正如向美国证券交易所提交的那样 2024年7月22日佣金。

登记第333-279908号

联合国
证券交易委员会

华盛顿，特区20549

修正案第2号
到

形式 S-1

登记声明
下
1933年证券法

伊利诺州， Inc.

（确切的章程中规定的注册人名称）

德拉瓦			7372			85-3961600
（州或其他司法管辖区成立或组织）			（初级标准工业分类代码号）			（国税局雇主识别号）

6701 民主大道，Suite 300

贝塞斯达，马里兰州20817
(650) 248-9874

（地址，包括登记人主要行政办公室的邮政编码和电话号码（包括地区代码）

哈里什奇丹巴兰
执行长
6701民主大道，Suite 300

贝塞斯达，马里兰州20817

(650) 248-9874

(Name, 服务代理人的地址（包括邮政编码）和电话号码（包括地区代码）

复本致：

乔什 Holleman
埃里克·布兰查德
保罗·亚历山大
Cooley LLP
宾夕法尼亚大道西北1299号，700套房

华盛顿，特区20004
(202) 842-7800

近似开始向公众出售的日期：
本登记声明宣布生效期间或之后不时发布。

如果根据第415条，在本表格上登记的任何证券均应延迟或连续发售 1933年证券法，勾选以下方框。☒

如果本表格是为根据证券法第462(B)条登记发行的额外证券而提交的，请查阅下列方框中列出之前生效的证券法注册表编号献祭。☐

如果本表格是根据证券法第462(C)条提交的生效后修正案，请勾选以下方框并列出证券法登记声明同一发行的较早生效的登记声明编号。☐

如果本表格是根据证券法第462(D)条提交的生效后修正案，请勾选以下方框并列出证券法登记声明同一发行的较早生效的登记声明编号。☐

表明通过勾选标记注册人是大型加速申请者、加速申请者、非加速申请者、较小的报告公司、或者一家新兴的成长型公司。请参阅“大型加速档案伺服器”、“加速档案伺服器”、“较小档案伺服器”的定义交易法第120亿2条中的“报告公司”和“新兴成长型公司”。

大型加速档案管理器	☐	加速的档案管理器	☐
非加速归档	☒	规模较小的报告公司。	☒
		新兴成长型公司：	☒

如果新兴成长型公司，用复选标记表示注册人是否已选择不使用延长的过渡期来遵守根据证券法第7(A)(2)(B)条提供的任何新的或修订的财务会计准则。☐

注册人特此在必要的一个或多个日期修改本注册声明，以将其生效日期推迟到注册人应提交进一步的修正案，明确规定本登记声明此后将根据根据19《证券法》第8(A)条的规定，或直至注册说明书于证券公司而交易所委员会根据上述第8(A)条行事，可决定。

这个这份初步招股说明书中的资讯不完整，可能会被更改。我们和出售证券的持有人都不能出售这些证券证券，直至提交给美国证券交易委员会的注册声明生效。这份初步招股说明书不是出售这些证券的要约，也不是在要约或出售这些证券的任何司法管辖区寻求购买这些证券的要约是不允许的。

主题将于2024年7月22日完成

初步招股书

向上至22,624,975股认股权证行使时可发行的普通股

向上至100,774,669股普通股

2024年可转换票据股票

“)以清偿可转换票据支付给这些投资者，(B)6,787,500股普通股(“

创始人股份“)(其中160,000人后来被由保荐人转让给ARRW的现任和前任董事)，最初于在ARRW首次公开发行之前向保荐人进行的私募；(C)82,091股普通股(“气象局股票“)以每股10.00美元的公允价值向某些投资者发行，根据与某些投资者作为该等投资者不行使与股东大会有关的赎回权的代价在企业合并(定义见下文)之前，(D)3,763,378股普通股(“出借人股份“) 以每股10.00美元的公允价值价格向Venture Lending&Leending IX，Inc.(“风险贷款“)及 WTI Fund X，Inc.(WTI基金X与风险贷款一起，贷款人“)根据《与In2vate，L.L.C.，iLearningEngines，Inc.的贷款档案的第二次总括修正案(仅限于股票发行普通股)和贷款人，作为修订WTI贷款协定下摊销时间表的部分代价企业合并前(定义见下文)和企业合并后全额偿还所有未偿债务根据(1)iLearningEngines Inc.与Venture Lending&Leending之间于2020年12月30日签订的贷款和担保协定 IX，Inc.(The“2020年贷款协定

“)，(2)iLearningEngines之间的贷款和担保协定，日期为2021年10月21日 Inc.、Venture Lending&Leending IX，Inc.和WTI Fund X，Inc.(2021年贷款协定“)；及(3)贷款和安全协定，日期为2023年10月31日，由iLearningEngines Inc.和WTI Fund X，Inc.(The2023年贷款协定“ 与2020年贷款协定和2021年贷款协定一起，WTI贷款协定“)，(E)460,384股普通股(“流动资本份额“)发给赞助商，作为偿还4,510,000美元的代价 (相当于每股9.80美元)，这是当时无担保本票项下未偿债务的一部分发行给ARRW，(F)78,730股普通股(“未归属股份“)可在归属和分派时发行最初授予的限制性股票单位 ILearningEngines Inc.不收取现金成本(“旧式iLearningEngine“)，并由本公司承担，并转换为受限根据合并协定与普通股有关的股票单位，不向接受者支付任何费用 (“假定的RSU)，(G)8,250,000股普通股(“认股权证股份“)由保荐人取得于行使私人配售认股权证时可按购买价8,250,000元(相等于每股1元)发行 (H)71,508,370股普通股(包括4,727,199股可发行普通股在归属的RSU结算时)(“控制权股份“)以公允价值价格发行予若干董事及高级职员每股10.00美元作为此类股票的合并代价，该股票最初由Legacy iLearningEngines向该等董事和高级管理人员发行作为企业合并前向Legacy iLearningEngines提供的就业和服务的对价，(I)511,073股普通股(“BTIG股票“)，根据BTIG修正案以每股5.87美元的价格发行聘书(“BTIG修正案)，日期为2024年3月27日，由ARRW和BTIG，LLC(BTIG“)、与支付某些企业合并交易费用有关，(J)1,022,146股普通股(风险因素使用所得测定报价市场证券和股息政策信息管理层的财务状况和运营结果的讨论和分析我们业务管理执行补偿某些关系及关联方交易主要企业主销售企业主描述我国证券材料美国联邦所得税后果证券 ACt对转售我们证券的限制规划分配的法律事务专家变化在注册人的认证会计师中哪里您可以找到更多资讯未经审核形式浓缩合并财务信息新iLearningEngine“ 或者是“公司“)，以前签订的某项合并和重组协定和计划，日期为自2023年4月27日起(经修订，“合并协议“)，与特拉华州一家公司Arac Merge Sub，Inc. 以及ArrowRoot收购公司的全资子公司(“并购特殊目的子公司和特拉华州的iLearningEngines Inc. 公司(“旧式iLearningEngine“)。2024年4月16日，公司完成合并交易合并协定(下称“合并协定”)预期业务合并“)合并子公司与遗产公司合并并并入遗产公司 ILearningEngine以单独的公司存在合并子公司停止和遗留iLearningEngines作为一个整体在合并中存活本公司的全资子公司。随著业务合并的完成，ARRW从ArrowRoot更名收购公司更名为iLearningEngines，Inc.和Legacy iLearningEngines将其名称从iLearningEngines Inc.更名为iLearningEngines 控股公司

除非上下文中另有说明，在本招股说明书中，提及“公司”、“iLearningEngines”、“我们”、“ “我们”、“我们的”和类似的术语指的是iLearningEngines，Inc.(F/k/a ArrowRoot Acquisition Corp.)及其合并后的子公司(包括传统iLearningEngines)。所指的“ARRW”是指合同完成前的前身公司企业合并的。

特殊关于前瞻性陈述的说明

一些人本招股说明书中包含的许多陈述均构成联盟证券法所指的前瞻性陈述。前瞻性陈述涉及预期、信念、预测、未来计划和战略、预期事件或趋势以及关于非历史事实的事项的类似表述。这些前瞻性陈述包括关于我们的意图、信念和当前的预期和预测，除其他事项外，涉及我们的运营结果、财务状况、流动性、前景、增长、战略和我们经营的市场。在某些情况下，您可以识别这些前瞻性陈述通过使用诸如“展望”、“相信”、“期望”、“潜力”、“继续”等术语， “可能”、“将”、“应该”、“可能”、“寻求”、“大概”、“预测” “打算”、“计划”、“估计”、“预期”或这些词的否定形式或其他类似的单字或短语。

这个本招股说明书中包含的前瞻性陈述反映了我们对业务合并和未来事件的当前看法，以及受到许多已知和未知的风险、不确定性、假设和可能导致其实际结果的环境变化的影响与任何前瞻性陈述中所表达的内容大不相同。不能保证交易和事件被描述的事情将会按照描述的方式发生(或者它们根本不会发生)。由于一些已知和未知的风险和不确定性，我们的实际结果或表现可能与这些前瞻性陈述所表达或暗示的大不相同。一些人可能导致实际结果不同的因素包括：●我们的能够认识到业务合并的预期收益，这些收益可能会受到竞争以及我们以盈利方式增长和管理增长的能力的影响；

●我们的有能力保持我们的普通股和权证在纳斯达克资本市场上市，以及此类证券的潜在流动资金和交易情况；「是指在收盘时签订的某些修订和重述的注册权协议由iLearningEngines、赞助商成员、Legacy iLearningEngines的某些前股东共同发起。

ARRW” 或「竹芋

」是指Arrowroot Acquisition Corp.（因相关原因更名为「iLearningEngines，Inc」随著业务合并的完善）。

ARRW IPO

「是指ARRW于2021年3月4日完成的首次公开募股。

ARRW 单位

「指我们的股权证券，每份证券由一股A类普通股和一份可赎回令的一半组成。业务组合「指合并协议中设想的交易，包括合并等。

关闭

” 意味著业务合并的结束。

关闭日期

	」意味著4月16日
2024年，收盘日期。	ii
共同股票	iii
「是指我们普通股的股份，每股面值0.0001美金。	v
DGCL	1
” 指德拉瓦州一般公司法。	4
第四本票	7
“指本金为2,000,000美元、以保荐人Arrowroot为受益人的无担保本票于2023年6月13日发布。	55
IPO	56
“ 指ArrowRoot首次公开募股ArrowRoot Units，于2021年3月4日完成。	57
首次公开募股(IPO) 本票	58
指保荐人于2020年12月21日向本公司签发的无担保本票本公司可借入本金总额不超过300,000元的债券。	89
遗赠 ILearningEngines	102
“指iLearningEngines Holdings，Inc.，一家特拉华州的公司，根据业务合并，成为iLearningEngines，Inc.的直接全资子公司，除非上下文另有规定，否则是其合并子公司。	110
合并	126
“ 指ARRW的直接全资子公司Sub与Legacy iLearningEngines合并，并与Legacy iLearningEngines合并作为幸存的实体继续存在。	131
合并协定	133
指截至2023年4月27日与合并子公司签订的某些合并重组协定和计划和Legacy iLearningEngines。	137
合并子	146
指ARRW的全资子公司、特拉华州公司Arac Merge Sub，Inc.。	151
私配售认股权证	152
指保荐人就ARRW IPO以私募方式购买的8,250,000份认股权证交易与ARRW IPO的结束同时进行。	155
期票备注	155
“统称为IPO本票、第一本票、第二本票、第三本票和第四期本票。	156
公共权证	157
“指作为ARRW IPO中出售的ARRW单位组成部分的14,374,975份认股权证，每份认股权证均可行使，根据其条款，每股普通股的行使价为11.50美元。	158
SEC	“ 指的是美国证券交易委员会。
第二本票	“指本金为500,000美元、以保证人ArrowRoot为受益人的无担保本票 2023年2月23日。
证券法	F-1
“指经修订的19美国证券法。	申办者

“ 指的是特拉华州的有限责任公司ArrowRoot Acquisition LLC。权证“ 指私募认股权证及公开认股权证。

二零二四年可转换票据购买协定

」意味著

可转换票据购买协定与投资者签订的传统iLearningEngines(“

三月投资者

“)2024年3月21日，根据该决议，除其他事项外，Legacy iLearningEngines向3月投资者发行并出售了2024年可转换票据(定义如下) 本金总额为700,000美元。2024年4月16日，Legacy iLearningEngines签订了2024年可转换票据购买协定与某些投资者(统称为“

4月的投资者与3月份的投资者一起，”

二零二四年可转换票据投资者“)，据此，除其他事项外，Legacy iLearningEngines发行并出售给4月份的投资者 2026年10月到期的可转换票据(“2024年可转换票据●我们依赖我们的渠道合作伙伴创造大量收入，如果我们失败了为了扩大和管理我们的分销渠道，我们的收入可能会下降，而我们的增长前景可能会受到影响。●如果我们无法成功引入新功能或服务并进行增强对于我们的平台或产品，我们的业务和运营结果可能会受到不利影响。●我们目标企业客户，向这些客户销售涉及可能不存在的风险或者，对较小实体的销售在较小程度上存在。●真实或者我们的平台和产品中发现的错误、故障或错误可能会对我们的业务、经营结果、财务状况和增长前景。●不正确或者不恰当地实施或使用我们的平台和产品可能会导致客户不满并损害我们的业务、运营结果、财务状况和增长前景。●如果我们无法确保我们的平台与各种软体应用程式集成其他人开发的，包括我们的集成合作伙伴，我们可能会变得不那么有竞争力而且我们的行动结果可能会受到损害。

●

我们的未偿债务可能会对我们的财务状况和我们的能力产生不利影响运营我们的业务并追求我们的业务战略，我们可能无法产生有足够的现金流来履行我们的偿债义务。

●

我们依靠我们客户的数据集。如果我们不能获得或利用这些数据规定或法规限制它这样做，我们的业务、财务状况和结果可能会对业务造成不利影响。

●

我们受到与数据隐私和安全相关的严格和不断变化的义务的约束。我们的实际或被认为不遵守此类义务可能会导致监管机构调查或诉讼；诉讼；罚款和处罚；中断我们的业务运营；声誉损害；收入或利润损失；客户或销售损失；以及其他不利业务后果。

●

任何未能获得、维护、保护或执行我们的知识产权和专有权利可能会削弱我们保护我们专有技术和我们品牌的能力。

认股权证的行使价

每股11.50美元，可按本文所述进行调整。

收益的使用

假设所有现金认股权证全部行使，我们将从行使认股权证中获得总计约26020美元的万。我们预期将行使认股权证所得款项净额(如有)用作一般公司用途。由于有关行使认股权证的不确定性，我们在本招股说明书中讨论的预计流动资金需求均不假设从行使认股权证所获得的任何收益。我们的公开认股权证和私募认股权证的行使价为每份认股权证11.50美元，这超过了截至本招股说明书日期我们普通股的交易价格。我们相信，认股权证持有人行使其认股权证的可能性，以及我们将获得的现金收益数额，取决于我们普通股的交易价格。只要我们普通股的交易价格低于每股11.50美元，这意味著认股权证“没钱了”，我们相信认股权证的持有者就不太可能行使他们的认股权证。此外，如果我们的认股权证是在“无现金基础上”行使的，我们从行使这种认股权证中获得的现金金额将会减少。私募认股权证可以现金或“无现金”方式行使。公共认股权证只能以现金形式行使，前提是有一份有效的声明，登记在行使认股权证后可发行的普通股的股份。如果没有当时生效的注册声明，则根据证券法规定的注册豁免，此类认股权证可在“无现金基础上”行使。见标题为“”的部分

所得款项用途

普通股和认股权证的转售

出售证券持有人发行的普通股

我们正在登记本招股说明书中指定的出售证券持有人或其许可受让人的转售，总计100,774,669股普通股，包括：

●的数据为8,0,532。 2024年发行的可转换票据股票，总购买价为29,414,500美元(相当于每股价格3.美元)，令人满意应付给该等投资者的可转换票据；

●*6,787,500 方正股份(其中160,000股后来由保荐人转让给ARRW的现任和前任董事)最初在ARRW首次公开募股之前，以每股约0.004美元的价格向保荐人进行私募发行；

●*82,091 以每股10.00美元的公允价值价格向某些投资者发行的气象股票，作为不行使赎回的代价投资者与企业合并前股东大会有关的权利；

●的数据为3,763,378。按公允价值每股10.00美元发行的出借人股票，部分作为修订摊销时间表的对价根据WTI贷款协定，在企业合并前和企业合并后，全额偿还 WTI贷款协定下的未偿债务；

●的股票价格为460,384英镑。作为偿还4,510,000美元(相当于每股9.80美元)的代价而发行的营运资金股票，代表向ARRW发行的无担保本票项下当时未偿债务的一部分；

●*78,730 在归属和结算限制性股票单位时可发行的普通股，这些股票最初是由Legacy iLearningEngines免费授予接受者的；

●*71,508,370 以每股10.00美元的公允价值向若干董事及高级职员发行的控制权股份，作为该等公司的合并代价最初由Legacy iLearningEngines向这些董事和高级管理人员发行的股票，作为雇用和提供服务的代价在业务合并之前提交给Legacy iLearningEngines；

●*511,073 根据BTIG修正案以每股5.87美元的价格发行的普通股，与付款有关一定的企业合并交易费用；

●的数据为1,022,146。为支付递延承销佣金而发行的普通股，总金额为6,000,000美元根据费用修改协定，与交易有关的每股5.87美元的价格；

●公司股价下跌221,465英镑。根据库利费用协定以每股5.87美元的价格发行的普通股，与支付企业合并交易费用；以及

●*8,250,000 保荐人以8,250,000美元(相当于每股1美元)的收购价购入的普通股，可发行于私人配售认股权证获行使时，每股价格为11.50美元。

鉴于普通股的数量相当大，根据本招股说明书出售证券持有人而登记的潜在转售，出售证券持有人出售股份持有大量股份，或市场上认为出售大量股份的证券持有人有意出售股票，可能会增加我们普通股的市场价格的波动性，或者导致公众的显著下降我们普通股的交易价格。即使我们的交易价格大大低于每股10.00美元，在ARRW的首次公开募股中提供的单位，其购买者将其ARRW股票交换为我们的普通股本招股说明书中描述的业务组合，出售证券持有人可能仍有动力出售我们的股票是因为他们购买股票的价格大大低于我们的公众投资者或我们普通股的当前交易价格。虽然某些出售证券的持有人可能会经历投资于我们普通股的正回报率因此，公共证券持有人可能不会经历类似的由于购买价格和交易价格不同而购买的证券的回报率。例如，基于关于我们的普通股在2024年7月18日的收盘价为每股10.49美元(

继续向新的行业和市场推介和销售我们的产品；

●

继续为我们的平台开发新产品和新功能，并成功地进一步优化我们现有的产品和基础设施；

●

成功确定并收购或投资于我们认为可以补充或扩展我们的平台；以及

●

iii

增加在全球范围内提高我们的品牌知名度，并成功地与其他公司竞争。

我们可能无法成功实现这些目标中的任何一个，因此，我们很难预测未来的运营结果。如果我们用来规划业务的假设是不正确的，或者随著市场的变化而发生变化，或者如果我们无法为了保持一致的ARR或关键运营和业务指标的改进，我们的股价可能会波动，这可能会很困难以实现并保持盈利能力。

在……里面此外，我们预计将继续在以下方面投入大量财政和其他资源：

●

我们的专门的数据集和技术基础设施，包括系统架构、可扩展性、可用性、性能和安全性；

●

我们的销售和营销组织以吸引我们的现有和潜在客户，增加品牌知名度，并推动我们产品的采用；

●

产品开发，包括对我们产品开发团队的投资和开发我们平台的新产品和新功能以及在进一步优化方面的投资我们现有的产品和基础设施；

●收购或战略投资；●

我们的全球业务和持续扩张；以及

“●●

“直接向最终客户和/或通过渠道合作伙伴销售的收入组合、收入成本和毛利率的波动包括我们的战略联盟;●我们扩大第三方云基础设施提供商容量的投资时间和金额;●

“季节性;●

“与现有基础设施和产品投资相关的新产品和功能投资;●

“客户购买的时间;●

“因预期我们或我们的竞争对手推出新产品或增强产品而导致采购决策出现波动或延迟;●

“客户预算及其预算周期和采购决策时间的变化;●,我们控制成本的能力，包括我们的运营费用;

“●运营费用的支付金额和时间，特别是销售和营销以及研发费用，包括佣金;

“●非现金费用的金额和时间，包括基于股票的补偿、善意损失和其他非现金费用;

“与我们的竞争对手相比，我们利用商机和应对竞争压力的能力可能由于我们的债务水准而受到损害；以及●

“我们借入额外资金或为债务再融资的能力可能有限。我们的未偿债务所造成的限制可能会限制我们运营业务、执行增长战略以及为我们未来的运营或资本需求提供资金的能力，或者从事其他经营活动。

“这些公约限制了我们的能力，以及其他事物，以：●

“招致额外的债务；●

“授予资产留置权；●

“出售或处置资产；●

“与其他公司合并、收购或者进行其他投资；●

“清算或解散自己；从事非相关行业的业务；或●

“支付股息或进行其他分配在旋转过程中违反任何契约在适用的补救期限内未以其他方式放弃或补救的贷款协定将导致违约事件，这可能触发我们债务的加速，并可能导致我们未来可能产生的其他债务的加速或违约，这可能会对我们的业务、运营结果和财务状况产生实质性的不利影响。在发生此类事件时在循环贷款协定下发生违约的情况下，适用的贷款人可以选择终止其承诺，并宣布所有未偿还的贷款，连同应计和未付利息以及任何到期和应付的费用和其他义务，和/或行使其权利根据管理我们的循环贷款协定或任何适用法律的贷款档案和补救措施。我们在轮换制度下的义务贷款协定以本公司、iLearningEngines Holdings，Inc.和In2vate，L.L.C.的几乎所有资产为抵押。

“如果我们无法偿还或以其他方式再融资当这些贷款到期时，适用的贷款人可以对授予他们的抵押品进行担保，以确保这种债务，这可以迫使我们破产或清算。如果适用的贷款人加速偿还我们的贷款，我们和我们的子公司可能没有足够的资产来偿还这些债务。循环贷款协定或行使项下到期金额的任何加速由适用的贷款人行使其权利和补救措施，可能会对我们的业务产生实质性的不利影响。这些限制可能会影响我们的成长能力根据我们的战略。

“此外，未来任何债务的条款我们可能会招致更多额外的限制性契约。我们可能无法继续遵守这些公约。在这种情况下，我们不能向您保证我们将能够从贷款人那里获得豁免或修改契诺。不利的媒体报道可能会对我们的业务、品牌形象或声誉。

“不利的宣传或媒体报道我们、我们的隐私实践、我们的社交媒体活动、数据安全泄露或违规、产品更改、产品或服务质量或功能、诉讼或监管活动，或关于我们的合作伙伴、我们的用户、我们的员工或其他公司在无论此类宣传或媒体报道的真实性如何，我们的行业都可能对我们的品牌形象或声誉产生实质性的不利影响。如果我们不能保护我们的品牌形象或声誉，我们可能会对规模、人口统计、参与度、和我们用户基础的忠诚度，导致收入减少，我们平台的安装减少(或我们平台的安装增加)，或较慢的用户增长率。对我们品牌或声誉的损害也可能对教育机构的意愿产生不利影响。和企业合作伙伴使用我们的产品和平台，这反过来可能会减缓或减少我们的收入增长。此外, 如果证券分析师或投资者认为任何媒体对我们的报道是负面的，我们普通股的价格可能会大幅下降。受到不利影响。上述任何一项都可能对我们的业务、财务状况和经营结果产生重大不利影响。我们依赖于来自客户的数据集。如果我们不是能够获得或使用此类数据集，或法规限制我们这样做，我们的业务、财务状况和运营结果可能会受到不利影响。

“我们的平台目前依赖于来自我们的渠道合作伙伴和客户，以及我们专有的人工智慧、数据和机器学习算法，以优化我们的自动化产品。例如，到目前为止，我们已经投资超过1.52亿美元购买专有数据集来培训我们的模型，我们计划未来继续购买战略数据集。我们的渠道合作伙伴和客户可能会对我们使用此类数据施加限制，提高他们为这些数据向我们收取的价格，完全拒绝将数据授权给我们或将数据授权给我们的竞争对手。如果我们无法使用来自我们的任何渠道合作伙伴和客户、我们的业务、财务状况和运营结果的数据可能会受到实质性的不利影响。我们目前的业务范围是国际化的，而且我们计划进一步扩大地理范围，带来各种运营挑战。

“我们目前在国际上运营，并且有一个元件我们的增长战略的一部分涉及进一步扩大我们的业务和国际客户基础。美国以外的客户截至2023年12月31日、2022年12月31日和2021年12月31日，分别创造了57%、66%和81%的收入。在美国以外，我们在国际上有业务存在，包括在印度和阿拉伯联合酋长国。我们正在继续适应制定进一步应对国际市场的战略，但不能保证这样的努力会取得预期的效果效果。例如，我们预计我们将需要与新的合作伙伴建立关系，以便向某些国家扩张，如果我们不能识别、建立和维持这样的关系，我们可能就无法执行我们的扩张计划。截至2024年5月，我们有101名全职员工全球428名合同制员工，既可以由我们的渠道合作伙伴提供，也可以直接与iLearningEngines签约。虽然我们的总部位于马利兰州的贝塞斯达，但我们的员工目前是远端优先。这使我们能够找到合适的人才来服务我们的用户，无论身在何处。在美国，我们在阿拉斯加、康涅狄格州、伊利诺伊州、马利兰州、俄克拉荷马州、德克萨斯州和弗吉尼亚州，这使我们的员工可以进行面对面和远端工作。这种方法仍然是一种优势我们的招聘努力，特别是在其他公司开始要求员工返回办公室或接受减薪的情况下。我们的非美国员工分布在澳大利亚、印度、英国和阿拉伯联合酋长国。我们希望我们的国际在可预见的未来，随著我们继续在现有和新的国际市场寻找机会，活动将继续增长，这将需要管理层的大量关注和财政资源的投入。

“我们现在和未来的国际业务运营涉及各种风险，包括：●

“国际企业对我们的平台和产品的供应和采用速度慢于预期；●特定国家或者地区的政治、监管或者经济条件的变化；●需要针对特定国家调整我们的产品并使其本地化；●催收应收账款难度加大，付款周期较长；●贸易关系、法规或法律的潜在变化；●我们没有设计和维护正式的治理政策、程式和控制实现对企业行为的完整、准确、及时的审核和记录。在2023年，我们没有遵守定期贷款的某些条款要求设立单独的银行账户，以持有2,000,000美元，与运营现金分开如果业务合并不是完善的，董事会和执行团队的正式会议记录，如批准，使用年内发出的回应股数目。此外，应该有审查和批准所有金融交易的证据，而不是目前被记录在案。

●

我们没有设计和维护正式的政策、程式和对重大合规性的控制用法律法规实现完整、准确、及时的工资税申报和缴纳。这种物质上的弱点导致因未及时报告和支付债务而支付罚款和罚金。此外，在2023年，我们推迟了2022年联盟和州所得税申报单的提交，这是在延长的最后期限之后。

我们还注意到以下缺陷，我们认为这些缺陷是重大缺陷。显著的缺陷是缺陷，或者财务报告内部控制方面的缺陷，对实体发起、根据公认的会计原则可靠地授权、记录、处理或报告财务数据更有可能的是，对实体财务报表的错误陈述不仅仅是无关紧要的未被实体的内部控制阻止或检测到。

●

我们做到了没有设计和维护对资讯技术(IT)的有效控制与财务准备相关的资讯系统的一般控制发言。具体地说，我们没有设计和维护用户访问控制以确保适当职责分离，充分限制用户和特权访问财务资源将应用程式、程式和数据提供给适当的公司人员。这一缺陷可能会影响保持有效的职责分工以及依赖资讯技术的有效性控制(如解决重大错报风险的自动控制或更多断言，以及支持有效性的it控件和基础数据。系统生成的数据和报告)，这可能导致错误陈述，可能会影响所有不会被预防或发现的财务报表账目和披露。我们不会对部门内的所有用户账户执行定期审查以验证访问许可权是适当的。如果发现不适当的用户许可权，应采取纠正措施被视为撤消或修改访问许可权。完成这项评价的档案应也会得到维护。此外，管理层有责任评估所有第三方服务提供者包括评估服务组织控制，其中可能包括审查一份SOC报告，以核实对财务报告的相关控制并在对服务组织和此类控制进行了适当的测试。管理层的审查 SOC报告的一部分还应评估我们在确保实现相关控制目标的地方。目前，管理层已经没有执行这样的任务，我们认为这是对周围环境控制不足的迹象财务报告是内部控制的一个重大缺陷。

我们正在设计和实施措施，以改善我们对财务报告的内部控制，以纠正这些问题物质上的弱点和重大缺陷。虽然我们正在设计和实施措施来补救这些实质性的弱点和重大缺陷，我们无法预测这些措施的成功与否，也无法预测我们对这些措施的评估结果时间到了。我们不能保证这些措施将弥补内部控制的缺陷或其他重大缺陷。否则，我们在财务报告内部控制方面的重大缺陷将不会在未来被发现。我们未能执行对财务报告保持有效的内部控制可能会导致我们财务报表中的错误，从而可能导致重述我们的财务报表或导致我们未能履行我们的报告义务。

如果我们不能维持一个有效的系统关于财务报告的披露控制和内部控制，我们编制及时和准确财务报表的能力或遵守适用的法规可能会受到损害。

作为一家上市公司，我们必须遵守符合萨班斯-奥克斯利法案的要求，其中包括我们保持有效的披露控制和财务报告的程式和内部控制。我们继续发展和完善我们的披露控制和其他程式。旨在确保我们在提交给美国证券交易委员会的报告中被要求披露的资讯被记录、处理、在美国证券交易委员会规则和表格中规定的期限内汇总和报告，以及需要在根据交易所法案收集报告，并传达给我们的管理层，包括我们的主要高管和财务人员警官们。此外，在2023年6月，我们的注册会计师事务所同意与美国证券交易委员会就某些事项达成和解与数百个特别专案的审计工作有关的系统性质量控制失误和违反审计标准目的收购公司(“SPAC”)客户最迟从2020年开始，一直持续到2022年。我们正在积极地正在监控情况，但目前不认为此和解会影响我们的财务报表或旧版iLearningEngines 财务报表。

我们必须继续完善我们的内部控制在财务报告上。我们的管理层将被要求对我们的内部控制的有效性进行正式评估根据萨班斯-奥克斯利法案第404(A)条的财务报告，我们未来可能被要求包括一份证明我国独立注册会计师事务所出具的财务报告内部控制报告。实现合规在规定的时间内满足这些要求，我们将参与记录和评估我们的内部控制的过程在财务报告方面，这既昂贵又具有挑战性。在这方面，我们将需要继续投入内部资源，可能会聘请外部顾问，并采用详细的工作计划来评估和记录我们内部控制的充分性财务报告，通过测试验证控制是否按照档案规定运行，并实施持续的报告和改进财务报告内部控制流程。我们有可能不能在规定的时间内得出结论期间或根本没有，我们对财务报告的内部控制是有效的，根据萨班斯-奥克斯利法案第404节的要求。

任何未能执行和保持有效的财务报告的披露控制和程式以及内部控制，包括确定一种或多种材料弱点，可能导致投资者对我们的财务报表和报告的准确性和完整性失去信心，这将可能会对我们普通股的市场价格产生不利影响。此外，我们可能会受到该公司的制裁或调查我们普通股上市的交易所，美国证券交易委员会等监管部门。

我们的普通股和认股权证的价格可能会波动。

我们普通股和认股权证的价格由于各种因素，过去大幅波动，未来可能继续波动，包括但不限于：●我们所在行业的变化；●我们产品和服务的销售量和销售时间；

●

现有或新的有竞争力的产品或技术的成功；

●

我们或我们行业中的其他人推出的新服务、产品或产品增强以及涉及的其他发展我们的竞争对手;

●

我们或我们的竞争对手宣布重大收购、战略合作伙伴关系、合资企业、合作或资本承诺;

●

美国和其他国家的监管或法律动态;

●

有关我们的智慧财产权或其他专有权的发展或争议;

●

关键人员的招聘或离职;

●

对财务业绩、开发时间表或证券分析师建议的估计的实际或预期变化;

●

我们或被认为与我们相似的公司的财务业绩存在差异;

●

证券分析师发布有关我们或我们的竞争对手或我们的行业的研究报告;

●

公众对我们的新闻稿、我们的其他公开公告和我们向美国证券交易委员会提交的档案的反应；

●

我们或我们的竞争对手未能满足分析师的预测或我们或我们的竞争对手可能给出的指导面向市场;

●

公司注册证书和附例包括条款可能会在未经同意的情况下延迟或阻止控制权的变更或管理层的变更我们的董事会。这些规定包括：

●

董事选举没有累积投票，限制了少数股东选举董事候选人的能力;

●

我们的董事会有权选举董事来填补因董事会扩大而产生的空缺或股东无故或无故辞职、死亡或撤职董事，这阻止了股东能够填补我们董事会的空缺；

●

我们董事会有能力决定是否发行我们的优先股，并决定价格和其他这些股份的条款，包括优先股和投票权，未经股东批准，可能被用来大幅稀释敌意收购方的所有权；

●

通过书面同意禁止股东采取行动，迫使股东在年度会议或特别会议上采取行动。我们股东的利益；

●

股东特别会议只能由董事会主席、首席执行官召集的要求高管或董事会，这可能会推迟我们的股东强制考虑提案的能力或采取行动，包括罢免董事；

●

限制董事和高级管理人员的责任，并为其提供赔偿；

●

控制股东会议的举行和安排的程式；

●

规定了交错董事会，董事会成员分为三个级别，任期一段时间自各自被任命或当选之日起三年；

●

授予以662/3%的流通股投票权的赞成票罢免董事的能力有表决权的我们的普通股；

●

客户C

客户D

止年度

2023年12月31日止年度 2022年12月31日

止年度

2021年12月31日

客户A客户A客户B

客户B

客户D		客户C

客户C		客户C

客户D		客户D

止三个月		3月31日，

净（损失）收入		利息开支所得税费用（福利）.”

折旧及摊销

EBITDA		其他费用交易成本认购证负债公允价值变化可转换票据公允价值变化债务消灭损失

调整EBITDA

截至12月31日的一年，

（美金单位：千）

净（损失）收入

利息开支

所得税费用（福利）

折旧及摊销

EBITDA收入成本毛利

运营费用：		销售、一般和管理费用

研发费用		总运营支出营运收入.”

