0001493152-23-041998 | 10-Q | XBRL Viewer | Ayala Pharmaceuticals INC

REVENUES (Details Narrative) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
REVENUES (Details Narrative) - USD ($) $ in Thousands	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Revenue from Contract with Customer [Abstract]
Revenues		$ 91	$ 13	$ 587

- Definition

Amount of revenue recognized from goods sold, services rendered, insurance premiums, or other activities that constitute an earning process. Includes, but is not limited to, investment and interest income before deduction of interest expense when recognized as a component of revenue, and sales and trading gain (loss).

+ References

+ Details

GENERAL

9 Months Ended

Sep. 30, 2023

Organization, Consolidation and Presentation of Financial Statements [Abstract]

GENERAL

NOTE 1—GENERAL

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 January 2023 Merger, as described below. References to “former Advaxis” refer to our company solely in the period prior to the January 2023 Merger.

Prior to the January 2023 Merger, we were a clinical-stage biotechnology company focused on the development and commercialization of proprietary Listeria monocytogenes (“Lm”)-based antigen delivery products. These efforts utilized our Lm platform directed against tumor-specific targets in order to engage the patient’s immune system to destroy tumor cells. Through a license from the University of Pennsylvania, we have exclusive access to this proprietary formulation of attenuated Lm called Lm Technology^TM.

Following the January 2023 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”)-based antigen delivery products. These efforts are primarily focused on the development of ADXS-504, a Lm-based therapy for early-stage prostate cancer.

In 2017, the Company entered into an exclusive worldwide license agreement with respect to AL101 and AL102. See note 5.

Going Concern

The Company has incurred recurring losses since inception as a research and development organization and has an accumulated deficit of $172.6 million as of September 30, 2023. For the nine months ended September 30, 2023, the Company used approximately $22.3 million of cash in operations. The Company has relied on its ability to fund its operations through public and private equity financings. The Company expects operating losses and negative cash flows to continue at significant levels in the future as it continues its clinical trials.

As of September 30, 2023, the Company had approximately $2.1 million in cash and cash equivalents, and had approximately $1.6 million, as of the date of filing of this Form 10-Q, following the completion of the financing transactions on November 17, 2023 (the “November 17 Financing”), as described below The Company has limited available cash resources and believes that its current resources will not, without additional funding, be sufficient to meet its current obligations on the date of issuance of these condensed consolidated financial statements, which are estimated at approximately $12 million, and $2 million Convertible note received on August 7, 2023. Also, The Company had deferred payments to its suppliers and its certain former officers starting approximately six months ago. The Company is in the process of obtaining deferrals for its current obligations.

Management has evaluated different strategies to obtain the required funding for future operations, including through public or private debt and equity financings, but despite its efforts, the Company has been unsuccessful, other than the November 17 Financing, in securing additional capital to fund operations and otherwise satisfy creditor obligations. Obtaining additional funding is essential to provide sufficient cash flow to meet current operating requirements. There can be no assurances that such financing will become available to the Company on satisfactory terms, or at all.

In addition to seeking to obtain additional financing, management and the Board are evaluating strategic alternatives that may be available. Should financing not be obtained, or another strategic alternative not consummated, management and the Board may consider other alternatives, including without limitation bankruptcy and liquidation of the Company or an assignment for the benefit of creditors.

AYALA PHARMACEUTICALS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

NOTE 1—GENERAL (continued):

During the three months ended September 30, 2023, the Company had a reduction in workforce in which the employment of approximately 30% of the Company’s employees was terminated. This reduction in workforce has not yet required the Company to cease any major development efforts. Following the reduction in workforce, the Company had 21 employees. The Company expects to be able to meet its financial obligations to its employees and to its creditors only if able to reach agreements on payment terms and secure additional funding. The Company is evaluating additional reductions in costs, including additional reductions in workforce expenses and is also actively working on securing additional funding to help meet current obligations.

If the Company is unable to obtain funding, the Company would be forced to delay, reduce, or eliminate its research and development programs, which could adversely affect its business prospects, or the Company may be unable to continue operations. As such, those factors raise substantial doubt about the Company’s ability to continue as a going concern.

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 nine months ended September 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.

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. (which shortly prior to the closing of the merger in January 2023 changed 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 “January 2023 Merger”). Immediately after the January 2023 Merger, former Advaxis stockholders as of immediately prior to the Merger own approximately 37.5% of the outstanding shares of the combined Company and former Old Ayala shareholders own approximately 62.5% of the outstanding shares of the combined Company.

At the effective time of the January 2023 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 per share, equal to the exchange ratio, 0.1874 shares of the Company’s common stock per Old Ayala share.

The January 2023 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 January 2023 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 January 2023 Merger.

Because most of the value of the assets of former Advaxis was in cash and cash equivalents, the January 2023 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 January 2023 Merger. Old Ayala’s transaction costs were capitalized and offset against the shareholder’s equity upon the January 2023 Merger, and former Advaxis’ transaction costs were expensed as merger costs. The consolidated financial statements from the closing date of the January 2023 Merger include the assets, liabilities, and results of operations of the combined company.

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:

	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 January 2023 Merger, which consist of the Patents and License agreements valued at $130 thousand with an estimated useful life of four years. Acquired identifiable finite-lived intangible assets are amortized on a straight-line basis over the estimated useful lives of the assets. The basis of amortization approximates the pattern in which the assets are utilized, over their estimated useful lives. The Company routinely reviews the remaining estimated useful lives of finite-lived intangible assets. In case the Company reduces the estimated useful life for any asset, the remaining unamortized balance is amortized or depreciated over the revised estimated useful life.

These intangible assets are classified as Level 3 measurements within the fair value hierarchy.

AYALA PHARMACEUTICALS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

NOTE 1—GENERAL (continued):

The following unaudited table provides certain pro forma financial information for the Company as if the January 2023 Merger occurred on January 1, 2022 (in thousands except per share amounts):

	Nine months			Nine months
	ended			ended
	September 30,			September 30,
		2023			2022	*
		Unaudited			Unaudited
Revenue	$	13		$	837
Net loss	$	(23,583	)	$	(40,308	)

	Three months			Three months
	Ended			ended
	September 30,			September 30,
		2023			2022*
		Unaudited			Unaudited
Revenue	$	-		$	91
Net loss	$	(7,992	)	$	(17,061	)

The pro forma amounts above are derived from historical numbers of the Company and Old Ayala. The results of operations for the three and nine months ended September 30, 2022 include the operations of the Company for the period from May 1, 2022 to July 31, 2022 and November 1, 2021 to July 31, 2022, respectively which was the first nine 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.

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 (Unaudited)

NOTE 1—GENERAL (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.

The table below sets forth the number of potential shares of common stock that have been excluded from diluted net loss per share


	For the Three Months Ended						For the Nine Months Ended
	September 30,						September 30,
	2023			2022			2023			2022
Net loss attributable to common stockholders, basic and diluted		(7,339	)		(10,185	)		(23,399	)		(28,246

Weighted average common shares outstanding, basic and diluted*		4,784,474			2,901,478			4,648,599			2,879,465

Warrants		465,271			109,316			465,271			109,316
Stock options		110,860			213,997			110,860			213,997
Anti dilutive shares outstanding which were not included in the diluted calculation		576,131			323,313			576,131			323,313

Net loss per share attributable to common stockholders, basic and diluted	$	(1.53	)	$	(3.51	)	$	(5.03	)	$	(9.81	)

See note 5 for condition of warrants.

