iLearningEngines, Inc. Announces Additional Funding in Connection With Its Business Combination; Brings Gross Proceeds to Approximately $92.8 Million

Rhea-AI Summary

iLearningEngines, Inc. secures additional funding of $92.8 million through a Loan and Security Agreement with East West Bank, bringing total gross funds raised in connection with the Business Combination to approximately $92.8 million. The Revolving Facility provides iLE Holdings with a new senior secured revolving credit facility of up to $40 million, with an option to increase by an additional $20 million. The funding will support the company's growth plans.

Insights

Financial Analyst

The funding received by iLearningEngines signifies a strategic financial move that is aimed at bolstering the company's growth trajectory post its business combination. The securing of a senior secured revolving credit facility valued at up to $40 million, with an option to extend it further by $20 million, enhances the company’s liquidity and financial flexibility. This is an important measure for iLearningEngines, which appears to be positioning itself for scaled operations or potential acquisitions.

From an investor's perspective, the immediate full drawdown of the $40 million and the use of part of these funds to repay existing term loan credit facilities demonstrates a strategic pivot in the company's debt structure. It shows a proactive approach to optimize the cost of capital, which may improve the company's net interest margins over time. However, the interest rate tied to the Adjusted Term SOFR rate plus 3.50% raises questions on the cost of debt, especially given the floor of 4.00%, which investors should monitor in relation to the company's interest expense in future earnings.

Technical Expert in Corporate Finance

It's important to acknowledge the significance of the uncommitted accordion feature within the Revolving Facility. This element provides iLearningEngines with the capacity to increase its credit line, which can be a critical lever for supporting unforeseen capital requirements or opportunistic investments. This suggests a degree of confidence from East West Bank in iLearningEngines' business model and creditworthiness.

For retail investors, understanding the implications of such financial instruments is key. An accordion feature in a credit agreement is essentially a clause that allows a borrower to expand the maximum allowed on a credit line or add a term loan to an existing agreement. It offers flexibility to the borrower without the need for a new loan agreement. This could translate to a potential increase in expenditure on development, acquisitions, or further expansion, which could drive the company's future earnings and market position.

BETHESDA, Md., April 17, 2024 (GLOBE NEWSWIRE) -- iLearningEngines, Inc. (“iLearningEngines”, “iLE”, or “the Company”, NASDAQ: AILE), a leader in AI-powered learning automation and information intelligence for corporate and educational use, is pleased to announce that the Company has entered into a Loan and Security Agreement with East West Bank (the “Lender”). This facility brings the total gross funds raised in connection with the business combination with Arrowroot Acquisition Corp. (the “Business Combination”) to approximately $92.8 million.

Following the successful completion of the Business Combination, the Company’s wholly owned subsidiary, iLearningEngines Holdings, Inc. (“iLE Holdings”), entered into a Loan and Security Agreement with the Lender pursuant to which the Lender provided iLE Holdings with a new senior secured revolving credit facility in a principal amount of up to $40 million (the “Revolving Facility”). The Revolving Facility also provides for an uncommitted accordion allowing iLE Holdings to increase the revolving commitments by an additional principal amount of $20 million at iLE Holdings’ option and upon Lender’s approval. The Revolving Facility has a term of 3 years and outstanding loans under the Revolving Facility bear interest at a rate equal to the Adjusted Term SOFR rate (with an interest period of 1 or 3 months at iLE Holdings’ option) plus 3.50% per annum, subject to an Adjusted Term SOFR floor of 4.00%. iLE Holdings drew the full $40 million at closing, a portion of which was used to repay in full iLE Holdings’ term loan credit facilities with Venture Lending & Leasing IX, Inc. and WTI Fund X, Inc.

“We are pleased to have raised approximately $92.8 million in gross proceeds during our successful go public process, and this additional funding will help us to execute on our growth plans going forward,” said iLearningEngines CEO Harish Chidambaran.

About iLearningEngines
iLearningEngines is a leading cloud-based, AI driven mission critical training platform for enterprises. iLearningEngines has consistently ranked as one of the fastest growing companies in North America on the Deloitte Technology Fast 500. iLearningEngines’ AI and Learning Automation platform is used by enterprises to productize their enterprise knowledge for consumption throughout the enterprise. The intense demand for scalable outcome-based training has led to deployments in some of the most regulated and detail-oriented vertical markets, including Healthcare, Education, Insurance, Retail, Oil & Gas / Energy, Manufacturing and Government. iLearningEngines was founded by Harish Chidambaran in 2010, with headquarters in Bethesda, MD and offices in Dubai, UAE, and Trivandrum, Pune and Kochi, India.