其他费用：		利息开支

认购证负债公允价值变化		可转换票据公允价值变化

NM		债务贫困损失

NM		其他费用NM汇兑亏损

NM		其他费用总计

所得税（费用）福利前净（损失）收入NM所得税（费用）福利

净（损失）收入

NM - 没有意义

比较截至2024年和2023年3月31日的三个月

收入按地理区域

三截至

3月31日，

（美金以千计）

变化

% 变化

印度

百分比收入

北美国

百分比收入

其他

百分比收入

总收入

三截至

3月31日，

(美元) (以千计)

变化

% 变化

销售，一般及行政开支

收入的百分比

销售，截至2024年3月31日的三个月，一般和行政费用增加了960万美元，增幅为30.4% 截至2023年3月31日的三个月，主要是由于新业务开发费用成本、营销成本、交易成本，以及与更大管道相关的概念验证开发成本，与增长预测保持一致。此外，以成功为基础与赢得新的直接合同相关的佣金也有所增加。

研究和开发费用

三截至

3月31日，

(美元) (以千计)

变化

% 变化

研发费用

收入的百分比

研发与截至2024年3月31日的三个月相比，截至2024年3月31日的三个月的支出增加了850万美元，增幅为29.8% 2023年3月31日，主要是与新AI数位资产开发、现有AI数位资产维护相关的研发活动包括监测、机器学习/人工智慧模型改进、增强、数据验证和测试以及品质保证活动。这是保持我们的产品优势、建立竞争壁垒和推动未来增长所必需的。

其他收入和支出

兴趣费用

三截至的月份

3月31日，

(美元) (以千计)

变化

% 变化

利息开支

收入的百分比

利息与截至2024年3月31日的三个月相比，截至2024年3月31日的三个月的支出增加了40万美元，增幅为25.1%。 2023年，主要是由于技术合作伙伴的利息支出增加。

变化论权证责任的公允价值

三截至

3月31日，

(美元) (以千计)

变化

公平的变化认股权证法律责任的价值

收入的百分比

变化在截至2024年3月31日的三个月中，权证负债的公允价值增加了1,480万美元，增幅为5,299.3% 截至2023年3月31日的三个月。关于2020年定期贷款、2022年定期贷款、2023年定期贷款和经修订的定期贷款公司向出借人发行认股权证，以购买我们的股票，这些认股权证可以是普通股或优先股根据逮捕令的条款。认股权证被归类为按公允价值列账的负债，因为存在某些认沽权利。这可能使我们有义务在未来基于我们无法控制的事件回购认股权证。

变化可转换票据的公允价值

三截至

3月31日，

(美元) (以千计)

变化

%变化

评估值变动可转换票据价值

收入的百分比

变化截至2024年3月31日的三个月，可转换债务的公允价值与截至2024年3月31日的三个月相比增加了550美金 2023年3月31日。公司选择了可转换票据的公允价值期权。公司于2023年4月27日发行可转换票据 2024年3月21日和2024年3月21日，而截至2023年3月31日，无未发行可转换票据。

损失债务清偿

三截至

3月31日，

（美金以千计）

变化

% 变化

债务消灭损失

收入的百分比

损失截至2024年3月31日的三个月与截至3月的三个月相比增加了1000美金 2023年31日。公司修订后的定期贷款协议被核算为本期债务消灭，无此类事件发生在2023年。

收入税收（NPS）福利

三截至

3月31日，

（美金以千计）

变化

% 变化

所得税（费用）受益

收入的百分比

收入截至2024年3月31日的三个月的税收费用为120加元，而截至3月的三个月的所得税福利 2023年31日为20万美金，主要是由于认购证和可转换票据的公允价值出现负变化以及与WTI债务修正案相关的债务消除损失，出于税收目的，该损失被归类为永久差异。

比较截至2023年、2022年和2021年12月31日的年份

年截至12月31日，

量变化

% 变化

（美金单位：千）

2023 vs 2022年

2022 vs 2021年

2023 vs 2022年

2022 vs 2021年

收入成本收入毛利润

操作费用：

销售，一般和管理费用

研究开发费用

总业务费用

操作收入

其他（费用）收入：

兴趣费用

变化以认购证负债的公允价值计算

变化可转换票据的公允价值

其他费用

总其他费用，净额

净所得税（费用）福利前收入

收入税（费用）福利

净（损失）收入

NM - 没有意义

比较截至2023年12月31日及2022年12月31日止年度

收入按地理区域

年告一段落

12月31日，

（美金以千计）

变化

% 变化

印度

百分比收入

北美国

百分比收入

其他

百分比收入

总收入

（美金以千计）

变化

% 变化

评估值变动可转换票据价值

收入的百分比

变化可转换债务的公允价值是由于截至2023年12月31日止年度发行了价值1740加元的可转换票据。公司选举可转换票据的公允价值选择权。2022年没有发行可转换票据。

收入税收（NPS）福利

年结束

12月31日，

（美金以千计）

变化

% 变化

所得税（费用）受益

收入的百分比

收入截至2023年12月31日止年度的税收费用为220日元，而截至2022年12月31日止年度的所得税福利为 600美金发票，主要是由于收入和营运收入增加以及被视为永久差异的项目的增加到应税收入。

比较截至2022年和2021年12月31日的年份

收入

年告一段落

12月31日，

(美元) (以千计)

变化

% 变化

印度

收入的百分比

北美

收入的百分比

其他

百分比收入的百分比

总收入

全球收入

全球与截至2021年12月31日的年度相比，截至2022年12月31日的年度收入增加了9,130美元万或41.9%，主要因为有16份新合同。请参阅下面按地区对更改的进一步讨论。

印度

收入在印度，在截至2022年12月31日的一年中，与截至2021年12月31日的一年相比，主要增加了1,170美元的万或9.2% 通过向我们现有客户追加销售1,170美元的万。

北美国

收入在截至2022年12月31日的一年中，北美地区的万比截至2021年12月31日的年度增加了6820美元，增幅为142.1%，主要是因为通过VAR销售的15个新合同增加到我们现有的5,370美元的客户群万，以及其余的增长是要向我们的现有客户追加销售1,450美元的万。

其他

收入在包括中东和欧洲在内的其他地区，截至2022年12月31日的一年中，万增长了1,150美元，增幅为26.3% 截至2021年12月31日的年度，主要是由于通过VAR销售的一份新合同增加到我们现有的客户群 430美元的万，其余的增长是由于向我们的现有客户追加销售710美元的万。

年结束

12月31日，

（美金以千计）

变化

% 变化

评估值变动担保责任价值

收入的百分比

的截至2022年12月31日止年度，与截至12月31日止年度相比，认购证负债的公允价值变化增加了30加元 2021年31日。与2020年定期贷款和2021年定期贷款有关，我们向贷方发行了购买我们股票的认购证，该股票可以根据认购证的条款行使普通股或优先股。该逮捕令作为一项负债承担按其公允价值计算，因为某些看跌权可能迫使我们根据事件在未来回购该等认购权这些超出了我们的控制范围。

收入税开支

年结束

12月31日，

（美金以千计）

变化

% 变化

所得税利益（费用）

收入的百分比

●

共同创建课程：

设计和实施结合组织内容的定制课程在复杂的人工智慧建议的推动下，拥有丰富外部资源的库。

●

扩充和策划内容：

智慧AI标签，组织和整理相关内容以丰富内容企业学习课程，包括人工智慧生成的测验和问题，以增加内容和提高记忆力。

●

内容摄取：

强大而多功能的人工智慧引擎，了解上下文和适用性灵活接收多媒体内容，包括文档、音频和视频。

●

知识书架：支持

通过提供来自数位环境的高质量内容来增强学习库和第三方存储库。

●

外部系统集成：支持

多功能应用程式编程接口(API)组合与领先的企业和学术管理系统、通信平台和内容提供商无缝结合，带来结构化将数据整合到知识云和工作流中。

●

工作流程方面的培训：

在工作和工作流程中提供培训，以创建共享团队体验和开启协作学习。

●

混合学习：支持

通过现场网路会议将电子学习与第三方讲师指导的在线培训相结合或脱机模式。

●

测试和评估：支持

灵活的人工智慧驱动的测试，具有多种问题类型，支援人工智慧主导的评分，评估和“深入”报告。

●

白色标签：是

定制灵活的标签解决方案以反映客户品牌，并实施在客户端域上使用他们的徽标。

●

仪表板和报告：支持

为学员、培训人员、管理人员和学习人员提供详细报告的完整存储库和发展领导人跟踪进展和合规情况。

●

通知：不

可配置的通知，便于跟踪内容分配和测试。

资讯情报部门。

资讯智慧助力学习通过深度集成、无代码工作流程和AI画布实现企业用户体验。我们的人工智慧助理，配置了针对行业特定需求，通过加速、增强对话、流程和决策并使其自动化，帮助实现应用转型。企业可以通过我们的AI助手利用资讯智慧，这些助手嵌入在整个员工的多个接触点和用户行程，使企业能够为客户提供个性化服务，并做出预测性和预防性决策基于即时数据洞察。我们的资讯智慧目标客户是寻求节省成本的大中型公司使用老化的企业资源规划、客户关系管理或文档管理系统，这些系统难以实现自动化。资讯智慧的主要功能包括：

●

知识云：未来

经过整理的机构知识储存库，收集自广泛的内部和外部来源，由与连接的企业来源的广泛集成提供支持。

●

AI画布：中国

创建个性化的用户旅程和粒度个性化，同时定义高级人工智慧主导的实时模型。

●

人工智慧推荐引擎：

人工智慧策展和增强能够更快、更「智能」课程创建。

●

人工智慧专家协助：

将过程中学习和行业用例相结合，提供专家支持，按需提供援助。

●

人工智慧自动化引擎：

基于认知的自适应测试、辅助评分以及流程和任务自动化这可以带来学习和过程的好处。

●

人工智慧企业搜索：

简单的人工智慧嵌入企业内容存储库，实现强大的索引搜索用于上下文和相关的学习。

●

企业整合：

易于实施的AI Canvas可提供多租户和强大的可扩展性，轻松与企业后台系统集成。

●

ILE 360 -结果评分卡：

360-具有管理仪表板的企业结果学位视图以及学习者和培训者的分数。

●

我们相信主要竞争因素在我们的市场中包括能够提供：

●

动态人工智慧驱动的功能和工作流程;

●

嵌入工作流程中的高度先进和复杂的内容增强和建议;

●

跨多个用例的灵活性和可扩展性，并实现跨企业的端到端集成;

●

彻底的结构化和非结构化数据理解;

●

如果没有深入的企业集成，就无法复制特定于公司的数据集;

●

定价和合同条款;

●

客户关系;

●

品牌声誉;

●

隐私和安全;以及

●

董事和执行官

下表列出了姓名、年龄以及截至2024年5月1日我们的董事和执行官的职位：

名称

年龄

位置

执行官

Puthugramam「Harish」Chidambaran

执行长兼主席

赛义德·法尔汉·纳克维

财务长兼财务主管

巴拉克里希南·阿拉卡尔

总裁、首席业务官兼董事

大卫·塞缪尔斯

首席法律官、执行副总裁-企业事务兼秘书

罗摩克里希南·帕拉米斯瓦兰

高级副总裁-技术和产品

非雇员董事

马修·巴格

主任

布鲁斯·梅尔曼

审查和批准聘请我们的独立审计师执行审计服务和任何允许的非审计服务；

●

审查内部控制政策和程式的充分性和有效性，包括与独立的审计师，管理层关于我们内部审计职能的责任、预算、人员配置和有效性的计划，以及审查和批准我们的内部审计负责人(如果成立)；

●

年度审计计划，包括审计活动的范围和所有关键的会计政策和可供我们使用的做法；

●

至少每年获取和审查(如果适用的证券交易所上市要求)或其他确定的情况，由我们的独立审计师提交的一份报告，说明独立审计师的内部质量控制程式和任何重大问题由最近的内部质量控制审查、同行审查或政府或专业人员的任何询问或调查提出当局；

●

根据法律要求，监督我们的独立审计师的合伙人在我们的参与团队中的轮换；

●

至少每年一次，审查可能被合理认为与委员会独立性有关的关系，收到审查独立审计师的一封信，确认他们的独立性，讨论任何此类关系的潜在影响，评估并以其他方式采取适当行动来监督我们的独立审计师的独立性；

●

审查我们的年度和季度财务报表和报告，包括“管理层讨论和分析财务状况和经营成果“和”风险因素“，并讨论报表并向我们的独立审计师和管理层提交报告；

●

与我们的独立审计师和管理层一起审查与会计原则和财务有关的重大问题报表列报及与财务控制和关键会计的范围、充分性和有效性有关的事项政策；

●

与管理层和我们的独立审计师一起审查任何收益公告、披露和其他财务资讯以及引导；

●

建立程式，审查、保留和调查我们收到的有关财务控制、会计、审计或者其他事项；

●

审查和批准与我们的整体薪酬战略和政策相关的公司目标；

●

每年审查和批准我们的高级管理人员和其他高级管理人员的薪酬和其他雇用条件管理层，由薪酬委员会酌情决定；

●

审查和批准支付或奖励给非雇员董事会成员的补偿类型和金额；

●

管理我们的股权激励计划和其他福利计划；

●

审查和批准任何雇佣协定的条款、遣散费安排、控制权保护的变更、赔偿与我们的执行官员和其他高级管理层成员在薪酬方面达成的协定和任何其他实质性安排委员会的酌处权；

●

审查并为我们的董事和高级管理人员建立适当的保险范围；

●

在“薪酬讨论与分析”的标题下，与管理层审查和讨论我们的披露应向美国证券交易委员会提交的定期报告或委托书，只要此类报告或委托书中包含此类说明；

●

在我们的年度委托书中编写美国证券交易委员会要求的高管薪酬年度报告；

●

审查我们与风险管理和冒险激励相关的员工薪酬做法和政策，以确定如果此类补偿政策和做法合理地可能对我们产生实质性的不利影响；

●

如有必要，为我们的董事和高管建立和监督股权指导方针或适当的；

姓名、主要职位

财政

年

薪津

花红

股票

奖

选项

奖

非股权

激励计划

补偿

所有其他

补偿

总

哈里什·奇丹巴兰

总裁兼执行长

S.法尔汉·纳克维

财务长兼企业发展主管

巴拉克里希南·阿拉卡尔

某些iLearningEngines关系和关联方交易-总监购买协议

「有关董事购买协议的更多信息。

期权大奖

股票奖励

名称

授出日期

数量

证券

底层

未行使

选项

行使

数量

证券

底层

未行使

选项

不可行使

选项

行使

价格

选项

到期

日期数量： 股份或 .”

单位

的股票

没有

既得

市场

值

股份或

单位

的股票

没有

既得

哈里什·奇丹巴兰

S.法尔汉·纳克维

巴拉克里希南·阿拉卡尔

奖项。

2020年计划规定授予激励性股票期权(“

ISO

)、非法定股票期权(“

国家体育组织

“)、限制性股票奖励、限制性股票单位奖励、股票增值权和其他股票授予iLearningEngines的员工、董事和顾问，这些员工、董事和顾问提供的服务 ILearningEngines。

授权股份。

主题根据某些市值调整，截至2023年12月31日，iLearningEngines普通股的总股份数量根据2020年计划，根据非限定股票奖励可能发行的股票为1000万股。

受根据2020年授予的奖励的股份到期或终止而未结算或以现金而不是以股票结算的计划不会减少股票数量可根据2020年计划发放。此外，任何重新获得的用于支付预扣义务的股份将再次可用于根据2020年计划发布。此外，如果根据股票奖励发行的任何股票被没收回iLearningEngines或回购由于未能满足或有或有条件需要授予，则被没收或回购的股票将恢复原状根据2020年计划，一次又一次地可供发行。

计划管理。

这个 2020计划由iLearningEngines董事会或iLearningEngines董事会正式授权的委员会管理，要在2020年规划中扮演“管理者”的角色。在符合2020年计划规定的情况下，管理人在其酌情决定权获奖的人、此类奖项的规模及其所有条款和条件。管理员拥有有权解释和解释2020年计划的条款和根据该计划授予的奖项。管理员也可以委托给 ILearningEngines的一名或多名高级管理人员有权：(1)指定员工(高级管理人员除外)接受指定奖励；(2)确定奖励的股份数量。

根据2020年计划，署长还一般地有权在任何有不利影响的参与者同意下：(A)减少行使、购买、或任何悬而未决的裁决的执行价格；。(B)取消任何悬而未决的裁决并授予其他奖励、现金或其他代价；或(C)根据公认会计被视为重新定价的任何其他行为原则。

限制性股票单位奖。

受限股票单位奖励是根据管理人通过的限制性股票单位奖励协定授予的。限制性股票单位奖可以作为iLearningEngines董事会可以接受并允许的任何形式的法律代价而授予根据适用法律。限制性股票单位奖励可以通过现金、股票交割、现金和股票相结合的方式进行结算。由管理人适当，或以限制性股票单位奖励协定中规定的任何其他形式的对价。另外，可就限制性股票单位奖励所涵盖的股票计入股息等价物。除非在适用的奖励协定，未归属的限制性股票单位奖励将在参与者连续服务因任何原因终止。

截至2023年12月31日，RSU将收到根据2020年计划，iLearningEngines普通股的流通股为7138,438股。在限制性股票单位下授予RSU 管理人通过的奖励协定。

资本结构的变化。

在……里面如果iLearningEngines的资本结构发生特定类型的变化，如资本重组、股票拆分、反向股份分立、重组、合并、合并、分立、合并、回购或者换股，适当调整将根据2020年计划可能交付的股票数量和类别和/或数量、类别和行权价格每一项未偿还奖励所涵盖的股份。

企业交易。

2020年计划规定，在发生公司交易时，奖励将由管理员决定，管理员将可对此类奖励采取下列一项或多项行动：

●

安排由尚存或收购的公司承担、延续或取代股票奖励；

●

安排将iLearningEngines持有的任何回购或回购权利转让给尚存或正在收购的公司；

●

加快股票奖励的授予，并规定如果在生效时或之前没有行使(如果适用)股票奖励，则终止股票奖励符合条件的交易的时间；

●

安排iLearningEngines持有的任何回购或回购权利失效；

●

在向参与者发出书面通知后，终止或取消或安排终止或取消股票奖励在交易生效时间之前未归属或未行使的程度；以及

●

支付相当于下列数额的超额款项：(A)股票奖励持有人本应获得的财产价值在行使授权书时，超过(B)，超过该持有人就行使授权书应支付的任何行使权价格。

管理员没有义务处理所有股票奖励或股票奖励的一部分以相同的方式进行，并且没有义务以相同的方式对待所有参与者。

根据2020年计划，公司交易是通常是：(1)出售iLearningEngines的全部或几乎所有资产；(2)出售或处置至少50%的iLearningEngines已发行证券；(3)iLearningEngines没有在交易中幸存下来；或(4)合并或整合，其中iLearningEngines确实在交易中存活下来，但 ILearningEngines在紧接此类交易之前发行的普通股被转换或交换为其他财产交易的优点。

控制权的变化。

在……里面除此之外，管理人可以在个人授奖协定中规定，授奖将受到额外的加速在控制权发生变化时的归属和可行使性。根据2020年计划，控制的变化意味著发生任何以下事件中的一种：(I)iLearningEngines的所有权发生变化，这发生在任何一个人或超过一个人作为一个团体，获得iLearningEngines股票的所有权，占总投票权的50%以上 ILearningEngines股票的所有权，但由于私人融资而导致的iLearningEngines股票所有权的任何变化经iLearningEngines董事会批准的iLearningEngines将不被视为控制权变更；(Ii)是否有完善的涉及本公司的合并、合并或类似交易，并在紧接该等合并、合并或类似交易后，紧接该公司之前的股东并不拥有(A)超过50%的未偿还有投票权证券在该等合并、合并或类似交易中，尚存实体的尚未行使的总投票权或(B)或更多在该合并、合并或类似交易中，尚存实体的母公司尚未行使的表决权合计超过50%，在每一种情况下，在紧接该交易之前其所有权的比例大体相同；或(Iii) 出售、租赁、独家许可或以其他方式处置公司及其子公司的全部或几乎所有合并资产。

计划修订或终止。

ILearningEngines的董事会有权修改、更改、暂停或终止2020年计划，前提是此类行动不损害现有权利任何未经参与者书面同意的参与者。某些重大修订还需要iLearningEngines的批准股东。在2020计划暂停期间或终止后，不得根据该计划授予股票奖励。

在生效时间，优秀的iLearningEngine 2020计划下的RSU由New iLearningEngines承担，并转换为覆盖New iLearningEngines股票的限制性股票单位普通股。限制性股票单位继续受2020年计划条款的约束。不得在下列条件下作出进一步的奖励 2020计划。

2024年股权激励计划

2024年4月，我们的董事会通过了，我们的股东 ILearningEngines 2024股权激励计划已获批准

支付

为这类购买是通过工资扣除进行的。我们相信，通过为符合条件的员工提供机会来增加他们的专有对新iLearningEngines的成功感兴趣，ESPP将激励接受者为新iLearningEngines做出最大努力并帮助他们专注于创造符合以下要求的长期价值

的

利益我们股东的利益。

本节总结了某些主要功能摘要参考了ESPP全文，对全文进行了限定。

股票储备。

跟随企业合并的完善，新iLearningEngine普通股可发行的最大数量根据ESPP，新iLearningEngines普通股的数量不会超过已发行和已发行普通股的2%(2%) 新iLearningEngines普通股的股票在紧随收盘后确定。这个号码在此称为“初始股票储备”，视新iLearningEngines的特定变化而调整。大写。预留发行的新iLearningEngines普通股数量将于1月1日自动增加从2025年1月1日到2034年1月1日，每一历年，增加New iLearningEngines总股数的1% 上一历年12月31日已发行的股本；但在任何该等增发日期之前，新的iLearningEngines董事会可能会决定不会有1月1日

增长速度在该日历年的股份储备金中，或该日历年的股份储备金的增加将是较少数目的普通股的股份比其他情况下会出现的更多。如果根据ESPP授予的购买权在未行使的情况下终止，没有根据此类购买权购买的新iLearningEngines普通股将再次可以根据 ESPP。

计划管理。

这个新的iLearningEngines董事会或其正式授权的委员会将有权管理ESPP。ESPP实施后通过一系列授予合格员工购买New iLearningEngines Common股票购买权的产品在此类发行过程中指定日期的股票。根据ESPP，计划管理员可以指定持续时间不超过超过27个月，并可在每次发售中指定较短的购买期。每个产品将有一个或多个购买日期参与发售的员工将购买哪些新iLearningEngines普通股。在以下条件下的供品在某些情况下，ESPP可能被终止。

薪水单扣减。

一般来说，新iLearningEngines雇用的所有正式员工，包括高管或由New iLearningEngines的任何指定附属公司提供，将有资格参与ESPP，并可能正常情况下提供资金通过工资扣减，购买新的iLearningEngines普通股，最高可达其收入的15%(如ESPP所定义) 根据ESPP。除非计划管理员另有决定，否则将购买新的iLearningEngines普通股

为

员工以相同的每股价格参与职工持股计划的账目至并不少于以下两者中较少者：(I)新iLearningEngines普通股首日公平市值的85% 发行的交易日期；或(Ii)新iLearningEngines普通股在#日的公平市值的85% 购买。

限制。

员工在参与计划管理员确定的ESPP之前，可能必须满足以下一项或多项服务要求，包括：(1)每周习惯受雇20小时以上；(2)习惯受雇时间超过每周20小时每历年五个月；或(三)连续就业一段时间(不超过两年)。没有员工可能根据ESPP以超过25,000美元的价格购买基于公平市场的新iLearningEngines普通股新iLearningEngines普通股的每股价值在发行开始时，每年此类购买权都是未偿还的。最后，如果雇员在根据ESPP被授予任何购买权之后，没有资格获得此类权利，根据第424(D)节的规定，该员工对新iLearningEngines 5%或以上的股本拥有投票权或投票权或价值代码。

资本结构的变化。

在……里面新iLearningEngines通过股票拆分、合并、整合、重组、资本重组、再注册、股票股利、现金以外的财产股利、大额非经常性现金股利、清算股利、股份合并、换股、变更公司结构或者其他类似的股权重组交易，计划管理人将对：(I)根据ESPP保留的股份类别和最大数量进行适当调整； (Ii)股份储备每年可自动增加的股份类别及最高数目；。(Iii)类别；。及适用于所有已发行股份及购买权的最高股份数目及收购价；及(四)类别以及正在进行的发行中受购买限制的股票数量。

公司交易。

提供后拥有的百分比

阶段 1成长基金，LLC系列3 NP，TO 3类

艾伦·哈森弗

我学习投资2，LLC

店 Credit，LLC

埃里克·史蒂文斯

凯文·马拉斯科

罗宾·布拉德伯里

充分有限责任公司

查理·法拉

丹·普莱斯埃迪·b。艾伦爱德华·法拉

伊莱恩·阿苏利安

加里·科尔曼

孟德尔·梅尔泽

彼得·卡霍尔

三一 Lane Capital LLC D系列小布拉迪1， LLC罗纳德·斯卢克

奇普·道格拉斯（威廉·P·道格拉斯）

JR冈德克

鲁迪·斯卢克

阿蒂利奥·塞尔凯拉

巴巴·瑞安

马克·洛厄里

詹姆斯·韦弗

约书亚·W罗杰斯

麦可·奥尔

扎克·阿苏利安

Lexy 道格拉斯不可撤销的信托

瑞安 R.道格拉斯不可撤销信托基金

保罗斯科特和伊莉莎白·斯科特，JTWOS

阿诺德·梅

奥布里·斯穆特

阿什利·阿苏利安

阿苏利安家庭基金会

克里斯汀·泰勒·阿苏利安

萝拉·萨乌德

杰弗里·莫里斯

John F.霍尔韦

约瑟夫·加洛

凯文·库克

罗伯特 D. Mashal Living Trust日期：2020年6月16日

YP Holdings LLC

张丽华

米莱昂 Holdings LLC

亚历克斯皮特

大卫爱泼斯坦

莫妮卡 Maliga

尼克达菲尔德

Priya 平托罗比爱德华兹罗杰达菲尔德沙夫纳 HaqueTraci Maxey风险 Lending & Leason IX，Inc.”).

WTI X基金公司

竹芋 Acquisition LLC

彼得·库珀

迪克森娃娃

高拉夫·希隆

威尔·森普尔

Meteora 特殊机会基金I，LP

Meteora Capital Partners，LP

Meteora 选择交易机会大师，LP

巴拉·克里希南

法尔汉·纳克维

拉姆·帕拉米斯瓦兰

MRB Capital LLC

布鲁斯·梅尔曼

哈里什·奇丹巴兰

普雷塔·奇丹巴兰

Cantor 菲茨杰拉德公司

库利 LLP

BTIG， LLC

不到百分之一。

David W.鲍姆，担任Stage 1 Growth Fund，LLC的管理成员系列3 NP，TO 3类，对该实体的持股拥有投票权和/或处置权。

David Villmow，I Learning Investment 2，LLC的经理，对该实体的持股拥有投票权和/或处置权。

James F. Hartle，III，作为Shop Credit，LLC的执行成员，对该实体的持股拥有投票权和/或处置权。

David·维尔莫作为Full Sender LLC的经理，拥有投票权和/或对这种实体的持有权的处置权。

Salil S.Pitroda，三一莱恩资本管理成员 D系列有限责任公司对此类实体的持股拥有投票权和/或处置权。

David·维尔莫作为LittleBrady1，LLC的经理，拥有投票权和/或对这种实体的持有权的处置权。

詹妮弗·P·道格拉斯，作为Lexy A Douglas不可撤销的受托人信托，对该实体的持股拥有投票权和/或处置权。

詹妮弗·P·道格拉斯，作为瑞安·R·道格拉斯的受托人不可撤销信托，对该实体的持股拥有投票权和/或处置权。

由保罗·斯科特和伊丽莎白·斯科特持有的股份组成享有生存权的联名承租人。

艾伦·阿舒里安，作为阿舒里安家庭基金会的董事，对该实体的持股拥有投票权和/或处置权。

罗伯特·D·马沙尔，罗伯特·D·马沙尔生活信托基金的受托人日期为2020年6月16日的信托基金对该实体持有的股份拥有投票权和/或处置权。

作为YP Holdings LLC的经理，Michael Yurkowsky拥有投票权和/或对该实体的持有权的处置权。

迈克尔·波林作为Milleon Holdings LLC的经理，拥有投票权和/或对该实体的持有权的处置权。

包括根据RSU可发行的80,613股普通股，其中11,756股普通股可根据尚未归属的RSU发行。

包括根据RSU可发行的1,612股普通股，其中806股普通股可根据尚未归属的RSU发行。

包括2,014股根据RSU可发行的普通股，其中1,007股普通股可根据尚未归属的RSU发行。

包括30,230股根据RSU可发行的普通股，其中15,115股普通股可根据尚未归属的RSU发行。

包括40,307股根据RSU可发行的普通股，其中3,359股普通股可根据尚未归属的RSU发行。

包括9,068股根据RSU可发行的普通股，其中4,534股普通股可根据尚未归属的RSU发行。

包括根据RSU可发行的70,536股普通股，其中35,268股普通股可根据尚未归属的RSU发行。

包括20,153股根据RSU可发行的普通股，其中3,359股普通股可根据尚未归属的RSU发行。

包括根据RSU可发行的7,052股普通股，其中3,526股普通股可根据尚未归属的RSU发行。

的营业地址这样的人是104La Mesa Drive，Suite 102，Portola Valley，CA 94028。WesTech Investment Advisors LLC是管理成员这样的人。David是WesTech Investment Advisors LLC的首席执行官，莫里斯·韦尔德加是该公司的董事会主席和也有权投资或投票这些证券。

由460,384名营运资金组成方正股份6,627,500股。ArrowRoot收购 LLC由两位经理马修·萨菲伊和托马斯·奥利维尔管理，因此，马修·萨菲伊和托马斯·奥利维尔拥有投票权和投资权谨慎行事。

Metora Capital，LLC是出售证券持有人的注册投资顾问。这些股份由维卡斯·米塔尔控制，他作为出售证券持有人的管理成员，拥有投票权和对报告证券的投资能力。出售证券持有人的地址是1200N Federal Hwy，#200，Boca Raton FL 33432。

由3,043,980股可在既有RSU结算时发行的股份组成。

由1,360,760股可在既有RSU结算时发行的股份组成。

由322,459股可在既有RSU结算时发行的股份组成。

马修·巴格，我们的董事会成员，是是MRB Capital LLC的成员，对MRB Capital LLC直接持有的股份拥有唯一的投票权和投资酌处权。

Cf&co是一家注册的经纪交易商，公司地址为：纽约东59街110号，邮编：10022。Cf集团管理公司(“CFGM”) 是Cantor Fitzgerald，L.P.(“CFLP”)的管理普通合伙人，并直接或间接控制管理 Cantor Fitzgerald Securities(“CFS”)的普通合伙人，后者间接是CF&CO的大股东。霍华德先生 Lutnick是CFGm的董事长兼首席执行官，也是CFGM的唯一股东受托人。CFLP间接持有多数股权拥有CFS的所有权权益，因此亦间接持有CF&CO的大部分所有权权益。因此， CFLP、CFGm、CFS和Lutnick先生均可被视为对CF&CO直接持有的证券拥有实益所有权。除任何金钱利益外，上述每一实体或个人均不承认对申报股份的任何实益所有权。他们可能直接或间接地在其中拥有。前述内容本身不应被解释为CFLP任何人的承认， CFGm、CFS或Lutnick先生关于直接实益拥有的证券的实益所有权。股份的数量在本次发行前实益拥有的包括作为对所提供服务的补偿而发行的普通股在合并期间。在收购股份时，CF&CO没有直接或间接地与任何人分销此类证券。

Cooley LLP的业务地址是55 Hudson Yards，New York，NY 10001-2157.

BTIG，LLC是一家注册经纪交易商，拥有注册地址地址：加利福尼亚州旧金山，布什街350号，9楼，邮编：94104。BTIG，LLC对证券拥有唯一投票权和处置权保持住。本次发行前实益拥有的股份数量包括作为补偿而发行的普通股。在合并期间提供的服务。在收购股份时，BTIG，LLC没有直接或间接地，与任何人分销此类证券。

描述：我们的证券

以下是材料术语的摘要并不是对这类证券的权利和优先权的完整概括，仅供参考。我们的公司注册证书、我们的章程和在此描述的认股权证，作为注册声明的证物这份招股说明书就是其中的一部分。我们敦促您阅读我们的公司注册证书、我们的章程和与授权证相关的档案完整地描述我们证券的权利和优先权。

授权股票和未偿还股票

我们的公司注册证书授权发行7.1亿股我们的股本，包括(A)7亿股普通股，具有面值每股0.0001美元；及(B)10,000,000股优先股，每股面值0.0001美元。截至2024年4月16日，我们的已发行普通股约有134,970,114股，没有已发行的优先股。

投票权

除法律另有规定或另有规定外在任何系列优先股的任何指定证书中，我们普通股的持有者拥有所有投票权选举我们董事的权力和所有其他需要股东采取行动的事项。我们普通股的持有者是在股东投票表决的所有事项上，每持有一股股份有一票的权利。

红利

受我们优先选择的持有者权利的约束我们普通股的持有者持有我们的公司注册证书中的股票和任何其他条款，该证书可能会不时修改将有权在以下情况下以现金、股票或财产的形式获得股息和其他分派：董事会可酌情决定不时动用我们的资产或可合法使用的资金。见“-

优先考虑库存

有关我们优先股持有人的股息权的更多资讯，请参见下文。

清算、解散和清盘

演练认股权证持有人因其他原因未能获得公众全部潜在价值的认股权证期限权证以确定和实现公共权证的期权价值组成部分。这个公式是为了补偿公众权证持有人因要求权证持有人行使公有认股权证而丧失认股权证的期权价值部分在事件发生后30天内发出公共逮捕令。布莱克-斯科尔斯模型是一种公认的估计公平市场的定价模型没有某一工具的报价市场价格的价值。

其他条款

这个公众

权证

根据认股权证协定以注册形式发行作为权证代理的大陆股票转让信托公司和ARRW之间。认股权证协定规定，条款可在未经任何持有人同意的情况下修改公共认股权证的条款，以纠正任何含糊之处或更正任何有缺陷的条款，但需要当时尚未发行的认股权证的至少过半数持有人的批准，才能做出任何不利的改变影响公有权证注册持有人的利益。

认股权证可在移交时行使于到期日或之前于认股权证代理人办事处递交认股权证证书，行使表在背面按说明填写并签立的认股权证的一面，连同行使价款的全额付款(或无现金支付) 根据适用的基准)，以保兑的或官方的银行支票，支付给我们，为正在行使的公共认股权证的数量。公众权证持有人没有普通股持有人的权利或特权以及任何投票权，直到他们行使其认股权证和获得我们的普通股。在我们的普通股在行使公共认股权证时发行后，每个持有人将就股东表决的所有事项，每持有一股记录在案的股份，有权投一票。

行权时不会发行零碎股份公共认股权证。如果在行使公共认股权证时，持有人将有权获得股份的零星权益，在行使时，我们将向下舍入向权证持有人发行的普通股的最接近的整数数量。私募股权认购证除如下所述，私募认股权证的条款和规定与公开认股权证的条款和规定相同。

的

私募认股权证(包括行权时可发行的普通股私募认股权证)在2024年5月16日之前不得转让、转让或出售(

但依据有限度的我们的高级管理人员和董事以及与私募初始购买者有关联的其他个人或实体除外认股权证

)。此外，我们的私募认股权证持有人有权某些登记权，这些权利在上文的“-

*注册权

和私人配售认股权证只要由保荐人或其获准受让人持有，本公司将不予赎回。赞助商，或其获准受让人可选择在无现金基础上行使私募认股权证。如果私募配售认股权证由保荐人或其获准受让人以外的持有人持有，认股权证可由本公司赎回在所有赎回情况下，并可由持有人行使，其基础与在ARRW中出售的单位所包括的权证相同首次公开募股。对私募配售认股权证条款的任何修订或认股权证协定的任何条款私募认股权证将需要当时未偿还私募认股权证数量的至少50%的持有人投票搜查令。

如果私募认股权证持有人选择为了在无现金的基础上行使它们，他们将支付行使价格，交出他或她或其对该数量股票的认股权证。普通股等于通过除以(X)认股权证标的普通股股数的乘积获得的商数，乘以权证的“公平市价”(定义见下文)与权证行使价格的差额乘以(Y)公允价值市场价值。就这些目的而言，“公允市场价值”是指普通股#年报告的平均收盘价。截至向权证代理人发出行权证通知之日前第三个交易日止的10个交易日。

转让代理和授权代理

新iLearningEngines Common的调用代理新iLearningEngines公开认股权证和私募认股权证的股票和认股权证代理是大陆股票转让公司& 信托公司。

上市
箭根已申请

列表

新iLearningEngines普通股和新的iLearningEngine在纳斯达克资本市场上公开认股权证，代码分别为“AILE”和“AILEW”。

我们的转让代理和令状代理

我们普通股的转让代理和我们认股权证的代理人是大陆股票转让信托公司。大陆股票转让信托公司地址是道富广场一号，纽约30层，邮编：10004。交易所上市我们的普通股和公共认股权证已上市关于纳斯达克资本市场，分别以AILE和AILEW为代码。

材质联合各州联盟所得税后果下面的讨论是材料的摘要美国联盟所得税考虑因素一般适用于购买、拥有和处置我们的普通股，招股说明书涉及(包括我们在行使私募和公开认股权证时可发行的普通股)和购买，私募认股权证的行使、处置及失效。就本讨论而言，私募认股权证为在此称为我们的“认股权证”，普通股和私募认股权证统称为在这里作为我们的“证券”。我们证券的所有潜在持有人应就以下事项咨询他们的税务顾问购买、所有权、行使、处置和失效的美国联盟、州、地方和非美国税收后果，如适用，我们的证券。这一讨论并不是对与购买、所有权、行使、处置和失效有关的所有潜在的美国联盟所得税后果，我们的证券。本摘要以经修订的1986年《国内收入法》(以下简称《法》)的现行规定为依据，根据该条例颁布的现有美国财政部法规，发布的行政声明和美国国税局的裁决服务(“

IRS“)和司法判决，均于本招股说明书日期生效。这些当局可能会有变化和不同的解释，可能具有追溯力。任何变化或不同的解释都可能改变本讨论中描述的对持有者的税收后果。不能保证法院或国税局不会对此提出质疑或更多在此描述的税收后果，我们没有获得，也不打算获得关于美国的裁决。联盟所得税对我们证券的购买、所有权、行使、处置或失效的持有者(如果适用)的后果。在此讨论中，我们假设持有者持有我们的证券作为第1221条所指的“资本资产”。《守则》(一般指为投资而持有的财产)。本讨论并不涉及美国联盟所得税的所有方面可根据特定持有人的个人情况与该持有人相关，也不涉及特殊税务会计根据守则第451(B)条规定的规则、任何替代最低标准、医疗保险缴费、遗产税或赠与税后果、以下任何方面美国州税、地方税或非美国税，或任何其他美国联邦税法。本讨论也不涉及相关的后果适用于受特别税务规则约束的持有人，例如拥有或被视为拥有超过5%股本的持有人(除以下具体列出的范围)，积累收益以逃避美国联盟所得税的公司，免税组织，政府组织、银行、金融机构、投资基金、保险公司、经纪商、交易商或证券交易商，商品或货币、受监管的投资公司或房地产投资信托基金、拥有“功能货币”的人除美元、符合纳税条件的退休计划外，持有或接受我们证券的持有者根据员工的行权股票期权或其他作为补偿，持有我们的证券的持有者作为对冲、跨境或其他降低风险策略的一部分，转换交易或其他综合投资，持有人被视为根据推定出售条款出售我们的证券《守则》、被动型外国投资公司、受控制的外国公司以及某些前美国公民或长期居民。”.