All of the Common Stock, exercise prices and per share data have been retroactively adjusted for the impact of the January 2023 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 and convertible note 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 (Unaudited)

Cover - shares	9 Months Ended
Cover - shares	Sep. 30, 2023	Nov. 11, 2023
Cover [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Quarterly Report	true
Document Transition Report	false
Document Period End Date	Sep. 30, 2023
Document Fiscal Period Focus	Q3
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		10,751,792

TAX

9 Months Ended

Sep. 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 September 30, 2023 and December 31, 2022, the Company has recorded an uncertain tax position liability exclusive of interest and penalties of $1.6 million and $1.3 million, respectively, which were classified as other accounts payable. As of September 30, 2023 and December 31, 2022, the Company accrued interest related to uncertain tax positions of $103 thousand and $79 thousand, respectively. The interest is recorded as part of financial expenses. These uncertain tax positions would impact the Company’s effective tax rate, if recognized. A reconciliation of the Company’s unrecognized tax benefits is below:

	Nine months			Year
	Ended			ended
	September 30,			December 31,
	2023			2022
		(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)		35			36
Subtractions for tax positions of previous period		(7	)
Additions for tax positions of current period		279			429
Uncertain tax position at the end of the period	$	1,630		$	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 September 30, 2023.

In March 2023, the Company received $4.7 million of proceeds from the sale of our Net Operating Losses (“NOLs”) under the State of New Jersey NOL Transfer Program. This was recorded as a tax benefit and offset against income tax expense in the consolidated statement of operations.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 13
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480990/946-20-50-13

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 235
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(h)(2))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480678/235-10-S99-1

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-Name Accounting Standards Codification
-Publisher FASB
-URI https://asc.fasb.org//740/tableOfContent

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 14
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482685/740-10-50-14

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 21
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482685/740-10-50-21

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 270
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482526/740-270-50-1

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 17
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482685/740-10-50-17

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SAB TOPIC 6.I.5.Q1)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479360/740-10-S99-1

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 2
-Subparagraph (SAB Topic 11.C)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479360/740-10-S99-2

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 30
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482603/740-30-50-2

+ Details

COMMITMENTS AND CONTINGENT LIABILITIES

9 Months Ended

Sep. 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 million paid in arrears for leasehold improvements. The amount was recorded as an incentive and is taken into account when computing the right of use (“ROU”) asset.

The Subsidiary obtained a bank guarantee in the amount of approximately $191 thousand for its new office lease agreement.

On March 25, 2021, the Company entered into a one-year lease agreement for its corporate office/lab with base rent of approximately $29 per year, plus other expenses. In September 2021, the Company exercised its option to renew the lease, extending the lease term until March 31, 2023. On March 25, 2023 the Company signed an extension up to March 31, 2025, with base rent of approximately $36 per year. The Company recorded an ROU asset and liability of approximately $65.

The Company has the following operating ROU assets and lease liabilities:

	September 30, 2023
		ROU assets		Lease liabilities
Offices	$	1,179	$	1,350
Cars		97		62
Total operating leases	$	1,276	$	1,412

	December 31, 2022
		ROU assets		Lease liabilities
Offices	$	1,273	$	1,612
Cars		189		139
Total operating leases	$	1,462	$	1,751

	September 30,		December 31,
	2023		2022
	Lease liabilities		Lease liabilities
Current lease liabilities	$	480	$	419
Non-current lease liabilities		932		1,332
Total lease liabilities	$	1,412	$	1,751

The following table summarizes the lease costs recognized in the condensed consolidated statement of operations:

SUMMARY OF LEASE COSTS

	For nine months		For nine months
	ended		ended
	September 30,		September 30,
	2023		2022
Operating lease cost	$	348	$	341
Variable lease cost		6		10
Total lease cost	$	354	$	351

	For three months		For three months
	ended		ended
	September 30,		September 30,
	2023		2022
Operating lease cost	$	79	$	120
Variable lease cost		-		-
Total lease cost	$	79	$	120

As of September 30, 2023, the weighted-average remaining lease term and weighted-average discount rate for operating leases are 2.7 years and 7.4%, respectively.

AYALA PHARMACEUTICALS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

NOTE 6—COMMITMENTS AND CONTINGENT LIABILITIES (continued):

The following table summarizes the future payments of the Company for its operating lease liabilities:

	September 30,
	2023
2023 (from October 1)	$	146
2024		380
2025		318
2026		308
2027		308
After 2027		411
Total undiscounted lease payments	$	1,871
Less: Interest		459
Total lease liabilities – operating	$	1,412

Purported Stockholder Claims

Purported Stockholder Claims Related to January 2023 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”).

AYALA PHARMACEUTICALS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

NOTE 6—COMMITMENTS AND CONTINGENT LIABILITIES (continued):

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 January 2023 Merger. The Complaint seeks, among other relief, (1) to enjoin defendants from consummating the January 2023 Merger; (2) to enjoin a vote on the January 2023 Merger; (3) to rescind the January 2023 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.

Insider Trading Arrangements	3 Months Ended
Insider Trading Arrangements	Sep. 30, 2023
Insider Trading Arrangements [Line Items]
Rule 10b5-1 Arrangement Adopted	false
Non-Rule 10b5-1 Arrangement Adopted	false
Rule 10b5-1 Arrangement Terminated	false
Non-Rule 10b5-1 Arrangement Terminated	false

COMMITMENTS AND CONTINGENT LIABILITIES (Tables)

9 Months Ended

Sep. 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:

	September 30, 2023
		ROU assets		Lease liabilities
Offices	$	1,179	$	1,350
Cars		97		62
Total operating leases	$	1,276	$	1,412

	December 31, 2022
		ROU assets		Lease liabilities
Offices	$	1,273	$	1,612
Cars		189		139
Total operating leases	$	1,462	$	1,751

	September 30,		December 31,
	2023		2022
	Lease liabilities		Lease liabilities
Current lease liabilities	$	480	$	419
Non-current lease liabilities		932		1,332
Total lease liabilities	$	1,412	$	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 nine months		For nine months
	ended		ended
	September 30,		September 30,
	2023		2022
Operating lease cost	$	348	$	341
Variable lease cost		6		10
Total lease cost	$	354	$	351

	For three months		For three months
	ended		ended
	September 30,		September 30,
	2023		2022
Operating lease cost	$	79	$	120
Variable lease cost		-		-
Total lease cost	$	79	$	120

SCHEDULE OF FUTURE PAYMENTS OF OPERATING LEASE LIABILITIES

The following table summarizes the future payments of the Company for its operating lease liabilities:

	September 30,
	2023
2023 (from October 1)	$	146
2024		380
2025		318
2026		308
2027		308
After 2027		411
Total undiscounted lease payments	$	1,871
Less: Interest		459
Total lease liabilities – operating	$	1,412

COMMITMENTS AND CONTINGENT LIABILITIES (Details Narrative) - USD ($) $ in Thousands			1 Months Ended	9 Months Ended
	Mar. 25, 2023	Mar. 25, 2021	Sep. 30, 2021	Sep. 30, 2023
Commitments and Contingencies Disclosure [Abstract]
Loan from lessor				$ 500
Bank guarantee amount				191
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%

Condensed Consolidated Statements of Changes in Stockholders' Equity (Deficiency) (Unaudited) - USD ($)
$ in Thousands

Common Stock [Member]

Additional Paid-in Capital [Member]

^[1]

Retained Earnings [Member]

Total

Beginning balance, value at Dec. 31, 2021

$ 3

^[1]

$ 145,296

$ (111,141)

$ 34,158

Stock-based compensation, shares at Dec. 31, 2021

^[1]

2,615,360

Vested restricted shares

^[1]

Vested restricted shares, shares

^[1]

6,658

Share based compensation

^[1]

1,914

Stock-based compensation, shares

^[1]

Proceeds from issuance of common stock, net of issuance cost of $3

^[1],[2]

512

Stock-based compensation, shares

^[1]

58,172

Net loss

^[1]

(28,246)

Ending balance, value at Sep. 30, 2022

$ 3

^[1]

147,722

(139,387)

8,338

Stock-based compensation, shares at Sep. 30, 2022

^[1]

2,680,190

Beginning balance, value at Jun. 30, 2022

$ 3

^[1]

146,738

(129,202)

17,539

Stock-based compensation, shares at Jun. 30, 2022

^[1]

2,620,716

Vested restricted shares

^[1]

Vested restricted shares, shares

^[1]

2,220

Share based compensation

^[1]

