Filing Details

---

1	NAME OF REPORTING PERSONS
	Israel Biotech Fund I, L.P.
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*			(a)	☐
				(b)	☐
3	SEC USE ONLY
4	SOURCE OF FUNDS
	OO
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)				☐
6	CITIZENSHIP OR PLACE OF ORGANIZATION
	Cayman Islands
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH		7	SOLE VOTING POWER
			- 0 -
		8	SHARED VOTING POWER
			2,584,909*
		9	SOLE DISPOSITIVE POWER
			- 0 -
		10	SHARED DISPOSITIVE POWER
			2,584,909*
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
	2,584,909*
12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES				☐
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
	20.9% **
14	TYPE OF REPORTING PERSON
	PN

 * See Item 5.

 * See Item 5.

 * See Item 5.

* See Item 5.

This Amendment No. 1 to Schedule 13D (this “Amendment”) amends and supplements the Statement on Schedule 13D initially filed by the Reporting Persons with the Securities and Exchange Commission (the “SEC”) on September 11, 2023 (the “Statement”) with respect to the shares of common stock, par value $0.001 per share (the “Common Stock”) of Ayala Pharmaceuticals, Inc. (the “Issuer”), a corporation incorporated under the laws of the State of Delaware. Capitalized terms not defined herein shall have the meaning ascribed thereto in the Statement.

The following amends and supplements Items 3, 4, 5 and 7 of the Statement.

 

Item 3 of the Statement is hereby amended and supplemented to add the following:

See Item 4, which is incorporated herein by reference.

 

 

Item 4 of the Statement is hereby amended and supplemented to add the following:

Biosight Merger - Closing. On October 18, 2023, the Biosight Merger was consummated and, in accordance with the Biosight Merger Agreement, each of IBF I and IBF II were issued, in exchange for the securities they held in Biosight, 338,693 shares of Common Stock and 338,693 shares of Common Stock, respectively (collectively, the “Biosight Consideration Shares”).

 

Biosight Merger – Side Letter. On September 15, 2023, the Issuer entered into a Side Letter Agreement for Conversion (the “Side Letter Agreement”) with IBF I, IBF II and certain other investors named therein (collectively, the “Investors”). The Side Letter Agreement references (i) the Biosight Merger Agreement, (ii) the Promissory Note, and (iii) a Simple Agreement for Future Equity by and between Biosight and the Investors, pursuant to which the Investors agreed to invest in Biosight up to $2,500,000 (of which IBF I and IBF II agreed to invest up to $700,000 and $700,000, respectively) and Biosight agreed to issue equity interests in Biosight to the Investors in certain circumstances (the “SAFE”). Pursuant to the Side Letter Agreement, the Issuer and the Investors agreed that should the Biosight Merger be consummated prior to the termination of the SAFE, then the Investors shall be entitled to receive, in consideration for amounts actually invested in Biosight up to $2,500,000, shares of the Common Stock. The number of shares to be so issued would be equal to the amounts actually invested by the Investors in Biosight, divided by a conversion price equal to sixty-five percent (65%) of either (a) if definitive agreements with respect to private investments in public equity transactions involving shares of Common Stock (“PIPE Transaction”) are executed prior to the consummation of the Biosight Merger and the PIPE Transaction is consummated substantially simultaneous with the closing of the Biosight Merger, the lowest effective price per share at which shares of Common Stock are purchased in the PIPE Transaction, or (b) if the conditions set forth in clause (a) are not satisfied, the average of the closing prices of the Common Stock on the OTCQB on the five trading days immediately preceding the date on which the closing of the Biosight Merger occurs (such shares of Common Stock, the “Ayala SAFE Initial Shares”). The Side Letter Agreement also provides that (i) should the Biosight Merger be closed prior to the termination of the SAFE, then, following the closing of the Biosight Merger, if the Issuer enters into definitive agreements for the PIPE Transaction, the Investors shall have the right (but not the obligation) to purchase, on the same terms of the PIPE Transaction, a number of shares of Common Stock equal to up to all of the portion, if any, of the $2,500,000 that they were entitled to invest under the SAFE that was never actually invested by the Investors (the “Uninvested Amount” and the shares of Common Stock in respect thereof, the “Ayala SAFE Additional Shares”)), except that the price per share shall be equal to sixty-five percent (65%) of the lowest effective price per share at which shares of Ayala Common Stock are purchased in the PIPE Transaction, and (ii) if the PIPE Transaction is not consummated by the date that is six months following the closing of the Merger, then, for a period of 30 days following such date, the Investors shall have the right (but not the obligation) to purchase a number of shares of Ayala Common Stock equal to up to all of the Uninvested Amount at a price per share equal to sixty-five percent (65%) of the average of the closing prices of the Ayala Common Stock on the OTCQB on the five trading days immediately preceding the date on which notice of such purchase is delivered to the Company. If the PIPE Transaction entails the issuance of warrants, the Investors are also entitled to receive warrants in accordance with the terms of the Side Letter Agreement.

