iLearningEngines, Inc. (AILE) Investigation

iLearningEngines, which went public through a SPAC merger in April 2024, is now under investor scrutiny over the propriety of its disclosures of related party transactions and whether its financial statements were prepared in accordance with applicable accounting rules.

Hagens Berman, a leading shareholder rights firm, has commenced an investigation after the price of iLearningEngines shares tanked as much as 59% on August 29, 2024, coincident with Hindenburg Research’s report entitled “iLearningEngines: An Artificial Intelligence SPAC With Artificial Partners and Artificial Revenue.”

Hindenburg observed that, contrary to iLearningEngines’ “claims to be a fast growing and high margin ‘early pioneer in enterprise AI’ operating in the corporate and educational learning space[…] We suspect both the company’s revenue and expenses are largely fake.”

Hindenburg concluded that “[n]early all of the company’s revenue and expenses (~96% of revenue and ~100% of CoGS in 2022) seem to be run through an undisclosed related party, an unnamed ‘Technology Partner[].’”  For 2023, Hindenburg estimated that over 92% of revenue and over 96% of CoGS were run through the “Technology Partner”. As to iLearningEngines’ India subsidiary business, Hindenburg estimates the company has overstated the subsidiary’s revenues for its fiscal year ending in March 2023 by over 99%.

Hindenburg said it unmasked the identity of “Technology Partner” as Experion Technologies, whose American contact is iLearningEngines’ CEO (Harish Chidambaran) and whose American address is also Chidambaran’s. Based on this, Hindenburg observed that representations to the SEC and to investors before the SPAC merger that “Technology Partner” was not a related party were lies.

FREQUENTLY ASKED QUESTIONS ABOUT THE CASE

What is the AILE investigation about?

We are looking into whether iLearningEngines may have misled investors about its business prospects and its financial reporting.

WHAT SHOULD I DO?

I worked at AILE. What should I do?

If you were an employee of AILE, you may have valuable information that could be relevant to the investigation. Hagens Berman is one of the nation’s top whistleblower law firms, and has successfully represented many individuals who come forward with information regarding corporate malfeasance. Under the new SEC Whistleblower program, whistleblowers who provide original information may receive rewards totaling up to 30 percent of any successful recovery made by the SEC. For more information, contact Reed Kathrein at 844-916-0895 or [email protected].

There are multiple law firms participating, do I need to contact all of them?

No, you do not need to contact all participating law firms. Generally, class-action investigations and lawsuits are consolidated into a single case to streamline the legal process, and attorneys from only a few law firms are selected to serve in a leadership role on the consolidated case. Hagens Berman has a proven track record of being appointed to leadership roles in complex, multidistrict litigation regarding investor fraud and other consumer rights issues, and your claim will be handled by attorneys who have helped secure approximately $325 billion in class-action settlements on behalf of individuals who have suffered due to corporate malfeasance and the wrongdoing of other powerful institutions.

AM I ELIGIBLE?

What is the threshold amount to be eligible? What are “substantial” losses?

The threshold amount and the definition of "substantial" losses may vary depending on a number of factors specific to the case, including the size of the company, market cap, shares outstanding and who holds them and the damages alleged by the fraud. In general, to be eligible to participate in a class-action lawsuit, you must be able to demonstrate that you suffered financial losses as a result of the alleged wrongdoing and that your losses meet the criteria set by the court or law firm. Fill out the form and submit your losses.

CAN I PARTICIPATE?

Am I affected? What do I need to do to participate?

If you were an investor in AILE, you may be affected and eligible to participate in the case. To determine your eligibility and potential involvement, fill out the form and submit your losses.

Can any AILE investor participate?

In most class-action investigations and cases, any investor who meets the eligibility criteria, including purchasing the shares during the relevant period, can participate, regardless of the size of their investment. Fill out the form to find out your rights.

I bought on a non-U.S. Exchange. Can I participate?

No. This investigation only covers shares bought on a U.S. exchange, i.e. NASDAQ or NYSE. Fill out the form to find out your rights.

Am I included if I still hold my shares, or do I need to sell to participate?

Participation is based on purchasing shares during the relevant period, rather than your current holdings. Accordingly, you do not need to sell to participate. Fill out the form to find out your rights.