此外，本讨论并未涉及合伙企业(或在美国联盟所得税中被视为合伙企业的实体或安排)的税务处理或通过这种合伙关系持有我们证券的人。如果合伙，包括被视为合伙的任何实体或安排出于美国联盟所得税的目的，持有我们的证券，美国联盟所得税对待此类合伙企业的合伙人将一般取决于合作伙伴的地位和伙伴关系的活动。此类合作伙伴和伙伴关系应咨询其关于购买、拥有、行使、处置和失效我们证券的税务后果的税务顾问。为了这次讨论的目的，“美国持有人“是指我们证券的实益所有人(合伙或被视为合伙的实体或安排除外用于美国联盟所得税目的)即用于美国联盟所得税目的：.

●是美国公民或居民的个人；●在美国创建或组织的公司或为美国联盟所得税目的而被视为公司的实体或根据美国或其任何州或哥伦比亚特区的法律；●其收入应缴纳美国联盟所得税的遗产，无论其来源如何；或”.

●

如果(A)美国法院可以对信托的管理进行主要监督，并且一个或多个美国人有权控制信托的所有重大决定，或(B)根据适用的法律，信托具有有效的选择美国财政部法规将被视为美国人。

在本次讨论中，“非美国持有人“是我们证券的实益持有人，既不是美国持有人，也不是合伙企业，也不是实体或安排作为合伙企业，用于美国联盟所得税目的。

适用于美国持有者的税收考虑

分配征税

如果我们支付分配或进行建设性分配 (不包括我们股票的某些分配或收购我们股票的权利)给我们普通股的美国持有者，这样的分配通常将构成美国联盟所得税的股息，从我们当前或累积的收入中支付，并且利润，根据美国联盟所得税原则确定。超过我们当前和累积收益和利润的分配将构成资本返还，适用于并降低(但不低于零)美国持有者的调整后税收以我们的普通股为基础。任何剩余的盈余将被视为出售或以其他方式处置普通股时实现的收益并将按照“

适用于美国持有者 - 收益或亏损的税务考虑普通股的出售、应税交换或其他应税处置

」下面。

我们支付给美国持有者的应纳税股息如果满足所需的持有期，公司一般将有资格获得所收到的股息扣除。除某些例外情况外 (包括就投资利息扣除限制而言被视为投资收入的股息)，并提供一定的持有量如果满足期限要求，我们向非公司美国持股人支付的股息通常将构成“合格股息” 这将按长期资本利得的最高税率征税。如果持有期要求未得到满足，公司可能没有资格获得所收到的股息扣除，并且其应纳税所得额将等于全部股息。非公司股东可按一般所得税率而非优惠税率缴税。这适用于合格的股息收入。

销售、应税交换或其他应税项目的损益普通股的处置

美国持有者通常会确认收益或出售、应税交换或其他应税处置普通股的损失。任何此类收益或损失都将是资本收益或损失。如果美国持有者对如此处置的普通股的持有期超过一年，则为长期资本收益或损失。确认的损益金额一般等于(1)现金金额与公允价值之和在这种处置中收到的任何财产的市值以及(2)美国持有者在这样处置的普通股中的调整后的纳税基础的。美国持有者在其普通股中调整后的纳税基础通常等于美国持有者购买此类股票的成本普通股(或，如果是在行使认股权证时收到的普通股，则为美国持股人的初始基础股票，如下所述)，减去被视为资本回报的任何先前分配。非公司确认的长期资本利得美国持有者通常有资格享受降低的税率。如果美国持有者持有如此出售的普通股的期限一年或以下，出售股份或其他应税处置的任何收益将受到短期资本利得处理的影响。并将按普通所得税税率征税。资本损失的扣除是有限制的。

锻炼一份授权书

除如下所述，关于无现金行使认股权证，美国持有者一般不会确认应税收益或损失在行使现金认股权证时。美国持有者在行使时收到的普通股份额中的初始纳税基础一般情况下，权证的价值将等于美国持有人购买权证的成本和行使权证的成本之和该认股权证的价格。目前尚不清楚美国持有者是否在行使认股权证将于认股权证行使之日或权证行使日的翌日开始生效；然而，在这种情况下，持有期将不包括美国持有人持有认股权证的时间。

在……里面在某些情况下，认股权证可在无现金的基础上行使。美国联盟所得税对权证行使的处理在无现金的基础上，这一点尚不清楚，可能与上述后果不同。无现金锻炼有可能是一项应纳税的事件。敦促美国持有者就行使无现金认股权证的后果咨询他们的税务顾问基础，包括他们的持有期和在行使认股权证时收到的普通股的纳税基础。

销售，权证的交换、赎回或到期

vt.在.的基础上出售、交换(非行使)、赎回或权证到期，美国持有者将确认应税收益或损失金额等于(1)该处分或到期时变现的金额与(2)美国持有者的权证中调整后的计税依据。美国持有人在其权证中调整后的纳税基础通常与美国持有人的相同收购成本，增加该美国持有者在收入中包括的任何推定分配的金额(如下所述在“下”

适用于美国持有者的税收考虑 - 可能的建设性分配

”). 如果美国持有人持有该令状超过处置或到期时一年。

如果如果许可证在未行使的情况下失效，美国持有人通常会承认相当于该持有人调整后的资本损失令状中的税基。任何此类损失通常将是资本损失，如果持有该令状，则将是长期资本损失一年多由于该凭证的期限超过一年，因此美国持有人的资本损失将被视为长期资本损失。资本损失的扣除受到一定的限制。

可能建设性分配的每份令状的条款规定调整可行使的普通股股份数量，或在某些情况下，令状的行使价格，如「部分所讨论的那样●

穿过出售证券持有人根据规则10b5-1根据根据本招股说明书进行发行时已生效的《交易所法案》，以及规定定期出售其证券的任何适用的招股说明书补充档案以此类交易计划中描述的参数为基础；

●短的销售量；●

分布出售证券持有人的雇员、成员、有限合伙人或证券持有人；●穿过买入或结算期权或其他套期保值交易，无论是通过期权交换或其他；

●

通过质押担保债务和其他债务；

●

延迟交货安排；●至或通过承销商或经纪自营商；

●在……里面根据证券法第415条规则定义的“在市场上”发行，在谈判价格，按销售时的现行价格或按与此有关的价格现行市场价格，包括直接在国家证券交易所进行的销售或通过交易所或其他类似产品以外的做市商进行的销售通过销售代理；●

在……里面私下协商的交易；●在……里面期权交易；

马库姆“)，独立的注册会计师事务所，以会计和审计专家的身分出现在本文其他地方，并得到该事务所的授权。这个 ArrowRoot收购公司截至2023年12月31日和2022年12月31日的合并财务报表，以及当时结束的年度，本招股说明书和注册说明书中的内容已由WithumSmith+Brown，PC审核 (“

Withum“)，独立注册会计师事务所，如其报告所述(该包括一段关于ArrowRoot收购公司S继续作为持续经营企业的能力的解释性段落)，出现在本招股说明书和注册说明书的其他地方，幷包括在依赖该报告的权威像会计和审计专家这样的公司。变化登记人的认证会计

在……上面 2024年4月16日，董事会批准Marcum LLP(“马库姆“)作为我们的独立注册公众审计本公司截至2024年12月31日年度的综合财务报表的会计师事务所。马库姆之前在业务合并前担任Legacy iLearningEngines的独立注册会计师事务所。

因此，使用Smith+Brown，PC(“

Withum

	“)，ARRW在营业前的独立注册会计师事务所合并，于2024年4月16日被告知，它将被解雇，由Marcum取而代之，成为我们的独立注册公共会计坚定。 Withum‘s 截至2023年12月31日和2022年12月31日的综合资产负债表报告，相关的综合经营报表，股东的截至2023年12月31日、2023年12月31日和2022年12月31日止年度的权益和现金流量以及财务报表的相关附注(合计，《大赛》		财务报表 “)没有任何不利意见或放弃意见，也没有保留意见或对不确定性、审计范围或会计原则进行修改，但对我们是否有能力继续一家持续经营的公司。
	(%)		(%)
在.期间从2020年11月5日(开始)到2023年12月31日以及随后的过渡期到2024年4月16日，没有：(I)与Withum在任何会计原则或做法、财务报表披露等问题上存在分歧或经审核的范围或程式，如果不能使Withum满意地解决这些分歧，则会导致Withum参考与其报告有关的分歧的主题事项，或(2)第304(A)(1)(V)项所界定的须报告的事件《交易法》规定的S-k。	16.7%	在.期间从2020年11月5日(成立)到2023年12月31日，以及到2024年4月16日的过渡期，我们没有就(I)将会计原则适用于已完成或已完成的特定交易向Marcum咨询或建议的；或可能在我们的财务报表上提出的审计意见的类型，并且没有书面报告或口头建议马库姆提供给我们的，马库姆得出结论，这是我们在就会计问题做出决定时考虑的一个重要因素，审计或财务报告问题；或(Ii)该术语所描述的存在分歧的任何事项在交易法下的S-k条例第304(A)(1)(Iv)项和S-k条例第304项下的相关指示中交易法，或交易法下S-k条例第304(A)(1)(V)项中定义的须报告事件。	21.5%
我们我已向Withum提供了我们针对4月提交的Form 8-k表格中第4.01项所作披露的副本 2024年22日，并要求维瑟姆向我们提交一封致美国证券交易委员会的信，声明是否同意所做的声明我们对本报告中关于表格8-k的专案4.01的答复，如果不是，请说明它不同意的方面。一封来自 Withum作为本招股说明书的附件16.1附于本文件。	13.5%	在哪里您可以找到更多资讯	17.7%
我们已根据证券法以S-1表格向美国证券交易委员会提交了关于以下公司发行的证券的登记声明这份招股书。本招股说明书是注册说明书的一部分，并不包含登记声明及其证物。如欲进一步了解本公司及本招股说明书所提供的证券，我们请您参考注册声明及其展品。本招股说明书所载有关任何合约内容的陈述或所提及的任何其他档案不一定完整，在每一种情况下，我们都请您参考合同或其他档案的副本作为登记声明的证物提交的档案。这些陈述中的每一种都受本参考文献的所有方面的限制。你可以在美国证券交易委员会的网站www.sec.gov上阅读我们的美国证券交易委员会备案档案，包括注册声明。	11.3%	3月31日，	13.0%
截至	10.3%	3月31日，	11.8%

	截至 3月31日，		iLearningEngines Inc.（历史） Arrowroot Acquisition Corp.（历史）		交易会计调整备考合并
	(%)		(%)		(%)
资产	19.3%	易变现资产	17.4%	现金	22.8%
一	16.0%	B	17.0%	应收帐款	20.2%
合约资产	11.7%	预付费用	14.9%	预缴所得税	13.1%
易变现资产总额	11.9%	非易变现资产	14.3%	信托账户中持有的现金和投资	11.0%
-	-	一	10.3%	-	-

应收技术合作伙伴款项

其他资产递延税项资产递延交易成本

B非易变现资产总额总资产负债

	流动负债应付帐款
应计费用	2024		2023
长期债务的流动部分，净	$	478,941	$	357,282

	未经审核的形式凝结合并余额片截至2024年3月31日
（美金单位：千）	2023		2022		2021
截至	$	447,343	$	313,667	$	224,332

3月31日， 截至

3月31日，

截至 3月31日，iLearningEngines Inc.（历史）

Arrowroot Acquisition Corp.（历史）交易会计调整备考合并

	合约负债应付薪津税
	2024			2023
贷款重组		132	%		125	%

	其他流动负债
	2023			2022			2021
应付消费税		125	%		117	%		139	%

本票-关联方

远期购买协议责任

可转换商业本票-相关党

流动负债总额

非流动负债

	可换股票据令状责任
	2024			2023
G	$	(25,935	)	$	451
n		1,986			1,588
支付给技术合作伙伴		1,222			(152	)
其他非流动负债		54			26
应付延期承保费		(22,673	)		1,913
非流动负债总额		-			60
总负债⁽¹⁾		1,060			26
承诺和意外情况		15,118			280
可能赎回的A类普通股，0.0001美金面值		5,465			-
H		10,041			-
O	$	9,011		$	2,279

	承诺和意外情况总额
	2023			2022			2021
	股权
股东（赤字）权益	$	(4,407	)	$	11,466		$	2,521
普通股：面值0.0001美金		6,274			6,614			5,047
未经审核的形式凝结合并余额片		2,157			(5,975	)		32
截至2024年3月31日		128			77			-
（美金单位：千）		4,152			12,182			7,600
截至		45			21			3
3月31日，		-			-			39
截至 ⁽¹⁾		4,280			709			159
3月31日，		771			(248	)		83
截至		14,147			-			-
3月31日，	$	23,395		$	12,664		$	7,884

(1)	iLearningEngines Inc.（历史）

Arrowroot Acquisition Corp.（历史）

交易会计调整

备考合并 Kb类普通股，面值0.0001美金借记资本公积

B F e H

J K

n预付远期购买协议

累计赤字 B

e J股东（赤字）权益总额权益总额

负债和权益总额

请参阅随附的未经审计的形式精简注释合并财务信息。

未经审计的形式浓缩合并报表操作截至2024年3月31日的三个月（美金单位：千）

为

日止期间

3月31日，为日止期间

三月 31,

为日止期间三月 31,

iLearningEngine Inc.（历史）Arrowroot Acquisition Corp.（历史）

交易会计调整

备考合并

收入

收入成本毛利业务费用

销售、一般和管理费用

BB研发费用总运营支出

营运收入（亏损）

利息开支

认购证负债公允价值变化

可转换票据公允价值变化

贫困损失

汇兑亏损

减少延期承销费

信托账户中持有的现金和投资赚取的利息

不赎回对价

所得税费用前净亏损

	所得税（费用）福利 JJ						净亏损每股普通股净亏损-基本和稀释			加权平均已发行普通股-基本和稀释
每股净亏损，A类普通股-基本和稀释	2024			2023			A类普通股加权平均发行股数 - 基本及摊薄			每股净亏损，b类普通股-基本和稀释
b类普通股加权平均发行股数 - 基本及摊薄	$	124,935		$	93,980		$	30,955			32.9	%
请参阅随附的未经审计的形式精简注释合并财务信息。		38,714			31,551			7,163			22.7	%
未经审计的形式浓缩合并报表操作		86,221			62,429			23,792			38.1	%
截至2023年12月31日的年度
（美金单位：千）		41,223			31,612			9,611			30.4	%
为		37,099			28,582			8,517			29.8	%
止年度		78,322			60,194			18,128			30.1	%
十二月 31,		7,899			2,235			5,664			253.4	%
为
止年度		(1,986	)		(1,588	)		(398	)		25.1	%
十二月 31,		(15,118	)		(280	)		(14,838	)		5,299.3	%
为		(5,465	)		-			(5,465	)		止年度
十二月 31,		(10,041	)		-			(10,041	)		iLearningEngine
Inc.（历史）		-			(60	)		60			Arrowroot Acquisition Corp.（历史）
交易会计调整		(2	)		(8	)		6			备考合并
收入		(32,612	)		(1,936	)		(30,676	)		1,584.5	%
收入成本		(24,713	)		299			(25,012	)		毛利
业务费用		(1,222	)		152			(1,374	)		销售、一般和管理费用
AA	$	(25,935	)	$	451		$	(26,386	)		BB

研发费用

总运营支出

营运收入（亏损）

	利息开支 ee
DD	2024			2023			认购证负债公允价值变化		FF
GG	$	51,873		$	34,795		$	17,078		49.1	%
可转换票据公允价值变化		41.5	%		37.0	%
hh	$	54,317		$	45,011		$	9,306		20.7	%
远期购买协议公允价值变更		43.5	%		47.9	%
会	$	18,745		$	14,174		$	4,571		32.2	%
信托账户中持有的现金和投资赚取的利息		15.0	%		15.1	%
其他收入	$	124,935		$	93,980		$	30,955		32.9	%

所得税(费用)利益前净亏损

所得税（费用）福利

净亏损

每股普通股净亏损-基本和稀释

加权平均已发行普通股-基本和稀释

每股净亏损，A类普通股-基本和摊薄

A类普通股加权平均流通股 -基本的和稀释的

	每股净亏损，B类普通股--基本和摊薄 B类普通股加权平均流通股 -基本的和稀释的
见未经审计的备考表格附注综合财务资讯。	2024			2023			关于未经审计备考简明附注的修订披露综合财务资讯			附注：1.列报依据
企业合并正在核算中作为根据公认会计准则进行的反向资本重组，iLearningEngines已被确定为会计收购人，主要是由于iLearningEngines将控制新的iLearningEngines。在这种会计方法下，而ArrowRoot是合法的为了财务报告的目的，它被视为“被收购的”公司。相应地，企业合并被视为相当于iLearningEngines为ArrowRoot的净资产发行股票，同时进行资本重组。这个 Arrowroot的净资产按历史成本列报，未记录商誉或其他无形资产。业务之前的运营它们的组合是iLearningEngines。	$	38,714		$	31,551		$	7,163			22.7	%
以下未经审计的形式简明合并截至2024年3月31日的资产负债表假设业务合并发生在2024年3月31日。未经审计的备考表格浓缩了截至2024年3月31日止三个月的合并经营报表及经审计的形式简明综合经营报表截至2023年12月31日的年度向业务合并提出形式上的效力，犹如其已于1月1日完成， 2023年。		69.0	%		66.4	%		2.6	%

未经审计的备考压缩合并余额截至2024年3月31日的报表和截至2024年3月31日的三个月的未经审计的形式简明合并经营报表以及截至2023年12月31日的年度，编制时使用了以下内容，并应结合以下内容阅读：

●

ILearningEngines截至2024年3月31日的未经审计简明综合资产负债表和截至2024年3月31日的相关附注，包括在本表格S-1的其他部分。

●

	十二月 31, 预计净亏损
加权平均股价突出、基本和稀释	2024			2023			普通股股东应占每股基本亏损和稀释后每股净亏损			AS 已发行的14,374,975股公募认股权证和8,250,000股私募认股权证都是现金外的，包括它们在库存股方法下会有反摊薄作用，则不计入每股摊薄亏损的计算。
32,151,912 在收盘时，新iLearningEngine的限制性股票和6954,620个RSU的流通股不在计算范围内因为它们的纳入将是反稀释的。	$	41,223		$	31,612		$	9,611			30.4	%
不包括1,019,999股需注销的股票。若本公司于(I)2024年4月15日或之前偿还定期贷款，则90%的贷款重组股份将被注销；(Ii)2024年5月1日，则80%的贷款重组股份将被注销；及(Iii)2024年7月1日，则50%的贷款重组股份将被注销。		33.0	%		33.6	%		(0.6	)%

指数财务报表

箭根收购公司。

	页面未经审计的财务 ILEARNINGENGINES，Inc.声明(前身为ArrowRoot收购公司)：
截至2024年3月31日(未经审计)和2023年12月31日的简明综合资产负债表	2024			2023			截至2024年3月31日和2023年3月31日的三个月未经审计的合并业务简明报表			截至2024年3月31日和2023年3月31日的三个月未经审计的股东赤字综合变动表
截至2024年3月31日和2023年3月31日的三个月未经审计的现金流量表简明合并报表	$	37,099		$	28,582		$	8,517			29.8	%
未经审计简明合并财务报表附注		29.7	%		30.4	%		(0.7	)%

页面

ArrowRoot收购公司经审计的财务报表：

独立特许会计师事务所报告

	截至2023年和2022年12月31日的合并资产负债表伊利诺州宁根根尼斯公司
（原名Arrowroot Acquisition Corp.）	2024			2023			浓缩合并资产负债表			3月31日，
12月31日，	$	1,986		$	1,588		$	398			25.1	%
资产		1.6	%		1.7	%		(0.1	)%

（未经审计）

易变现资产

	现金预付费用
预缴所得税	2024			2023			易变现资产总额			% 信托账户中持有的现金和投资
总资产	$	15,118		$	280		$	14,838			5,299.3	%
A类普通股票可能受到赔偿和股东缺陷的责任		12.1	%		0.3	%		11.8	%

流动负债

应付帐款和应计费用

	应付消费税本票-关联方
远期购买协议责任	2024			2023		可转换商业本票-关联方			流动负债总额
应付延期承保费	$	5,465		$	-	$	5,465			认股权证负债
总负债		4.4	%		-		4.4	%

承诺和意外情况

可能赎回的A类普通股，美金

	面值; 和
已发行和发行股票约为美金	2024			2023		和$			截至2024年3月31日和2023年12月31日的每股赎回价值
股东赤字	$	10,041		$	-	$	10,041			优先股，美金
面值;		8.0	%		-		8.0	%

授权股份;

没有一

	截至2024年3月31日和2023年12月31日已发行或未偿还 A类普通股，美金
面值;	2024			2023			授权股份，			没有一
截至2024年3月31日和2023年12月31日，已发行和未发行（不包括可能赎回的1，017，030和4，445，813）	$	(1,222	)	$	152		$	(1,374	)		b类普通股，美金
面值;		(1.0	)%		0.2	%		(1.2	)%

授权股份;

截至2024年3月31日和2023年12月31日已发行和发行股票

	借记资本公积									累计赤字						股东赤字总额
A类普通股票可能受到赔偿和股东违约的总负债	2023			2022			2021			随附注释是未经审核简明综合财务报表			ILEARNINENGINES，Inc.			（原名Arrowroot Acquisition Corp.）			浓缩合并运营报表
（未经审计）	$	420,582		$	309,170		$	217,867		$	111,412		$	91,303			36.0	%		41.9	%
为止三个月		132,154			93,890			64,834			38,264			29,056			40.8	%		44.8	%
三月 31,		288,428			215,280			153,033			73,148			62,247			34.0	%		40.7	%
一般及行政费用
经营亏损		140,897			105,966			74,434			34,931			31,532			33.0	%		42.4	%
其他（损失）收入：		128,544			97,436			70,913			31,108			26,523			31.9	%		37.4	%
认购证负债公允价值变动		269,441			203,402			145,347			66,039			58,055			32.5	%		39.9	%
免除延期承保佣金的收益		18,987			11,878			7,686			7,109			4,192			59.9	%		54.5	%
不赎回对价
利息发票-商业本票		(6,274	)		(6,614	)		(5,047	)		340			(1,567	)		5.1	%		31.0	%
现金和投资赚取的利息保存在信托账户中		(771	)		248			(83	)		(1,019	)		331			其他（损失）收入总额，净			所得税拨备前损失
所得税拨备		(14,147	)		-			-			(14,147	)		-			净亏损			加权平均流通股， A类普通股
每股基本和稀释净亏损，A类普通股		(45	)		(21	)		(3	)		(24	)		(18	)		加权平均流通股， b类普通股			每股基本和稀释净亏损，b类普通股
随附注释是未经审计的简明综合财务报表。		(21,237	)		(6,387	)		(5,133	)		(14,850	)		(1,254	)		ILEARNINENGINES，Inc.			24.4	%
（原名Arrowroot Acquisition Corp.）		(2,250	)		5,491			2,553			(7,741	)		2,938			浓缩合并变更声明股东赤字			（未经审计）
截至2024年3月31日的三个月		(2,157	)		5,975			(32	)		(8,132	)		6,007			类一			共同股票
类 B	$	(4,407	)	$	11,466		$	2,521		$	(15,873	)	$	8,945			共同股票			额外

实收

积累

总

	股东股份
量	2023			2022			股份		量
资本	$	162,854		$	138,048		$	24,806		18.0	%
赤字		38.7	%		44.7	%
赤字		194,886			116,112			78,774		67.8	%
余额-2024年1月1日（已审计）		46.4	%		37.5	%
A类普通股的加入可能存在赎回		62,842			55,010			7,832		14.2	%
减少延期承销费		14.9	%		17.8	%
不赎回协议的考虑	$	420,582		$	309,170		$	111,412		36.0	%

净亏损

余额-2024年3月31日（未经审计）

截至2023年3月31日的三个月

A类普通股

b类

普通股

额外

实收

积累

	总股东
股份	2023			2022			量			股份
量	$	132,154		$	93,890		$	38,264			40.8	%
资本		68.6	%		69.6	%		(1.0	)%

赤字

余额-2023年1月1日（已审计）

A类普通股的加入须赎回

	净亏损余额-2023年3月31日（未经审计）
随附注释是未经审计的简明综合财务报表。	2023			2022			ILEARNINENGINES，Inc.			（原名Arrowroot Acquisition Corp.）
简明综合现金流量表	$	140,897		$	105,966		$	34,931			33.0	%
（未经审计）		33.5	%		34.3	%		(0.8	)%

止三个月

三月 31,

	经营活动产生的现金流：净亏损
调整以调节净亏损与经营中使用的净现金活动：	2023			2022			减少延期承销费			不赎回对价
信托账户中持有的投资赚取的利息	$	128,544		$	97,436		$	31,108			31.9	%
认购证负债公允价值变动		30.6	%		31.5	%		(0.9	)%

经营资产和负债变化：

预付费用

预付所得税

	应计费用应付所得税
所用现金净额经营活动	2023			2022			投资活动的现金流：			信托账户现金投资
从信托账户提取现金用于支付特许经营权课征义务	$	6,274		$	6,614		$	340			5.1	%
从信托账户提取现金与赎回的联系		1.5	%		2.1	%		0.6	%

提供的净现金通过投资活动

融资活动产生的现金流：

	商业本票收益-关联方不可转换商业本票收益-关联方
可转换商业本票收益-相关党	2023			2022			普通股赎回			所用现金净额融资活动
现金净变化	$	(771	)	$	248		$	(1,019	)		现金-期末
现金-期末		(0.2	)%		0.1	%		(0.3	)%

非现金投资和融资活动：

减少延期承销费

	不赎回对价补充现金流信息：
(前身为ArrowRoot收购公司。)	2023			2022		未经审计的简明综合财务报表附注报表			2024年3月31日
业务合并	$	(14,147	)	$	-	$	(14,147	)		2023年4月27日，本公司(前身为作为ArrowRoot收购公司)与以下人士订立合并重组协定及计划(下称“合并协定”) ARAC合并子公司，是特拉华州的一家公司，也是ArrowRoot收购公司的全资子公司(“合并子”)，以及特拉华州公司iLearningEngines Inc.(“Legacy iLearningEngines”)。
合并协定规定，除其他外，在符合条款和条件的情况下，将发生以下交易(连同其他交易合并协定预期的：		(3.4	)%		于业务合并结束时(“结束”)，根据经修订的特拉华州一般公司法(“DGCL”)，Merge Sub将与Legacy iLearningEngines合并并并入Legacy iLearningEngines，Merge Sub的独立法人地位将终止，而Legacy iLearningEngines将成为尚存的法团(“尚存公司”)和公司的全资附属公司(“合并”)；以及		(3.4	)%

由于合并(其中包括)，iLearningEngines的普通股流通股(受Legacy Legacy iLearningEngines股权奖励、库存股和异议股份约束的股份除外)将被注销，以换取获得相当于(X)(I)基本购买价(定义如下)减去(Ii)公司奖励金额(定义如下)的美元价值减去(Iii)在紧接生效时间之前发行和发行的公司认股权证的总行使价(定义见合并协定)的若干尚存公司普通股的权利。*减去(Iv)票据余额总额(定义见合并协定)除以(Y)$

。“基本购买价格”指的是等于$的金额。

	。“公司奖励金额”是指(X)可向Legacy iLearningEngines证券持有人(为免生疑问，不包括公司可转换票据持有人)发行的公司A类普通股数量，且Legacy iLearningEngines和公司在交易结束前至少两(2)个工作日同意向某些私募投资者和非赎回股东发行(金额将相等向这些投资者和非赎回股东发行的所有此类股份的%，其余部分由保荐人出资)，乘以(Y)$
本公司董事会(以下简称“董事会”) 是否(I)批准并宣布合并协定和企业合并为可取的，以及(Ii)决定建议批准公司股东的合并协定及相关事项。	2023			2022			合并协定以清偿为准或放弃某些惯常的成交条件，除其他外，包括(1)批准企业合并和相关协定以及本公司和Legacy iLearningEngines各自股东之间的交易，(Ii)注册声明的有效性公司提交的与企业合并有关的S-4表格，(Iii)等待期届满或终止根据《哈特-斯科特-罗迪诺反托拉斯改进法》，(四)没有任何禁令、命令、法规、规则或条例禁止或禁止完成合并；(V)公司至少有$			结算时的有形资产净值和(Vi) 获批准于纳斯达克上市尚存公司的普通股将于合并。
公司义务的其他条件为完成合并，除其他事项外，(I)Legacy iLearningEngines应已履行所有公约在所有重大方面，及(Ii)双方之间不会发生任何重大不利影响(定义见合并协定) 合并协定的签订日期和结束日期。	$	(2,157	)	$	5,975		$	(8,132	)		遗留iLearningEngines的其他条件完成合并的义务包括，除其他外，(I)公司应已履行所有契诺在所有重大方面：(Ii)双方之间不会发生收购重大不利影响(定义见合并协定) 合并协定和完成的日期以及(Iii)信托账户中可用现金的金额，几乎所有本公司首次公开招股及私募认股权证所得款项已存入公众股东，连同在公司或Legacy iLearningEngines之前的某些私募投资的收益完成合并，并遵守合并协定中规定的扣减和条件，包括对公司的某些扣减交易费用，至少等于或大于$
ILEARNINGENGINES，Inc.		(0.5	)%		1.9	%		(2.4	)%

(前身为ArrowRoot收购公司。)

未经审计的简明综合财务报表附注报表

2024年3月31日

	合并协定包含额外的契约，除其他外，包括规定(I)当事各方在结束之前在正常过程中开展各自的业务， (Ii)各方不得就某些替代交易招揽、启动任何谈判或订立任何协定；。(Iii)遗产 ILearningEngines编制并向公司交付某些已审计和未经审计的遗留简明合并财务报表 ILearningEngines，(Iv)本公司编制及提交S-4表格注册说明书，并采取若干其他行动以获取需要公司股东批准有关企业合并的某些建议，以及(V)各方尽最大努力从政府机构获得必要的批准。 2024年4月16日，ArrowRoot收购公司。 (现在称为iLearningEngines，Inc.)是我们的前身，是特拉华州的一家公司，完成了之前宣布的业务合并根据截至2023年4月27日ArrowRoot收购的特定合并和重组协定和计划公司、Arac Merge Sub，Inc.(合并子公司)和Legacy iLearningEngines。合并子公司与Legacy iLearningEngines合并随著合并子公司的独立存在和Legacy iLearningEngines作为全资子公司生存下来公司的成员。随著业务合并的结束，ArrowRoot收购公司更名为iLearningEngines，有关更多资讯，请参见2024年4月22日提交给美国证券交易委员会的8-K表格。
流动性和持续经营	2022			2021			2021年12月29日，公司发行了一份无担保与保荐人的可转换本票(“第一本票”)，保荐人据此同意借出公司本金总额不超过$		。发行时，$
在钞票上注明了额外的$	$	138,048		$	126,371		$	11,677		9.2	%
抽签日期为2022年3月17日。2022年4月21日，公司提取了剩余的美元		44.7	%		58.0	%
根据第一张期票的条款注意。在这一提款之后，全额$	$	116,112		$	47,953		$	68,159		142.1	%
第一张期票下的可用现金尚未支付。没有剩余的资金了在第一张期票项下可用于今后的提款。截至2024年3月31日和2023年12月31日，美元		37.5	%		22.0	%
都是杰出的在这张第一张本票项下。	$	55,010		$	43,543		$	11,467		26.3	%
第一张本票以保荐人的批准，不承担利息。本票的本金余额将在下列日期中最早的日期支付：本公司完成其初始业务合并或(Ii)本公司清盘生效之日(该日、 “到期日”)。在公司完成其初始业务合并的情况下，保荐人可以选择将第一张本票项下未偿还本金的全部或任何部分转换为该数目的认股权证的到期日 (“营运资金认股权证”)相当于被转换的第一张本票本金的部分按$		17.8	%		20.0	%
，向上舍入到最接近的整数。营运资金认股权证的条款(如果有的话)将与本公司于首次公开发售时发行的私募认股权证，如首次公开募股日期为2021年3月1日，并提交给美国证券交易委员会，包括适用的转让限制。第一个本票受惯例违约事件的影响，其中某些违约事件的发生会自动触发未付本金第一张本票的余额和与第一张本票立即到期有关的所有其他应付款项，以及应付款项。	$	309,170		$	217,867		$	91,303		41.9	%

2023年2月23日，公司发行了一份无担保本金金额为#美元的本票

以保荐人(“第二张期票”)为受益人，已获资助保荐人在签立第二张本票时全额付款。第二张本票不能转换为营运资金认股权证或根据其条款提供的任何其他担保。截至2024年3月31日和2023年12月31日，该公司拥有

杰出的本第二期期票项下的余额。

ILEARNINGENGINES，Inc.