516

Stock-based compensation, shares

^[1]

Proceeds from issuance of common stock, net of issuance cost of $3

^[1],[2]

468

Stock-based compensation, shares

^[1]

57,254

Net loss

^[1]

(10,185)

Ending balance, value at Sep. 30, 2022

$ 3

^[1]

147,722

(139,387)

8,338

Stock-based compensation, shares at Sep. 30, 2022

^[1]

2,680,190

Beginning balance, value at Dec. 31, 2022

$ 3

^[1]

148,052

(149,154)

(1,099)

Stock-based compensation, shares at Dec. 31, 2022

^[1]

2,695,067

Vested restricted shares

^[1]

Vested restricted shares, shares

^[1]

30,882

Share based compensation

^[1]

1,308

$ 1,308

Stock-based compensation, shares

^[1]

Stock-based compensation, shares

0.1874

Net loss

^[1]

(23,399)

$ (23,399)

Issuance of shares upon January 2023 Merger, net of issuance costs of $3,153

$ 2

^[1]

16,947

16,949

Stock-based compensation, shares

^[1]

2,062,143

Ending balance, value at Sep. 30, 2023

$ 5

^[1]

166,307

(172,553)

(6,241)

Stock-based compensation, shares at Sep. 30, 2023

^[1]

4,788,092

Beginning balance, value at Jun. 30, 2023

$ 5

^[1]

166,218

(165,214)

1,009

Stock-based compensation, shares at Jun. 30, 2023

^[1]

4,779,826

Vested restricted shares

^[1]

Vested restricted shares, shares

^[1]

8,266

Share based compensation

^[1]

Stock-based compensation, shares

^[1]

Net loss

^[1]

(7,339)

Ending balance, value at Sep. 30, 2023

$ 5

^[1]

$ 166,307

$ (172,553)

$ (6,241)

Stock-based compensation, shares at Sep. 30, 2023

^[1]

4,788,092

[1]	All of the Common Stock and per share data have been retroactively adjusted for the impact of the January 2023 merger between Old Ayala, Inc. (f/k/a Ayala Pharmaceuticals, Inc.) and Ayala Pharmaceutical, Inc.(f/k/a Advaxis, Inc.). See note 1
[2]	Represents an amount lower than $1.

SCHEDULE OF ASSUMPTIONS USED IN WARRANT LIABILITY (Details)	Sep. 30, 2023 $ / shares	Aug. 07, 2023 $ / shares	Jan. 19, 2023 $ / shares
Stock Price	$ 0.94	$ 1.15
Measurement Input, Price Volatility [Member]
Measurement input percentage	80.2	74.5
Measurement Input, Risk Free Interest Rate [Member]
Measurement input percentage	4.60	4.20
Warrant Liability [Member] \| Private Placement [Member]
Exercise Price	$ 55.73		$ 55.73
Stock Price	$ 0.94		$ 2.95
Warrant Liability [Member] \| Private Placement [Member] \| Measurement Input, Expected Term [Member]
Expected term	4 years 11 months 23 days		4 years 11 months 23 days
Warrant Liability [Member] \| Private Placement [Member] \| Measurement Input, Price Volatility [Member]
Measurement input percentage	128		117
Warrant Liability [Member] \| Private Placement [Member] \| Measurement Input, Risk Free Interest Rate [Member]
Measurement input percentage	4.60		3.60

SUBSEQUENT EVENTS (Details Narrative)	Nov. 17, 2023 USD ($) Integer $ / shares	Jul. 26, 2023
Senior Convertible Promissory Note [Member]
Subsequent Event [Line Items]
Aggregate amount	$ 4,000,000.0
Share price \| $ / shares	$ 0.001
Senior Convertible Promissory Note [Member] \| Subsequent Event [Member]
Subsequent Event [Line Items]
Aggregate amount	$ 4,000,000.0
Share price \| $ / shares	$ 0.001
Debt instrument description	(i) 50% of the Common Stock’s price per share as of market close on November 16, 2023 and (ii) 50% of the Common Stock’s price per share as of the close of market on the Trading Day immediately prior to the date of the Notice of Conversion, subject to certain adjustments. In connection with the issuance of the Senior Convertible Notes, the Company has issued to the noteholders warrants to purchase an aggregate of 15,000,000 shares of the Common Stock with an exercise price equal to the lower of (A) 50% of the Common Stock’s price per share as of market close on November 16, 2023 and (ii) 50% of the Common Stock’s price per share as of the close of market on the Trading Day immediately prior to the date of the Notice of Exercise of the warrant, subject to adjustment, which exercise may be on a cashless basis
Debt instrument additional amount	$ 4.0
Debt instrument share \| Integer	7,500,000
Ayala Pharmaceuticals Inc [Member]
Subsequent Event [Line Items]
Ownership percentage		45.00%
Biosight Merger [Member]
Subsequent Event [Line Items]
Ownership percentage		55.00%

Condensed Consolidated Statement of Cash Flows (Unaudited) (Parenthetical) - USD ($) $ in Thousands	3 Months Ended	9 Months Ended
	Sep. 30, 2022	Sep. 30, 2022
Statement of Cash Flows [Abstract]
Common stock issuance cost	$ 3	$ 3

GENERAL (Policies)

9 Months Ended

Sep. 30, 2023

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Going Concern

Going Concern

AYALA PHARMACEUTICALS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

NOTE 1—GENERAL (continued):

Merger with Ayala Pharmaceuticals, Inc.

Fair Value Allocation

	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

These intangible assets are classified as Level 3 measurements within the fair value hierarchy.

AYALA PHARMACEUTICALS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

NOTE 1—GENERAL (continued):

The following unaudited table provides certain pro forma financial information for the Company as if the January 2023 Merger occurred on January 1, 2022 (in thousands except per share amounts):

	Nine months			Nine months
	ended			ended
	September 30,			September 30,
		2023			2022	*
		Unaudited			Unaudited
Revenue	$	13		$	837
Net loss	$	(23,583	)	$	(40,308	)

	Three months			Three months
	Ended			ended
	September 30,			September 30,
		2023			2022*
		Unaudited			Unaudited
Revenue	$	-		$	91
Net loss	$	(7,992	)	$	(17,061	)

Basis of Presentation

Basis of Presentation

Use of estimates

Use of estimates

AYALA PHARMACEUTICALS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

NOTE 1—GENERAL (continued):

Net Loss per Share

Net Loss per Share

The table below sets forth the number of potential shares of common stock that have been excluded from diluted net loss per share


	For the Three Months Ended						For the Nine Months Ended
	September 30,						September 30,
	2023			2022			2023			2022
Net loss attributable to common stockholders, basic and diluted		(7,339	)		(10,185	)		(23,399	)		(28,246

Weighted average common shares outstanding, basic and diluted*		4,784,474			2,901,478			4,648,599			2,879,465

Warrants		465,271			109,316			465,271			109,316
Stock options		110,860			213,997			110,860			213,997
Anti dilutive shares outstanding which were not included in the diluted calculation		576,131			323,313			576,131			323,313

Net loss per share attributable to common stockholders, basic and diluted	$	(1.53	)	$	(3.51	)	$	(5.03	)	$	(9.81	)

See note 5 for condition of warrants.

All of the Common Stock, exercise prices and per share data have been retroactively adjusted for the impact of the January 2023 Merger. The shares have been adjusted to the merger ratio of 0.1874.

