iLearningEngines (AILE) Special Committee Provides Update

iLearningEngines, Inc. (NASDAQ: AILE) (“iLearningEngines,” “ILE” or the “Company”), a leader in AI-powered learning and work automation, today provided an update from the Special Committee (as defined below), including management actions and the receipt of a Non-Compliance Letter from Nasdaq. As previously disclosed, on September 5, 2024, the Board of Directors (the “Board”) of the Company formed a special committee of the Board (the “Special Committee”), consisting of independent directors, to oversee, among other matters, an internal investigation (the “Investigation”) conducted by outside counsel with respect to allegations raised in a report issued on August 29, 2024 by Hindenburg Research LLC.

Special Committee Update

Since its creation, the independent Special Committee and its advisors have been focused on validating the Company’s revenues and associated customer contracts, value-added reseller (VAR) partnerships and products and enterprise-specific AI models, as well as reviewing other claims made by a short seller. The Investigation remains ongoing. The Company will provide a full update on the Investigation as soon as it is completed.

Management Actions

Upon the recommendation of the Special Committee, on December 5, 2024, the Board appointed Thomas Olivier to serve as the Company’s Interim Chief Executive Officer and designated Mr. Olivier as its interim principal executive officer.

In addition, at the recommendation of the Special Committee, on December 5, 2024 the Board placed each of Harish Chidambaran, the Company’s Chief Executive Officer, Sayyed Farhan Naqvi, the Company’s former Chief Financial Officer and current Senior Vice President – Corporate Development, Balakrishnan Arackal, the Company’s President and Chief Business Officer, Ramakrishnan Parameswaran, the Company’s Senior Vice President – Technology and Products, and Vivek Chary, the Company’s Vice President – Consulting and Business Operations, on administrative leave from their respective positions pending the conclusion of the Investigation. Harish Chidambaran and Balakrishnan Arackal will remain as directors on the Board.

Receipt of Non-Compliance Letter from Nasdaq

The Company received a notice (the “Notice”) from the Listing Qualifications Department of The Nasdaq Stock Market LLC (“Nasdaq”) notifying the Company that the Company is not in compliance with Nasdaq Listing Rule 5250(c)(1) (the “Rule”), which requires listed companies to timely file all periodic financial reports with the Securities and Exchange Commission (the “SEC”), as a result of the Company’s failure to file its Quarterly Report on Form 10-Q for the quarter ended September 30, 2024 (the “Form 10-Q”) within the prescribed timeline.

The Notice has no immediate effect on the listing or trading of the Company’s securities, and provides that the Company has 60 calendar days from the date of the Notice, or until February 3, 2025, to submit to Nasdaq a plan to regain compliance with the Rule. If Nasdaq accepts the plan, Nasdaq may grant the Company an exception of up to 180 calendar days from the due date of the Form 10-Q, or until May 19, 2025, to regain compliance. The Company may be able to regain compliance with the Rule by filing the Form 10-Q with the SEC (and any other reports required to be filed) before the end of any such exception period. If the Company fails to regain compliance prior to the expiration of any such exception period or if Nasdaq does not accept the plan of compliance, Nasdaq will issue a determination indicating that the Company is subject to delisting. If that occurs, the Company may request a hearing before a hearing panel to review the determination. However, there can be no assurance that Nasdaq will accept such plan or grant an exception period, that any hearing would be successful, or that the Company will be able to regain compliance within the deadline or any exception period that may be granted or maintain compliance with the other continued listing requirements set forth in the listing rules of Nasdaq.

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