(前身为ArrowRoot收购公司。)

未经审计的简明综合财务报表附注报表

2024年3月31日

与公司的批准有关延长日期的股东在特别会议上，保荐人向公司发行了一张到期的无担保本票公司完成初始业务合并时(“第三期本票”)。遵循延期建议获得批准后，赞助商资助了$

每股，可予调整(见附注8)。私募认股权证的部分收益加入首次公开募股的收益存放在信托账户中。如果公司没有在以下时间完成业务合并在合并期间，出售信托户口内持有的私募认股权证所得款项将用作赎回公开股份(受适用法律要求的约束)，以及私募认股权证的到期将一文不值。

	Ilearninggenines，公司 (前身为ArrowRoot收购公司。)
未经审计的简明综合财务报表附注报表	2022			2021			2024年3月31日			附注5.关联方交易
创始人股份	$	93,890		$	64,834		$	29,056			44.8	%
2020年11月，赞助商购买了		69.6	%		70.2	%		(0.6	)%

公司B类普通股的股份(“方正股份”)，总价为$

。后来， 2020年12月，公司实施了4股中5股的拆分，据此又增加了一笔

B类普通股股份已发行，导致总计

方正股份已发行并已发行。方正股份包括总计最高可达

	方正股份因承销商超额配售未完全行使而遭没收或部分，以便方正股票的数量在折算后的基础上大约等于公司已发行股票的百分比和首次公开发行后的已发行普通股。2021年1月，赞助商将
方正股份分给每个人三家董事提名者中，没有一家在承销商的超额配售选择权被没有完全行使。由于承销商被选举全面行使其2021年3月4日的超额配售选择权，	2022			2021			没有			方正股份目前被没收。
将创办人的股份转让给公司董事被提名者属于财务会计准则委员会第718主题“薪酬-股票薪酬”(“ASC718”)的范围。在……下面根据ASC 718，与股权分类奖励相关的基于股票的薪酬在授予日按公允价值计量。创建者根据业绩条件(即企业合并的发生)，股票有效转让。补偿与方正股份相关的费用仅在符合适用条件的情况下才确认在这种情况下的会计文献。基于股票的薪酬将在考虑企业合并之日确认很可能(即企业合并完成后)的金额等于创办人股份数乘以授予日期每股公允价值(除非后来修改)。	$	105,966		$	74,434		$	31,532			42.4	%
赞助商已同意，除有限的例外情况外，不得转让、转让或出售创始人的任何股份，直至(A)在企业完成一年后发生的较早者合并和(B)企业合并后，(X)如果A类普通股的最后报告销售价格等于或超过 $		34.3	%		34.2	%		0.1	%

每股(按股票拆分、股票资本化、重组、资本重组等调整后)

包销协议

	承销商有权获得递延费用。共$ 每单位，或$
总体而言。递延费用将从持有的金额中支付给承销商仅在公司完成业务合并的情况下，在符合承销协定条款的情况下，信托账户。	2022			2021			2024年3月27日，公司与康托·菲茨杰拉德签署了一项减费协定，承销商在协定中被没收			%的用户延期承销佣金导致减少#美元
带著剩余的$	$	97,436		$	70,913		$	26,523			37.4	%
这是延期支付的业务合并。美元的减少		31.5	%		32.5	%		(1.0	)%

导致从免除递延承销佣金中获益 $

记为应在损益表上支付的承销费的减少和$

已记入累计赤字。

	合并协议如附注1中更详细地描述的，4月1日 2023年27日，本公司签订合并协定。
合并	2022			2021			合并协定规定，除其他外，在符合条款和条件的情况下，将发生以下交易(连同其他交易合并协定预期的)：			于结束时，根据DGCL，Merge Sub将与Legacy iLearningEngines合并及并入Legacy iLearningEngines，Merge Sub的独立法人地位将终止，而Legacy iLearningEngines将成为尚存的法团及本公司的全资附属公司；及
作为合并的结果，iLearningEngines的普通股流通股(受Legacy iLearningEngines股权奖励、库存股和异议股份约束的股份除外)将被注销，以换取相当于(X)(I)基本购买价(定义如下)减去(Ii)公司激励金额(定义如下)的总和，加上(Iii)在紧接生效时间之前发行和发行的公司认股权证的总行使价(定义见合并协定)的若干尚存公司普通股的权利。减去(Iv)票据余额总额(定义见公司可转换票据(定义见合并协定))除以(Y)$	$	6,614		$	5,047		$	1,567			31.0	%
。“基本购买价格”指的是等于$的金额。		2.1	%		2.3	%		(0.2	)%

。“公司奖励金额”是指(X)可向Legacy iLearningEngines证券持有人(为免生疑问，不包括公司可转换票据持有人)发行的公司A类普通股数量，且Legacy iLearningEngines和公司在交易结束前至少两(2)个工作日同意向某些私募投资者和非赎回股东发行(金额将相等

向这些投资者和非赎回股东发行的所有此类股份的%，其余由保荐人出资)，乘以(Y)$

	说明7.股东的赤字优先股
公司获授权签发	2022			2021			面值为美金的优先股			具有此类指定、权利和优先顺序的每股由公司董事会不时决定。截至2024年3月31日和2023年12月31日，已有
没有	$	248		$	(83	)	$	331			已发行或发行的优先股。
A类普通股		0.1	%		的公司有权发布			0.1	%

面值为美金的A类普通股

每股持有人

	A类普通股票每股有一票投票权 .截至2024年3月31日和2023年12月31日，已有
和	2022			2021			股份分别已发行和发行的A类普通股，可能会赎回并呈列为临时股权。			b类普通股
的公司有权发布	$	5,975		$	(32	)	$	6,007			面值为美金的b类普通股股票
每股持有人		1.9	%		b类普通股票每股有一票投票权			1.9	%

一旦认股权证可行使，本公司可要求赎回认股权证以换取现金：

●

全部而不是部分;

●售价为$每张搜查令；●不少于

提前几天向每位凭证持有人发出书面赎回通知;以及

●

当且仅当普通股的收盘价等于或超过$

每股(作为调整后的股票拆分、股票资本化、重组、资本重组等)

a内交易日

-自认股权证可行使后至本公司向认股权证持有人发出赎回通知前三个工作日结束的交易日。

如果和何时认股权证可以通过以下方式赎回为换取现金，即使无法登记标的证券或使标的证券符合资格，公司仍可行使赎回权根据所有适用的州证券法出售。

如果公司要求公开认股权证赎回，如上所述，其管理层将有权要求任何希望行使公共认股权证的持有人这样做认股权证协定中所描述的“无现金基础”。可发行A类普通股的行权价格和发行数量在行使公共认股权证时，可在某些情况下进行调整，包括在派发股息的情况下，非常分红或资本重组、重组、合并或合并。但是，除非如下所述，公共认股权证不会以低于行使价的价格发行普通股进行调整。此外，在任何情况下，本公司都不需要以现金净额结算公开认股权证。如果公司无法在合并期内完成业务合并，并且本公司清算信托账户中持有的资金，认股权证持有人将不会收到任何此类资金他们也不会从公司持有的信托账户以外的资产中获得任何分配尊重此类公共授权证。因此，公开认股权证可能会到期变得毫无价值。

此外，如果(X)公司发布了额外的为筹集资金而发行的A类普通股或股权挂钩证券的股票，与其首次公开募集的以低于美元的发行价或有效发行价进行业务合并

每股A类普通股(发行时) 价格或有效发行价由公司董事会真诚确定，如果是任何此类发行，保荐人或其关联公司，不考虑保荐人或该关联公司(视情况适用)持有的任何方正股份，发行前)(“新发行价”)，(Y)该等发行的总收益超过

可用于为公司最初的业务合并提供资金的股权收益总额的%及其利息初始业务合并完成之日(扣除赎回)，以及(Z)成交量加权平均公司A类普通股自下一个交易日起20个交易日内的价格公司完成其初始业务合并(该价格，“市值”)低于$

每股，行权认股权证的价格将调整为(最接近的)等于

用现金支付。在截至2024年3月31日的三个月内，公司提取了一笔$

信托账户的利息收入支付特许经营税和所得税以及$

与赎回有关。

下表提供有关以下内容的资讯本公司截至2024年3月31日和12月31日按公允价值经常性计量的资产和负债， 2023，并显示公司用来确定该公允价值的估值投入的公允价值层次：

描述

水平

3月31日，

12月31日，

	资产：信托账户中的现金和投资
负债：	2024			2023
认股权证法律责任--公开认股权证	$	(3,610	)	$	(2,200	)
认股权证负债-私募认股权证	$	(9	)	$	-
远期购房协定	$	(2,329	)	$	2,937

	认股权证作为负债入账。根据美国会计准则815-40，并在附带的未经审计的简明综合余额中的认股权证负债内列报床单。认股权证负债在开始时按公允价值计量，并按经常性基础计量，并按公允价值变动列示。未经审计的简明综合经营报表内认股权证负债的公允价值变动。
私募认股权证的估值方式为修正的布莱克·斯科尔斯期权定价模型，该模型被认为是公允价值计量的第三级。修改后的布莱克·斯科尔斯模型在确定私募认股权证公允价值时使用的主要不可观察的输入是预期波动率普通股。于首次公开发售日期之预期波动率乃根据可见公开认股权证定价计算。在没有确定目标的可比“空白支票”公司上。截至后续估值日期的预期波动率是从公司自己的公共认股权证定价中隐含的。用蒙特卡罗类比方法对交易会进行了评估在没有可见交易价格的期间，使用与所用相同的预期波动率计算的认股权证的价值在衡量私募认股权证的公允价值时。在认股权证与于有关单位内，公开认股权证的收市价被用作公开认股权证于各相关日期的公允价值。测量公权证脱离单位后的公权证由于使用了可观察对象而被归类为1级活跃市场中的市场报价。	2023			2022			2021
ILEARNINGENGINES，Inc.	$	(16,166	)	$	(8,943	)	$	(8,234	)
(前身为ArrowRoot收购公司。)	$	(24	)	$	161		$	(18	)
未经审计的简明综合财务报表附注报表	$	22,097		$	5,231		$	6,729

2024年3月31日

远期购买协议的衡量标准为

股票价格为美金

每股这被视为第3级公允价值计量，因为价格基于合同不基于反映报价的可观察输入的金额。

修改后的布莱克斯科尔斯的关键输入 3级令的模型如下：

输入

3月31日，

12月31日，

公众股票市场价格

无风险利率

股息率

行使价

波动

至到期期限（年）

下表列出了第3级担保凭证负债的公允价值：

私人

放置

截至2024年1月1日的公允价值

公平值变动

截至2024年3月31日的公允价值

私人

我们根据PCAOB的标准进行审计。这些标准要求我们计划和执行审核以获得关于合并财务报表是否没有重大错报的合理保证，无论是由于错误还是舞弊。本公司并无被要求对其财务报告的内部控制进行审计，我们也没有受聘进行审计。作为一部分在我们的审计中，我们被要求了解财务报告的内部控制，但不是为了表达关于公司财务报告内部控制有效性的意见。因此，我们不表达这样的意见。

我们审计包括执行程式以评估合并财务报表重大错误陈述的风险，是否由于错误或欺诈，并执行应对这些风险的程式。此类程式包括在测试的基础上检查证据有关综合财务报表中的金额和披露。我们的审计还包括评估会计原则管理层所使用的重大估计，以及评估合并财务报表的整体列报方式。我们相信我们的审计为我们的意见提供了合理的基础。

我们自2020年以来一直担任本公司的审计师。

/S/WithumSmith+Brown，PC

新纽约州纽约市

四月 1,2024

PCAOB 100号

箭根收购公司。

综合资产负债表

12月31日，

资产

易变现资产

现金

预付费用

预付所得税

总易变现资产

现金和信托账户中的投资

总资产

负债， A类普通股可能面临赎回和股东亏损

电流负债

账户应付和应计费用

收入应课征额

消费应课征额

承兑注-关联方

向前购买协议责任

可换股商业本票-关联方

总流动负债

递延应付承保费

令负债

总负债

承诺和应急预案

可能赎回的A类普通股，美金

面值;

和

已发行和发行股票约为美金

和$

截至2023年12月31日和2022年12月31日的每股赎回价值

股东赤字

优先股，美金

面值;

授权股份;

没有一

截至2023年和2022年12月31日已发行或未偿还

A类普通股，美金

面值;

授权股份，

没有一

截至2023年和2022年12月31日，已发行和未发行（不包括可能赎回的4，445，813和28，750，000份）

b类普通股，美金

面值;

授权股份;

截至2023年和2022年12月31日已发行和发行股票

积累赤字

总股东赤字

总 A类普通股票可能受到赔偿和股东缺陷的责任

的随附附注是合并财务报表的组成部分。

竹芋 ACQUISITION Corp.

综合经营报表

止年度

12月31日，

止年度

12月31日，

一般及行政开支

损失经营

其他收入（费用）：

变化以认购证负债的公允价值计算

远期收购协议

兴趣费用-商业本票

兴趣通过信托账户中持有的现金和投资赚取

总其他收入（费用），净额

（损失）所得税拨备前的收入

提供所得税

净（损失）收入

加权平均流通股，A类普通股

A类普通股每股基本和稀释净（损失）收益加权平均流通股，b类普通股

b类普通股每股基本和稀释净（损失）收益

的随附附注是合并财务报表的组成部分。竹芋 ACQUISITION Corp.

综合股东亏损变动说明

为截至2023年和2022年12月31日的年份类一

共同股票

类 B共同股票

额外

实收积累

总

股东股份

量

股份量

资本

赤字赤字

平衡 - 2022年1月1

吸积可能赎回的A类普通股净收入

平衡 - 2022年12月31日

吸积可能赎回的A类普通股消费赎回普通股应缴税款

净损失

平衡 - 2023年12月31日的随附附注是合并财务报表的组成部分。

竹芋 ACQUISITION Corp.

综合现金流量表止年度

12月31日，

止年度 12月31日，

现金运营活动的流量：

净（损失）收入

调整将净（损失）收入与经营活动中使用的净现金进行调节：

兴趣通过信托账户中持有的现金和投资赚取变化以认购证负债的公允价值计算

远期收购协议

变化在经营资产和负债方面：预付费用

预付所得税

应计费用收入应课征额

净经营活动所用现金

现金投资活动的流量：投资现金存入信托账户

现金从信托账户提取以支付特许经营税和所得税

现金因赎回而从信托账户中提取净投资活动提供的现金

现金融资活动的流量：

收益来自商业本票-关联方收益来自可转换商业本票-关联方

赎回普通股

净融资活动提供的现金（用于）净现金变动

现金 - 今年年初

现金 - 今年年底补充现金流信息：

现金缴纳所得税

这个合并协定规定，除其他事项外，根据合并协定的条款和条件，下列交易将发生(连同合并协定预期的其他交易(“业务合并”)：在企业结束时合并(“关闭”)，根据经修订的特拉华州公司法(“DGCL”)， Merge Sub将与iLearningEngines合并，合并Sub和iLearningEngines的独立公司将停止存在将是尚存的法团(“尚存的公司”)及本公司的全资附属公司(“合并”)；和

作为合并的结果，除其他事项外，iLearningEngines的普通股流通股(受iLearningEngines股权奖励的股份、库存股和持不同意见的股份除外)将被注销，以换取获得相当于(X)(I)基本购买价(定义如下)、

减去*(Ii)公司奖励金额的美元价值(定义如下)，

加上

*(Iii)在紧接生效时间前已发行及未偿还的本公司认股权证(定义见合并协定)的行使总价，减去

*(Iv)票据结余总额(定义见合并协定)

除以

(Y)$

。“基本购买价格”指的是等于$的金额。

。“公司奖励金额”指(X)iLearningEngines证券持有人(为免生疑问，不包括公司可转换票据持有人)在收盘时可向iLearningEngine证券持有人发行的公司A类普通股数量，iLearningEngine和公司在收盘前至少两(2)个工作日同意向某些私募投资者和非赎回股东发行A类普通股(金额将等于

向此类投资者和非赎回股东发行的所有此类股份的%，其余由保荐人出资)，

乘以。

(Y)$

这个公司董事会(以下简称“董事会”)已(一)批准并宣布可取的合并协定和业务合并和(Ii)决议建议本公司股东批准合并协定及相关事项。

箭根收购公司。注意到合并财务报表

十二月 2023年3月31日

注意 5.关联交易创始人股份

在……里面 2020年11月，赞助商购买了

公司B类普通股股份(“方正股份”) 总价为$。随后，于2020年12月，本公司进行了4股换5股的股票拆分，据此其他内容

发行了B类普通股，产生了总计

方正股份已发行并已发行。方正股份包括总计高达方正股份可被没收，但承销商的超额配售没有全部或部分行使，因此方正股票的数量在折算后的基础上将大致相等

首次公开招股后公司已发行及已发行普通股的百分比。2021年1月，赞助商将

方正向三名董事提名人中的每一人配售股份，如果承销商的超额配售选择权没有全部行使。由于承销商被选为充分行使其超额配售选项2021年3月4日，没有

方正股份目前被没收。

这个将创办人的股份转让给公司的董事被提名人属于财务会计准则委员会第718主题“薪酬-股票”的范围补偿“(”ASC 718“)。根据ASC 718，与股权分类奖励相关的基于股票的薪酬是衡量的按授予日的公允价值计算。方正股份的有效转让取决于业绩条件(即指企业合并)。与方正股份相关的薪酬支出只有在可能的业绩条件下才会确认在这种情况下，在适用的会计文献下发生的。基于股票的薪酬将在该日期确认企业合并被认为是可能的(即，在企业合并完成后)，金额等于创始人股票乘以授予日期的每股公允价值(除非随后进行修改)。这个发起人已同意，除有限的例外情况外，在较早的情况发生之前，不会转让、转让或出售任何方正股份 (A)企业合并完成后一年及(B)企业合并后，(X)如最后一次报告 A类普通股售价等于或超过$

每股(根据股票拆分、股票资本化、重组、资本重组等)

任何交易日内 -至少开始交易日期间

生意结束后的几天合并，或(Y)公司完成清算、合并、股本交换或其他类似交易的日期这使得所有公共股东都有权将他们的普通股换取现金、证券或其他财产。

行政性支持协定这个公司于2021年3月4日通过公司完成业务的较早日期签订了一项协定合并及其清算，向赞助商支付总计$

BTIG 收费协议

2023年7月25日，BTIG，LLC（「BTIG」）与公司达成达成一份书面协议（「BTIG承诺书」），根据该协议，公司聘请BTIG担任财务顾问与业务合并的联系。注意 7.股东的赤字

优选股票

公司有权发布 面值为美金的优先股

每股港币公司董事会可能不时确定的指定、权利和偏好。截至 2023年和2022年，有

没有已发行或发行的优先股。

类普通股

公司有权发布 面值为美金的A类普通股

每股持有人

A类普通股每股有权获得一票

. 2023年12月31日和2022年12月31日，有

和

分别已发行和发行的A类普通股股份，可能会被赎回并呈列作为临时股权。

类 b普通股

公司有权发布

面值为美金的b类普通股股票

递延税资产，扣除免税额

竹芋 ACQUISITION Corp.

注意到合并财务报表

十二月 2023年31日

收入税收准备金包括以下内容：

年结束

12月31日，

年结束

12月31日，

联邦

电流

递延

状态

电流

递延

变化估值津贴

收入税项拨备

截至2023年和2022年12月31日，公司拥有美金

和$

分别可用于抵消未来应税收入的美国联邦和州净营运亏损结转的金额。

波动

Term 至到期（年）

的下表呈列第三级担保凭证负债公允价值的变化：

私人

放置

截至2023年1月1日的公允价值

公平值变动

截至2023年12月31日的公允价值

私人

放置

截至2022年1月1日的公允价值

公平值变动

截至2022年12月31日的公允价值

转入/转出第1级、第2级或第3级的转移在估值技术或方法发生变化的报告期末确认。有

没有

截至2023年12月31日和2022年12月31日止年度，从第3级测量转移至第1级。

有截至2023年12月31日，远期购买协议的公允价值没有变化。

注意 11.后续事件

的公司评估了资产负债表日后直至合并日期发生的后续事件和交易财务报表已发布。根据此次审查，公司没有发现任何后续事件（以下除外）需要在合并财务报表中进行调整或披露。

公司批准额外提款总计为美金

截至

3月31日，

2024年（未经审计）

12月31日，

资产

易变现资产：

现金

受限制现金

应收帐款，扣除信用损失拨备后分别为510美金和336美金

合约资产

预付费用

易变现资产总额

应收技术合作伙伴款项

应收关联方

其他资产

递延所得税资产，净额

递延交易成本

总资产

负债和股东赤字

流动负债：

应付帐款

应计费用

长期债务的流动部分，净

合约负债

应付薪津税

贷款重组股份负债

其他流动负债

流动负债总额

可换股票据

令状责任

长期债务，净

次级支付给技术合作伙伴

其他非流动负债

总负债

股东赤字：

普通股面值0.0001美金：200，00，000股授权股：2024年3月31日和2023年12月31日已发行和发行的95，782，605股

借记资本公积

累计赤字

股东赤字总额

负债总额和股东赤字

随附注释是这些简明合并财务报表。ILEARNINENGINES，Inc.和子公司浓缩合并运营报表（未经审计）(In千，份额和每股金额除外）.”

100

止三个月

3月31日，

收入

收入成本

毛利

运营费用：

销售、一般和管理费用

研发费用

总运营支出

营运收入

其他费用：

利息开支

认购证负债公允价值变化

可转换票据公允价值变化

债务贫困损失

101

其他费用

汇兑亏损

其他费用总计

所得税前净（损失）收入	所得税（费用）福利	净（损失）收入
*每股净（亏损）收益-基本和稀释*
加权平均已发行普通股-基本	55	加权平均已发行普通股-稀释
随附注释是这些简明合并财务报表。	42	ILEARNINENGINES，Inc.和子公司
股东赤字变化的浓缩合并报表（未经审计）	56	(In数千人，股份金额除外）
额外	61	总
普通股	52	实收
积累
股东^{(1) (3)}	66	股份
量⁽²⁾	55	资本
赤字	56	赤字
2023年12月31日余额⁽¹⁾	61	净亏损
2024年3月31日余额^(1)(2)(3)	73	额外

(1)

总

(2)

普通股

(3)

实收

积累

股东

股份

量

资本

赤字

102

2022年12月31日余额

净收入

2023年3月31日余额

随附注释是这些简明合并财务报表。

ILEARNINENGINES，Inc.和子公司

简明综合现金流量表（未经审计）

(In数千）

止三个月

3月31日，

经营活动中使用的现金流量：

净（损失）收入

将净（损失）收入与经营活动中使用的净现金流量进行调节的调整：

103

折旧及摊销

债务发行成本摊销

递延税的变化

附属应付技术合作伙伴的利息加记

认购证负债公允价值变化

可转换票据公允价值变化

债务贫困损失

当前预期信用损失拨备

经营资产和负债变化：

应收帐款

应收关联方

104

合约资产

预付费用和其他易变现资产

应收技术合作伙伴款项

应付帐款

应计费用和其他负债

合约负债

应付薪津税

递延交易成本

经营活动使用的净现金流量

投资活动产生的现金流量：

购买财产和设备

投资活动使用的净现金流量

融资活动产生的现金流量：

105

定期贷款收益

偿还定期贷款

可转换票据收益

融资活动提供的净现金流量（用于）

现金净变化

现金，年初

现金，期末

此外，修正案规定，如果公司提前支付修改后的定期贷款，则根据公司的选择，公司可以预付金额的50% 本应在预付款日期后通过发行若干新公司股票而应计的预定但未支付的利息支付通过(A)(X)未支付的预定利息付款和(Y)2.75的乘积除以(B)按成交量加权得到的普通股紧接发行日前七(7)个交易日内新公司普通股的平均价格。

贷款重组股份被确定为最初按公允价值计量的负债，随后在收益中计入公允价值变动。贷款重组股份的初始公允价值被确定为2.8亿美元万。提供了贷款重组股份。在随附的综合资产负债表中的“贷款重组份额负债”内。曾经有过于2024年3月27日厘定的初始公允价值日期至2024年3月31日之间的公允价值并无变动。

这项修正案被计算在内作为美国公认会计准则下的债务清偿，本公司于年内因清偿债务而录得1,000美元万损失随附的简明综合经营报表。

公司选择入账用于公允价值期权项下的经修订定期贷款。根据公允价值选择，余额随后按公允价值计量。对于公允价值发生变化的每个报告期，包括因特定工具信用风险而发生的变化，计入收益。经修订定期贷款的初始公允价值被确定为2,600美元万，修订日期为2024年3月27日和2024年3月31日：

修订后的定期贷款

(In数千）

2024年3月27日的公允价值

因特定工具信用风险导致的定期贷款公允价值变动

公允价值剩余变动

截至2024年3月31日的公允价值

2024年4月18日，公司使用现金和159,379股新公司普通股的组合，全额预付修订后的定期贷款。根据时间安排在预付款中，815,999股贷款重组股份被注销。

债务契约遵从性

公司的2020年， 2021年和2023年的定期贷款受契约条款的约束。与及时提交工资税申报单有关的违反公约行为和失败作为修正案的一部分，作为修正案的一部分，各自贷款人免除了200亿美元的万限制性现金。由于获得的豁免，截至2024年3月31日，该公司遵守了所有债务契约。

权证

以下是日程表 2023年12月31日至2024年3月31日期间已发行及未偿还认股权证的变动情况：

单位

截至2023年12月31日未完成

已发行的认股权证

截至2024年3月31日的未偿债务

的公允价值权证负债是使用期权定价模型确定的，见附注11，公允价值计量，以在假设担保责任。

贷款重组股份负债

关于2020年的任期贷款，2021年定期贷款，2023年定期贷款，公司截至2023年12月31日的公允价值接近本金价值。对于向技术合作伙伴支付的附属付款，公司确定公允价值接近于3月的本金价值 2024年12月31日和2023年12月31日。现列载2023年及2024年可换股票据及贷款重组股份负债按每个呈列期间的公允价值计算。

2023年的公允价值和2024年可转换票据、贷款重组股份负债和修订定期贷款采用基于情景的方法进行估计，该方法考虑每个方案中的转换功能和相关收益。

106

中使用的第3级输入截至2024年3月31日，经修订的定期贷款的估值模型包括：

2024年3月31日

兑换活动

预付方

4月15日，

预付方

5月1日，

预付方

七月一日，

坚持住-

成熟性

私下出售

贴现价差

概率

期限匹配无风险利率

中使用的第3级输入截至2024年3月31日的2024年可转换票据的估值模型包括：

2024年3月31日

赎回事件

De-SPAC

交易

持有-

成熟

概率

活动日期时间（年）

折扣价差

无风险利率

折扣收益率

使用的3级输入截至2024年3月31日和2023年12月31日的2023年可转换票据的估值模型包括以下内容：

2024年3月31日

赎回事件

De-SPAC

交易

持有-

成熟

概率

活动日期时间（年）

折扣价差

107

无风险利率

折扣收益率

2023年12月31日

赎回事件

股权

融资

De-SPAC

交易

持有-

成熟

概率

活动日期时间（年）

折扣价差

无风险利率

折扣收益率

认购证的公允价值负债和贷款重组股份负债使用期权定价模型确定，该模型利用以下第3级输入：

2024年3月31日

私人销售场景（5% 可能性）

SPAC场景（95%的可能性）

波动

无风险利率

股息率

6.94美金期权的行使价

10.14美金期权的行使价

缺乏市场流通性折让

Term

0.75年

0.04年

股权价值

股权价值源自贴现现金流的加权平均值、指导公司法和交易方法。

2023年12月31日

私人销售场景（10% 可能性）

SPAC场景（90%的可能性）

波动

无风险利率

股息率

6.94美金期权的行使价

10.14美金期权的行使价

Term

1.0年

108

0.1年

股权价值

股权价值源自贴现现金流的加权平均值、指导公司法和交易方法。

公司负债按经常性基准按公允价值计量的公允价值等级分类如下。

2024年3月31日

1级

2级

3级

总

(In数千）

负债

认股权证负债

修改后的定期贷款

2023年可转换票据

2024年可转换票据

贷款重组股份负债

总负债

2023年12月31日1级2级

3级

总

109

(In数千）

负债

令状责任

2023年可转换票据

总负债

下表总结了以下活动公司按公允价值计量的第三级负债：

令状责任

可换股票据

贷款重组

修改后的定期贷款

(In数千）

截至2023年12月31日余额

发行

公平值变动

截至2024年3月31日余额

在结束的三个月里 2024年3月31日和2023年3月31日，第1级和第2级之间没有转移，也没有转入和转出第3级。

12.承诺和应急预案

意外开支

公司对以下专案进行评估任何可能并可合理估计的或有损失的潜在影响。截至2024年3月31日，没有发生或有损失录制好了。	而该公司则没有预计任何正在进行的问题的解决将对其运营结果、财务状况或关于现金流，必须指出的是，这些问题的最终结果仍然不确定。在出现不利解决方案的情况下在上述一个或多个或有事件中，可能会对公司的财务状况、经营结果或现金流。公司将继续监督这些事项，并在必要时披露未来财务报表中的任何重大发展或变化。	购承担 ($)⁽¹⁾		本公司签订了一项与主要客户签订的长期软体许可合同，于2018年开始生效，将于2024年6月到期，但须附加续订5年。该合同的年价值为5,030美元万。作为协定的一部分，该公司安装其软体许可证在客户的服务器上，作为交换，客户每年支付访问软体许可证和相关维护的费用服务。此外，该公司还与客户签订了购买客户最终用户数据的单独合同。此数据对于公司开发和使用其下一代人工智慧平台至关重要。每年的价格是这一数据采集金额约为3,000美元万。 ($)		软体许可的销售而购买客户的最终用户数据被视为不同和独立的交易。此外，软体许可可以单独取消合同和数据采集合同，而不影响另一份合同任何一方需提前12个月通知取消的合同。由于数据采集的不同性质以公允价值获得并主要用于研发目的的客户，即从软体产生的收入许可合同是按总额确认的。相反，与数据采集相关的费用也在以毛为基础，归类为研究和开发费用。财务顾问协定 ($)		本公司有一笔财务资金与指定的财务顾问签订咨询协定，以协助未来的股权筹资活动。根据根据协定条款，财务顾问将获得基于以下结构的补偿：对于股权募集，包括低于公司股权资本的多数，财务顾问将有权获得相当于总收入5.0%的费用股权募集所得收益。 ($)		在股权的情况下融资占公司股本的大部分，财务顾问的薪酬将根据以下各项中较大的一项：固定费用为350美元万。股权总价值的1.0%最高可筹集10美元亿，外加1.5%的额外部分股权募集总价值超过10美元的亿。 ($)		这些补偿条款概述了财务顾问在成功完成股权筹资活动的基础上有权获得费用。对于非股权交易具体的费用可以在逐笔交易的基础上进行协商，以确保财务顾问的薪酬与考虑到股权募集的规模和意义，考虑到公司的股权资本和资金总额养大的。 2024年3月27日，公司财务顾问修改了财务咨询协定，规定以现金全额支付任何根据财务顾问协定所欠咨询费或其他费用或开支，本公司将向财务顾问支付7,500,000美元现金或新公司股份，由本公司全权酌情决定。截至2024年3月31日和2023年12月31日，财务顾问的目前还不可能支付费用，支付的金额也无法确定。因此，不会在压缩合并资产负债表，用于财务顾问协定中概述的潜在补偿。 ($)⁽²⁾		诉讼 ($)
该公司参与了在正常业务过程中发生的诉讼。预计此类诉讼不会对公司的财务状况产生实质性影响经营状况、经营结果和现金流。	2023		360,000		—		—		—		—		53,145		413,145
13.关联方交易记录	2022		360,000		—		—		—		—		53,145		413,145

相关应收账款聚会	2023		300,000		—		—		—		—		48,366		348,366
该公司有突出的截至2023年12月31日，董事应收账款50万，与公司代表公司发生的费用有关董事的身分。	2022		275,000		—		—		—		—		48,366		323,366

2024年2月，公司全额收取各董事应收关联方款项。截至2024年3月31日，没有未偿还的余额。	2023		325,000		—		—		—		—		—		325,000
ILEARNINENGINES，Inc.和子公司	2022		325,000		—		—		—		—		—		325,000

(1)	综合资产负债表(In数千人，股份金额除外）截至12月31日，

110

(2)

资产

易变现资产：

现金

受限制现金

应收帐款，扣除信用损失拨备后分别为336美金和0美金

合约资产

预付费用

易变现资产总额

应收技术合作伙伴款项

应收关联方其他资产递延所得税资产，净额递延交易成本总资产

负债和股东赤字流动负债：应付帐款

111

应计费用^{长期债务的流动部分，净}合约负债^{应付薪津税}其他流动负债流动负债总额可换股票据

令状责任

长期债务，净

次级支付给技术合作伙伴

其他非流动负债

总负债

股东赤字：

112

普通股面值0.0001美金：200，00，000股授权股：2023年12月31日和2022年12月31日已发行和发行的95，782，605股

借记资本公积累计赤字股东赤字总额总负债及股东赤字随附注释是这些合并财务报表。ILEARNINENGINES，Inc.和子公司 综合经营报表

		(In千，份额和每股金额除外）								截至12月31日的一年，
收入	收入成本	毛利运营费用：销售、一般和管理费用研发费用总运营支出营运收入 (#)		其他（费用）收入：利息开支认购证负债公允价值变化可转换票据公允价值变化其他费用其他费用总额，净额 (#)		所得税（费用）福利前净（损失）收入所得税（费用）福利净（损失）收入 ($)		每股净（亏损）收益-基本每股净（亏损）收益-稀释加权平均已发行普通股-基本		加权平均已发行普通股-稀释随附注释是这些合并财务报表。 ILEARNINENGINES，Inc.和子公司股东赤字变化综合报表 (In数千人，股份金额除外）额外 (#)⁽¹⁾			总普通股实收积累股东股份量 ($)⁽²⁾
资本	8/12/2021		—		—		—		—		34,225,600	⁽³⁾		342,256,000
赤字	8/12/2021		—		—		—		—		1,387,979	⁽⁴⁾		13,879,790
	8/12/2021		—		—		—		—		300,000	⁽⁵⁾		3,000,000
赤字	8/12/2021		—		—		—		—		2,775,957	⁽⁶⁾		27,759,570
	8/12/2021		—		—		—		—		1,000,000	⁽⁷⁾		10,000,000

(1)	2021年1月1日余额关联方出资 —发行股票换取现金.”