Fair value of financial instruments

Fair value of financial instruments

Recently Adopted Accounting Pronouncements

Recently Adopted Accounting Pronouncements

Condensed Consolidated Statements of Operations (Unaudited) - USD ($)
$ in Thousands

3 Months Ended

9 Months Ended

Sep. 30, 2023

Sep. 30, 2022

Sep. 30, 2023

Sep. 30, 2022

Income Statement [Abstract]

Revenues from licensing agreement and others

$ 91

$ 13

$ 587

Cost of services

(91)

(13)

(497)

Gross profit

Operating expenses:

Research and development

5,683

7,199

18,671

20,282

General and administrative

1,448

2,881

8,815

7,586

Operating loss

(7,131)

(10,080)

(27,486)

(27,778)

Financial (loss) income, net

(143)

Loss before income tax

(7,274)

(10,079)

(27,414)

(27,737)

Taxes on income

(65)

(106)

4,015

(509)

Net loss

$ (7,339)

$ (10,185)

$ (23,399)

$ (28,246)

Net Loss per share attributable to common stockholders, basic

$ (1.53)

$ (3.51)

$ (5.03)

$ (9.81)

Net loss per share, basic and diluted

$ (1.53)

$ (3.51)

$ (5.03)

$ (9.81)

Weighted average common shares outstanding, basic

^[1],[2]

4,784,474

2,901,478

4,648,599

2,879,465

Weighted average common shares outstanding, diluted

^[1],[2]

4,784,474

2,901,478

4,648,599

2,879,465

[1]	Common Stock, additional paid-in capital and per share data have been retroactively adjusted for the impact of the January 2023 merger between Old Ayala, Inc. (f/k/a Ayala Pharmaceuticals, Inc.) and Ayala Pharmaceutical, Inc.(f/k/a Advaxis, Inc.). See note 1
[2]	Exercise price and warrant numbers of Old Ayala’s warrants have been retroactively adjusted for the impact of the January 2023 Merger, see note 1

SCHEDULE OF FAIR VALUE LIABILITIES MEASURED ON RECURRING BASIS (Details) - Fair Value, Recurring [Member] - Fair Value, Inputs, Level 3 [Member] - USD ($)	3 Months Ended	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2023
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Beginning balance	$ 67
Long term warrant assumed from Merger		203
Proceed from issuance of loan	2,000	2,000
Revaluation recorded in financial income, net	66	(70)
Ending balance	$ 2,133	$ 2,133

COMMON STOCK PURCHASE WARRANTS AND WARRANT LIABILITY

9 Months Ended

Sep. 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 September 30, 2023, there were 465,271 warrants outstanding of which 290,206 were exercisable warrants to purchase shares of our common stock, with exercise prices ranging from $2.79 to $224.00 per share. As of December 31, 2022, there were outstanding and exercisable warrants to purchase 337,320*, shares of our common stock with exercise prices ranging from $0.05* to $96.58* per share. Information on the outstanding warrants as of September 30, 2023 is as follows:

SCHEDULE OF WARRANTS OUTSTANDING

		Number of
		Shares
		Underlying
Exercise Price		Warrants			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 after the date such warrants become exercisable, if ever	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 January 2023 Merger, see note 1

AYALA PHARMACEUTICALS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

NOTE 4 – COMMON STOCK PURCHASE WARRANTS AND WARRANT LIABILITY (continued):

As of September 30, 2023, the Company had 289,327 of its total 465,271 outstanding warrants classified as equity. As of December 31, 2022, all outstanding warrants were classified as equity. At issuance, equity warrants are recorded in additional paid-In capital.

A summary of warrant activity was as follows (in thousands, except share and per share data):

								Weighted
								Average
				Weighted				Remaining
				Average			Contractual Life			Aggregate
	Shares			Exercise Price				In Years		Intrinsic Value
Outstanding and exercisable warrants at December 31, 2022		337,320		$	25.08				1.14	$	86,613
Issuance of warrants upon January 2023 Merger		377,818	*		53.45	*
Exercised		(249,867	)*		0.05	*
Outstanding warrants at September 30, 2023		465,271	*	$	61.56	*			3.15	$	-
Exercisable warrants at September 30, 2023		290,206		$	64.92				2.29	$	-

Exercise price and warrant numbers have been retroactively adjusted for the impact of the January 2023 Merger, see note 1.

Shares Issued for Warrants Exercises

During the nine months ended September 30, 2023, pre-funded warrant holders from the Old Ayala’s February 2019 Offering automatically net exercised 249,867 warrants in exchange for 246,192 shares of the Company’s common stock in accordance with their terms.

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 par value per share from 170,000,000 shares to 300,000,000 shares. These warrants expire five years after the date they become exercisable. As of September 30, 2023, such an amendment has not been filed, and thus the warrants have not become exercisable. Accordingly, based on certain indemnification provisions of the securities purchase agreement, the Company concluded that liability classification is warranted. The Company utilized the Black Scholes model to calculate the fair value of these warrants at the merger and reporting date.

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 September 30, 2023, the down round feature was triggered five times and the exercise price of the warrants were reduced from $1,800.00 to $2.79. The warrants require liability classification as the warrant agreement requires the Company to maintain an effective registration statement and does not specify any circumstances under which settlement in other than cash would be permitted or required. In addition, the contract contains an unpermitted adjustment to the exercise price, and therefore precludes an equity classification. As a result, net cash settlement is assumed, and liability classification is warranted. The Company utilized the Black Scholes model to calculate the fair value of these warrants at the merger and reporting date.

In measuring the warrant liability for the warrants issued in the April 2021 Private Placement and September 2018 Public Offering at September 30, 2023, the Company used the following inputs in its Black Scholes model:

	September 30, 2023			January 19, 2023
Exercise Price	$	55.73		$	55.73
Stock Price	$	0.94		$	2.95
Expected Term		4.98 years			4.98 years
Volatility %		128	%		117	%
Risk Free Rate		4.60	%		3.60	%

For the nine months ended September 30, 2023, the Company reported a gain of approximately $138 due to changes in the fair value of the warrant liability

Convertible Note

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 million dollars, which borrowings are expected to fund on or after September 1, 2023, or sooner under certain circumstances if required, which as of date of this filling have not been met. The Note is convertible into shares of the Company’s common stock under the terms described in the Note, with the expected mandatory conversion in the event of a PIPE (Private Investment into a Public Entity) with the minimum of $15 Million investment at a price equal to 65% of the lowest price offered in the PIPE.

On September 1, 2023 the company received the $2.0 million dollars, and since then no further payments have been made or withdrawn.

The Company has elected the fair value option to measure the Note upon issuance, in accordance with ASC 825-10. Under the fair value option, the Note is measured at fair value each period with changes in fair value reported in the consolidated statements of operations. According to ASC 825-10, changes in fair value that are caused by changes in the instrument-specific credit risk will be presented separately in other comprehensive income (loss).

The Note was valued using a probability-weighted expected return model, which incorporated significant unobservable inputs such as the likelihood of a voluntary Note conversion (30% likelihood), the Note being held to maturity (30% likelihood) and the Note mandatory conversion in a PIPE (40% likelihood). This resulted in an implied borrowing rate of 37.8% was used as an input to the fair value measurement. None of the change in fair value was deemed to be attributable to instrument-specific credit risk and thus the full amount of such change was recognized in the statements of operations.

In measuring the note for issued the Company used the following inputs:

	September 30, 2023			August 7, 2023
Stock price	$	0.94		$	1.15
Interest rate		7.4			7.3	%
Implied discount		48.8	%		40.6	%
Volatility %		80.2	%		74.5	%
Risk Free Rate		4.60	%		4.20	%

For the nine months ended September 30, 2023, the Company reported change in fair value of not of approximately $68 as part of financial loss in the consolidated statement of operations.

AYALA PHARMACEUTICALS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

SUBSEQUENT EVENTS

9 Months Ended

Sep. 30, 2023

Subsequent Events [Abstract]

SUBSEQUENT EVENTS

NOTE 7 – SUBSEQUENT EVENTS

Merger with Biosight

On July 26, 2023, the Company and its wholly owned subsidiary organized under the laws of the State of Israel, Advaxis Israel Ltd. (“Biosight Merger Sub”), entered into an Agreement and Plan of Merger and Reorganization (the “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 on October 18, 2023, Merger Sub merged (the “Biosight Merger”) with and into Biosight, which is now a wholly owned subsidiary of the Company. At completion of the Biosight Merger, Ayala’s then-current equity holders own approximately 45% and the former Biosight equity holders own approximately 55% of Ayala’s common stock.

