As previously announced, on October 18, 2022, Ayala
Pharmaceuticals, Inc. (“Ayala”), entered into an Agreement and Plan
of Merger (the “Merger Agreement”) with Advaxis, Inc., a Delaware
corporation (“Advaxis”), and Doe Merger Sub, Inc., a Delaware
corporation and a wholly-owned subsidiary of Advaxis (“Merger
Sub”), pursuant to which Merger Sub will merge with and into Ayala,
with Ayala as the surviving corporation and a wholly-owned
subsidiary of Advaxis (the “Merger”). On December 12, 2022,
Ayala filed a definitive proxy statement on Schedule 14A (the
“Proxy Statement”) with the U.S. Securities and Exchange Commission
(the “SEC”) relating to the special meeting of Ayala’s stockholders
to approve certain matters related to the Merger, which will be
held on January 13, 2023.
On December 15, 2022, a purported Ayala stockholder filed a
complaint in the U.S. District Court for the Southern District of
New York against Ayala and the members of its Board, captioned
Stephen Bushansky
v. Ayala Pharmaceuticals,
Inc., Case No. 1:22-cv-10621 (S.D.N.Y.) (the
“Complaint”).
The Complaint asserts claims against all defendants under
Section 14(a) of the Securities Exchange Act of 1934, as
amended (the “Exchange Act”) and Rule 14a-9 promulgated thereunder for
omitting or misrepresenting material information from 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 Ayala’s
financial projections and Torreya’s financial analyses. The
Complaint seeks, among other relief, (1) to enjoin defendants
from consummating the Merger; (2) to enjoin a vote on the
Merger; (3) to rescind the Merger Agreement or recover
damages, if the Merger is completed; (4) a declaration that
defendants violated Sections 14(a) or 20(a) and Rule 14a-9 of the Exchange Act; and
(5) attorneys’ fees and costs.
In addition, as of the date of this Current Report on Form
8-K, nine purported Ayala
stockholders sent letters to those noted in the above-referenced
Complaint alleging similar deficiencies in Ayala’s Proxy Statement
(collectively, the “Demand Letters”).
Ayala believes that the Proxy Statement complies fully with all
applicable law and that the allegations in the Complaint and the
Demand Letters are without merit. Additional lawsuits arising out
of the Merger may be filed in the future. No assurances can be made
as to the outcome of such lawsuits, the Complaint or the Demand
Letters.
Supplemental Proxy Statement
Disclosure
Ayala does not believe, with respect to the Complaint or Demand
Letters, that supplemental disclosures are required or necessary
under applicable laws or that any information contained herein is
material. However, solely to moot the unmeritorious disclosure
claims and minimize the risk, costs, burden, nuisance and
uncertainties inherent in litigation, and without admitting any
liability or wrongdoing, Ayala is electing to make the supplemental
disclosures to the Proxy Statement set forth below in response to
the Complaint and Demand Letters. These supplemental disclosures
should be read in conjunction with, and incorporated by reference
into, the Proxy Statement. Ayala denies the allegations in the
Complaint and Demand Letters, and denies any violation of law.
Ayala believes that the Proxy Statement disclosed all material
information required to be disclosed therein, and denies that the
supplemental disclosures are material or are otherwise required to
be disclosed. Nothing in the supplemental disclosures should be
deemed an admission of the legal necessity or materiality of any
supplemental disclosures under applicable laws.
SUPPLEMENT TO PROXY STATEMENT/PROSPECTUS
This supplemental information
should be read in conjunction with the Proxy Statement, which
should be read in its entirety. Page references in the below
disclosures are to the pages in the Proxy Statement, and defined
terms used but not defined herein have the meanings set forth in
the Proxy Statement. Without admitting in any way that the
disclosures below are material or otherwise required by law, Ayala
makes the following amended and supplemental disclosures. For
clarity, new text within the amended or amended and restated
portions of the Proxy Statement is highlighted with
bold, underlined
text, and
deleted text is denoted with a strikethrough.