(2)

净收入

(3)	2021年12月31日余额

(4)	收购发行股份净收入 —2022年12月31日余额净亏损

(5)	2023年12月31日余额随附注释是这些合并财务报表。 —ILEARNINENGINES，Inc.和子公司综合现金流量表

(6)	(In数千）截至2013年12月31日的年度， —经营活动中使用的现金流量：净（损失）收入

(7)	为调节净利润与经营活动中使用的净现金流量而进行的调整：折旧及摊销 —股份补偿费用债务贴现和债务发行成本摊销

113

递延税款拨备

附属应付技术合作伙伴的利息加记

认购证负债公允价值变化

可转换债务公允价值变化信贷损失准备金经营资产和负债变化：

应收帐款

应收关联方

合约资产

预付给客户

预付费用和其他易变现资产

应收技术合作伙伴款项

应付帐款

114

应计费用和其他流动负债

合约负债次级支付给技术合作伙伴应付薪津税

递延交易成本

经营活动使用的净现金流量

投资活动提供的现金流（用于）：

添置物业及设备

业务收购获得的现金

115

投资活动提供的净现金流量（用于）：

融资活动提供的现金流：

定期贷款收益

偿还定期贷款可转换票据收益其他融资活动

融资活动提供的净现金流量：

现金净变化

现金和限制性现金，年初

现金和限制性现金，年底

现金流量信息补充披露：

年内支付的利息现金

116

非现金投资融资信息补充披露：

发行认购普通股的认购权

发行股权以收购In2vate，LLC

应计交易成本

注销可转换票据的出资

现金和限制性现金的对账现金受限制现金

年末现金总额和限制性现金

随附注释是这些合并财务报表。

ILEARNINGENGINES，Inc.及附属公司
综合财务报表附注
(#)

1.自然业务和演示的基础⁽¹⁾

5,657,788

(1)	ILearningEngines，Inc.(共同及其子公司，总部设在美利坚合众国马利兰州的公司，于2010年11月17日在特拉华州注册成立。该公司提供专注于人工智慧(AI)平台关于学习的自动化和使组织能够大规模推动关键任务成果。人工智慧学习和参与平台具有基于云的、移动的、离线的和多媒体功能，可用于提供高度个性化的学习和参与模块。该公司开发了一个过程中学习平台，使组织能够在日常流程中提供学习活动。

截至2013年12月31日的年度内， 2021年，公司管理层注册成立了iLearningEngines FZ-LLZ(“Ile Dubai”)，这是一家自由贸易区公司在迪拜开发区。该实体的目标是发展Ile在中东的客户。伊莱迪拜在Ile的指导和监督下运营。该公司已确定它在Ile Dubai拥有可变权益并且是主要受益人，因此公司将迪拜岛合并为可变权益实体(“VIE”)。截至2013年12月31日的年度内， 2021年，本公司收购了iLearningEngines India Private Limited的多数股权，iLearningEngines India Private Limited是根据印度法律(“Ile India”)。此次收购的目标是为Ile India培养员工和支持运营在印度，通过Ile India招聘人才和员工，供公司内部使用。Ile India在这一指导下运营以及对Ile的监管。公司已确定它在Ile India拥有可变权益，是主要受益者，因此该公司已将Ile India合并为VIE。截至2013年12月31日的年度内， 2022年，公司将iLearningEngines Australia注册为全资子公司。这家子公司的目标是开发新的澳大利亚、纽西兰和东南亚的销售和渠道合作伙伴。

截至2013年12月31日的年度内， 2022年，公司收购了风险管理和学习平台提供商In2vate，LLC(“In2vate”)的全部已发行股权。

建议的业务合并

2023年4月27日，公司与ArrowRoot收购订立合并重组协定及计划(“合并协定”) 纳斯达克(Sequoia Capital：ARRW)(以下简称“箭根”)，一家特殊目的收购公司(以下简称“SPAC”)和Arac Merge Sub，公司是特拉华州的一家公司，也是ArrowRoot的直接全资子公司(“合并子”)。在完成合并时合并后的公司将更名为“iLearningEngines，Inc.”。并将在纳斯达克上市，新的股票代码为“爱乐”。ArrowRoot已同意收购所有未偿还的公司的股权。交易的完成取决于某些惯常的监管同意和股东的批准。 ArrowRoot和公司的。

呈列基准

117

随附的合并财务报表是按照美利坚合众国普遍接受的会计原则编制的 (“美国公认会计原则”)和美国证券交易委员会(“美国证券交易委员会”)的规则和条例。合并后的财务报表包括iLearningEngines，Inc.及其子公司的账目。

改叙某些重新分类已经做出了与前一时期的列报一致的说明。风险和不确定性

●第2级-根据可观察到的其他投入进行估值比第1级中包括的报价，如活跃市场中类似工具的报价，相同或相似非活跃市场中的工具，或其投入或重大价值驱动因素可观察到或可以观察到的基于模型的估值可观察到的市场数据证实了这一点。●3级-基于不可观察到的输入进行估值。这些估值需要做出重大判断。估值的可获得性技术和可观察到的投入可能会有所不同，并受到各种因素的影响，包括资产或负债的类型，无论是资产或负债是新的，尚未在市场上建立，以及交易特有的其他特征。至估值基于在市场上不太可观察或不可观察的模型或投入的程度，公允的确定价值需要更多的判断。这些估计值不一定代表由于不能合理确定的未来情况的发生。由于估值的内在不确定性，那些估计价值可能大大高于或低于资产或负债的现成市场所使用的价值。公允价值中的水准公允价值计量的整体等级是基于对公允价值有重要意义的最低水准的投入价值衡量的整体。

公允价值期权(“FVO”) 选本公司签订了一项 2023年4月27日的可转换票据购买协定，本文简称可转换票据，现已入账在下文讨论的“公允价值期权选择”项下。

在财务会计下准则委员会(“FASB”)会计准则编纂(“ASC”)主题815，衍生工具和对冲，(“ASC” 815“)，可能需要将包含嵌入特征和/或选项的金融工具从该金融工具中分离出来托管并确认为单独的衍生资产或负债，分支衍生资产或负债最初按截至交易发布日的估计公允价值，然后按每个报告期的估计公允价值重新计量资产负债表日期。

或者，FASB ASC主题 825，金融工具，(“ASC 825”)规定“公允价值期权”(“FVO”)选择。在……里面在这方面，ASC 825-10-15-4规定提供FVO选举(在ASC 825-10-15-5未禁止的范围内) 指金融工具，其中该金融工具最初按交易发行日的估计公允价值计量然后按每个报告期资产负债表日的估计公允价值重新计量，估计的在经营报表中确认为其他收入或费用的公允价值。可转换债券的估计公允价值调整票据在随附的综合报表中可转换票据的公允价值变动内列於单行专案。运营(由ASC 825-10-50-30(B)规定)。此外，根据ASC 825-10-45-5的要求，在公允价值的一部分调整归因于特定于工具的信用风险的变化，这一部分将被确认为其他综合收益(“保监处”)(并无就可换股票据作出该等调整)。在……下面所述的公允价值期权选择本公司呈列可换股票据的全部公允价值变动，包括与利息支出有关的构成部分，列在合并业务报表标题为“变动”的单行专案内以可转换票据的公允价值计算“。可转换债券的公允价值截至2023年12月31日的票据为3,150美元万，并在合并资产负债表的“可转换票据”中列报。有关可转换票据的更多细节，请参阅附注7。

延迟交易费用

本公司直接招致以及截至2023年12月31日的年度与拟议中的与ArrowRoot合并相关的增量交易成本。交易记录 4,000美元万的成本已递延并资本化到综合资产负债表上的递延交易成本专案 2023年12月31日。在完善了合并后，这些成本将计入股东赤字，作为由此产生的额外实收资本的减少关于合并的问题。如果与ArrowRoot的合并后来被取消，公司将审查递延交易成本的减值。截至2023年12月31日，110亿美元万和160亿美元万的未付交易成本包括在应付贸易账户和应计费用分别列于合并资产负债表中。

股份酬金

本公司记录薪酬根据ASC主题718，与基于股份的奖励有关的费用，薪酬调整--股票薪酬

118

(“ASC 718”)，据此，本公司于授予日以奖励的估计公允价值为基础计量补偿成本。补偿成本为在授标的必要服务期内，通常是授权期，以直线方式予以确认。没收在它们发生时都会被计算在内。收入确认

公司确认收入根据ASC主题第606条。

应付帐款

其他流动负债

承担负债总额

假设净资产总额

商誉代表超额按收购净资产的公允价值支付的代价，并计入合并余额中的其他资产床单。商誉的分配价值主要涉及现有劳动力的价值和预期的协同效应公司现有职能。被收购公司的经营结果包括在公司的合并报表中从收购之日起的收入。商誉可在15年内为纳税目的摊销。

4.应计利润费用

下表列出了截至2023年12月31日和2022年12月31日的应计费用构成：

截至

12月31日，

(In数千）

应计所得税

其他应计费用

总其他应计费用包括应计专业服务费、应计利息、应计薪酬和福利，以及其他流动负债。

5.移动技术合作伙伴2019年，公司进入与技术合作伙伴签订的主协定(MA)，允许按季度对技术收取的金额进行净额结算来自最终用户的合作伙伴，对照技术合作伙伴向公司提供和支付的服务的成本。金融管理专员有一个初始任期为五年，可自动续期五年。

2021年1月1日，公司修改了与技术合作伙伴的利率，从12个月LIBOR利率加2.0%改为固定利率3.99%，通过 2023年12月31日。在2023年12月31日之后，公司将与技术合作伙伴的利率修改为固定利率截至2024年12月31日，利率为5.99%。在十周年之前，公司不需要偿还任何未偿还的余额或应计利息终止并购交易的生效日期。截至这些合并财务报表的日期，金融管理专员尚未终止。

119

下表总结了技术合作伙伴向公司收取的费用在收入成本、销售成本、一般成本和行政成本中列示截至2022年12月31日的年度综合经营报表中的费用和研究与开发费用和2021年：

12月31日，(In数千）收入成本

销售、一般和管理费用

研发费用

从属应付致技术合作伙伴2020年12月30日，结合注6 -债务中描述的2020年定期贷款发行，公司与技术合作伙伴达成一份次级协议，根据该协议，支付给技术合作伙伴的款项从属于2020年和2021年定期贷款。

12月31日，(In数千）

期初余额应计利息次级支付给技术合作伙伴与之相关的利息费用截至2023年12月31日、2022年12月31日止年度，向技术合作伙伴支付的次级款项每年为170卢比，以及 2021.应收账款净额技术合作伙伴在执行之后根据从属协定，本公司和技术合作伙伴恢复按季度计算收藏品和服务成本提供与上述定义相同的利率条件。

12月31日，(In数千）应收技术合作伙伴的年初余额

按技术合作伙伴分类的收藏

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技术合作伙伴提供的服务成本公司与技术合作伙伴之间的现金净转移

应收技术合作伙伴的期末余额6.债务下表呈列截至2023年12月31日和2022年12月31日公司债务组成：12月31日，

(In数千）2020年定期贷款

2021年定期贷款2023年定期贷款其他贷款减去：债务贴现减：当前部分.

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债务的长期部分合同利息费用截至2023年12月31日、2022年12月31日止年度，与长期债务相关的金额为250日元、200万美金和110日元，和2021年。截至12月的年度，债务发行成本摊销分别为210日元、320日元和220日元分别为2023年、2022年和2021年。年度到期日总计截至12月31日的年度，未来五年每年的长期债务义务如下：截至12月31日的一年，

长期的 债务

(In数千）总

定期贷款和令状发布2020年12月30日，本公司与Venture Lending&Leating IX，Inc.订立贷款及担保协定(“2020定期贷款”)。 (“2020贷款人”)，据此，2020贷款人向本公司提供合共一项定期贷款安排本金为1,000美元万。与2020年有关定期贷款，公司向2020年贷款人的关联公司Venture Lending&Leating IX，LLC发行认股权证，购买433,597份本公司股份(“2020年认股权证”)。2020年权证被归类为负债并按其公允价值入账。因为存在某些看跌期权，可能会迫使本公司在未来回购2020年权证，基于以下事件不在本公司的控制范围之内。2020年权证的行使价为每股6.94美元，可行使至7月 2036年3月31日。如果公司参与一轮优先股融资，认股权证也将可以行使行使价格等于任何一轮优先股融资的最低每股价格的优先股。2020年的授权列于2023年12月31日和2022年12月31日合并资产负债表的权证负债专案内。截至2023年12月31日，2020年定期贷款加权平均实际利率为32.4%。2021年10月21日，本公司订立贷款及担保协定(“2021年定期贷款”，连同2020年定期贷款协定，与Venture Lending&Leending IX，Inc.和WTI Fund X，Inc.签订的《定期贷款协定》(统称为《2021年贷款人“)，据此，2021年贷款人向本公司提供本金总额的定期贷款安排 2,000美元万。2023年1月10日，该公司第四次动用了2021年5亿美元的定期贷款万。2021年定期贷款利息为年息11.5%。本公司于2021年定期贷款发生债务贴现，与以下引用的认股权证。截至2023年12月31日，2021年定期贷款加权平均实际利率为19.1%。

关于2021年定期贷款，公司向2021年贷款人的关联公司Venture Lending&Leending IX，LLC和WTI Fund X，LLC发行认股权证，以购买440,021股本公司普通股(“2021年认股权证”)，其中55,005股于2023年发行，涉及这笔5亿美元的万将于2023年1月10日提取2021年的定期贷款。2021年认股权证被归类为负债，并记录在其公允价值，因为存在某些认沽权利，可能会迫使本公司在未来回购2021年认股权证，基于不在公司控制范围内的事件。2021年权证的行权价为每股6.94美元，可以行使一直到2037年7月31日。如果公司参与一轮优先股融资，认股权证也将可以行使对于行使价格等于任何一轮优先股融资的最低每股价格的优先股。2021年权证在2023年12月31日和2022年12月31日合并余额的权证负债细目中列示床单。2023年10月31日，公司与WTI Fund X，Inc.(“2023年贷款人”)签订贷款和担保协定，根据该协定，2023年贷款人提供向本公司提供本金总额为1,000万的定期贷款(“2023年定期贷款”)。在10月 2023年3月31日，公司提取了本金为1,000美元的全部万。关于2023年定期贷款，本公司发行了 2023年贷款机构WTI Fund X的附属公司WTI Fund X LLC认股权证购买220,681股普通股。2023年的权证有行权价每股10.14美元，可行使至2038年10月31日。截至2023年12月31日，2023年定期贷款的有效利率是35.9%。

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公司的2020年， 2021年和2023年定期贷款受契约条款的约束，根据该条款，公司必须及时缴纳和申报所有税款并在每个财务报告年度结束后六个月内提交经审计的合并财务报表。“公司”(The Company) 在截至2020年12月31日的一年内，没有支付或提交就业工资税申报单。“公司”(The Company) 也没有在规定的时间内提交截至2022年12月31日和2021年12月31日的年度经审计的合并财务报表句号。此外，公司没有按照《公约》的要求，在一个单独的银行账户中保留200亿美元的万作为限制性现金。 2023年定期贷款条款，截至2023年12月31日的年度。由于这些违反契约条款的行为，2020、2021和2023年的贷款人根据合同有权要求立即偿还2020年、2021年和2023年的未偿还定期贷款，但同意放弃描述的每一种违反圣约的行为。因此，长期债务的当前部分在合并后的资产负债表仅代表在每个资产负债表日期的12个月内合同到期的本金付款。以下是日程表 2022年1月1日至2023年12月31日期间已发行和未偿还权证的变化情况：单位截至2021年12月31日未完成

已发行的认股权证截至2022年12月31日未完成

已发行的认股权证截至2023年12月31日未完成

7.敞篷车备注本公司签订了一项 2023年4月27日与ArrowRoot Capital达成的可转换票据购买协定，为拟议的业务合并提供资金注1--业务性质和列报依据。可转换票据应计入单利，按日累算以拖欠利息为基准，年利率为15.0%，直至累计利息超过本金的25.0%，并按此后年利率为8.0%。相当于未偿还本金余额乘以2.75的乘积之和，或47.9美元于2023年12月31日，该等票据的未付应计利息将于到期日及任何违约事件的发生，如协定中所定义。可换股票据可发行，本金总额为截至2023年12月31日，最高可支付5,000美元万现金，其中1,740美元万已支取。可转换票据于 2025年10月27日，除非在到期日之前根据其条款提前转换、赎回或回购。

根据可转换汽车的条款票据购买协定，可转换票据将在4月27日后包括以下情况下可转换为股票， 2023年：

●在发生股权融资时，贷款人可以选择将可转换票据交换为在这种股权融资中发行的股权证券的数量，等于票据余额除以在这种融资中的股权价格股权融资和●

在符合条件的De-SPAC交易完成之前，可转换票据应自动全部转换为公司普通股，从而使贷款人有权获得一定数量的股份等于纸币余额除以10美元。此外，根据根据票据购买协定，公司可以不经持有人同意，以现金形式预付等额的可转换票据到票据余额，在2025年10月27日之前的任何时间。截至2023年12月31日，可转换票据的公允价值于截至该年度止年度，可换股票据的公允价值相应变动为增加1,410美元万 2023年12月31日。8.以股份为基础补偿2021年8月12日，公司通过2020年股权激励计划(《计划》)。根据《规则》授予的限制性股票单位总数截至2023年12月31日和2022年12月31日的计划分别为8,338,438和7,138,438。该奖项为期四年。自受雇日期起计为期一年的悬崖归属要求，并受下述流动性事项拨备所规限。截至2023年12月31日和 2022年12月31日，公司拥有39,883,388股已发行的限制性股票奖励，公司创始人以10 自流动资金事件发生之日起的年度服务要求(定义如下)(“方正限制性股份”)及与前雇员发行的360,290股限制性股票，其中服务要求在授予日被视为已满足(一起与方正限售股(简称“限售股”)。公司40,243,678股已发行限制性股票在公司的所有分派中与普通股平等参与，因为这些限制性股票的持有人有权不可没收的股息权。每一个RSU和受限股份都受控制权变更条款的约束；有效登记根据修订后的19证券法(“证券法”)发表的声明；在纳斯达克全球精选直接上市市场或纽约证券交易所；或本公司完成与SPAC的合并或合并，而尚存公司的普通股根据《证券法》规定的有效注册声明在公开发行中公开交易(统称为， “流动性事件”)。

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非既得利益相关单位概述并披露其归属取决于截至2023年12月31日的年度的流动性事件的限制性股票以下是：

股份加权平均^{赠与日期交易会} 值

股份单位截至2022年1月1日未归属

授予截至2022年12月31日未归属授予截至2023年12月31日未归属

股份加权平均

124

赠与日期交易会价值

限售股截至2022年1月1日未归属授予截至2022年12月31日未归属

授予截至2023年12月31日未归属未识别的总数截至12月31日，这些奖励的归属取决于流动性事件的实现，其补偿费用为17610美金， 2023.这些RSU的归属而限制性股票取决于流动性事件，这些事件被认为在实际发生之前不太可能发生，因此，在发生任何流动性事件之前，不会确认基于股份的薪酬支出。

9.收入税

收入前的（损失）收入税收费用（福利）包括以下内容（以千计）：

125

截至12月31日，

国内外国所得税（福利）费用前净（损失）收入

条款的组成部分所得税（福利）如下（以千计）：

截至12月31日，

当前费用：

联邦

状态

外国

经常费用总额：

递延费用（福利）：

联邦

状态

外国

递延福利总额：

所得税费用总额（福利）：

126

公司的对帐法定所得税率与公司实际所得税率之比如下：

截至12月31日，

联邦法定税率影响：

州税，扣除联邦税收优惠

永久性差异

FDII条款

国外利差

证券公允价值变化

各州费率的变化股票薪酬

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估值津贴变化

实际税率

有关递延所得税与以下相关的资产余额（单位：千）：截至12月31日，

递延所得税资产：

联盟、州和地方净营业亏损结转工资税163J不准予利息

资本化R&D费用

应计费用估值备抵前的递延所得税资产总额递延税务负债：

其他

481(A)调整

估值免税额前递延税项负债总额

128

估值免税额

净递延税资产截至2023年12月31日， 2022年和2021年，公司的联盟净营业亏损分别为1,450万美元、2,630万美元和3,780万美元，分别进行了分析。截至2023年12月31日、2023年12月31日和2022年12月31日，公司的国家净营业亏损(NOL)结转为26.7美元 3740万美元和3740万美元。联盟净营业亏损结转可以无限期结转，按80%的应税比例结转收入限制。结转的国家净营业亏损将于2037年开始到期。截至2023年12月31日，该公司拥有 NOL结转10美元万，主要与澳大利亚有关。截至2022年12月31日，没有外国NOL结转。截至2023年12月31日，公司有90美元的利息支出结转用于美国所得税目的万。整个90美元的万有一个无限期的结转句号。这些结转是可用的，但受某些限制，以抵消未来的应税收入。

未来将实现的存在暂时性差额和净营业亏损结转的税收优惠最终取决于是否存在足够的结转期内的应纳税所得额。截至2023年12月31日、2023年12月31日和2022年12月31日，公司进行了评估，以确定是否需要估值津贴。该公司考虑了所有现有的证据，包括积极和消极的证据，包括本年度和前几年的经营业绩。除澳大利亚司法管辖区外，公司决定未来的应税收入是可能的，并决定了所有递延税项资产更有可能变现。因此，自2023年12月31日起，公司不再保留澳大利亚司法管辖区以外的估值津贴。

《减税和就业法案》 (“TCJA”)导致在第174节中对研发支出的处理方式发生了重大变化。在纳税年度内从2021年12月31日之后开始，纳税人被要求将所有已支付或发生的研发支出资本化和摊销与他们的贸易或业务有关。具体地说，总部位于美国的研发活动的成本必须在五年内摊销此外，外国研发活动的成本必须在15年内摊销-这两种方式都使用年中公约。在.期间截至2023年12月31日的年度，公司将450万美元的海外研发费用资本化，用于所得税目的。根据国内税法第382条，如果一家公司经历了所有权变更，该公司使用其变更前的能力 NOL结转和其他变动前税收属性抵消其变动后收入可能是有限的。该公司尚未完成评估是否发生了“所有权变更”或自Ile以来是否发生了多次所有权变更的研究成为第382节所界定的“亏损公司”。未来公司股权的变化，这可能不在Ile的控制之下，可能会引发“所有权变更”。此外，未来的股权发行或收购将股权作为收购价格组成部分的公司可能会导致“所有权变更”。如果“所有权变更” 已经发生或将来发生的情况下，NOL结转或其他税务属性的利用可能受到限制，这可能导致未来对公司的纳税义务增加。关于公司利润的计算纳税义务涉及处理在适用复杂的联邦税收和税收法规方面的不确定性本公司经营或开展业务的多个州。ASC 740规定，不确定的税收状况带来的税收优惠可在审查后更有可能维持立场的情况下予以承认，包括任何有关的决议上诉或诉讼程式，根据技术是非曲直。公司记录不确定根据美国会计准则第740条将纳税列为负债，并在公司的判断发生变化时调整这些负债。对以前没有的新资讯进行评估的结果。由于其中一些不确定性的复杂性，最终解决方案可能导致的付款与公司目前对未确认资产的估计大不相同税收优惠负债。这些差异将在新税期内反映为所得税费用的增加或减少资讯是可用的。截至2023年12月31日、2023年12月31日及2022年12月31日，本公司并未在本公司的财务报表。本公司确认利息以及与随附的合并经营报表中所得税费用行未确认的税收优惠有关的处罚。截至2023年12月31日和2022年12月31日，合并资产负债表上不计入应计利息或罚金。一开始的和解未确认税项准备的期末金额如下：截至12月31日的一年，(In数千）年初的或有税收总额

税收或有事项总额的减少

截至年底的或有税收总额公司提交纳税申报单按照其经营所在司法管辖区税法的规定。在正常业务过程中，公司将接受检查联盟和州司法管辖区，在适用的情况下。目前没有悬而未决的税务审查。.”

10.中国网每股(亏损)收益每项基本净(亏损)收益股份是根据期内已发行普通股的加权平均数计算的。稀释后每股净(亏损)收益是使用期间已发行普通股的加权平均数和普通股等价物的加权平均数来计算的。BASIC和的计算本报告所述期间公司已发行普通股的每股摊薄净(亏损)收益和加权平均股份如下所示：截至12月31日的一年，(In千，份额和每股金额除外）每股基本净(亏损)收益：.”

净（损失）收入分配给参与证券的收益普通股股东应占净(亏损)收入-基本每股摊薄净(亏损)收益：普通股股东应占净(亏损)收入-基本

2019年可转换票据的利息支出

普通股股东应占净(亏损)收入-摊薄计算中使用的份额：加权平均流通普通股稀释证券的加权平均效应：假设2019年可转换票据的转换稀释加权平均已发行普通股普通股股东每股净(亏损)收益：

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基本

稀释

没有宣布分红或在截至2023年12月31日、2022年及2021年12月31日止年度内累积普通股。对其含有不可没收股息权的限制性股票，从而符合参与证券的定义，它要求普通股股东在该期间可获得的收益在普通股和参与证券之间进行分配。根据他们各自获得股息的权利，就好像该期间的所有收入都已分配一样。未分配净亏损按照合同条款向参股证券转让。公司已发行的加权平均限售股截至12月31日的三个年度，2023年、2022年和2021年分别为40,243,678，40,243,678和15,656,445。不包括该公司下列证券，基于每个期末的未偿还金额，通过计算稀释净(亏损)收益而列报在所示期间内归属于普通股股东的每股收益，因为将其包括在内将产生反稀释效果：截至12月31日的一年，购买普通股的认股权证股份单位激励或有对价可换股票据.”

限售股

库存股方法被应用于权证，其影响在年内是反摊薄的。截至2023年12月31日和2022年12月31日。因此，它们被排除在稀释每股收益的计算之外。

RSU受制于流动性事件下的归属条件，如附注8-股票所述以薪酬为基础。由于这些证券被视为或有可能发行的股票，而或有事项最终没有得到满足在报告期内，它们被排除在列报期间的每股摊薄净收益(亏损)计算之外。

截至年末，应付给发起人的或有对价所涉的或有事项尚未满足报告期。因此，这些股份已被排除在各期间每股稀释净(亏损)收益的计算之外。呈上了。IF转换方法被应用于可转换票据，其中的影响是反稀释的截至2023年12月31日的年度。因此，它们被排除在稀释每股收益的计算之外。截至去年12月底止年度的每股摊薄收益不包括限制性股份。 2023年31日，因为纳入此类股份的影响将是反稀释的。

11.美国薪水单应缴税金

该公司尚未支付或提交从开始到2020年12月31日的任何时期的就业工资税报税表。联盟和州预缴税金、雇主自公司成立至2023年12月31日的工资税、罚款和利息责任以及相关罚款和利息计入综合资产负债表的应付工资税内。总负债为300万美元，截至2023年12月31日和2022年12月31日分别为280万美元。这些应计专案的相关费用被记录下来。在合并经营报表中计入销售、一般和行政费用。

12.广交会价值测量

公司的财务状况工具包括认股权证负债、2020年定期贷款、2021年定期贷款、2023年定期贷款、其他贷款、可转换票据和次级贷款支付给技术合作伙伴。

账面价值和估计公司2020年定期贷款、2021年定期贷款、2023年定期贷款、其他贷款、可转换票据和附属债券的公允价值 2023年12月31日和2022年12月31日支付给技术合作伙伴的金额如下：

2023年12月31日

2022年12月31日

主要

金额

帐面

金额

公平值

130

主要

金额

帐面

金额

公平值

(In数千）

2020年定期贷款

2021年定期贷款

2023年定期贷款

可换股票据

131

其他贷款⁽¹⁾	次级应付技术合作伙伴关于2020年任期贷款、2021年定期贷款、2023年定期贷款、其他贷款和次级应付技术合作伙伴，公司得出了公允价值接近截至2023年和2022年12月31日的本金价值。可转换债券的公允价值注释是使用基于情景的方法进行估计的，该方法考虑了每个场景中的转化特征和相关回报。的截至2023年12月31日，可转换票据估值模型中使用的第3级输入数据包括以下内容： 2023年12月31日兑换活动股权融资 De-SPAC		交易持有至到期概率活动日期时间（年）折扣价差
无风险利率
折扣收益率⁽²⁾		96,764,327		71.7	%
认购证的公允价值负债是使用期权定价模型确定的，该模型利用了以下第3级输入：		–		*
2023年12月31日		–		*
私人销售场景		–		*
(10%可能性）		–		*
SPAC场景⁽³⁾		845,465		*
(90%可能性）⁽⁴⁾		1,323,291		*
波动⁽⁵⁾		7,005,793		5.2	%
无风险利率		–		*
股息率		–		*
6.94美金期权的行使价		105,938,876		78.5	%
10.14美金期权的行使价
Term⁽²⁾		96,764,327		71.7	%
1.0年⁽⁵⁾		7,005,793		5.2	%

0.1年

(1)

股权价值

(2)

股权价值源自加权平均值贴现现金流、指导公司方法和交易方法论。

(3)

12月31日，

(4)

波动

(5)

无风险利率

132

股息率

行使价

Term2.0年股权价值

股权价值源自贴现现金流的加权平均值、指导公司法和交易方法。

公司负债按经常性基准按公允价值计量的公允价值等级分类如下。

2023年12月31日

133

1级2级3级

	总									(In数千）
负债	令状责任		可换股票据		总负债		2022年12月31日			1级		2级		3级		总
(In数千）⁽¹⁾		2,255,000		2,255,000		—		—			—		—		—		—
负债		1,100,000		1,100,000		—		—			—		—		—		—
令状责任⁽²⁾		748,962		748,962		—		—			—		—		—		—
总负债⁽³⁾		330,000		330,000		—		—			—		—		—		—
下表总结公司按公允价值计量的第三级负债的活动：		275,000		275,000		—		—			—		—		—		—
令		206,250		206,250		—		—			—		—		—		—
责任		192,500		192,500		—		—			—		—		—		—
(In数千）⁽⁴⁾		165,137		165,137		—		—			—		—		—		—
截至2022年1月1日余额		137,500		137,500		—		—			—		—		—		—
发行		137,500		137,500		—		—			—		—		—		—
公平值变动		137,500		137,500		—		—			—		—		—		—
截至2022年12月31日余额		137,500		137,500		—		—			—		—		—		—
发行		137,500		137,500		—		—			—		—		—		—
公平值变动		137,500		137,500		—		—			—		—		—		—
截至2023年12月31日余额		137,500		137,500		—		—			—		—		—		—
可换股		137,500		137,500		—		—			—		—		—		—
备注⁽⁵⁾		137,500		137,500		—		—			—		—		—		—
(In数千）⁽⁶⁾		117,012		117,012		—		—			—		—		—		—
截至2022年12月31日余额		89,375		89,375		—		—			—		—		—		—
发行		82,500		82,500		—		—			—		—		—		—
公平值变动		82,500		82,500		—		—			—		—		—		—
截至2023年12月31日余额		82,500		82,500		—		—			—		—		—		—
截至去年十二月底止年度 31年、2023年和2022年，1级和2级之间没有调入，也没有调出3级。		68,750		68,750		—		—			—		—		—		—
13.中国的承诺和或有事件		68,750		68,750		—		—			—		—		—		—
意外开支		68,750		68,750		—		—			—		—		—		—
公司对以下专案进行评估任何可能并可合理估计的或有损失的潜在影响。截至2023年12月31日和2022年12月31日，有没有记录或有损失。		55,000		55,000		—		—			—		—		—		—
而该公司则没有预计任何正在进行的问题的解决将对其运营结果、财务状况或关于现金流，必须指出的是，这些问题的最终结果仍然不确定。在出现不利解决方案的情况下在上述一个或多个或有事件中，可能会对公司的财务状况、经营结果或现金流。		55,000		55,000		—		—			—		—		—		—
公司将继续监督这些事项，并在必要时披露未来财务报表中的任何重大发展或变化。		55,000		55,000		—		—			—		—		—		—
购承担		68,750		68,750		—		—			—		—		—		—
本公司签订了一项与主要客户签订的长期软体许可合同，于2018年开始生效，将于2024年6月到期，但须附加续订5年。该合同的年价值为5,030美元万。作为协定的一部分，该公司安装其软体许可证在客户的服务器上，作为交换，客户每年支付访问软体许可证和相关维护的费用服务。此外，该公司还与客户签订了购买客户最终用户数据的单独合同。此数据对于公司开发和使用其下一代人工智慧平台至关重要。每年的价格是这一数据采集金额约为3,000美元万。⁽⁷⁾		41,250		41,250		—		—			—		—		—		—
软体许可的销售而购买客户的最终用户数据被视为不同和独立的交易。此外，软体许可可以单独取消合同和数据采集合同，而不影响另一份合同要求任何一方提前12个月通知取消的合同。由于数据采集的不同性质以公允价值获得并主要用于研发目的的客户，即从软体产生的收入许可合同是按总额确认的。相反，与数据采集相关的费用也在以毛为基础，归类为研究和开发费用。⁽⁸⁾		41,250		41,250		—		—			—		—		—		—
这种会计处理方法准确反映这些交易的独立性质，并确保适当确认与软体许可和数据获取活动。⁽⁹⁾		41,250		41,250		—		—			—		—		—		—
财务顾问协定		27,500		27,500		—		—			—		—		—		—
本公司有一笔财务资金与指定的财务顾问签订咨询协定，以协助未来的股权筹资活动。根据根据协定条款，财务顾问将获得基于以下结构的补偿：		27,500		27,500		—		—			—		—		—		—
对于股权募集，包括低于公司股权资本的多数，财务顾问将有权获得相当于总收入5.0%的费用股权募集所得收益。		27,500		27,500		—		—			—		—		—		—
在股权的情况下融资占公司股本的大部分，财务顾问的薪酬将根据以下各项中较大的一项：⁽¹⁰⁾		27,500		27,500		—		—			—		—		—		—
固定费用为350美元万。		27,500		27,500		—		—			—		—		—		—
股权总价值的1.0%最高可筹集10美元亿，外加1.5%的额外部分股权募集总价值超过10美元的亿。		27,500		27,500		—		—			—		—		—		—
这些补偿条款概述了财务顾问在成功完成股权筹资活动的基础上有权获得费用。对于非股权交易具体费用可以在逐笔交易的基础上进行协商，以确保财务顾问的薪酬与考虑到股权募集的规模和意义，考虑到公司的股权资本和资金总额养大的。		27,500		27,500		—		—			—		—		—		—
诉讼		27,500		27,500		—		—			—		—		—		—
该公司参与了在正常业务过程中发生的诉讼。预计此类诉讼不会对公司的财务状况产生实质性影响经营状况、经营结果和现金流。		27,500		27,500		—		—			—		—		—		—
14.关联方交易		27,500		27,500		—		—			—		—		—		—
相关应收账款聚会⁽¹¹⁾		27,500		27,500		—		—			—		—		—		—
本公司拥有未行使截至2023年12月31日和2022年12月31日，应收董事款项分别为50卢比和60卢比与公司代表董事发生的费用有关。⁽¹²⁾		24,750		24,750		—		—			—		—		—		—
2024年2月，公司收取每位董事应收关联方的全部金额。收款后无余额。		756,488		193,046		563,442		*			—		—		—		—
15.后续事件⁽¹³⁾		41,250		41,250		—		—			—		—		—		—
公司已评估 2023年12月31日之后至2024年4月22日（即这些合并财务报告的日期）的所有事件可以发表声明。⁽¹⁴⁾		80,613		11,756
完成合并及相关交易⁽¹⁵⁾		1,612		806
2024年4月16日，(《闭幕》日期“)，本公司完成先前宣布的合并，该合并由日期为2023年4月27日的合并协定(”空间“)提出交易“)。有关更多详细资讯，请参阅注1。⁽¹⁶⁾		2,014		1,007
业务组合为根据美国公认会计原则，被计入反向资本重组。在这种会计方法下，尽管ArrowRoot发布了 ILearningEngines，Inc.在业务合并中的流通股权益，ArrowRoot被视为“被收购” 用于财务报告目的的公司。因此，企业合并被视为公司发行股票的等价物收购ArrowRoot的净资产，同时进行资本重组。ArrowRoot的净资产按历史成本列报，没有已记录的商誉或其他无形资产。在业务合并之前的业务将是公司的业务。⁽¹⁷⁾		30,230		15,115
与闭幕式有关在业务合并中，ArrowRoot收购公司(纳斯达克代码：ARRW)更名为“iLearningEngines，Inc.”。 (“新公司”)，并在纳斯达克上市，新的股票代码为“爱乐”。⁽¹⁸⁾		40,307		3,359
在截止日期，根据合并协定的条款进行的交易如下：⁽¹⁹⁾		9,068		4,534
目前的Ile股东在交易结束日拥有109,684,738股新公司普通股对于前Ile股票；⁽²⁰⁾		70,536		35,268
前Arrowroot公开股东在交易结束日拥有638,977股NewCo普通股作为交换对于前Arrowroot公开发行的股票；⁽²¹⁾		20,153		3,359
截至截止日期，Arrowroot的现任和前任附属公司拥有8,674,617股NewCo普通股换取以前的ArrowRoot可转换票据和期票；⁽²²⁾		7,052		3,526
可转换票据-投资者(不包括ArrowRoot的关联公司)拥有NewCo的11,551,784股结算日的普通股，以换取以前的ILE可转换票据(见下文“可转换票据购买协定” 对于在成交日签订的可转换票据的部分)；⁽²³⁾		2,191,506		2,191,506		—		—			—		—		—		—
这家2020年、2021年和2023年的贷款机构在收盘时拥有4,419,998股新公司普通股根据定期贷款修正案确定的日期(详情见下文“2020年、2021年和2023年定期贷款修正案”)。vt.在.的基础上 2024年4月18日偿还定期贷款，815,999股新公司普通股被取消。⁽²³⁾		1,571,872		1,571,872		—		—			—		—		—		—
购买可转换票据协定⁽²⁴⁾		7,087,884		7,087,884		—		—			8,250,000		8,250,000		—		—
与SPAC有关该公司发行并转换了价值2940英镑的2024年可转换票据。该公司发行了70美金的可转换债券 2024年3月21日的票据和截止日期的2870便士的可转换票据（统称为「2024年可转换票据」）。 2024年可转换票据于截止日期转换为NewCo的8，089，532股普通股。		40,000		40,000		—		—			—		—		—		—
2020年的修正案， 2021年和2023年定期贷款		40,000		40,000		—		—			—		—		—		—
2024年3月27日，伊利岛签订了修订2020、2021年和2023年定期贷款(“定期贷款”)的协定。根据修正案，定期贷款被修订为：		40,000		40,000		—		—			—		—		—		—
修订定期贷款摊销时间表，以换取1,019,999股新公司普通股将于SPAC交易完成后发行(“贷款重组股份”)		40,000		40,000		—		—			—		—		—		—
终止2020年权证、2021年权证和2023年权证及相关的各自认沽权利作为交换，我们同意向2020年、2021年和2023年的贷款人提供总额为3399,999美元的贷款 SPAC交易完成后将发行的新公司普通股。⁽²⁵⁾		10,975		10,975		—		—			—		—		—		—
如果公司偿还定期贷款于(一)2024年4月15日或之前，则90%的贷款重组股份将被注销，(二)2024年5月1日，则80% 贷款重组股份将被注销，以及(三)2024年7月1日，则贷款重组股份将被注销50%。该公司于2024年4月18日偿还了定期贷款，815,999股被注销。⁽²⁵⁾		22,222		22,222		—		—			—		—		—		—
此外，修正案规定，如果本公司提前偿还定期贷款，则根据本公司的选择，本公司可以提前支付预定但未支付的利息支付，本应在预付款日期后通过发行若干新公司普通股而应计通过(A)(X)未支付的预定利息付款和(Y)2.75的乘积除以(B)新公司普通股的VWAP而获得的股票在紧接发行日期前七(7)个交易日的股票。公司全额预付定期贷款 2024年4月18日，以现金和159,379股普通股的组合。⁽²⁵⁾		48,894		48,894		—		—			—		—		—		—
应付款项的议付给第三方供应商⁽²⁶⁾		3,043,980		3,043,980		—		—			—		—		—		—
2024年3月27日，公司财务顾问(见附注13)修订了财务咨询协定，规定以现金支付根据财务咨询协定所欠的任何咨询费或其他费用或费用的全额，公司将支付财务顾问7,500,000美元现金或新公司股票，由公司自行决定。⁽²⁷⁾		1,360,760		1,360,760		—		—			—		—		—		—
公司还进行了谈判以几种形式向其他第三方供应商支付账款的特许权。优惠形式包括：(1)提供优惠应支付的总金额，(2)以普通股结算某些应付款项的选择权，以及(3)订立延期付款协定某些应付账款。特许权于截止日期生效。⁽²⁸⁾		322,459		322,459		—		—			—		—		—		—
拟议的2024年股本激励计划⁽²⁹⁾		845,465		845,465		—		—			—		—		—		—
该公司提出了一项新的 2024年股权激励计划，该计划于2024年4月1日获得批准。		1,323,291		1,323,291		—		—			—		—		—		—
东西岸融资		77,964,895		50,373,997		27,590,898		20.4	%		—		—		—		—
2024年4月17日(《贷款》) 截止日期“)，Legacy iLearningEngines签订了贷款和担保协定(”循环贷款协定“)，由Legacy iLearningEngines作为借款人(“借款人”)、贷款人一方(“贷款人”)和East 西岸，作为贷款人的行政代理和抵押代理(“代理”)。循环贷款协定规定 (一)本金总额高达4,000万的回圈信贷安排；及(二)手风琴贷款借款人根据借款人的选择和条件将回圈承诺额增加2,000万美元代理人批准(统称为“循环贷款”)。借款人在贷款结束时提取了4,000美元万循环贷款日期，(X)用于全额偿还借款人的定期贷款，(Y)用于一般企业用途。		18,799,432		14,238,418		4,561,014		3.4	%		—		—		—		—
《公约》规定的义务循环贷款协定以借款人几乎所有资产的完美担保权益为担保，但某些资产除外根据循环贷款协定的条款，习惯上不包括财产。在贷款结束日，本公司和In2Vate， Legacy iLearningEngines的全资子公司、俄克拉荷马州有限责任公司(担保人)L.L.C. 与代理人订立保证和保证协定(“保证”)，根据该协定，担保人提供保证借款人在循环贷款协定下的债务，并提供了几乎所有担保人的担保权益根据担保条款，除某些习惯上被排除在外的财产外的资产。⁽³⁰⁾		1,022,146		1,022,146		—		—			—		—		—		—
适用的利率对于循环贷款，调整后的期限SOFR(利息期限为1个月或3个月，由借款人选择)加3.50% 年利率，以调整后的期限SOFR下限4.00%为准。⁽³¹⁾		221,465		221,465		—		—			—		—		—		—
回圈债券的到期日贷款期限为2027年4月17日。循环贷款协定包含习惯陈述和保证以及习惯肯定和消极契约，除其他外，包括对债务、留置权、投资、合并、处置、提前还款的限制其他债务、股息和其他分配。借款人还必须遵守以下金融契约，循环贷款协定中更充分地规定了(一)最低流动资金，(二)计划的最低收入业绩，(三) 最低固定费用覆盖率和(Iv)最高杠杆率。⁽³²⁾		511,073		511,073		—		—			—		—		—		—