Based on the agreement, Ayala Pharmaceuticals, Inc. is the legal acquirer in the Merger. In addition, the Company considered ASC 805-10-55 to determine the accounting acquirer in the Merger. As the Company holds a majority of the members of the governing body of the combined Company, the Company’s former management dominates the majority of the senior management of the combined Company and after considering all other factors according to ASC 805-10-55, the Company was identified as the accounting acquirer in the Merger. The Company has accounted for the Merger as a business combination according to ASC 805 “Business Combinations”.

Senior Convertible Notes

On November 17, 2023, the Company issued Senior Convertible Promissory Notes (collectively, the “Senior Convertible Notes”), in an aggregate amount of $4.0 million, to several existing lenders and investors in the Company, including Israel Biotech Fund I, L.P., Israel Biotech Fund II, L.P., Arkin Bio Ventures L.P. and Biotel Limited. The amounts borrowed by the Company under the Senior Convertible Notes are expected to be funded to the Company on or about November 20, 2023. The Senior Convertible Notes are convertible into shares of the Company’s common stock, par value $0.001 per share (the “Common Stock”) at any time at the option of the noteholders, and are subject to mandatory conversion upon certain events. including a change of control transaction and certain financing transactions involving the Company, at a conversion price equal to the lower of (i) 50% of the Common Stock’s price per share as of market close on November 16, 2023 and (ii) 50% of the Common Stock’s price per share as of the close of market on the Trading Day immediately prior to the date of the Notice of Conversion, subject to certain adjustments. In connection with the issuance of the Senior Convertible Notes, the Company has issued to the noteholders warrants to purchase an aggregate of 15,000,000 shares of the Common Stock with an exercise price equal to the lower of (A) 50% of the Common Stock’s price per share as of market close on November 16, 2023 and (ii) 50% of the Common Stock’s price per share as of the close of market on the Trading Day immediately prior to the date of the Notice of Exercise of the warrant, subject to adjustment, which exercise may be on a cashless basis. The noteholders also have the right, pursuant to a Side Letter Agreement between the noteholders and the Company, to lend an additional $4.0 million dollars to the Company on the same terms. The Company and Israel Biotech Fund I, L.P. and Israel Biotech Fund II, L.P. also agreed to amend and restate the terms of the Senior Secured Convertible Promissory Notes issued by the Company on August 7, 2023 to conform to the terms of the Senior Convertible Notes, and issued to the holders of such notes warrants to purchase an aggregate of 7,500,000 shares of the Common Stock on the terms of the above-described warrants.

TAX (Details Narrative) - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
TAX (Details Narrative) - USD ($) $ in Thousands	Sep. 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	$ 103	$ 79
Proceeds form sale of discontinued operation			$ 4,700

SCHEDULE OF PRO FORMA FINANCIAL INFORMATION (Details) - USD ($)
$ in Thousands

3 Months Ended

9 Months Ended

Sep. 30, 2023

Sep. 30, 2022

^[1]

Sep. 30, 2023

Sep. 30, 2022

^[1]

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Revenue

$ 91

$ 13

$ 837

Net loss

$ (7,992)

$ (17,061)

$ (23,583)

$ (40,308)

[1]

SUMMARY OF LEASE COSTS (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
SUMMARY OF LEASE COSTS (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Commitments and Contingencies Disclosure [Abstract]
Operating lease cost	$ 79	$ 120	$ 348	$ 341
Variable lease cost			6	10
Total lease cost	$ 79	$ 120	$ 354	$ 351

SCHEDULE OF ANTI-DILUTIVE SECURITIES EXCLUDED FROM DILUTED NET LOSS PER SHARE (Details) - USD ($)
$ / shares in Units, $ in Thousands

3 Months Ended

9 Months Ended

Sep. 30, 2023

Sep. 30, 2022

Sep. 30, 2023

Sep. 30, 2022

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Net loss

$ (7,339)

$ (10,185)

$ (23,399)

$ (28,246)

Weighted average common shares outstanding, basic

^[1],[2]

4,784,474

2,901,478

4,648,599

2,879,465

Weighted average common shares outstanding, diluted

^[1],[2]

4,784,474

2,901,478

4,648,599

2,879,465

Warrants

465,271,000

109,316,000

465,271,000

109,316,000

Stock options

110,860,000

213,997,000

110,860,000

213,997,000

Anti dilutive shares outstanding which were not included in the diluted calculation

576,131,000

323,313,000

576,131,000

323,313,000

Net Loss per share attributable to common stockholders, basic

$ (1.53)

$ (3.51)

$ (5.03)

$ (9.81)

Net Loss per share attributable to common stockholders, diluted

$ (1.53)

$ (3.51)

$ (5.03)

$ (9.81)

[1]	Common Stock, additional paid-in capital and per share data have been retroactively adjusted for the impact of the January 2023 merger between Old Ayala, Inc. (f/k/a Ayala Pharmaceuticals, Inc.) and Ayala Pharmaceutical, Inc.(f/k/a Advaxis, Inc.). See note 1
[2]	Exercise price and warrant numbers of Old Ayala’s warrants have been retroactively adjusted for the impact of the January 2023 Merger, see note 1

- Definition

The amount of net income (loss) for the period per each share of common stock or unit outstanding during the reporting period.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 250
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 3
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483443/250-10-50-3

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 260
-SubTopic 10
-Name Accounting Standards Codification
-Section 55
-Paragraph 15
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482635/260-10-55-15

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 815
-SubTopic 40
-Name Accounting Standards Codification
-Section 65
-Paragraph 1
-Subparagraph (e)(4)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480175/815-40-65-1

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 815
-SubTopic 40
-Name Accounting Standards Codification
-Section 65
-Paragraph 1
-Subparagraph (f)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480175/815-40-65-1

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 250
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 11
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483443/250-10-50-11

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 250
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 11
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483443/250-10-50-11

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 250
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 7
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483443/250-10-50-7

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 260
-SubTopic 10
-Name Accounting Standards Codification
-Section 45
-Paragraph 2
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482689/260-10-45-2

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 260
-SubTopic 10
-Name Accounting Standards Codification
-Section 45
-Paragraph 60B
-Subparagraph (d)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482689/260-10-45-60B

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Topic 250
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 4
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483443/250-10-50-4

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Topic 260
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482662/260-10-50-1

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Topic 260
-SubTopic 10
-Name Accounting Standards Codification
-Section 45
-Paragraph 10
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482689/260-10-45-10

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Topic 220
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 2
-Subparagraph (SX 210.5-03(25))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483621/220-10-S99-2

Reference 14: http://www.xbrl.org/2003/role/disclosureRef
-Topic 942
-SubTopic 220
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.9-04(27))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483589/942-220-S99-1

Reference 15: http://www.xbrl.org/2003/role/disclosureRef
-Topic 944
-SubTopic 220
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.7-04(23))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483586/944-220-S99-1

Reference 16: http://www.xbrl.org/2003/role/exampleRef
-Topic 260
-SubTopic 10
-Name Accounting Standards Codification
-Section 55
-Paragraph 52
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482635/260-10-55-52

Reference 17: http://www.xbrl.org/2003/role/disclosureRef
-Topic 260
-SubTopic 10
-Name Accounting Standards Codification
-Section 45
-Paragraph 7
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482689/260-10-45-7

+ Details

- Definition

The amount of net income (loss) for the period available to each share of common stock or common unit outstanding during the reporting period and to each share or unit that would have been outstanding assuming the issuance of common shares or units for all dilutive potential common shares or units outstanding during the reporting period.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 250
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 3
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483443/250-10-50-3

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 260
-SubTopic 10
-Name Accounting Standards Codification
-Section 55
-Paragraph 15
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482635/260-10-55-15

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 815
-SubTopic 40
-Name Accounting Standards Codification
-Section 65
-Paragraph 1
-Subparagraph (e)(4)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480175/815-40-65-1

