCHEDULE OF FAIR VALUE, ASSETS AND LIABILITIES MEASURED ON RECURRING BASIC (Details)	Jun. 30, 2023 USD ($)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total financial liabilities at fair value	$ 67
Private Placement [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total financial liabilities at fair value	67
Fair Value, Inputs, Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total financial liabilities at fair value
Fair Value, Inputs, Level 1 [Member] | Private Placement [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total financial liabilities at fair value
Fair Value, Inputs, Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total financial liabilities at fair value
Fair Value, Inputs, Level 2 [Member] | Private Placement [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total financial liabilities at fair value
Fair Value, Inputs, Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total financial liabilities at fair value	67
Fair Value, Inputs, Level 3 [Member] | Private Placement [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total financial liabilities at fair value	$ 67

SCHEDULE OF OPERATING RIGHT OF

SCHEDULE OF OPERATING RIGHT OF USE ASSETS AND LEASE LIABILITIES (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Property, Plant and Equipment [Line Items]
Operating right-of-use asset	$ 1,390	$ 1,462
Total lease liabilities	1,542	1,751
Current lease liabilities	542	419
Non-current lease liabilities	1,000	1,332
Officer [Member]
Property, Plant and Equipment [Line Items]
Operating right-of-use asset	1,266	1,273
Total lease liabilities	1,454	1,612
Cars [Member]
Property, Plant and Equipment [Line Items]
Operating right-of-use asset	124	189
Total lease liabilities	$ 88	$ 139

SUMMARY OF LEASE COSTS (Details

SUMMARY OF LEASE COSTS (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Commitments and Contingencies Disclosure [Abstract]
Operating lease cost	$ 143	$ 109	$ 269	$ 221
Variable lease cost	2		6	10
Total lease cost	$ 145	$ 109	$ 275	$ 231

SCHEDULE OF FUTURE PAYMENTS OF

SCHEDULE OF FUTURE PAYMENTS OF OPERATING LEASE LIABILITIES (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Commitments and Contingencies Disclosure [Abstract]
2023 (from July 1)	$ 225
2024	380
2025	318
2026	308
2027	308
After 2027	411
Total undiscounted lease payments	1
Less: Interest	408
Total lease liabilities – operating	$ 1,542	$ 1,751

COMMITMENTS AND CONTINGENT LI_3

COMMITMENTS AND CONTINGENT LIABILITIES (Details Narrative) - USD ($) $ in Thousands			1 Months Ended	6 Months Ended
	Mar. 31, 2023	Mar. 25, 2021	Sep. 30, 2021	Jun. 30, 2023
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Loan from lessor				$ 500
Bank guarantee amount				200
Lease and rental expense	$ 36	$ 29
Lease to extending term date			March 31, 2023
Operating lease right of use asset and lease liabilities				$ 65
Weighted average remaining lease term				2 years 8 months 12 days
Weighted average discount rate percent				7.40%
First BMS Licensed Compound [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Payments for license				$ 95,000
Second BMS Licensed Compound [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Payments for license				47,000
Third BMS Licensed Compound [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Payments for license				$ 50,000

SUBSEQUENT EVENTS (Details Narr

SUBSEQUENT EVENTS (Details Narrative) - Subsequent Event [Member] - USD ($) $ in Millions	Aug. 07, 2023	Jul. 26, 2023
Bio sight LTD [Member]
Subsequent Event [Line Items]
Ownership percentage		55%
Ayala Pharmaceuticals Inc [Member]
Subsequent Event [Line Items]
Ownership percentage		45%
Israel Biotech Fund Ilp [Member]
Subsequent Event [Line Items]
Convertible debt	$ 2
Investmentst	$ 15
Interest rate percentage	65%