《循环贷款协定》还包括常规违约事件，包括未能在到期时支付本金、利息或某些其他金额、重大不准确陈述和担保、违反契约、具体规定的交叉违约和与其他重大债务的交叉加速，某些破产和资不抵债事件、某些未撤销的判决、担保的重大无效或担保权益的授予，重大不利影响和控制的变化，在某些情况下，受某些门槛和宽限期的限制。如果一个或多个事件如果违约发生并持续超过任何适用的补救期限，代理人可在持有多数贷款人同意的情况下，贷款和贷款承诺，或将在贷款人的要求下终止贷款人作出的承诺并宣布本公司于循环贷款协定项下之所有债务将即时到期及应付。

(1)

部分 II

134

(2)	招股说明书中不需要的信息

(3)	项目13.发行和发行的其他费用。

(4)	这个下表列出了除承保折扣和佣金外，我方应支付的与下列各项有关的所有成本和费用被登记证券的出售。除美国证券交易委员会注册费外，所有金额均为估计值。

(5)

量

(6)

SEC注册费

(7)

公证费用和开支

(8)

法律费用和开支

(9)

杂项费用和支出

(10)

总支出

(11)	折扣，本招股说明书涵盖的出售普通股股份所涉及的特许权、佣金和类似的出售费用将由出售证券的持有人承担。我们将支付所有费用(折扣、优惠、佣金和类似销售除外与股份在美国证券交易委员会登记有关的开支)，详见上表估计。

(12)	专案14.对董事的赔偿还有军官。

(13)	部分经修订的《特拉华州公司法》145条规定，公司可以赔偿董事和高级管理人员以及其他雇员和个人的费用。 (包括律师费)、判决、罚款及为达成和解而实际及合理地招致的款项与任何受威胁、待决或已完成的诉讼、诉讼或法律程序有关，而在该诉讼、诉讼或法律程序中，该人是因以下原因而成为一方的该人是或曾经是登记人的董事、高级职员、雇员或代理人。DGCL规定，第145条不是不包括寻求赔偿的人根据任何章程、协定、股东投票或不偏不倚的董事或其他。注册人的公司注册证书和章程规定由在DGCL允许的最大范围内登记其董事和高级管理人员。

(14)	部分《香港特区政府合同法》第102(B)(7)条准许法团在其公司注册证书中规定，法团的董事不得因违反董事受托责任而对公司或其股东承担个人责任，但以下情况除外责任(1)违反董事对公司或其股东的忠诚义务，(2)作为或不作为非善意或涉及故意不当行为或明知违法；(三)非法支付股息或违法股票回购、赎回或其他分配；(4)董事派生不当个人利益的任何交易利益。注册人的公司注册证书在允许的最大范围内规定了这种责任限制由DGCL提供。

(15)	这个注册人已与每位董事及行政人员订立赔偿协定，以提供合约上的赔偿。除了我们公司注册证书中规定的赔偿外。每一份赔偿协定都规定了赔偿以及由司法常务官垫付与其送达服务所引起的申索、诉讼或法律程序有关的某些开支及讼费注册人，或应我们的要求，在适用的最大范围内，作为高级职员或董事向其他实体提供服务法律。我们认为，这些条款和协议对于吸引合格董事是必要的。

(16)	这个注册人还维持标准的保险单，在该保险单下为其董事和高级管理人员提供损失保险。以董事、高级管理人员的身分因失职或者其他不法行为而提出的索赔注册人可向注册人支付的款项及(2)注册人可向该等高级人员及董事支付的款项根据注册人公司注册证书和附例中所载的任何赔偿条款或以其他方式这是一个法律问题。

(17)	项目15.最近出售的未注册证券。

(18)	这个以下列表列出了自2021年1月1日以来我们出售的所有未注册证券的资讯：

(19)	(1)输入 2020年11月，我们发行了总计5,750,000股ArrowRoot B类普通股，总认购价为30,000美元。在12月 2020年31日，我们实现了4取5的股票拆分，产生了7,187,500股ArrowRoot b类普通股；

(20)	(2)输入 2021年3月，我们以每份认股权证1元的价格发行了8,250,000份认股权证供保荐人，产生8,250,000美元的总收入；

135

(21)	(3)输入 2024年4月，基本上与交易结束同时，我们向2024年可转换股票的持有人发行了8,0,532股普通股转换原先根据2024年可换股票据以私募方式发行的2024年可换股票据时的票据采购协定；

(22)	(4)输入 2024年4月，基本上与交易结束同时，我们根据不赎回条款向某些投资者发行了82,091股普通股与某些投资者达成协定，作为此类投资者不行使赎回权的对价；

(23)	(5)输入于二零二四年四月，大体上与交易结束同时，吾等向保荐人发行460,384股普通股以供偿还。全额偿付向ARRW发行的无担保本票项下的所有未偿债务；

(24)	(6)输入 2024年4月，基本上与成交同时，我们根据第二项规定向贷款人发行了4,419,998股普通股对贷款档案的综合修正，以In2vate，L.L.C.和贷款人为考虑因素修订摊销时间表根据业务合并前的WTI贷款协定。815,999股普通股随后被注销对In2vate，L.L.C.贷款档案的第二次总括修正案；

(25)	(7)在 2024年4月，我们根据In2vate贷款档案的第二次综合修正案向贷款人发行了159,379股普通股，有限责任公司和贷款人作为全额偿还WTI贷款协定下所有未偿债务的对价；

(26)	(8)2024年6月，我们向BTIG，LLC发行了511,073股普通股根据BTIG修正案，每股5.87美元的价格，与支付某些企业合并交易有关费用；

(27)	(9)2024年6月，发布1022,146 出售普通股予康托？菲茨杰拉德公司，以代替支付合共数额的递延承销佣金根据与交易有关的费用修订协定，按每股5.87美元的价格支付6,000,000美元；及

(28)	(10)2024年6月，我们向Cooley LLP发行了221,465股普通股根据与支付企业合并交易有关的库利费用协定，每股价格为5.87美元费用。

(29)	无上述交易涉及任何承销商、承销折扣或佣金或任何公开招股。我们相信每个人根据《证券法》第4(A)(2)条的规定，这些交易豁免了《证券法》的登记(和规则D)作为不涉及任何公开发行的发行人的交易或根据第701条颁布《证券法》第3(B)款作为发行人根据下列规定的利益计划和与赔偿有关的合同进行的交易规则701。在每笔交易中，证券的接受者表示他们有意购买证券进行投资。仅限于并不是为了出售或与其任何分发有关的出售，并在股份上放置了适当的图例在这些交易中签发的证书。所有收件人都可以通过他们与我们的关系获得有关以下内容的资讯我们。这些证券的出售是在没有任何一般招揽或广告的情况下进行的。

(30)	专案 16。展品和财务报表附表

(31)

注册成立通过引用

(32)

号证物

136

描述

时间表/

表格

文件编号

表现出

备案

日期

ArrowRoot Acquisition Corp.、Arac Merge Sub，Inc.和iLearningEngines，Inc.之间的合并协定，日期为2023年4月27日。2023年5月2日ILearningEngines，Inc.第二次修订和重新注册的注册证书。

2024年4月22日

iLearningEngines，Inc.修订和重述章程

2024年4月22日

修订和重述的注册权协议，日期为2024年4月16日，由iLearningEngines，Inc.，Arrowroot Acquisition LLC的成员以及iLearningEngines，Inc.的某些前股东。

2024年4月22日

普通股证书样本。

137

2024年4月22日

许可证样本。

2024年4月22日

Arrowroot Acquisition Corp.于2021年3月4日签署的令状协议以及大陆股票转让与信托公司，作为授权书代理。2021年3月5日2020年收购iLearningEngines Inc.行使股票股份的授权书S-4/A2023年12月8日2021年收购iLearningEngines Inc.行使股票股份的授权书S-4/A

2023年12月8日

2023年收购iLearningEngines Inc.行使股票股份的授权书

S-4/A

2023年12月8日

形式限制性股票协议

2024年4月22日

138

意见 Cooley LLP

2024年6月3日

Arrowroot Acquisition Corp.签署的赞助商支持协议形式iLearningEngines，Inc.，Arrowroot Acquisition LLC。以及iLearningEngines，Inc.的某些股东。

2023年9月5日Arrowroot Acquisition Corp.签署的股东支持协议形式，iLearning Engines，Inc.以及iLearningEngines，Inc.的某些股东。

2023年9月5日10.3*+iHealthEngines Inc.于2011年1月1日签订的高管雇佣协议和哈里什·奇丹巴兰

S-4/A

2023年12月8日

10.4*+

139

iLearningEngines Inc.签订的行政雇佣协议，日期为2019年2月20日和赛义德·法尔汉·纳克维

S-4/A

2023年12月8日

并入通过引用

号证物

描述

日程安排/

形式

文件编号

表现出

备案

日期

10.5*+

iLearningEngines Inc.签订的行政雇佣协议，日期为2018年10月10日和巴拉克里希南·阿拉卡尔

S-4/A

2023年12月8日iLearningEngines FZ-LLC和Ramakrishnan Parameswaran签署的就业录取信，日期为2022年9月15日.

S-4/A

140

2023年12月8日

iLearningEngines Inc.签订的行政雇佣协议，日期为2023年10月12日和大卫·塞缪尔斯S-4/A2023年12月8日

iLearningEngines Inc. 2020年股权激励计划S-4/A2023年12月8日

iLearningEngines Inc.下的限制性股票单位协议和授予通知的格式2020年股权激励计划

S-4/A2023年12月8日iLearning Engines，Inc. 2024年股权激励计划。

2024年4月22日

2024年股权激励计划下股票期权授予通知书格式和股票期权协议格式。

2024年4月22日10.12*+2024年股权激励计划下限制性股票单位授予通知书格式和限制性股票单位协议格式。

141

2024年4月22日iLearning Engines，Inc. 2024年员工股票购买计划。2024年4月22日

公司与其董事和高管签订的赔偿协议形式。

2024年4月22日

10.15+

iLearningEngines Inc.之间签订的贷款和担保协议，日期为2020年12月30日和Venture Lending & Leason IX，Inc.

S-4/A

2023年12月8日

10.16+#

iLearningEngines Inc.之间日期为2020年12月30日的贷款和担保协议补充协议和Venture Lending & Leason IX，Inc.

S-4/A

2023年12月8日

iLearningEngines Inc.于2021年10月21日签署的贷款和担保协议第1号修正案和Venture Lending & Leason IX，Inc.

S-4/A2023年12月8日10.18+

142

贷款 iLearningEngines Inc.和安全协议，日期为2021年10月21日和Venture Lending & Leason IX，Inc.和 WTI Fund X，Inc.S-4/A2023年12月8日

10.19+#iLearningEngines Inc.与iLearningEngines Inc.之间于2021年10月21日签订的贷款和担保协议的补充协议和Venture Lending & Leason IX，Inc.和WTI Fund X，Inc.S-4/A

2023年12月8日

10.20+

iLearningEngines Inc.签订的贷款和担保协议，日期为2023年10月31日和WTI Fund X，Inc.

S-4/A2023年12月8日并入通过引用

号证物

143

描述

日程安排/

形式文件编号表现出

备案

日期10.21+#iLearningEngines Inc.与iLearningEngines Inc.之间于2023年10月31日签订的贷款和担保协议补充协议和WTI Fund X，Inc.

S-4/A

144

2023年12月8日

10.22+#

iLearningEngines Inc.之间的智慧财产权安全协议，日期为2020年12月30日和Venture Lending & Leason IX，Inc.S-4/A2023年12月8日10.23+#iLearningEngines Inc.与iLearningInc.签订的智慧财产权安全协议，日期为2021年10月21日和Venture Lending & Leason IX，Inc.和WTI Fund X，Inc.S-4/A”, 2023年12月8日

10.24+#

iLearningEngines Inc.之间于2023年10月31日签订的智慧财产权安全协议，和WTI Fund X，Inc.

S-4/A

2023年12月8日

2023年可转换票据购买协议格式。2023年9月5日2023年可转换票据形式。

S-4/A

2024年1月5日

2024年可转换票据购买协议格式。

2024年4月22日

145

10.28+

形式 2024年可转换票据。

四月 2024年22月从属协议的形式。2024年4月22日

10.30+#

贷款和担保协议，日期为2024年4月17日，由iLearningEngines Holdings，Inc.，作为借款人、作为代理人的东西岸和贷方。

2024年4月22日

10.31+

iLearningEngines Holdings，Inc.于2024年4月17日签署的智慧财产权安全协议和In2vate，LLC作为授予人，受益于East West Bank。

2024年4月22日

iLearningEngines Holdings，Inc.于2024年4月17日签署的担保和保证协议In2vate、LLC为债务人，East West Bank为贷方代理人。

2024年4月22日

隶属协议，日期为2024年4月17日，由iLearningEngines Holdings，Inc和Experion Technology，FZ LLC签署。

2024年4月22日

146

10.34+#

iLearningEngines Holdings，Inc.对贷款文件的第二次综合修正案，作为借款人，以及In 2 vate，LLC，Venture Lending & Leanning IX，Inc.，和WTI Fund X，Inc.作为贷方。

2024年4月22日

Cantor Fitzgerald & Co.于2024年3月27日签订的费用减免协议，由Cantor Fitzgerald & Co.、Arrowroot Acquisition Corp.和iLearningEngines Inc.2024年4月22日瑞穗证券美国有限责任公司、iLearningEngines Inc.于2024年3月27日对日期为2020年6月5日的信函协议的第1号修正案和Arrowroot Acquisition Corp.

2024年4月22日

并入通过引用

号证物

描述

日程安排/

形式

文件编号

表现出备案日期

BTIG，LLC和Arrowroot Acquisition Corp.之间日期为2024年3月27日的信函协议修订案

147

2024年4月22日

费用等值协议日期为2024年3月27日，由Cooley LLP、Arrowroot Acquisition Corp.和iLearningEngines Inc签署2024年6月3日iLearningEngines，Inc.于2024年5月31日签署的费用等效协议第1号修正案和Cooley LLPS-1/A2024年7月1日

远期购买协议，日期：2023年4月26日

S-4/A

2023年11月6日

Polar Multi-Strategy Master Fund、Arrowroot Acquisition Corp.和iLearningEngines Inc.于2024年4月9日签署的信函协议

S-1/A

2024年7月1日

iLearningEngines Holdings，Inc.之间的贷款和担保协议第一修正案作为借款人、作为行政代理人的东西岸及其贷方

S-1/A2024年7月1日WithumSmith+Brown，PC致SEC的信。2024年4月22日iLearningEngines，Inc.子公司列表2024年4月22日^

独立特许会计师事务所Marcum LLP的同意

148

23.2

WithumSmith+Brown，PC，独立特许会计师事务所的同意库利的同意 LLP（包含在图表5.1中）2024年6月3日授权书(包括在签名页上)”

2024年6月3日

101.INS

内联MBE实例文档。

101.SCH

内联MBE分类扩展架构文档。

101.CAL

内联MBE分类扩展计算Linkbase文档。

101.DEF

内联MBE分类扩展定义Linkbase文档。

101.LAB

149

内联MBE分类扩展标签Linkbase文档。

101.PRE内联MBE分类扩展演示Linkbase文档。封面交互式数据文件（格式为Inline BEP，包含在附件101中）。备案收费表2024年6月3日

提交在此。+这个根据S-k条例第601(A)(5)项，本协定的附表和证物已被省略。任何遗漏的附表的副本和/或展品将根据要求提供给美国证券交易委员会。

一定的根据法规S-k第601(B)(10)(Iv)项，本展品的部分内容已被省略，因为它们不是实质性的，注册人视为私人或机密的资讯类型。注册人同意提供未经编辑的补充应要求向美国证券交易委员会提供展品或其中任何部分的副本

表示管理合同或补偿计划或安排。

150

专案 17. 承诺

这个以下签署的注册人特此承诺

至在提出要约或出售的任何期间内，提交生效后的修正案致本注册声明：

至包括19证券法第10(A)(3)条规定的任何招股说明书；

至在招股说明书中反映在本注册生效日期后发生的任何事实或事件声明(或其最新的生效后修正案)，个别或在该集合代表本注册中所述资讯的根本性变化声明。尽管有上述规定，证券交易量的任何增加或减少要约(如果所要约证券的总美元价值不超过注册)，以及与估计最高发行价的低端或高端有任何偏差范围可以根据规则向委员会提交的招股说明书的形式反映 424(B)如果数量和价格的变化合计不超过20% 在《登记计算》中规定的最高总发行价有效登记说明书中的“费用”表；以及

至包括与分配计划有关的任何材料资讯在本注册声明中披露的资讯或对本注册声明中注册声明。

那, 为了确定根据19《证券法》所承担的任何责任，变更生效后，包含招股说明书形式的，视为新登记与其中提供的证券及该等证券的发售有关的陈述届时应被视为其首次真诚发售。

至藉在生效后作出的修订而将以下任何证券从注册中删除在股票发行终止时仍未售出的已登记股票。

那, 为根据19《证券法》确定对任何买方的责任，根据规则第424(B)条提交的每份招股说明书，作为登记声明的一部分发行，但根据规则4300亿作出的注册声明或招股说明书除外依据规则430A提交的，应被视为注册的一部分幷包括在注册中报表自生效后首次使用之日起计算。然而，前提是没有在注册说明书或招股章程中作出的陈述，而该陈述是注册的一部分声明或在以引用方式并入或被视为并入作为注册说明书一部分的注册说明书或招股说明书将作为在第一次使用、取代或修改之前签订销售合同的购买者在注册说明书或招股章程中作出的任何陈述，而该陈述是在紧接该日期之前在任何该等档案中作出的注册陈述或作出的注册声明第一次使用。

那, 为确定注册人根据19《证券法》所承担的责任向证券初次分销中的任何购买人、以下签署的登记人在以下签署的注册人的首次证券发售中承担这一责任至本注册声明，不论以何种承销方式出售证券如果证券是以任何形式向买方提供或出售给买方的，在以下通信中，

任何以下签署的注册人与此次发行有关的初步招股说明书或招股说明书根据规则424要求提交的档案；

任何由以下签署人或其代表准备的与发行有关的免费招股说明书登记人或以下签署的登记人使用或提及的登记人；

这个任何其他免费撰写的招股说明书中包含材料的部分关于以下签署的注册人或其由或代表提供的证券的资讯下列签署的登记人；及

任何以下签署的注册人在要约中提出的要约的其他通知购买者。

就目前而言因为根据19证券法产生的责任的赔偿可以允许董事、高级管理人员和控制人根据前述规定，或以其他方式，登记人被告知，美国证券交易委员会认为这种赔偿违反了19《证券法》所规定的公共政策，因此是不可执行的。在该事件中就该等法律责任提出的赔偿申索(注册人支付的费用除外) 董事，注册人在任何诉讼、诉讼或法律程序的成功抗辩中的高级人员或控制人)由该董事、高级职员或控制人与正在登记的证券有关，除非注册人认为其律师的问题已通过控制先例解决，向具有适当管辖权的法院提交问题他们的这种赔偿违反了19证券法中所表达的公共政策，并将由最终裁决管辖这样的问题。

签名

根据要求根据《证券法》，登记人已正式促使本登记声明由以下签署人代表其签署，正式授权，于2024年7月22日在马利兰州贝塞斯达举行。

Ilearninggenines，公司

作者：

/S/ 哈里什·奇丹巴兰

151

姓名：

哈里什·奇丹巴兰

标题：

执行长

根据《证券条例》的要求根据19《公民权利和政治权利国际法》，本登记书由下列人员以指定的身分在指定的日期签署。

签名

标题

日期

/S/哈里什奇丹巴兰语

首席执行官兼董事会主席

2024年7月22日

哈里什·奇丹巴兰

（执行长）

财务长

152

2024年7月22日

法尔汉·纳克维

（首席财务会计官）

主任

2024年7月22日

巴拉克里希南·阿拉卡尔

主任

2024年7月22日

马修·巴格

主任

2024年7月22日

伊恩·戴维斯

主任

2024年7月22日

布鲁斯·梅尔曼

主任

2024年7月22日

麦可·MoE

主任

2024年7月22日

托马斯·奥利维尔

* 作者： /s/ Harish Chidambaran

哈里什·奇丹巴兰

事实律师

II-8

S-1/A

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(1)	aile：PrivatePlacement会员

(2)	aile：FounderSharesMember

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Notes to Condensed Consolidated Financial Statements (Unaudited)	F-61

	Page
AUDITED FINANCIAL STATEMENTS OF ILEARNINGENGINES, INC.:
Report of Independent Registered Public Accounting Firm	F-76
Consolidated Balance Sheets as of December 31, 2023 and 2022	F-77
Consolidated Statements of Operations for the years ended December 31, 2023, 2022 and 2021	F-78
Consolidated Statements of Changes in Shareholders’ Deficit for the years ended December 31, 2023, 2022 and 2021	F-79
Consolidated Statements of Cash Flows for the years ended December 31, 2023, 2022 and 2021	F-80
Notes to Consolidated Financial Statements	F-81

F-1

ILEARNINGENGINES INC.

(FORMERLY KNOWN AS ARROWROOT ACQUISITION CORP.)

CONDENSED CONSOLIDATED BALANCE SHEETS

	March 31, 2024			December 31, 2023
ASSETS	(unaudited)
Current assets
Cash	$	26,757		$	145,669
Prepaid expenses		60,750			48,319
Prepaid income tax		16,795			65,585
Total Current Assets		104,302			259,573

Cash and investments held in Trust Account		10,788,134			46,744,889
TOTAL ASSETS	$	10,892,436		$	47,004,462

LIABILITIES, CLASS A COMMON STOCK SUBJECT TO POSSIBLE REDEMPTION AND STOCKHOLDERS’ DEFICIT
Current liabilities
Accounts payable and accrued expenses	$	5,481,646		$	4,099,162
Excise tax payable		2,472,591			2,472,591
Promissory note – related party		2,230,000			2,180,000
Forward purchase agreement liability		1,500,000			1,500,000
Convertible promissory notes – related party		2,780,000			2,620,000
Total Current Liabilities		14,464,237			12,871,753

Deferred underwriting fee payable		6,000,000			10,062,500
Warrant liabilities		4,072,500			1,810,000
Total Liabilities		24,536,737			24,744,253

Commitments and Contingencies
Class A common stock subject to possible redemption, $0.0001 par value; 1,017,030 and 4,445,813 shares issued and outstanding at approximately $10.61 and $10.51 per share redemption value as of March 31, 2024 and December 31, 2023, respectively		10,788,134			46,744,889

Stockholders’ Deficit
Preferred stock, $0.0001 par value; 1,000,000 shares authorized; none issued or outstanding as of March 31, 2024 and December 31, 2023		—			—
Class A common stock, $0.0001 par value; 200,000,000 shares authorized, none issued and outstanding (excluding 1,017,030 and 4,445,813 subject to possible redemption), respectively, as of March 31, 2024 and December 31, 2023		—			—
Class B common stock, $0.0001 par value; 20,000,000 shares authorized; 7,187,500 shares issued and outstanding as of March 31, 2024 and December 31, 2023		719			719
Additional paid-in capital		410,772			—
Accumulated deficit		(24,843,926	)		(24,485,399	)
Total Stockholders’ Deficit		(24,432,435	)		(24,484,680	)
TOTAL LIABILITIES, CLASS A COMMON STOCK SUBJECT TO POSSIBLE REDEMPTION AND STOCKHOLDERS’ DEFICIT	$	10,892,436		$	47,004,462

The accompanying notes are an integral part of the unaudited condensed consolidated financial statements

F-2

ILEARNINGENGINES, INC.

(FORMERLY KNOWN AS ARROWROOT ACQUISITION CORP.)

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

	For The Three Months Ended March 31,
	2024			2023

General and administrative expenses	$	1,545,279		$	828,626
Loss from operations		(1,545,279	)		(828,626	)

Other (loss) income:
Change in fair value of warrant liabilities		(2,262,500	)		(2,610,000	)
Gain from forgiveness of deferred underwriting commissions		184,844			—
Non-redemption consideration		(763,446	)		—
Interest Expense - Promissory Note		(33,736	)		—
Interest earned on cash and investments held in Trust Account		232,724			2,199,882
Total other (loss) income, net		(2,642,114	)		(410,118	)

Loss before provision for income taxes		(4,187,393	)		(1,238,744	)
Provision for income taxes		(48,790	)		(455,948	)
Net loss	$	(4,236,183	)	$	(1,694,692	)

Weighted average shares outstanding, Class A common stock		2,373,472			21,188,697

Basic and diluted net loss per share, Class A common stock	$	(0.44	)	$	(0.06	)

Weighted average shares outstanding, Class B common stock		7,187,500			7,187,500

Basic and diluted net loss per share, Class B common stock	$	(0.44	)	$	(0.06	)

The accompanying notes are an integral part of the unaudited condensed consolidated financial statements.

F-3

ILEARNINGENGINES, INC.

(FORMERLY KNOWN AS ARROWROOT ACQUISITION CORP.)

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIT

(UNAUDITED)

FOR THE THREE MONTHS ENDED MARCH 31, 2024

	Class A Common Stock				Class B Common Stock				Additional Paid-in			Accumulated			Total Stockholders’
	Shares		Amount		Shares		Amount		Capital			Deficit			Deficit
Balance – January 1, 2024 (audited)		—	$	—		7,187,500	$	719	$	—		$	(24,485,399	)	$	(24,484,680	)
Accretion of Class A common stock subject to possible redemption		—		—		—		—		(352,674	)		—			(352,674	)
Reduction of Deferred Underwriting Fee		—		—		—		—		—			3,877,656			3,877,656
Consideration for non-redemption agreement		—		—		—		—		763,446			—			763,446
Net loss		—		—		—		—		—			(4,236,183	)		(4,236,183	)
Balance – March 31, 2024 (unaudited)		—	$	—		7,187,500	$	719	$	410,772		$	(24,843,926	)	$	(24,432,435	)

FOR THE THREE MONTHS ENDED MARCH 31, 2023

	Class A Common Stock				Class B Common Stock				Additional Paid-in		Accumulated			Total Stockholders’
	Shares		Amount		Shares		Amount		Capital		Deficit			Deficit
Balance – January 1, 2023 (audited)		—	$	—		7,187,500	$	719	$	—	$	(12,477,730	)	$	(12,477,011	)
Accretion of Class A common Stock Subject to Redemption		—		—		—		—		—		(2,355,234	)		(2,355,234	)
Net loss		—		—		—		—		—		(1,694,692	)		(1,694,692	)
Balance – March 31, 2023 (unaudited)		—	$	—		7,187,500	$	719	$	—	$	(16,527,656	)	$	(16,526,937	)

The accompanying notes are an integral part of the unaudited condensed consolidated financial statements.

F-4

ILEARNINGENGINES, INC.

(FORMERLY KNOWN AS ARROWROOT ACQUISITION CORP.)

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

	For the Three Months Ended March 31,
	2024			2023
Cash Flows from Operating Activities:
Net loss	$	(4,236,183	)	$	(1,694,692	)
Adjustments to reconcile net loss to net cash used in operating activities:
Reduction of Deferred Underwriting Fee		(184,844	)		—
Non-redemption consideration		763,446			—
Interest earned on investments held in Trust Account		(232,724	)		(2,199,882	)
Change in fair value of warrant liabilities		2,262,500			2,610,000
Changes in operating assets and liabilities:
Prepaid expenses		(12,431	)		(67,799	)
Prepaid income taxes		48,790			—
Accrued expenses		1,382,484			438,394
Income tax payable		—			455,948
Net cash used in operating activities		(208,962	)		(458,031	)

Cash Flows from Investing Activities:
Investment of cash in Trust Account		(160,000	)		(640,000	)
Cash withdrawn from Trust Account for payment of franchise tax obligations		40,050			40,050
Cash withdrawn from Trust Account in connection with redemptions		36,309,429			247,259,068
Net cash provided by investing activities		36,189,479			246,659,118

Cash Flows from Financing Activities:
Proceeds from promissory note - related party		50,000			—
Proceeds from non-convertible promissory note – related party		—			1,140,000
Proceeds from convertible promissory note – related party		160,000			—
Redemption of common stock		(36,309,429	)		(247,259,068	)
Net cash used in financing activities		(36,099,429	)		(246,119,068	)

Net Change in Cash		(118,912	)		82,019
Cash – Beginning of the period		145,669			145,980
Cash – End of the period	$	26,757		$	227,999

Non-Cash investing and financing activities:
Reduction of deferred underwriting fees	$	3,877,656		$	—
Non-redemption consideration	$	763,446		$	—

Supplementary cash flow information:
Cash paid for income taxes	$	—		$	367,000

The accompanying notes are an integral part of the unaudited condensed consolidated financial statements.

F-5

ILEARNINGENGINES, INC.

(FORMERLY KNOWN AS ARROWROOT ACQUISITION CORP.)

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2024

NOTE 1. DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS

iLearningEngines, Inc. formerly known as Arrowroot Acquisition Corp. (the “Company”) is a blank check company incorporated in Delaware on November 5, 2020. The Company was formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses (the “Business Combination”).

The Company is not limited to a particular industry or sector for purposes of consummating a Business Combination. The Company is an early stage and emerging growth company and, as such, the Company is subject to all of the risks associated with early stage and emerging growth companies.

As of March 31, 2024, the Company had not commenced any operations. All activity through March 31, 2024 relates to the Company’s formation, the initial public offering (“Initial Public Offering”), which is described below, and identifying a target company for a Business Combination, including activities in connection with the Business Combination (as defined and discussed below). The Company will not generate any operating revenues until after the completion of a Business Combination, at the earliest. The Company generates non-operating income in the form of interest income from the cash held in the Trust Account (as defined below).