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 815
-SubTopic 40
-Name Accounting Standards Codification
-Section 65
-Paragraph 1
-Subparagraph (f)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480175/815-40-65-1

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 250
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 11
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483443/250-10-50-11

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 250
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 11
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483443/250-10-50-11

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 250
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 7
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483443/250-10-50-7

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 260
-SubTopic 10
-Name Accounting Standards Codification
-Section 45
-Paragraph 2
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482689/260-10-45-2

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 260
-SubTopic 10
-Name Accounting Standards Codification
-Section 45
-Paragraph 60B
-Subparagraph (d)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482689/260-10-45-60B

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Topic 250
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 4
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483443/250-10-50-4

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Topic 260
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482662/260-10-50-1

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Topic 220
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 2
-Subparagraph (SX 210.5-03(25))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483621/220-10-S99-2

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Topic 942
-SubTopic 220
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.9-04(27))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483589/942-220-S99-1

Reference 14: http://www.xbrl.org/2003/role/disclosureRef
-Topic 944
-SubTopic 220
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.7-04(23))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483586/944-220-S99-1

Reference 15: http://www.xbrl.org/2003/role/exampleRef
-Topic 260
-SubTopic 10
-Name Accounting Standards Codification
-Section 55
-Paragraph 52
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482635/260-10-55-52

Reference 16: http://www.xbrl.org/2003/role/disclosureRef
-Topic 260
-SubTopic 10
-Name Accounting Standards Codification
-Section 45
-Paragraph 7
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482689/260-10-45-7

+ Details

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 235
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(g)(1)(ii))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480678/235-10-S99-1

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 323
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 3
-Subparagraph (c)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481687/323-10-50-3

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 825
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 28
-Subparagraph (f)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482907/825-10-50-28

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 220
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 6
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482765/220-10-50-6

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 250
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 3
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483443/250-10-50-3

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 250
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (b)(2)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483443/250-10-50-1

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 815
-SubTopic 40
-Name Accounting Standards Codification
-Section 65
-Paragraph 1
-Subparagraph (f)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480175/815-40-65-1

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 250
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 8
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483443/250-10-50-8

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 250
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 9
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483443/250-10-50-9

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Topic 250
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 11
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483443/250-10-50-11

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Topic 250
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 11
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483443/250-10-50-11

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Topic 250
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 4
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483443/250-10-50-4

Reference 13: http://www.xbrl.org/2003/role/exampleRef
-Topic 946
-SubTopic 830
-Name Accounting Standards Codification
-Section 55
-Paragraph 10
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480167/946-830-55-10

Reference 14: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 220
-Name Accounting Standards Codification
-Section 45
-Paragraph 7
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483581/946-220-45-7

Reference 15: http://www.xbrl.org/2003/role/disclosureRef
-Topic 944
-SubTopic 220
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.7-04(18))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483586/944-220-S99-1

Reference 16: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 22
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-22

Reference 17: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 220
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.6-07(9))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483575/946-220-S99-1

Reference 18: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 220
-Name Accounting Standards Codification
-Section S99
-Paragraph 3
-Subparagraph (SX 210.6-09(1)(d))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483575/946-220-S99-3

Reference 19: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1A
-Subparagraph (SX 210.13-01(a)(4)(i))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480097/470-10-S99-1A

Reference 20: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 470
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1A
-Subparagraph (SX 210.13-01(a)(4)(ii))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480097/470-10-S99-1A

Reference 21: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1A
-Subparagraph (SX 210.13-01(a)(4)(iii)(A))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480097/470-10-S99-1A

Reference 22: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1A
-Subparagraph (SX 210.13-01(a)(4)(iv))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480097/470-10-S99-1A

Reference 23: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1A
-Subparagraph (SX 210.13-01(a)(5))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480097/470-10-S99-1A

Reference 24: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1B
-Subparagraph (SX 210.13-02(a)(4)(i))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480097/470-10-S99-1B

Reference 25: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1B
-Subparagraph (SX 210.13-02(a)(4)(iii)(A))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480097/470-10-S99-1B

Reference 26: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1B
-Subparagraph (SX 210.13-02(a)(4)(iii)(B))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480097/470-10-S99-1B

Reference 27: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1B
-Subparagraph (SX 210.13-02(a)(4)(iv))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480097/470-10-S99-1B

Reference 28: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1B
-Subparagraph (SX 210.13-02(a)(5))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480097/470-10-S99-1B

Reference 29: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 30
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-30

Reference 30: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 32
-Subparagraph (f)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-32

Reference 31: http://www.xbrl.org/2003/role/disclosureRef
-Topic 260
-SubTopic 10
-Name Accounting Standards Codification
-Section 45
-Paragraph 60B
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482689/260-10-45-60B

Reference 32: http://www.xbrl.org/2003/role/exampleRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 31
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-31

Reference 33: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 32
-Subparagraph (c)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-32

Reference 34: http://www.xbrl.org/2003/role/disclosureRef
-Topic 205
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 7
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483499/205-20-50-7

Reference 35: http://fasb.org/us-gaap/role/ref/legacyRef
-Topic 230
-SubTopic 10
-Name Accounting Standards Codification
-Section 45
-Paragraph 28
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482740/230-10-45-28

Reference 36: http://www.xbrl.org/2003/role/disclosureRef
-Topic 220
-SubTopic 10
-Name Accounting Standards Codification
-Section 45
-Paragraph 1A
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482790/220-10-45-1A

Reference 37: http://www.xbrl.org/2003/role/disclosureRef
-Topic 220
-SubTopic 10
-Name Accounting Standards Codification
-Section 45
-Paragraph 1B
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482790/220-10-45-1B

Reference 38: http://fasb.org/us-gaap/role/ref/legacyRef
-Topic 220
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 2
-Subparagraph (SX 210.5-03(20))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483621/220-10-S99-2

Reference 39: http://fasb.org/us-gaap/role/ref/legacyRef
-Topic 942
-SubTopic 220
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.9-04(22))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483589/942-220-S99-1

+ Details

SCHEDULE OF RECONCILIATION OF COMPANY’S UNRECOGNIZED TAX BENEFITS (Details) - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 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)	35	36
Subtractions for tax positions of previous period	(7)
Additions for tax positions of current period	279	429
Uncertain tax position at the end of the period	$ 1,630	$ 1,323

COMMON STOCK PURCHASE WARRANTS AND WARRANT LIABILITY (Details Narrative)
$ / shares in Units, $ in Thousands

9 Months Ended

Sep. 01, 2023

USD ($)

Sep. 30, 2023

USD ($)

$ / shares

Sep. 30, 2022

USD ($)

Aug. 07, 2023

USD ($)

$ / shares

Dec. 31, 2022

$ / shares

Exercisable warrants to purchase | shares

465,271

Warrant exchanges of shares | shares

^[1]

249,867

Par value per share | $ / shares

$ 0.001

Gain on fair value of warrant liability | $

$ 138

Proceeds from convertible debt | $

$ 2,000

Unobservable measurement input, uncertainty, description

Stock Price | $ / shares

$ 0.94

$ 1.15

Change in fair value | $

$ 68

Measurement Input, Interest Rate [Member]

Stock Price

7.4

7.3

Measurement Input, Discount Rate [Member]

Stock Price

48.8

40.6

Measurement Input, Price Volatility [Member]

Stock Price

80.2

74.5

Measurement Input, Risk Free Interest Rate [Member]

Stock Price

4.60

4.20

Israel Biotech Fund Ilp [Member]

Convertible debt | $

$ 2,000

Investmentst | $

$ 15,000

Interest rate percentage

65.00%

Proceeds from convertible debt | $

$ 2,000

Minimum [Member]

Shares authorized | shares

170,000,000

Maximum [Member]

Shares authorized | shares

300,000,000

Warrant [Member]

Exercisable warrants to purchase | shares

290,206

Warrant exchanges of shares | shares

249,867

Warrant [Member] | Minimum [Member]

Warrant exercise price per share | $ / shares

$ 2.79

Warrant [Member] | Maximum [Member]

Warrant exercise price per share | $ / shares

$ 224.00

Common Stock [Member]

Exercisable warrants to purchase | shares

337,320

Warrant exchanges of shares | shares

246,192

Common Stock [Member] | Minimum [Member]

Warrant exercise price per share | $ / shares

$ 0.05

Common Stock [Member] | Maximum [Member]

Warrant exercise price per share | $ / shares

$ 96.58

Warrant Liability [Member] | Minimum [Member]

Warrant exercise price per share | $ / shares

$ 2.79

Warrant Liability [Member] | Maximum [Member]

Warrant exercise price per share | $ / shares

$ 1,800.00

[1]	Exercise price and warrant numbers have been retroactively adjusted for the impact of the January 2023 Merger, see note 1.