Forward-Looking Statements
Certain statements included in this press release that are not historical facts are forward-looking statements for purposes of the safe harbor provisions under the United States Private Securities Litigation Reform Act of 1995 with respect to the Business Combination. Forward looking statements generally are accompanied by words such as “believe,” “may,” “will, “estimate,” “continue,” “anticipate,” “intend”, “expect”, “should”, “would”, “plan”, “predict”, “potential”, “seem”, “seek”, “future”, “outlook”, the negative forms of these words and similar expressions that predict or indicate future events or trends or that are not statements of historical matters. These forward-looking statements include, but are not limited to statements regarding the potential benefits of the Business Combination, and the Company’s future growth prospects. These statements are based on various assumptions, whether or not identified in this press release, and on the current expectations of the iLearningEngines’ management and are not predictions of actual performance. These forward-looking statements are provided for illustrative purposes only and are not intended to serve as, and must not be relied on by an investor as, a guarantee, an assurance, a prediction, or a definitive statement of fact or probability. Actual events and circumstances are difficult or impossible to predict and will differ from assumptions this press release relies on. Many actual events and circumstances are beyond the control of iLearningEngines. These forward-looking statements are subject to a number of risks and uncertainties, including changes in domestic and foreign business, market, financial, political, and legal conditions; iLearningEngines’ failure to realize the anticipated benefits of the Business Combination; risks relating to the uncertainty of the projected financial information with respect to iLearningEngines; risks related to the rollout of iLearningEngines’ business and the timing of expected business milestones; iLearningEngines’ dependence on a limited number of customers and partners; iLearningEngines’ ability to obtain sufficient financing to pay its expenses incurred in connection with the closing of the business combination; the ability of iLearningEngines to issue equity or equity-linked securities or obtain debt financing in the future; risks related to iLearningEngines' need for substantial additional financing to implement its operating plans, which financing it may be unable to obtain, or unable to obtain on acceptable terms; iLearningEngines’ ability to maintain the listing of its securities on Nasdaq or another national securities exchange; the risk that the Business Combination disrupts current plans and operations of iLearningEngines; the effects of competition on iLearningEngines’ future business and the ability of iLearningEngines to grow and manage growth profitably, maintain relationships with customers and suppliers and retain its management and key employees; risks related to political and macroeconomic uncertainty; the outcome of any legal proceedings that may be instituted against iLearningEngines or any of their respective directors or officers, including litigation related to the Merger Agreement or the Business Combination; the impact of the global COVID-19 pandemic on any of the foregoing risks; and those factors discussed in the Company’s registration statement on Form S-4, as amended or supplemented, under the heading “Risk Factors,” and other documents the Company has filed, or will file, with the SEC. If any of these risks materialize or our assumptions prove incorrect, actual results could differ materially from the results implied by these forward-looking statements. There may be additional risks that iLearningEngines does not presently know, or that iLearningEngines does not currently believe are immaterial, that could also cause actual results to differ from those contained in the forward-looking statements. In addition, forward-looking statements reflect iLearningEngines’ expectations, plans, or forecasts of future events and views as of the date of this communication. iLearningEngines anticipates that subsequent events and developments will cause iLearningEngines’ assessments to change. However, while iLearningEngines may elect to update these forward-looking statements at some point in the future, iLearningEngines specifically disclaims any obligation to do so. These forward-looking statements should not be relied upon as representing iLearningEngines’ assessments as of any date subsequent to the date of this communication. Accordingly, undue reliance should not be placed upon the forward-looking statements.

Contacts
For iLearningEngines:
Investor Contacts:
Kevin Hunt
iLearningEnginesIR@icrinc.com

For iLearningEngines:
Dan Brennan
ICR Inc.
iLearningPR@icrinc.com

 

FAQ

How much additional funding did iLearningEngines, Inc. secure?

iLearningEngines, Inc. secured approximately $92.8 million in additional funding.

Who did iLearningEngines, Inc. enter into a Loan and Security Agreement with?

iLearningEngines, Inc. entered into a Loan and Security Agreement with East West Bank.

What is the total gross funds raised in connection with the Business Combination?

The total gross funds raised in connection with the Business Combination amount to approximately $92.8 million.

What is the principal amount of the new senior secured revolving credit facility provided to iLE Holdings?

The new senior secured revolving credit facility provided to iLE Holdings is up to $40 million.

What is the term of the Revolving Facility?

The Revolving Facility has a term of 3 years.