Financing

The registration statement for the Company’s Initial Public Offering was declared effective on March 1, 2021. On March 4, 2021, the Company consummated the Initial Public Offering of 28,750,000 units (the “Units” and, with respect to the Class A common stock included in the Units sold, the “Public Shares”), which includes the full exercise by the underwriter of its over-allotment option in the amount of 3,750,000 Units, at $10.00 per Unit, generating gross proceeds of $287,500,000.

Simultaneously with the closing of the Initial Public Offering, the Company consummated the sale of 8,250,000 warrants (the “Private Placement Warrants”) at a price of $1.00 per Private Placement Warrant in a private placement to Arrowroot Acquisition LLC (the “Sponsor”), generating gross proceeds of $8,250,000.

Transaction costs amounted to $16,392,714, consisting of $5,750,000 in cash underwriting fees, net of reimbursements, $10,062,500 of deferred underwriting fees and $580,214 of other offering costs.

Trust Account

Following the closing of the Initial Public Offering on March 4, 2021, an amount of $287,500,000 ($10.00 per Unit) from the net proceeds of the sale of the Units in the Initial Public Offering and the sale of the Private Placement Warrants was placed in a trust account (the “Trust Account”), located in the United States and has been invested only in U.S. government securities, within the meaning set forth in Section 2(a)(16) of the Investment Company Act of 1940, as amended (the “Investment Company Act”), with a maturity of 185 days or less or in any open-ended investment company that holds itself out as a money market fund selected by the Company meeting the conditions of Rule 2a-7 of the Investment Company Act, as determined by the Company, until the earlier of (i) the completion of a Business Combination and (ii) the distribution of the funds held in the Trust Account, as described below.

F-6

ILEARNINGENGINES, INC.

(FORMERLY KNOWN AS ARROWROOT ACQUISITION CORP.)

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2024

Operations Prior to Business Combination with iLearningEngines Holdings Inc.

On February 28, 2023, the Company’s stockholders held a special meeting (the “Special Meeting”) and approved and adopted an amendment to its Amended and Restated Certificate of Incorporation (the “Certificate of Incorporation”) to extend the period of time for which the Company is required to consummate a Business Combination from March 4, 2023 (the “Original Termination Date”) to July 6, 2023 (the “Charter Extension Date”) and to allow the Company, without another stockholder vote, to elect to extend the date (the “Termination Date”) to consummate an initial business combination on a monthly basis for up to seven times by an additional one month each time after the Charter Extension Date, by resolution of the Company’s board of directors (the “Board”) if requested by the Arrowroot Acquisition LLC (the “Sponsor”), and upon five days’ advance notice prior to the applicable Termination Date, until February 4, 2024 (each, an “Additional Charter Extension Date”) for a total of up to eleven months after the Original Termination Date, unless the closing of an initial Business Combination shall have occurred prior thereto (the “Extension”, such extension deadline, the “Extension Date”, and such proposal, the “Extension Proposal”). In connection with the Extension, shareholders holding 24,304,187 shares of the Company’s Class A common stock exercised their right to redeem such shares for a pro rata portion of the funds in the Company’s Trust Account at a redemption price of approximately $10.17 per share. As a result, following the Special Meeting, approximately $247,259,068 in cash was removed from the Trust Account to pay such holders.

The Company approved an additional draw of an aggregate of $160,000 pursuant to the Third Promissory Note, which Extension Funds were deposited into the Company’s Trust Account for its public stockholders, on January 5, 2024. This deposit enables the Company to extend the date by which it must complete its initial business combination from January 6, 2024 to February 6, 2024 (the “Seventh Extension”). The Seventh Extension is the final of seven one-month extensions permitted under the Company’s Certificate of Incorporation and provides the Company with additional time to complete its initial business combination.

On January 8, 2024, the Company received a notice (the “Annual Meeting Notice”) from the Listing Qualifications Department of The Nasdaq Stock Market LLC (“Nasdaq”) stating that the Company failed to hold an annual meeting of stockholders within 12 months after its fiscal year ended December 31, 2022, as required by Nasdaq Listing Rule 5620(a). In accordance with Nasdaq Listing Rule 5810(c)(2)(G), the Company had 45 calendar days (or until February 22, 2024) to submit a plan to regain compliance and, if Nasdaq accepts the plan, Nasdaq may grant the Company up to 180 calendar days from its fiscal year end, or until June 28, 2024, to regain compliance. The Company submitted a plan to regain compliance on February 22, 2024. While the compliance plan was pending, the Company’s securities continued to trade on Nasdaq. In connection with the closing of the Business Combination, Arrowroot Acquisition Corp. (NASDAQ: ARRW) changed its name to “iLearningEngines, Inc.” and is listed on the NASDAQ under the new ticker symbol “AILE”.

On February 2, 2024, the Company held a special meeting of stockholders (the “Extension Special Meeting”) to approve an amendment to the Company’s Certificate of Incorporation, as amended, (the “Charter Amendment”), to extend the Termination Date from February 4, 2024 to March 6, 2024 (the “Initial Subsequent Charter Extension Date”) and to allow the Company, without another stockholder vote, to elect to extend the Termination Date to consummate an initial business combination on a monthly basis up to five times by an additional one month each time after the Initial Subsequent Charter Extension Date (the Initial Subsequent Charter Extension Date, as further extended by the Company, the “Subsequent Extension Date”), by resolution of the Board, if requested by the Sponsor, and upon five days’ advance notice prior to the applicable Termination Date, until August 6, 2024, unless the closing of an initial business combination shall have occurred prior thereto (the “Subsequent Extension Proposal”). The stockholders of the Company approved the Subsequent Extension Proposal at the Extension Special Meeting and on February 2, 2024, the Company filed the Charter Amendment with the Delaware Secretary of State.

On February 2, 2024, the Company entered into a Non-Redemption Agreement (the “Non-Redemption Agreement”) with a certain public stockholder of the Company (the “Public Stockholder”) eligible to redeem its shares of the Company’s Class A common stock at the Company’s Extension Special Meeting. Pursuant to the Non-Redemption Agreement, the Public Stockholder agreed not to request redemption of 410,456 shares of Class A Common Stock (the “Non-Redeemed Shares”) in connection with the Extension Special Meeting. In consideration of the Public Stockholder entering into the Non-Redemption Agreement, immediately following the closing of Arrowroot’s initial business combination, the Sponsor agreed to forfeit 82,091 shares of Class B common stock (the “Class B Common Stock”), or 41,046 shares of Class B Common Stock in the event the initial business combination is consummated in February 2024, (“Forfeited Shares”). Pursuant to the terms of the Non-Redemption Agreement, Arrowroot agreed to issue to the Public Stockholder and the Public Stockholder agreed to acquire from Arrowroot, a number of newly-issued shares of common stock promptly following the consummation of Arrowroot’s initial business combination. As a result, the Company recorded $9.30 per share or $763,446 as an expense with a corresponding charge to additional paid-in capital to recognize the fair value of the shares transferred.

In connection with the vote to approve the Charter Amendment, the holders of 3,428,783 shares of Class A common stock properly exercised their right to redeem their shares (and did not withdraw their redemption) for cash at a redemption price of approximately $10.59 per share, for an aggregate redemption amount of $36,309,429. After the satisfaction of such redemptions, the balance in the Company’s Trust Account was approximately $10.77 million.

F-7

ILEARNINGENGINES, INC.

(FORMERLY KNOWN AS ARROWROOT ACQUISITION CORP.)

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2024

Business Combination

On April 27, 2023, the Company (formerly known as Arrowroot Acquisition Corp.) entered into an Agreement and Plan of Merger and Reorganization (the “Merger Agreement”) with ARAC Merger Sub, Inc., a Delaware corporation and a wholly owned subsidiary of Arrowroot Acquisition Corp. (“Merger Sub”), and iLearningEngines Inc., a Delaware corporation (“Legacy iLearningEngines”).

The Merger Agreement provides that, among other things and upon the terms and subject to the conditions thereof, the following transactions will occur (together with the other transactions contemplated by the Merger Agreement:

	(i)	at the closing of the Business Combination (the “Closing”), in accordance with the Delaware General Corporation Law, as amended (“DGCL”), Merger Sub will merge with and into Legacy iLearningEngines, the separate corporate existence of Merger Sub will cease and Legacy iLearningEngines will be the surviving corporation (the “Surviving Corporation”) and a wholly owned subsidiary of the Company (the “Merger”); and

	(ii)	as a result of the Merger, among other things, the outstanding shares of common stock of iLearningEngines (other than shares subject to Legacy Legacy iLearningEngines equity awards, treasury shares and dissenting shares) will be cancelled in exchange for the right to receive a number of shares of common stock of the Surviving Corporation equal to (x) the sum of (i) the Base Purchase Price (as defined below), minus (ii) the dollar value of the Company Incentive Amount (as defined below), plus (iii) the aggregate exercise price of the Company Warrants (as defined in the Merger Agreement) that are issued and outstanding immediately prior to the Effective Time, minus (iv) the aggregate amount of Note Balance (as defined in the Merger Agreement) divided by (y) $10.00. The “Base Purchase Price” means an amount equal to $1,285,000,000. The “Company Incentive Amount” means (x) the number of shares of the Company Class A Common Stock issuable to Legacy iLearningEngines securityholders (excluding, for the avoidance of doubt, the holders of Company Convertible Notes) at the Closing which Legacy iLearningEngines and the Company agree, at least two (2) business days prior to the Closing, to issue to certain private placement investors and non-redeeming stockholders (which amount will equal 82.03125% of all such shares issued to such investors and non-redeeming stockholders, with the remainder being contributed by the Sponsor), multiplied by (y) $10.00.

The Board of Directors of the Company (the “Board”) has (i) approved and declared advisable the Merger Agreement and the Business Combination and (ii) resolved to recommend approval of the Merger Agreement and related matters by the stockholders of the Company.

The Merger Agreement is subject to the satisfaction or waiver of certain customary closing conditions, including, among others, (i) approval of the Business Combination and related agreements and transactions by the respective shareholders of the Company and Legacy iLearningEngines, (ii) effectiveness of the registration statement on Form S-4 to be filed by the Company in connection with the Business Combination, (iii) expiration or termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act, (iv) the absence of any injunction, order, statute, rule, or regulation enjoining or prohibiting the consummation of the Merger, (v) that the Company have at least $5,000,001 of net tangible assets upon Closing and (vi) receipt of approval for listing on Nasdaq the shares of common stock of the Surviving Corporation to be issued in connection with the Merger.

Other conditions to the Company’s obligations to consummate the Merger include, among others, that as of the Closing, (i) Legacy iLearningEngines shall have performed all covenants in all material respects and (ii) no Company Material Adverse Effect (as defined in the Merger Agreement) shall have occurred between the date of the Merger Agreement and Closing.

Other conditions to Legacy iLearningEngines’ obligations to consummate the Merger include, among others, that as of the Closing, (i) the Company shall have performed all covenants in all material respects (ii) no Acquiror Material Adverse Effect (as defined in the Merger Agreement) shall have occurred between the date of the Merger Agreement and Closing and (iii) the amount of cash available in the Trust Account into which substantially all of the proceeds of the Company’s initial public offering and private placement of its warrants have been deposited for the benefit of its public shareholders, together with the proceeds of certain private placement investments in the Company or Legacy iLearningEngines prior to closing and subject to the deductions and conditions set forth in the Merger Agreement, including deductions for certain the Company transaction expenses, is at least equal to or greater than $100,000,000.

F-8

ILEARNINGENGINES, INC.

(FORMERLY KNOWN AS ARROWROOT ACQUISITION CORP.)

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2024

The Merger Agreement contains additional covenants, including, among others, providing for (i) the parties to conduct their respective businesses in the ordinary course through the Closing, (ii) the parties to not solicit, initiate any negotiations or enter into any agreements for certain alternative transactions, (iii) Legacy iLearningEngines to prepare and deliver to the Company certain audited and unaudited condensed consolidated financial statements of Legacy iLearningEngines, (iv) the Company to prepare and file a registration statement on Form S-4 and take certain other actions to obtain the requisite approval of the Company’s stockholders of certain proposals regarding the Business Combination and (v) the parties to use reasonable best efforts to obtain necessary approvals from governmental agencies.

On April 16, 2024, Arrowroot Acquisition Corp. (now known as iLearningEngines, Inc.), a Delaware corporation that is our predecessor, consummated the previously announced Business Combination pursuant to that certain Agreement and Plan of Merger and Reorganization, dated as of April 27, 2023, by and among Arrowroot Acquisition Corp., ARAC Merger Sub, Inc. (“Merger Sub”), and Legacy iLearningEngines. Merger Sub merged with and into Legacy iLearningEngines with the separate corporate existence of Merger Sub ceasing and Legacy iLearningEngines surviving the merger as a wholly owned subsidiary of the Company. In connection with the closing of the Business Combination, Arrowroot Acquisition Corp. changed its name to iLearningEngines, Inc. See the Form 8-K, filed with the SEC on April 22, 2024, for additional information.

Liquidity and Going Concern

On December 29, 2021, the Company issued an unsecured convertible promissory note (the “First Promissory Note”) with the Sponsor pursuant to which the Sponsor agreed to loan the Company up to an aggregate principal amount of $1,500,000. Upon issuance, $750,000 was drawn down on the note with an additional $200,000 drawn down on March 17, 2022. On April 21, 2022, the Company drew down the remaining $550,000 pursuant to the terms of the First Promissory Note. Following this drawdown, the full $1,500,000 available under the First Promissory Note was outstanding. There are no remaining funds available under the First Promissory Note for future drawdowns. As of March 31, 2024 and December 31, 2023, $1,500,000 were outstanding under this First Promissory Note.

The First Promissory Note is subject to the Sponsor’s approval and does not bear interest. The principal balance of the note will be payable on the earliest to occur of (i) the date on which the Company consummates its initial Business Combination or (ii) the date that the winding up of the Company is effective (such date, the “Maturity Date”). In the event the Company consummates its initial Business Combination, the Sponsor has the option on the Maturity Date to convert all or any portion of the principal outstanding under the First Promissory Note into that number of warrants (“Working Capital Warrants”) equal to the portion of the principal amount of the First Promissory Note being converted divided by $1.00, rounded up to the nearest whole number. The terms of the Working Capital Warrants, if any, would be identical to the terms of the private placement warrants issued by the Company at the time of its initial public offering, as described in the prospectus for the initial public offering dated March 1, 2021 and filed with the SEC, including the transfer restrictions applicable thereto. The First Promissory Note is subject to customary events of default, the occurrence of certain of which automatically triggers the unpaid principal balance of the First Promissory Note and all other sums payable with regard to the First Promissory Note becoming immediately due and payable.

On February 23, 2023, the Company issued an unsecured promissory note in the principal amount of $500,000 in favor of the Sponsor (the “Second Promissory Note”), which was funded in full by the Sponsor upon execution of the Second Promissory Note. The Second Promissory Note is not convertible into Working Capital Warrants or any other security pursuant to its terms. As of March 31, 2024 and December 31, 2023, the Company had $500,000 outstanding balance under this Second Promissory Note.

F-9

ILEARNINGENGINES, INC.

(FORMERLY KNOWN AS ARROWROOT ACQUISITION CORP.)

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2024

In connection with the approval by the Company’s stockholders of the Extension Date at the Special Meeting, the Sponsor issued to the Company an unsecured promissory note that matures upon the Company closing its initial Business Combination (the “Third Promissory Note”). Following the Extension Proposal being approved, the Sponsor funded $640,000 of the Third Promissory Note. Pursuant to the terms of the Third Promissory Note, on each Additional Charter Extension Date, the Sponsor must fund the lesser of (a) $160,000 or (b) $0.04 for each public share that is not redeemed in connection with the Special Meeting for an aggregate deposit of up to the lesser of (x) $1,120,000 or (y) $0.28 for each public share that is not redeemed in connection with the Special Meeting (if all seven additional monthly extensions are exercised). As of March 31, 2024 and December 31, 2023, the Company had $480,000 and $1,600,000 outstanding balance under this Third Promissory Note, respectively. Additionally, on January 5, 2024, the Company drew down an additional $160,000 pursuant to the Third Promissory Note. If the Company completes an initial Business Combination, the Company will, at the option of the Sponsor, repay the amounts loaned under the Third Promissory Note or convert a portion or all of the amounts loaned under such promissory note into warrants, which warrants will be identical to the private placement warrants issued in connection with the Company’s initial public offering. If the Company does not complete an initial Business Combination by the Subsequent Charter Extension Date, such promissory note will be repaid only from funds held outside of the Trust Account or will be forfeited, eliminated or otherwise forgiven.

On June 13, 2023, the Company issued an unsecured promissory note (the “Fourth Promissory Note” and together with the First Promissory Note, the Second Promissory Note and the Third Promissory Note, the “Promissory Notes”) in the principal amount of $2,000,000 to the Sponsor. The Fourth Promissory Note bears interest at 15% per annum and matures upon closing of the Company’s initial Business Combination. In the event that the Company does not consummate an initial Business Combination, the Fourth Promissory Note will be repaid only from funds held outside of the Trust Account or will be forfeited, eliminated or otherwise forgiven. The Fourth Promissory Note may be further drawn down from time to time prior to the Maturity Date upon request by the Company subject to the Sponsor’s approval. The Fourth Promissory Note is subject to customary events of default, the occurrence of certain of which automatically triggers the unpaid principal balance of the Fourth Promissory Note and all other sums payable with regard to the Fourth Promissory Note becoming immediately due and payable. As of March 31, 2024 and December 31, 2023, the Company had a $750,000 and $1,200,000 principal outstanding under this Fourth Promissory Note, respectively. An additional $50,000 was drawn on the Fourth Promissory Note on March 11, 2024.

Notwithstanding the original terms of the Promissory Notes, the Company and Legacy iLearningEngines agreed, pursuant to the Merger Agreement, that if the Closing occurs, the Sponsor will have the option for the principal and interest outstanding under the Promissory Notes to be repaid in cash or convert into common stock of the Surviving Corporation at a price per share equal to $10.00 per share at the Closing; provided, however, that to the extent the Acquiror Transaction Expenses (as defined in the Merger Agreement) exceed $30,000,000 then the Promissory Notes will be settled by the conversion of an amount equal to the lesser of (i) the principal and interest outstanding under the Promissory Notes and (ii) the Excess Transaction Expenses (as defined in the Merger Agreement) into common stock of the Surviving Corporation at a price per share equal to $10.00 per share.

As of March 31, 2024, the Company had $26,757 of cash held outside its Trust Account for use as working capital, $10,788,134 in cash held in the Trust Account to be used for a Business Combination or to repurchase or redeem its common stock in connection therewith and working capital deficit of $14,359,935. As of March 31, 2024, $215,214 of the deposit in the Trust Account represented interest income, which is available to pay the Company’s tax obligations. For the three months ended March 31, 2024, the Company withdrew an aggregate amount of $40,050 to pay income and franchise taxes and $36,309,429 in connection with redemption. In order to finance transaction costs in connection with a Business Combination, the Sponsor or an affiliate of the Sponsor or certain of the Company’s officers and directors may, but are not obligated to, provide the Company working capital loans, as defined below.

F-10

ILEARNINGENGINES, INC.

(FORMERLY KNOWN AS ARROWROOT ACQUISITION CORP.)

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2024

NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and in accordance with the instructions to Form 10-Q and Article 8 of Regulation S-X of the SEC. Certain information or footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted, pursuant to the rules and regulations of the SEC for interim financial reporting. Accordingly, they do not include all the information and footnotes necessary for a complete presentation of financial position, results of operations, or cash flows. In the opinion of management, the accompanying unaudited condensed consolidated financial statements include all adjustments, consisting of a normal recurring nature, which are necessary for a fair presentation of the financial position, operating results and cash flows for the periods presented.

The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, as filed with the SEC on April 1, 2024. The interim results for the three months ended March 31, 2024 are not necessarily indicative of the results to be expected for the year ending December 31, 2024.

Principles of Consolidation

The accompanying unaudited condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiary. All significant intercompany balances and transactions have been eliminated in consolidation.

Emerging Growth Company

The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the independent registered public accounting firm attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.

Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s unaudited condensed consolidated financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.

F-11

ILEARNINGENGINES, INC.

(FORMERLY KNOWN AS ARROWROOT ACQUISITION CORP.)

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2024

Use of Estimates

The preparation of the unaudited condensed consolidated financial statements in conformity with GAAP requires the Company’s management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the unaudited condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods.

Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the unaudited condensed consolidated financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. One of the more significant accounting estimates included in these unaudited condensed consolidated financial statements is the determination of the fair value of the warrant liabilities. Such estimates may be subject to change as more current information becomes available and accordingly, the actual results could differ significantly from those estimates.

Cash and Cash Equivalents

The Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents. The Company did not have any cash equivalents as March 31, 2024 and December 31, 2023.

Cash and Investments Held in Trust Account

Prior to the Special Meeting, the Company’s portfolio of cash and investments held in Trust Account was comprised solely of U.S. government securities, within the meaning set forth in Section 2(a)(16) of the Investment Company Act, with a maturity of 185 days or less, or investments in money market funds that invest in U.S. government securities, or a combination thereof. The Company’s investments held in the Trust Account were classified as trading securities. Trading securities are presented on the unaudited condensed consolidated balance sheets at fair value at the end of each reporting period. Gains and losses resulting from the change in fair value of these investments are included in interest earned on cash and investments held in Trust Account in the accompanying unaudited condensed consolidated statements of operations. The estimated fair values of investments held in the Trust Account are determined using available market information. In connection with the Special Meeting, the Company liquidated its portfolio of investments held in the Trust Account and converted it into cash held in the Trust Account.

Offering Costs

Offering costs consisted of legal, accounting, underwriting fees and other costs incurred through the unaudited condensed consolidated balance sheet date that are directly related to the Initial Public Offering. Offering costs associated with warrant liabilities were expensed as incurred in the unaudited condensed consolidated statements of operations. Offering costs associated with the Class A common stock issued were initially charged to temporary equity and then accreted to Class A common stock subject to possible redemption upon the completion of the Initial Public Offering. Offering costs amounted to $16,392,714, of which $760,022 was allocated to the warrant liabilities and charged to the unaudited condensed consolidated statements of operations.

F-12

ILEARNINGENGINES, INC.

(FORMERLY KNOWN AS ARROWROOT ACQUISITION CORP.)

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2024

Class A Common Stock Subject to Possible Redemption

The Company accounts for its Class A common stock subject to possible redemption in accordance with the guidance in Accounting Standards Codification (“ASC”) Topic 480, “Distinguishing Liabilities from Equity.” Shares of Class A common stock subject to mandatory redemption are classified as a liability instrument and are measured at redemption value. Conditionally redeemable common stock (including common stock that features redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within the Company’s control) is classified as temporary equity. At all other times, common stock is classified as stockholders’ deficit. The Company’s Class A common stock features certain redemption rights that are considered to be outside of the Company’s control and subject to occurrence of uncertain future events. Accordingly, Class A common stock subject to possible redemption is presented as temporary equity, outside of the stockholders’ deficit section of the Company’s unaudited condensed consolidated balance sheets.

The Company recognizes changes in redemption value immediately as they occur and adjusts the carrying value of redeemable common stock to equal the redemption value at the end of each reporting period. This method would view the end of the reporting period as if it were also the redemption date for the security. Increases or decreases in the carrying amount of redeemable common stock are affected by charges against additional paid-in capital and accumulated deficit.

As of March 31, 2024 and December 31, 2023, the Class A common stock subject to possible redemption reflected in the unaudited condensed consolidated balance sheets is reconciled in the following table:

Gross proceeds	$	287,500,000
Less:
Proceeds allocated to Public Warrants		(13,081,250	)
Class A common stock issuance costs		(15,632,692	)
Plus:
Remeasurement of carrying value to redemption value		31,531,449
Class A common stock subject to possible redemption at December 31, 2022		290,317,507
Less:
Redemption		(247,259,068	)
Plus:
Remeasurement of carrying value to redemption value		3,686,450
Class A common stock subject to possible redemption at December 31, 2023	$	46,744,889
Less:
Redemption		(36,309,429	)
Plus:
Remeasurement of carrying value to redemption value		352,674
Class A common stock subject to possible redemption at March 31, 2024	$	10,788,134

Warrant Liabilities

The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in FASB ASC 480, “Distinguishing Liabilities from Equity” (“ASC 480”), and ASC 815, “Derivatives and Hedging” (“ASC 815”). The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company’s own common stock, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding.

For issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of additional paid-in capital at the time of issuance. For issued or modified warrants that do not meet all the criteria for equity classification, the warrants are required to be recorded at their initial fair value on the date of issuance, and each balance sheet date thereafter. Changes in the estimated fair value of the warrants are recognized as a non-cash gain or loss on the unaudited condensed consolidated statements of operations. Pursuant to the Initial Public Offering, the Company sold 28,750,000 Units, including a full exercise by the underwriter of their over-allotment option in the amount of 3,750,000 Units, at a price of $10.00 per Unit. Each Unit consists of one share of Class A common stock and one-half of one redeemable warrant (“Public Warrant”). The Public Warrants for periods where no observable traded price was available were valued using a Monte Carlo simulation. The Private Placement Warrants are valued using a modified Black-Scholes Option Pricing Model. For periods subsequent to the detachment of the Public Warrants from the Units, the close price of the Public Warrant price was used as the fair value of the Public Warrants as of each relevant date (see Note 9).

F-13

ILEARNINGENGINES, INC.

(FORMERLY KNOWN AS ARROWROOT ACQUISITION CORP.)

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2024

Income Taxes

The Company accounts for income taxes under ASC 740, “Income Taxes.” ASC 740 requires the recognition of deferred tax assets and liabilities for both the expected impact of differences between the unaudited condensed financial statements and tax basis of assets and liabilities and for the expected future tax benefit to be derived from tax loss and tax credit carryforwards. ASC 740 additionally requires a valuation allowance to be established when it is more likely than not that all or a portion of deferred tax assets will not be realized. As of March 31, 2024 and December 31, 2023, the Company’s deferred tax asset had a full valuation allowance recorded against it.

ASC 740-270-25-2 requires that an annual effective tax rate be determined, and such annual effective rate applied to year-to-date income in interim periods under ASC 740-270-30-5. The Company’s effective tax rate was 1.17% and (562.16%) for the three months ended March 31, 2024 and 2023, respectively. The effective tax rate differs from the statutory tax rate of 21% for the three months ended March 31, 2024 and 2023, due to changes in fair value in warrant liability, the fair value in convertible promissory notes and the valuation allowance on the deferred tax assets.

ASC 740 also clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements and prescribes a recognition threshold and measurement process for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities. ASC 740 also provides guidance on derecognition, classification, interest and penalties, accounting in interim period, disclosure and transition.

The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. There were no unrecognized tax benefits and no amounts accrued for interest and penalties as of March 31, 2024 and December 31, 2023. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position.

The Company has identified the United States as its only “major” tax jurisdiction. The Company is subject to income taxation by major taxing authorities since inception. These examinations may include questioning the timing and amount of deductions, the nexus of income among various tax jurisdictions and compliance with federal and state tax laws. The Company’s management does not expect that the total amount of unrecognized tax benefits will materially change over the next twelve months.

Net Loss per Common Share

The Company complies with accounting and disclosure requirements of FASB ASC Topic 260, “Earnings Per Share”. The Company has two classes of common stock, which are referred to as Class A common stock and Class B common stock. Income and losses are shared pro rata between the two classes of common stock. Net income per common stock is computed by dividing net loss by the weighted average number of common stock outstanding for the period. Accretion associated with the redeemable shares of Class A common stock is excluded from loss per common share as the redemption value approximates fair value.

The Company has not considered the effect of warrants sold in the Initial Public Offering and private placement to purchase 22,625,000 shares of Class A common stock in the calculation of diluted loss per share, since the exercise of the warrants are contingent upon the occurrence of future events and the inclusion of such warrants would be anti-dilutive. As of March 31, 2024 and 2023, the Company did not have any dilutive securities or other contracts that could, potentially, be exercised or converted into common stock and then share in the earnings of the Company. As a result, diluted net loss per common share is the same as basic net loss per common share for the periods presented.

The following table reflects the calculation of basic and diluted net loss per common share (in dollars, except per share amounts):

	For the Three Months Ended March 31,
	2024						2023
	Class A			Class B			Class A			Class B
Basic net loss per common stock
Numerator:
Allocation of net loss, as adjusted	$	(1,051,615	)	$	(3,184,568	)	$	(1,265,438	)	$	(429,254	)
Denominator:
Basic weighted average shares outstanding		2,373,472			7,187,500			21,188,697			7,187,500

Basic net loss per common share	$	(0.44	)	$	(0.44	)	$	(0.06	)	$	(0.06	)

F-14

ILEARNINGENGINES, INC.

(FORMERLY KNOWN AS ARROWROOT ACQUISITION CORP.)

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2024

Concentration of Credit Risk

The Company has significant cash balances at financial institutions which throughout the year regularly exceed the federally insured limit of $250,000. Any loss incurred or a lack of access to such funds could have a significant adverse impact on the Company’s financial condition, results of operations, and cash flows.

Fair Value of Financial Instruments

The fair value of the Company’s assets and liabilities, which qualify as financial instruments under ASC Topic 820, “Fair Value Measurement,” approximates the carrying amounts represented in the accompanying unaudited condensed consolidated balance sheets, primarily due to their short-term nature, other than the warrant liabilities (see Note 9).

Recent Accounting Standards

In August 2020, the FASB issued ASU 2020-06, “Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40)” (“ASU 2020-06”), to simplify accounting for certain financial instruments. ASU 2020-06 eliminates the current models that require separation of beneficial conversion and cash conversion features from convertible instruments and simplifies the derivative scope exception guidance pertaining to equity classification of contracts in an entity’s own equity. The new standard also introduces additional disclosures for convertible debt and freestanding instruments that are indexed to and settled in an entity’s own equity. ASU 2020-06 amends the diluted earnings per share guidance, including the requirement to use the if-converted method for all convertible instruments. As a smaller reporting company, ASU 2020-06 is effective January 1, 2024 for fiscal years beginning after December 15, 2023 and should be applied on a full or modified retrospective basis, with early adoption permitted beginning on January 1, 2021. The Company has adopted ASU 2020-06. The adoption of ASU-2020-06 did not have an impact on the Company’s financial position, results of operations or cash flows.

Management does not believe that any other recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on the Company’s unaudited condensed consolidated financial statements.

NOTE 3. INITIAL PUBLIC OFFERING

Pursuant to the Initial Public Offering, the Company sold 28,750,000 Units, including a full exercise by the underwriters of their over-allotment option in the amount of 3,750,000 Units, at a price of $10.00 per Unit. Each Unit consists of one share of Class A common stock and one-half of one Public Warrant. Each whole Public Warrant entitles the holder to purchase one share of Class A common stock at a price of $11.50 per share, subject to adjustment (see Note 8).

NOTE 4. PRIVATE PLACEMENT

Simultaneously with the closing of the Initial Public Offering, the Sponsor purchased an aggregate of 8,250,000 Private Placement Warrants, at a price of $1.00 per warrant, or $8,250,000 in the aggregate. Each Private Placement Warrant is exercisable to purchase one share of Class A common stock at an exercise price of $11.50 per share, subject to adjustment (see Note 8). A portion of the proceeds from the Private Placement Warrants was added to the proceeds from the Initial Public Offering held in the Trust Account. If the Company did not complete a Business Combination within the Combination Period, the proceeds from the sale of the Private Placement Warrants held in the Trust Account would be used to fund the redemption of the Public Shares (subject to the requirements of applicable law), and the Private Placement Warrants would expire worthless.

F-15

ILEARNINGENGINES, INC.

(FORMERLY KNOWN AS ARROWROOT ACQUISITION CORP.)

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2024

NOTE 5. RELATED PARTY TRANSACTIONS

Founder Shares

In November 2020, the Sponsor purchased 5,750,000 shares (the “Founder Shares”) of the Company’s Class B common stock for an aggregate price of $30,000. Subsequently, in December 2020 the Company effectuated a 5-for-4 stock split, pursuant to which an additional 1,437,500 shares of Class B common stock were issued, resulting in an aggregate of 7,187,500 Founder Shares issued and outstanding. The Founder Shares included an aggregate of up to 937,500 Founder Shares subject to forfeiture to the extent that the underwriters’ over-allotment was not exercised in full or in part, so that the number of Founder Shares would equal, on an as-converted basis, approximately 20% of the Company’s issued and outstanding common stock after the Initial Public Offering. In January 2021, the Sponsor transferred 40,000 founder shares to each of three Director nominees, none of which are subject to forfeiture in the event that the underwriters’ over-allotment option was not exercised in full. As a result of the underwriters’ election to fully exercise their over-allotment option March 4, 2021, no Founder Shares are currently subject to forfeiture.

The transfer of the Founders Shares to the Company’s director nominees is in the scope of FASB ASC Topic 718, “Compensation-Stock Compensation” (“ASC 718”). Under ASC 718, stock-based compensation associated with equity-classified awards is measured at fair value upon the grant date. The Founder Shares were effectively transferred subject to a performance condition (i.e., the occurrence of a Business Combination). Compensation expense related to the Founder Shares is recognized only when the performance condition is probable of occurrence under the applicable accounting literature in this circumstance. Stock-based compensation would be recognized at the date a Business Combination is considered probable (i.e., upon consummation of a Business Combination) in an amount equal to the number of Founders Shares times the grant date fair value per share (unless subsequently modified).

The Sponsor has agreed, subject to limited exceptions, not to transfer, assign or sell any of the Founder Shares until the earlier to occur of (A) one year after the completion of a Business Combination and (B) subsequent to a Business Combination, (x) if the last reported sale price of the Class A common stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock capitalizations, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after a Business Combination, or (y) the date on which the Company completes a liquidation, merger, capital stock exchange or other similar transaction that results in all of the Public Stockholders having the right to exchange their shares of common stock for cash, securities or other property.

Administrative Support Agreement

The Company entered into an agreement, commencing on March 4, 2021, through the earlier of the Company’s consummation of a Business Combination and its liquidation, to pay the Sponsor a total of $20,000 per month for office space, secretarial, and administrative support services. For the three months ended March 31, 2024, the Company incurred $60,000 in fees for these services. For the three months ended March 31, 2023, the Company incurred and paid $60,000 in fees for these services. There were $60,000 and $0 of fees outstanding for these services as of March 31, 2024 and December 31, 2023.

Promissory Notes — Related Parties

On December 21, 2020, the Sponsor issued an unsecured promissory note to the Company (the “IPO Promissory Note”), pursuant to which the Company could borrow up to an aggregate principal amount of $300,000. The IPO Promissory Note was non-interest bearing and payable on the earlier of (i) July 31, 2021, or (ii) the consummation of the Initial Public Offering. The outstanding balance under the IPO Promissory Note of $149,992 was repaid at the closing of the Initial Public Offering on March 4, 2021. No future borrowings are permitted.

Related Party Loans

In order to finance transaction costs in connection with a Business Combination, the Sponsor or an affiliate of the Sponsor, or certain of the Company’s officers and directors may, but are not obligated to, loan the Company funds as may be required (“Working Capital Loans”). Upon completion of the Business Combination, the Company would repay the Working Capital Loans out of the proceeds of the Trust Account released to the Company. Otherwise, the Working Capital Loans would be repaid only out of funds held outside the Trust Account. In the event that a Business Combination had not closed, the Company could use a portion of proceeds held outside the Trust Account to repay the Working Capital Loans, but no proceeds held in the Trust Account would be used to repay the Working Capital Loans. Except for the foregoing, the terms of such Working Capital Loans, if any, have not been determined and no written agreements exist with respect to such loans. The Working Capital Loans would either be repaid upon consummation of a Business Combination, without interest, or, at the lender’s discretion, up to $1,500,000 of such Working Capital Loans may be convertible into warrants of the post-Business Combination entity at a price of $1.00 per warrant. The warrants would be identical to the Private Placement Warrants.