GENERAL (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Nov. 17, 2023	Aug. 07, 2023	Jan. 19, 2023	Dec. 31, 2022	Oct. 18, 2022
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Accumulated deficit	$ 172,553					$ 149,154
Net cash used in operating activities	22,283	$ 26,342
Cash and Cash Equivalents, at Carrying Value	2,123	$ 11,195				2,408
Reduced value	1,600
Available cash resources	12,000
Convertible note	$ 2,068			$ 2,000
Reduction in workforce percentage	30.00%
Common stock, par value	$ 0.001					$ 0.001
Stock issued during period, shares, new issues	0.1874
Intangible assets	$ 130				$ 130
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%
Senior Convertible Promissory Note [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Aggregate amount			$ 4,000
Share price			$ 0.001
Senior Convertible Promissory Note [Member] \| Subsequent Event [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Aggregate amount			$ 4,000
Share price			$ 0.001

FAIR VALUE MEASUREMENTS (Tables)

9 Months Ended

Sep. 30, 2023

Fair Value Disclosures [Abstract]

SCHEDULE OF FAIR VALUE, ASSETS AND LIABILITIES MEASURED ON RECURRING BASIS

As of September 30, 2022 the Company did not have any assets or liabilities carried at fair value on a recurring basis. The following table provide the liabilities carried at fair value measured on a recurring basis as of September 30, 2023:

Fair Value Measured at September 30, 2023

	Level 1		Level 2		Level 3		Total

Financial liabilities at fair value:
Convertible note	$	-	$	-	$	2,068	$	2,068
Long term warrant liability	$	-	$	-	$	65	$	65
Total financial liabilities at fair value	$	-	$	-	$	2,133	$	2,133

SCHEDULE OF FAIR VALUE LIABILITIES MEASURED ON RECURRING BASIS

The changes in the fair value of the Company’s Level 3 financial liabilities, which are measured on a recurring basis are as follows (in thousands):

	For the 9 months ended September 30, 2023			For the 3 months ended September 30, 2023
Beginning balance		-			67
Long term warrant assumed from Merger		203			-
Proceed from issuance of loan	$	2,000			2,000
Revaluation recorded in financial income, net		(70	)		66
Ending balance		2,133			2,133

SCHEDULE OF FAIR VALUE OF INTANGIBLE ASSETS ACQUIRED (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Jan. 19, 2023
Organization, Consolidation and Presentation of Financial Statements [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

Condensed Consolidated Statements of Changes in Stockholders' Equity (Unaudited) (Parenthetical) $ in Thousands	9 Months Ended
	Sep. 30, 2023 USD ($)
Statement of Stockholders' Equity [Abstract]
Merger, net of issuance costs	$ 3,153

Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares	Sep. 30, 2023	Dec. 31, 2022
Statement of Financial Position [Abstract]
Common stock, par value, per share	$ 0.001	$ 0.001
Common stock, shares authorized	170,000,000	37,480,000
Common stock, shares, issued	4,838,322	2,775,906
Common stock, shares, outstanding	4,788,091	2,695,067

GENERAL (Tables)

9 Months Ended

Sep. 30, 2023

Organization, Consolidation and Presentation of Financial Statements [Abstract]

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 January 2023 Merger occurred on January 1, 2022 (in thousands except per share amounts):

	Nine months			Nine months
	ended			ended
	September 30,			September 30,
		2023			2022	*
		Unaudited			Unaudited
Revenue	$	13		$	837
Net loss	$	(23,583	)	$	(40,308	)

	Three months			Three months
	Ended			ended
	September 30,			September 30,
		2023			2022*
		Unaudited			Unaudited
Revenue	$	-		$	91
Net loss	$	(7,992	)	$	(17,061	)

SCHEDULE OF ANTI-DILUTIVE SECURITIES EXCLUDED FROM DILUTED NET LOSS PER SHARE

The table below sets forth the number of potential shares of common stock that have been excluded from diluted net loss per share


	For the Three Months Ended						For the Nine Months Ended
	September 30,						September 30,
	2023			2022			2023			2022
Net loss attributable to common stockholders, basic and diluted		(7,339	)		(10,185	)		(23,399	)		(28,246

Weighted average common shares outstanding, basic and diluted*		4,784,474			2,901,478			4,648,599			2,879,465

Warrants		465,271			109,316			465,271			109,316
Stock options		110,860			213,997			110,860			213,997
Anti dilutive shares outstanding which were not included in the diluted calculation		576,131			323,313			576,131			323,313

Net loss per share attributable to common stockholders, basic and diluted	$	(1.53	)	$	(3.51	)	$	(5.03	)	$	(9.81	)

FAIR VALUE MEASUREMENTS

9 Months Ended

Sep. 30, 2023

Fair Value Disclosures [Abstract]

FAIR VALUE MEASUREMENTS

NOTE 5—FAIR VALUE MEASUREMENTS

Fair Value Measured at September 30, 2023

	Level 1		Level 2		Level 3		Total

Financial liabilities at fair value:
Convertible note	$	-	$	-	$	2,068	$	2,068
Long term warrant liability	$	-	$	-	$	65	$	65
Total financial liabilities at fair value	$	-	$	-	$	2,133	$	2,133

The changes in the fair value of the Company’s Level 3 financial liabilities, which are measured on a recurring basis are as follows (in thousands):

	For the 9 months ended September 30, 2023			For the 3 months ended September 30, 2023
Beginning balance		-			67
Long term warrant assumed from Merger		203			-
Proceed from issuance of loan	$	2,000			2,000
Revaluation recorded in financial income, net		(70	)		66
Ending balance		2,133			2,133

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

Condensed Consolidated Balance Sheets - USD ($)
$ in Thousands

Sep. 30, 2023

Dec. 31, 2022

CURRENT ASSETS:

Cash and cash equivalents

$ 2,123

$ 2,408

Short-term restricted bank deposits

102

110

Trade receivables

234

Prepaid expenses and other current assets

2,327

436

Total current assets

4,552

3,188

LONG-TERM ASSETS:

Deferred issuance costs

1,953

Operating lease right of use asset

1,276

1,462

Intangible assets, net

107

Property and equipment, net

845

960

Other assets

201

206

Total long-term assets

2,429

4,581

Total assets

6,981

7,769

CURRENT LIABILITIES:

Trade payable

5,056

4,080

Operating lease liabilities

480

419

Accrued expenses

1,556

551

Accrued payroll and employee benefits

1,231

994

Other accounts payable

204

169

Total current liabilities

8,527

6,213

LONG TERM LIABILITIES:

Long-term warrant liability

Convertible Note

2,068

Uncertain tax position

1,630

1,323

Long-term operating lease liabilities

932

1,332

Total long-term liabilities

4,695

2,655

STOCKHOLDERS’ EQUITY (DEFICIENCY):

Common Stock of $0.001 par value per share; 170,000,000 and 37,480,000 shares authorized on September 30, 2023 (unaudited) and on December 31, 2022, respectively; 4,838,322 and 2,775,906 shares issued and on September 30, 2023 (unaudited) and December 31, 2022, respectively; 4,788,091 and 2,695,067 shares outstanding on September 30, 2023 (unaudited) and December 31, 2022, respectively.