 

 

Items 5(a)-(c) of the Statement are hereby amended by replacing them in their entirety with the following:

 

The aggregate percentage of shares reported beneficially owned by each person named herein is based on 10,751,792 shares of Common Stock issued and outstanding as of October 19, 2023, according information received from the Issuer.

 

(a), (b)

 

As of the close of business on October 18, 2023, IBF 1 beneficially owned 2,584,909 shares of Common Stock, representing approximately 20.9% of the outstanding shares of Common Stock. IBF I GP, by virtue of being the general partner of IBF I, may be deemed to beneficially own, and share the power to vote and dispose, such shares. For the sake of clarity, such 2,584,909 shares of Common Stock exclude the SAFE Additional Shares issuable to IBF I under the terms of the Side Letter Agreement.

 

As of the close of business on October 18, 2023, IBF 2 beneficially owned 1,094,091 shares of Common Stock, representing approximately 9.5% of the outstanding shares of Common Stock. IBF II GP, by virtue of being the general partner of IBF II, may be deemed to beneficially own, and share the power to vote and dispose, such shares. For the sake of clarity, such 1,094,091 shares of Common Stock exclude the SAFE Additional Shares issuable to IBF II under the terms of the Side Letter Agreement.

 

As of the close of business on October 18, 2023, IBF Management, by virtue of being the management company of each of IBF I GP and IBF II GP, may be deemed to beneficially own 3,679,000 shares of Common Stock, representing approximately 28.0% of the outstanding shares of Common Stock. For the sake of clarity, such 3,679,000 shares of Common Stock (i) exclude the SAFE Additional Shares issuable to IBF I and IBF II under the terms of the Side Letter Agreement and (ii) any securities of the Issuer held by Dr. David Sidransky, Robert Spiegel, M.D. and Murray A. Goldberg, for which the Reporting Persons disclaim any beneficial ownership.

 

Information provided to the Reporting Persons indicates that none of the persons listed on Schedule A annexed hereto beneficially owned as of October 18, 2023 any shares of Common Stock, except as indicated in Schedule A.

 

(c)            Except as set forth herein, none of the Reporting Persons effected any transactions in the shares of Common Stock in the 60 days preceding October 18, 2023. Information provided to the Reporting Persons indicates that none of the persons listed on Schedule A annexed hereto effected any transactions in the shares of Common Stock in the 60 days preceding October 18, 2023.

 

 

Item 7 of the Statement is hereby amended and supplemented to add the following exhibit:

 

 

After reasonable inquiry and to the best of his knowledge and belief, the undersigned certifies that the information set forth in this statement is true, complete and correct.

 

Dated: October 31, 2023

 

Directors and Officers of IBF Management

 

 

 

Yuval Cabilly – None

 

Aido Zairi – None

 

David Sidransky – 93 shares of Common Stock (of which 46 shares are held by his son) and the following stock options:

 

---