^[1]

Additional paid-in capital

^[1]

166,307

148,052

Accumulated deficit

(172,553)

(149,154)

Total stockholders’ equity (deficiency)

(6,241)

(1,099)

Total liabilities and stockholders’ equity (deficiency)

$ 6,981

$ 7,769

[1]	Common Stock, additional paid-in capital and per share data have been retroactively adjusted for the impact of the January 2023 merger between Old Ayala, Inc. (f/k/a Ayala Pharmaceuticals, Inc.) and Ayala Pharmaceutical, Inc.(f/k/a Advaxis, Inc.). See note 1

REVENUES

9 Months Ended

Sep. 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 thousand in the nine months ended September 30, 2023 while there was no revenue recognized in the three months ended September 30, 2023.

Revenue associated with the research and development services in the amount of approximately $587 and $91 thousands was recognized in the nine and three months ended September 30, 2022, respectively.

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 (Unaudited)

- Definition

The entire disclosure of revenue from contract with customer to transfer good or service and to transfer nonfinancial asset. Includes, but is not limited to, disaggregation of revenue, credit loss recognized from contract with customer, judgment and change in judgment related to contract with customer, and asset recognized from cost incurred to obtain or fulfill contract with customer. Excludes insurance and lease contracts.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 9
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479806/606-10-50-9

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 10
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479806/606-10-50-10

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 15
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479806/606-10-50-15

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 12
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479806/606-10-50-12

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 12
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479806/606-10-50-12

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 12
-Subparagraph (c)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479806/606-10-50-12

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 12
-Subparagraph (d)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479806/606-10-50-12

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 12
-Subparagraph (e)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479806/606-10-50-12

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 13
-Subparagraph (b)(2)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479806/606-10-50-13

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Name Accounting Standards Codification
-Topic 606
-Publisher FASB
-URI https://asc.fasb.org//606/tableOfContent

+ Details

Pay vs Performance Disclosure - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
Pay vs Performance Disclosure - USD ($) $ in Thousands	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Pay vs Performance Disclosure [Table]
Net Income (Loss) Attributable to Parent	$ (7,339)	$ (10,185)	$ (23,399)	$ (28,246)

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

+ References

+ Details

COMMON STOCK PURCHASE WARRANTS AND WARRANT LIABILITY (Tables)

9 Months Ended

Sep. 30, 2023

Common Stock Purchase Warrants And Warrant Liability

SCHEDULE OF WARRANTS OUTSTANDING

		Number of
		Shares
		Underlying
Exercise Price		Warrants			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 after the date such warrants become exercisable, if ever	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 January 2023 Merger, see note 1

A summary of warrant activity was as follows (in thousands, except share and per share data):

								Weighted
								Average
				Weighted				Remaining
				Average			Contractual Life			Aggregate
	Shares			Exercise Price				In Years		Intrinsic Value
Outstanding and exercisable warrants at December 31, 2022		337,320		$	25.08				1.14	$	86,613
Issuance of warrants upon January 2023 Merger		377,818	*		53.45	*
Exercised		(249,867	)*		0.05	*
Outstanding warrants at September 30, 2023		465,271	*	$	61.56	*			3.15	$	-
Exercisable warrants at September 30, 2023		290,206		$	64.92				2.29	$	-

Exercise price and warrant numbers have been retroactively adjusted for the impact of the January 2023 Merger, see note 1.

SCHEDULE OF ASSUMPTIONS USED IN WARRANT LIABILITY

	September 30, 2023			January 19, 2023
Exercise Price	$	55.73		$	55.73
Stock Price	$	0.94		$	2.95
Expected Term		4.98 years			4.98 years
Volatility %		128	%		117	%
Risk Free Rate		4.60	%		3.60	%

In measuring the note for issued the Company used the following inputs:

	September 30, 2023			August 7, 2023
Stock price	$	0.94		$	1.15
Interest rate		7.4			7.3	%
Implied discount		48.8	%		40.6	%
Volatility %		80.2	%		74.5	%
Risk Free Rate		4.60	%		4.20	%

Condensed Consolidated Statement of Cash Flows (Unaudited) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$ (23,399)	$ (28,246)
Adjustments to reconcile net loss to net cash used in operating activities:
Shared based compensation	1,308	1,914
Depreciation and Amortization	143	121
Asset write-downs	28
Remeasurement of long term warrant liability	(138)
Remeasurement of convertible note	68
Loss from exchange rate fluctuation	26
(Increase) decrease in prepaid expenses and other assets	(1,590)	1,106
Decrease (increase) in trade receivables	234	(129)
Increase (decrease) in trade payables	1,225	(888)
Decrease in operating lease right-of-use assets	255	220
Decrease in operating lease liabilities	(409)	(568)
Increase (decrease) in accrued expenses	(573)	330
Increase (decrease) in accrued payroll and employee benefits	197	(618)
Changes in uncertain tax position	307	542
Increase (decrease)in other accounts payable	35	(126)
Net cash used in operating activities	(22,283)	(26,342)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of shares, net of issuance cost of $3		512
Proceeds from issuance of convertible note	2,000
Issuance of shares upon Merger, net of issuance costs	20,001
Net cash provided by financing activities	22,001	512
Effect of exchange rate changes on cash, cash equivalents and restricted cash	(26)
Decrease in cash and cash equivalents and restricted cash	(308)	(25,830)
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	2,416	11,509
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	286	182
Cash and cash equivalents	2,123	11,195
Restricted bank deposits	102	110
Restricted bank deposits in other assets	191	204
Cash and cash equivalents and restricted cash at end of the period	$ 2,416	$ 11,509

SCHEDULE OF WARRANTS OUTSTANDING (Details) - USD ($)
$ / shares in Units, $ in Thousands

9 Months Ended

12 Months Ended

Sep. 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

$ 224.00

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

$ 28.00

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

$ 56.00

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

$ 56.00

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 January 2023 Merger, see note 1.
[2]	Exercise price and warrant numbers of Old Ayala’s warrants have been retroactively adjusted for the impact of the January 2023 Merger, see note 1

TAX (Tables)

9 Months Ended

Sep. 30, 2023

Income Tax Disclosure [Abstract]

SCHEDULE OF RECONCILIATION OF COMPANY’S UNRECOGNIZED TAX BENEFITS

	Nine months			Year
	Ended			ended
	September 30,			December 31,
	2023			2022
		(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)		35			36
Subtractions for tax positions of previous period		(7	)
Additions for tax positions of current period		279			429
Uncertain tax position at the end of the period	$	1,630		$	1,323

SCHEDULE OF FUTURE PAYMENTS OF OPERATING LEASE LIABILITIES (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Commitments and Contingencies Disclosure [Abstract]
2023 (from October 1)	$ 146
2024	380
2025	318
2026	308
2027	308
After 2027	411
Total undiscounted lease payments	1,871
Less: Interest	459
Total lease liabilities – operating	$ 1,412	$ 1,751

SCHEDULE OF OPERATING RIGHT OF USE ASSETS AND LEASE LIABILITIES (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Property, Plant and Equipment [Line Items]
Operating right-of-use asset	$ 1,276	$ 1,462
Total lease liabilities	1,412	1,751
Current lease liabilities	480	419
Non-current lease liabilities	932	1,332
Officer [Member]
Property, Plant and Equipment [Line Items]
Operating right-of-use asset	1,179	1,273
Total lease liabilities	1,350	1,612
Cars [Member]
Property, Plant and Equipment [Line Items]
Operating right-of-use asset	97	189
Total lease liabilities	$ 62	$ 139

SCHEDULE OF FAIR VALUE, ASSETS AND LIABILITIES MEASURED ON RECURRING BASIS (Details)	Sep. 30, 2023 USD ($)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total financial liabilities at fair value	$ 2,133
Private Placement [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Convertible note	2,068
Total financial liabilities at fair value	65
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]
Convertible note
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]
Convertible note
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	2,133
Fair Value, Inputs, Level 3 [Member] \| Private Placement [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Convertible note	2,068
Total financial liabilities at fair value	$ 65