F-16

ILEARNINGENGINES, INC.

(FORMERLY KNOWN AS ARROWROOT ACQUISITION CORP.)

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2024

The Company has determined that bifurcation of a single derivative that comprises all of the fair value of the conversion feature (i.e., derivative instrument) is necessary under ASC 815-15-25-7 through 25-10. As a result, the derivative value was deemed to be de minimis at the issuance date and at each subsequent reporting date resulting in no change in the value of the derivative. The derivative will continue to be monitored and measured at each reporting period until the notes are settled.

On December 29, 2021, the Company issued its First Promissory Note with the Sponsor pursuant to which the Sponsor agreed to loan the Company up to an aggregate principal amount of $1,500,000. The note was issued in connection with advances the Sponsor may make in the future, to the Company for working capital expenses. Upon issuance, $750,000 was drawn down on the note with an additional $200,000 drawn down on March 17, 2022. On April 21, 2022, the Company drew down the remaining $550,000 pursuant to the terms of the First Promissory Note. Following this drawdown, the full $1,500,000 available under the First Promissory Note was outstanding. There are no remaining funds available under the First Promissory Note for future drawdowns.

In connection with the approval by the Company’s stockholders of the Extension Date at the Special Meeting, the Sponsor issued to the Company an unsecured promissory note that matures upon the Company closing its initial Business Combination (the “Third Promissory Note”). Following the Extension Proposal being approved, the Sponsor funded $640,000 of the Third Promissory Note. Pursuant to the terms of the Third Promissory Note, on each Additional Charter Extension Date, the Sponsor must fund the lesser of (a) $160,000 or (b) $0.04 for each public share that is not redeemed in connection with the Special Meeting for an aggregate deposit of up to the lesser of (x) $1,120,000 or (y) $0.28 for each public share that is not redeemed in connection with the Special Meeting (if all seven additional monthly extensions are exercised). As of March 31, 2024 and December 31, 2023, the Company had a $1,600,000 outstanding balance under this Third Promissory Note. Additionally, on January 5, 2024, the Company drew down an additional $160,000 pursuant to the Third Promissory Note. Upon completion of the Business Combination, the Company would, at the option of the Sponsor, repay the amounts loaned under the Third Promissory Note or convert a portion or all of the amounts loaned under such promissory note into warrants, which warrants will be identical to the private placement warrants issued in connection with the Company’s initial public offering. If the Company had not completed an initial Business Combination by the Subsequent Charter Extension Date, such promissory note would be repaid only from funds held outside of the Trust Account or will be forfeited, eliminated or otherwise forgiven.

On June 13, 2023, the Company issued an unsecured promissory note in the principal amount of $2,000,000 in favor of the Sponsor (the “Fourth Promissory Note” and together with the First Promissory Note, the Second Promissory Note and the Third Promissory Note, the “Promissory Notes”), of which $700,000 was funded by the Sponsor upon execution of the Note. On September 27, 2023, the Company drew down an additional amount of $500,000 pursuant to the terms of the Fourth Promissory Note, after which $1,200,000 was outstanding under the Note. An additional $50,000 was drawn on the Fourth Promissory Note on March 11, 2024. There remains $750,000 available under the Note for future drawdowns. The Fourth Promissory Note bears interest at 15% per annum and matures upon closing of the Company’s initial business combination or the date that the winding up of the Company is effective (such date, the “Maturity Date”). The Fourth Promissory Note is not convertible into Working Capital Warrants or any other security. In the event that the Company had not consummated an initial business combination, the Fourth Promissory Note would be repaid only from funds held outside of the Trust Account established in connection with the Company’s initial public offering or will be forfeited, eliminated or otherwise forgiven. The Fourth Promissory Note may be further drawn down from time to time prior to the Maturity Date upon request by the Company subject to the Sponsor’s approval. The Fourth Promissory Note is subject to customary events of default, the occurrence of certain of which automatically triggers the unpaid principal balance of the Fourth Promissory Note and all other sums payable with regard to the Fourth Promissory Note becoming immediately due and payable. As of March 31, 2024 and December 31, 2023, the Company had a $480,000 and $1,200,000 outstanding balance under this Fourth Promissory Note. As of March 31, 2024 and December 31, 2023, the Company incurred $33,736 and $89,408 of interest expense, respectively, which is included in Accrued Expenses on the balance sheet. An additional $50,000 was drawn on the Fourth Promissory Note on March 11, 2024.

Notwithstanding the original terms the Promissory Notes, the Company and Legacy iLearningEngines agreed, pursuant to the Merger Agreement, that if the Closing occurs, the Sponsor will have the option for the principal and interest outstanding under the Promissory Notes to be repaid in cash or convert into common stock of the Surviving Corporation at a price per share equal to $10.00 per share at the Closing; provided, however, that to the extent the Acquiror Transaction Expenses (as defined in the Merger Agreement) exceed $30,000,000, then the Promissory Notes will be settled by the conversion of an amount equal to the lesser of (i) the principal and interest outstanding under the Promissory Notes and (ii) the Excess Transaction Expenses (as defined in the Merger Agreement) into common stock of the Surviving Corporation at a price per share equal to $10.00 per share.

The Board approved a draw of an aggregate of $160,000 (the “First Extension Funds”) pursuant to the Third Promissory Note, between the Company and Arrowroot Acquisition LLC (the “Lender”), which First Extension Funds were deposited into the Company’s Trust Account on July 6, 2023. This deposit enabled the Company to extend the date by which it must complete its initial business combination from July 6, 2023 to August 6, 2023 (the “First Extension”). The First Extension was the first of seven one-month extensions permitted under the Company’s Certificate of Incorporation and provides the Company with additional time to complete its initial business combination.

F-17

ILEARNINGENGINES, INC.

(FORMERLY KNOWN AS ARROWROOT ACQUISITION CORP.)

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2024

The Board approved a draw of an aggregate of $160,000 (the “Second Extension Funds”) pursuant to the Third Promissory Note, which Second Extension Funds were deposited into the Company’s Trust Account on August 4, 2023. This deposit enables the Company to extend the date by which it must complete its initial business combination from August 6, 2023 to September 6, 2023 (the “Second Extension”). The Second Extension is the second of seven one-month extensions permitted under the Company’s Certificate of Incorporation and provides the Company with additional time to complete its initial business combination.

The Board approved a draw of an aggregate of $160,000 pursuant to the Third Promissory Note (the “Third Extension Funds”), which Third Extension Funds were deposited into the Company’s Trust Account on September 6, 2023. This deposit enables the Company to extend the date by which it must complete its initial business combination from September 6, 2023 to October 6, 2023 (the “Third Extension”). The Third Extension is the third of seven one-month extensions permitted under the Company’s Certificate of Incorporation and provides the Company with additional time to complete its initial business combination.

The Board approved a draw of an aggregate of $160,000 pursuant to the Third Promissory Note (the “Fourth Extension Funds”), which Fourth Extension Funds were deposited into the Company’s Trust Account on October 4, 2023. This deposit enables the Company to extend the date by which it must complete its initial business combination from October 6, 2023 to November 6, 2023 (the “Fourth Extension”). The Fourth Extension is the fourth of seven one-month extensions permitted under the Company’s Certificate of Incorporation and provides the Company with additional time to complete its initial business combination.

The Company approved an additional draw of an aggregate of $160,000 pursuant to the Third Promissory Note (the “Fifth Extension Funds”), which Fifth Extension Funds were deposited into the Company’s Trust Account for its public stockholders on November 2, 2023. This deposit enables the Company to extend the date by which it must complete its initial business combination from November 6, 2023 to December 6, 2023 (the “Fifth Extension”). The Fifth Extension is the fifth of seven one-month extensions permitted under the Company’s Certificate of Incorporation and provides the Company with additional time to complete its initial business combination.

The Company approved an additional draw of an aggregate of $160,000 pursuant to the Third Promissory Note (the “Sixth Extension Funds”), which Sixth Extension Funds were deposited into the Company’s Trust Account for its public stockholders on December 2, 2023. This deposit enables the Company to extend the date by which it must complete its initial business combination from December 6, 2023 to January 6, 2024 (the “Sixth Extension”). The Sixth Extension is the sixth of seven one-month extensions permitted under the Company’s Certificate of Incorporation and provides the Company with additional time to complete its initial business combination.

The Company approved an additional draw of an aggregate of $160,000 pursuant to the Third Promissory Note (the “Seventh Extension Funds”), which Seventh Extension Funds were deposited into the Company’s Trust Account for its public stockholders on January 5, 2024. This deposit enables the Company to extend the date by which it must complete its initial business combination from January 6, 2024 to February 6, 2024 (the “Seventh Extension”). The Seventh Extension is the final of seven one-month extensions permitted under the Company’s Certificate of Incorporation and provides the Company with additional time to complete its initial business combination. The Note does not bear interest and matures upon closing of the Company’s initial business combination.

The Company approved an additional draw of an aggregate of $160,000 pursuant to the Third Promissory Note (the “Eighth Extension Funds”), which Eighth Extension Funds were deposited into the Company’s Trust Account for its public stockholders on February 5, 2024. This deposit enables the Company to extend the date by which it must complete its initial business combination from February 6, 2024 to March 6, 2024 (the “Eighth Extension”). The Eighth Extension is the first of an additional five one-month extensions permitted under the Company’s Certificate of Incorporation and provides the Company with additional time to complete its initial business combination. The Note does not bear interest and matures upon closing of the Company’s initial business combination.

The Company approved an additional draw of an aggregate of $160,000 pursuant to the Third Promissory Note (the “Ninth Extension Funds”), which Ninth Extension Funds were deposited into the Company’s Trust Account for its public stockholders on March 5, 2024. This deposit enables the Company to extend the date by which it must complete its initial business combination from March 6, 2024 to April 6, 2024 (the “Ninth Extension”). The Ninth Extension is the second of an additional five one-month extensions permitted under the Company’s Certificate of Incorporation and provides the Company with additional time to complete its initial business combination. The Note does not bear interest and matures upon closing of the Company’s initial business combination.

The Third Promissory Note does not bear interest and matures upon closing of the Company’s initial business combination. In the event that the Company had not consummated an initial business combination, the Third Promissory Note would be repaid only from funds remaining outside of the Company’s Trust Account, if any, or will be forfeited, eliminated, or otherwise forgiven. Up to $1,760,000 of the total principal amount of the Third Promissory Note may be converted, in whole or in part, at the option of the Lender into warrants of the Company at a price of $1.00 per warrant, which warrants will be identical to the private placement warrants issued to the Lender at the time of the initial public offering of the Company.

In the event that the Company had not consummated an initial business combination, the Note would be repaid only from funds remaining outside of the Company’s Trust Account, if any, or will be forfeited, eliminated, or otherwise forgiven. Up to $1,760,000 of the total principal amount of the Note may be converted, in whole or in part, at the option of the Lender into warrants of the Company at a price of $1.00 per warrant, which warrants will be identical to the private placement warrants issued to the Lender at the time of the initial public offering of the Company.

F-18

ILEARNINGENGINES, INC.

(FORMERLY KNOWN AS ARROWROOT ACQUISITION CORP.)

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2024

Pursuant to the terms of the Merger Agreement by and among Arrowroot Acquisition Corp., ARAC Merger Sub, Inc. and Legacy iLearningEngines, at closing Arrowroot Acquisition LLC elected to settle $500,000 of the Acquiror Transaction Expenses (as defined in the Agreement) in cash and convert the balance of the Acquiror Transaction Expenses into shares of common stock of the New iLearningEngines (“New iLearningEngines Common Stock”).

Forward Purchase Agreement

On April 26, 2023, the Company and Polar Multi-Strategy Master Fund, a Cayman Islands exempted company (“Polar”) entered into an agreement (“Forward Purchase Agreement”), pursuant to which, among other things, the Company agreed to purchase up to 2,500,000 shares from Polar at $10.77 per share (the “Initial Price”), which is $10.17 (the “Redemption Price”, plus $0.60). In exchange for the Company’s purchase of the shares, Polar agreed to waive redemption rights on the shares that Polar owns in connection with the Business Combination.

The Forward Purchase Agreement provides that at the closing of the Business Combination, the Company will pre-pay Polar for the forward purchase an amount equal to the sum of (x) the number of Class A Ordinary Shares owned by Polar on the day prior to the closing of a business combination multiplied by the Redemption Price (the “Polar Shares”) and (y) the proceeds from Polar’s purchase of a number of Class A Ordinary Shares of up to 2,500,000 shares less the Polar Shares (the “Prepayment Amount”).

The scheduled maturity date of the forward transaction is one year from the closing of the Business Combination (the “Maturity Date”), except that the Maturity Date may be accelerated if the shares trade under $2.00 for 10 out of 30 days or the shares are delisted by Nasdaq. Polar has the right to early terminate the transaction (in whole or in part) before the Maturity Date by delivering notice to the Company. If Polar terminates the Forward Purchase Agreement with respect to some or all of the shares prior to the Maturity Date, Polar will return an amount to the Company equal to the number of terminated shares multiplied by the Redemption Price. The Company can terminate the Forward Purchase Agreement prior to the redemption deadline if the Company pays Polar a $300,000 break-up fee. On the Maturity Date, the Company may be required to make a cash payment to Polar if Polar has not terminated the Forward Purchase Agreement in full equal to the number of shares (less any shares terminated prior to the Maturity Date) multiplied by $0.60.

Upon closing of the Business Combination, the Company agreed to pay $246,000 and shares of iLearningEngines have been issued as repayment for the Forward Purchase Agreement.

NOTE 6. COMMITMENTS AND CONTINGENCIES

Risks and Uncertainties

Management continues to evaluate the impact of the COVID-19 pandemic and has concluded that while it is reasonably possible that the virus could have a negative effect on the Company’s financial position, results of its operations and/or search for a target company, the specific impact is not readily determinable as of the date of these unaudited condensed consolidated financial statements. Although a number of vaccines for COVID-19 have been developed and are in the process of being deployed in certain countries, including the United States, the timing for widespread vaccination is uncertain, and these vaccines may be less effective against new mutated strains of the virus. The impact of this coronavirus continues to evolve and is affecting the economies of many nations, individual companies and markets in general and may continue to last for an extended period of time. The unaudited condensed consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

In February 2022, the Russian Federation and Belarus commenced a military action with the country of Ukraine. As a result of this action, various nations, including the United States, have instituted economic sanctions against the Russian Federation and Belarus. Further, the impact of this action and related sanctions on the world economy is not determinable as of the date of these unaudited condensed consolidated financial statements. The specific impact on the Company’s financial condition, results of operations, and cash flows is also not determinable as of the date of these unaudited condensed consolidated financial statements.

On August 16, 2022, the Inflation Reduction Act of 2022 (the “IR Act”) was signed into federal law. The IR Act provides for, among other things, a new U.S. federal 1% excise tax on certain repurchases of stock by publicly traded U.S. domestic corporations and certain U.S. domestic subsidiaries of publicly traded foreign corporations occurring on or after January 1, 2023. The excise tax is imposed on the repurchasing corporation itself, not its shareholders from which shares are repurchased. The amount of the excise tax is generally 1% of the fair market value of the shares repurchased at the time of the repurchase. However, for purposes of calculating the excise tax, repurchasing corporations are permitted to net the fair market value of certain new stock issuances against the fair market value of stock repurchases during the same taxable year. In addition, certain exceptions apply to the excise tax. The U.S. Department of the Treasury (the “Treasury”) has been given authority to provide regulations and other guidance to carry out and prevent the abuse or avoidance of the excise tax.

Any redemption or other repurchase that occurs after December 31, 2022, in connection with a Business Combination, extension vote or otherwise, may be subject to the excise tax. Whether and to what extent the Company would be subject to the excise tax in connection with a Business Combination, extension vote or otherwise would depend on a number of factors, including (i) the fair market value of the redemptions and repurchases in connection with the Business Combination, extension or otherwise, (ii) the structure of a Business Combination, (iii) the nature and amount of any “PIPE” or other equity issuances in connection with a Business Combination (or otherwise issued not in connection with a Business Combination but issued within the same taxable year of a Business Combination) and (iv) the content of regulations and other guidance from the Treasury. In addition, because the excise tax would be payable by the Company and not by the redeeming holder, the mechanics of any required payment of the excise tax have not been determined. The foregoing could cause a reduction in the cash available on hand to complete a Business Combination and in the Company’s ability to complete a Business Combination.

F-19

ILEARNINGENGINES, INC.

(FORMERLY KNOWN AS ARROWROOT ACQUISITION CORP.)

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2024

Registration Rights

Pursuant to a registration rights agreement entered into on March 4, 2021, the holders of the Founder Shares, Private Placement Warrants and warrants that may be issued upon conversion of Working Capital Loans (and any Class A common stock issuable upon the exercise of the Private Placement Warrants and warrants that may be issued upon conversion of Working Capital Loans and upon conversion of the Founder Shares) will be entitled to registration rights pursuant to a registration rights agreement to be signed prior to or on the effective date of the Initial Public Offering, requiring the Company to register such securities for resale. The holders of these securities are entitled to make up to three demands, excluding short form demands, that the Company register such securities. In addition, the holders have certain “piggyback” registration rights with respect to registration statements filed subsequent to the completion of a Business Combination. The registration rights agreement does not contain liquidated damages or other cash settlement provisions resulting from delays in registering the Company’s securities. The Company will bear the expenses incurred in connection with the filing of any such registration statements.

Underwriting Agreement

The underwriters are entitled to a deferred fee of $0.35 per Unit, or $10,062,500 in the aggregate. The deferred fee will become payable to the underwriters from the amounts held in the Trust Account solely in the event that the Company completes a Business Combination, subject to the terms of the underwriting agreement.

On March 27, 2024, the Company signed a fee reduction agreement with Cantor Fitzgerald in which the underwriters forfeited 40.37% of the deferred underwriting commissions resulting in a reduction of $4,062,500 with a remaining $6,000,000 that is deferred and payable upon the business combination. The reduction of the $4,062,500 resulted in a gain from forgiveness of deferred underwriting commissions of $184,844 recorded as reduction of underwriting fee payable on the income statement and $3,877,656 was recorded to accumulated deficit.

Merger Agreement

As described in greater detail in Note 1, on April 27, 2023, the Company entered into the Merger Agreement.

The Merger

	(i)	At the Closing, in accordance with the DGCL, Merger Sub will merge with and into Legacy iLearningEngines, the separate corporate existence of Merger Sub will cease and Legacy iLearningEngines will be the surviving corporation and a wholly owned subsidiary of the Company; and

	(ii)	as a result of the Merger, among other things, the outstanding shares of common stock of iLearningEngines (other than shares subject to Legacy iLearningEngines equity awards, treasury shares and dissenting shares) will be cancelled in exchange for the right to receive a number of shares of common stock of the Surviving Corporation equal to (x) the sum of (i) the Base Purchase Price (as defined below), minus (ii) the dollar value of the Company Incentive Amount (as defined below), plus (iii) the aggregate exercise price of the Company Warrants (as defined in the Merger Agreement) that are issued and outstanding immediately prior to the Effective Time, minus (iv) the aggregate amount of Note Balance (as defined in the Company Convertible Notes (as defined in the Merger Agreement)) divided by (y) $10.00. The “Base Purchase Price” means an amount equal to $1,285,000,000. The “Company Incentive Amount” means (x) the number of shares of the Company Class A Common Stock issuable to Legacy iLearningEngines securityholders (excluding, for the avoidance of doubt, the holders of Company Convertible Notes) at the Closing which Legacy iLearningEngines and the Company agree, at least two (2) business days prior to the Closing, to issue to certain private placement investors and non-redeeming stockholders (which amount will equal 82.03125% of all such shares issued to such investors and non-redeeming stockholders, with the remainder being contributed by the Sponsor), multiplied by (y) $10.00.

The Board has (i) approved and declared advisable the Merger Agreement and the Business Combination and (ii) resolved to recommend approval of the Merger Agreement and related matters by the stockholders of the Company. The consummation of the Business Combination is subject to certain conditions as further described in the Merger Agreement.

Sponsor Support Agreement

On April 27, 2023, concurrently with the execution of the Merger Agreement, the Company and Legacy iLearningEngines entered into an agreement (the “Sponsor Support Agreement”), pursuant to which, among other things, in connection with the Closing, the Sponsor agreed to (i) vote all its shares of the Company common stock in favor of the Business Combination, (ii) discharge any Excess Transaction Expenses (as defined in the Merger Agreement) by payment in cash or elect, at the option of Sponsor, to have the Company discharge any Excess Transaction Expenses by payment in cash against a corresponding cancellation of shares of the Company common stock held by Sponsor (or any combination thereof), (iii) loan all amounts contemplated by the proxy statement filed by the Company on or about February 13, 2023, pursuant to which the Company stockholders approved the extension of the deadline by which the Company must complete its Business Combination to July 6, 2023, including any amounts required in connection with any additional extension of such deadline, (iv) contribute the Sponsor Incentive Shares (as defined in the Merger Agreement), (v) waive any adjustment to the conversion ratio set forth in the governing documents of the Company or any other anti-dilution or similar protection with respect to the Class B common stock of the Company, in each case, on the terms and subject to the conditions set forth in the Sponsor Support Agreement, and (vi) agree to be bound by any restrictions on transfer set forth in the Company’s bylaws, in each case, on the terms and subject to the conditions set forth therein.

F-20

ILEARNINGENGINES, INC.

(FORMERLY KNOWN AS ARROWROOT ACQUISITION CORP.)

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2024

The scheduled maturity date of the forward transaction is one year from the Closing of the Business Combination (the “Maturity Date”), except that the Maturity Date may be accelerated if the shares trade under $2.00 for 10 out of 30 days or the shares are delisted by Nasdaq. Polar has the right to early terminate the transaction (in whole or in part) before the Maturity Date by delivering notice to the Company. If Polar terminates the Forward Purchase Agreement with respect to some or all of the shares prior to the Maturity Date, Polar will return an amount to the Company equal to the number of terminated shares multiplied by the Redemption Price. the Company can terminate the Forward Purchase Agreement prior to the redemption deadline if the Company pays Polar a $300,000 break-up fee. On the Maturity Date, the Company may be required to make a cash payment to Polar if Polar has not terminated the Forward Purchase Agreement in full equal to the number of shares (less any shares terminated prior to the Maturity Date) multiplied by $0.60.

As of March 31, 2024 and December 31, 2023, the value of the Forward Purchase Agreement was $1,500,000. Upon closing of the Business Combination, the Company agreed to pay $246,000, and shares of New iLearningEngines Common Stock have been issued as repayment for the Forward Purchase Agreement.

BTIG Fee Agreement

On July 25, 2023, BTIG, LLC (“BTIG”) and the Company entered into a letter agreement (the “BTIG Engagement Letter”) pursuant to which the Company engaged BTIG as a financial advisor in connection with the Business Combination.

On March 27, 2024, the Company and BTIG amended the BTIG Engagement Letter (the “BTIG Amendment”), pursuant to which, in lieu of payment in cash of the full amount of any advisory fees or other fees and expenses owed under the BTIG Engagement Letter, the Company agreed to issue shares of New iLearningEngines Common Stock in an aggregate amount of approximately $3 million along with approximately $53,000 of expenses.

The number of BTIG Fee Shares to be so issued, transferred and delivered to BTIG in satisfaction of the Success Fee shall be equal to the greater of (a) the dollar amount of the Success Fee (less any portion of the Success Fee previously paid in cash, if any) divided by $10.00 and (b) the quotient obtained by dividing (x) the dollar amount of the Success Fee (less any portion of the Success Fee previously paid in cash, if any) by (y) the VWAP (as defined herein) of the New Common Stock over the seven (7) Trading Days immediately preceding the Initial Filing Date.

Goodwin Agreement

On March 25, 2024, Goodwin Proctor LLP (“Goodwin”) and the Company entered into an agreement pursuant to which the Company will pay $2,000,000 upon closing of the Business Combination and another $1,000,000 as a deferred payment before July 31, 2024. As of March 31, 2024 and December 31, 2023, the Company accrued $2,718,385 and $1,907,277, respectively.

Cooley Fee Agreement

On October 20, 2020, Cooley LLP and Arrowroot entered into a letter agreement (the “Cooley Engagement Letter”) pursuant to which Arrowroot engaged Cooley as a law firm in connection with the Business Combination. On March 27, 2024, Cooley and Arrowroot amended the Cooley Engagement Letter (the “Cooley Amendment”), to provide that, Arrowroot will pay to Cooley $2,000,000 in legal fees (the “Cooley Deferred Law Fee”) in the form of a certain number of shares (the “Cooley Fee Shares”). The Cooley Fee Shares will be issued in the form of shares of New iLearningEngines Common Stock (as defined below) in an amount of shares equal to the greater of (i) $2,000,000, divided by $10.00 and (ii) the quotient obtained by dividing (x) $2,000,000 by (y) the VWAP (as defined in the Cooley Amendment) of New iLearningEngines Common Stock over the seven (7) trading days immediately prior to the initial filing of the Resale Registration Statement (as defined in the Cooley Amendment). Under the Cooley Amendment, the combined company will be subject to, among others, certain obligations with respect to the filing of the resale registration statement and maintaining the continued effectiveness of the resale registration statement. As of March 31, 2024 and December 31, 2023, the Company accrued $1,205,451 and $1,187,272, respectively.

F-21

ILEARNINGENGINES, INC.

(FORMERLY KNOWN AS ARROWROOT ACQUISITION CORP.)

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2024

NOTE 7. STOCKHOLDERS’ DEFICIT

Preferred Stock — The Company is authorized to issue 1,000,000 shares of preferred stock with a par value of $0.0001 per share with such designation, rights and preferences as may be determined from time to time by the Company’s board of directors. As of March 31, 2024 and December 31, 2023, there were no shares of preferred stock issued or outstanding.

Class A Common Stock — The Company is authorized to issue 200,000,000 shares of Class A common stock with a par value of $0.0001 per share. Holders of Class A common stock are entitled to one vote for each share. As of March 31, 2024 and December 31, 2023, there were 1,017,030 and 4,445,813 shares of Class A common stock issued and outstanding, respectively, which are subject to possible redemption and presented as temporary equity.

Class B Common Stock — The Company is authorized to issue 20,000,000 shares of Class B common stock with a par value of $0.0001 per share. Holders of Class B common stock are entitled to one vote for each share. As of March 31, 2024 and December 31, 2023, there were 7,187,500 shares of common stock issued and outstanding.

Holders of Class A common stock and holders of Class B common stock will vote together as a single class on all matters submitted to a vote of the Company’s stockholders except as otherwise required by law.

The shares of Class B common stock will automatically convert into Class A common stock upon the consummation of a Business Combination, or earlier at the option of the holder, on a one-for-one basis, subject to adjustment. In the case that additional shares of Class A common stock or equity-linked securities are issued or deemed issued in connection with the initial Business Combination, the number of shares of Class A common stock issuable upon conversion of all Founder Shares will equal, in the aggregate, on an as-converted basis, 20% of the total number of shares of Class A common stock outstanding after such conversion, including the total number of shares of Class A common stock issued, or deemed issued or issuable upon conversion or exercise of any equity-linked securities or rights issued or deemed issued, by the Company in connection with or in relation to the consummation of a Business Combination, excluding any shares of Class A common stock or equity-linked securities or rights exercisable for or convertible into shares of Class A common stock issued, or to be issued, to any seller in a Business Combination and any Private Placement Warrants issued to the Sponsor, officers or directors upon conversion of Working Capital Loans, provided that such conversion of Founder Shares will never occur on a less than one-for-one basis.

NOTE 8. WARRANT LIABILITIES

As of March 31, 2024 and December 31, 2023, there were 14,375,000 Public Warrants outstanding. Only whole warrants are exercisable. No fractional warrants will be issued upon separation of the units and only whole warrants will trade. The Public Warrants will become exercisable on the later of 30 days after the completion of the initial Business Combination or 12 months from the closing of the initial public offering and will expire five years after the completion of the initial Business Combination or earlier upon redemption or the Company’s liquidation.

The Company will not be obligated to deliver any shares of Class A common stock pursuant to the exercise of a warrant and will have no obligation to settle such warrant exercise unless a registration statement under the Securities Act covering the issuance of the shares of Class A common stock underlying the warrants is then effective and a prospectus relating thereto is current, subject to the Company satisfying its obligations with respect to registration. No warrant will be exercisable, and the Company will not be obligated to issue shares of Class A common stock upon exercise of a warrant unless Class A common stock issuable upon such warrant exercise has been registered, qualified or deemed to be exempt under the securities laws of the state of residence of the registered holder of the warrants.

F-22

ILEARNINGENGINES, INC.

(FORMERLY KNOWN AS ARROWROOT ACQUISITION CORP.)

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2024

The Company has agreed that as soon as practicable, but in no event later than 15 business days after the closing of a Business Combination, the Company will use its best efforts to file with the SEC a registration statement for the registration, under the Securities Act, of the Class A common stock issuable upon exercise of the warrants. The Company will use its best efforts to cause the same to become effective and to maintain the effectiveness of such registration statement, and a current prospectus relating thereto, until the expiration of the warrants in accordance with the provisions of the warrant agreement. If a registration statement covering the shares of Class A common stock issuable upon exercise of the warrants is not effective by the sixtieth (60th) business day after the closing of a Business Combination, warrant holders may, until such time as there is an effective registration statement and during any period when the Company will have failed to maintain an effective registration statement, exercise warrants on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act or another exemption. Notwithstanding the above, if the Company’s Class A common stock is at the time of any exercise of a warrant not listed on a national securities exchange such that they satisfy the definition of a “covered security” under Section 18(b)(1) of the Securities Act, the Company may, at its option, require holders of Public Warrants who exercise their warrants to do so on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act and, in the event the Company so elect, it will not be required to file or maintain in effect a registration statement, and in the event the Company does not so elect, it will use its best efforts to register or qualify the shares under applicable blue sky laws to the extent an exemption is not available.

Once the warrants become exercisable, the Company may call the warrants for redemption for cash:

	●	in whole and not in part;

	●	at a price of $0.01 per warrant;

	●	upon not less than 30 days’ prior written notice of redemption to each warrant holder; and

	●	if, and only if, the closing price of the common stock equals or exceeds $18.00 per share (as adjusted stock splits, stock capitalizations, reorganizations, recapitalizations and the like) for any 20 trading days within a 30-trading day period commencing after the warrants become exercisable and ending three business days before the Company sends to the notice of redemption to the warrant holders.

If and when the warrants become redeemable by the Company for cash, the Company may exercise its redemption right even if it is unable to register or qualify the underlying securities for sale under all applicable state securities laws.

If the Company calls the Public Warrants for redemption, as described above, its management will have the option to require any holder that wishes to exercise the Public Warrants to do so on a “cashless basis,” as described in the warrant agreement. The exercise price and number of Class A common stock issuable upon exercise of the Public Warrants may be adjusted in certain circumstances including in the event of a share dividend, extraordinary dividend or recapitalization, reorganization, merger or consolidation. However, except as described below, the Public Warrants will not be adjusted for issuances of common stock at a price below its exercise price. Additionally, in no event will the Company be required to net cash settle the Public Warrants. If the Company is unable to complete a Business Combination within the Combination Period and the Company liquidates the funds held in the Trust Account, holders of Public Warrants will not receive any of such funds with respect to their Public Warrants, nor will they receive any distribution from the Company’s assets held outside of the Trust Account with respect to such Public Warrants. Accordingly, the Public Warrants may expire worthless.

In addition, if (x) the Company issues additional shares of Class A common stock or equity-linked securities for capital raising purposes in connection with the closing of its initial Business Combination at an issue price or effective issue price of less than $9.20 per share of Class A common stock (with such issue price or effective issue price to be determined in good faith by the Company’s board of directors and, in the case of any such issuance to the Sponsor or its affiliates, without taking into account any Founder Shares held by the Sponsor or such affiliates, as applicable, prior to such issuance) (the “Newly Issued Price”), (y) the aggregate gross proceeds from such issuances represent more than 60% of the total equity proceeds, and interest thereon, available for the funding of the Company’s initial Business Combination on the date of the consummation of such initial Business Combination (net of redemptions), and (z) the volume weighted average trading price of the Company’s Class A common stock during the 20 trading day period starting on the trading day after the day on which the Company consummates its initial Business Combination (such price, the “Market Value”) is below $9.20 per share, the exercise price of the warrants will be adjusted (to the nearest cent) to be equal to 115% of the higher of the Market Value and the Newly Issued Price and the $18.00 per share redemption trigger price described above will be adjusted (to the nearest cent) to be equal to 180% of the higher of the Market Value and the Newly Issued Price.

As of March 31, 2024 and December 31, 2023, there were 8,250,000 Private Placement Warrants outstanding. Private Placement Warrants are identical to the Public Warrants underlying the Units sold in the Initial Public Offering, except that the Private Placement Warrants and the Class A common stock issuable upon the exercise of the Private Placement Warrants will not be transferable, assignable or salable until 30 days after the completion of a Business Combination, subject to certain limited exceptions. Additionally, the Private Placement Warrants will be exercisable on a cashless basis and be non-redeemable, except as described above, so long as they are held by the initial purchasers or their permitted transferees. If the Private Placement Warrants are held by someone other than the initial purchasers or their permitted transferees, the Private Placement Warrants will be redeemable by the Company and exercisable by such holders on the same basis as the Public Warrants.

F-23

ILEARNINGENGINES, INC.

(FORMERLY KNOWN AS ARROWROOT ACQUISITION CORP.)

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2024

NOTE 9. FAIR VALUE MEASUREMENTS

The fair value of the Company’s financial assets and liabilities reflects management’s estimate of amounts that the Company would have received in connection with the sale of the assets or paid in connection with the transfer of the liabilities in an orderly transaction between market participants at the measurement date. In connection with measuring the fair value of its assets and liabilities, the Company seeks to maximize the use of observable inputs (market data obtained from independent sources) and to minimize the use of unobservable inputs (internal assumptions about how market participants would price assets and liabilities). The following fair value hierarchy is used to classify assets and liabilities based on the observable inputs and unobservable inputs used in order to value the assets and liabilities:

Level 1:

Quoted prices in active markets for identical assets or liabilities. An active market for an asset or liability is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis.

Level 2:

Observable inputs other than Level 1 inputs. Examples of Level 2 inputs include quoted prices in active markets for similar assets or liabilities and quoted prices for identical assets or liabilities in markets that are not active.

Level 3:

Unobservable inputs based on assessment of the assumptions that market participants would use in pricing the asset or liability.

As of March 31, 2024, assets held in the Trust Account were comprised of $10,788,134 in cash. As of December 31, 2023, assets held in the Trust Account were comprised of $46,744,889 in cash. During the three months ended March 31, 2024, the Company withdrew an amount of $40,050 in interest income from the Trust Account to pay franchise and income taxes and $36,309,429 in connection with redemptions.

The following table presents information about the Company’s assets and liabilities that are measured at fair value on a recurring basis as of March 31, 2024 and December 31, 2023 and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value:

Description	Level		March 31, 2024		December 31, 2023
Assets:
Cash and investments held in Trust Account		1	$	10,788,134	$	46,744,889

Liabilities:
Warrant Liabilities – Public Warrants		1	$	2,587,500	$	1,150,000
Warrant Liabilities – Private Placement Warrants		3	$	1,485,000	$	660,000
Forward Purchase Agreement		3	$	1,500,000	$	1,500,000

The Warrants are accounted for as liabilities in accordance with ASC 815-40 and are presented within warrant liabilities in the accompanying unaudited condensed consolidated balance sheets. The warrant liabilities are measured at fair value at inception and on a recurring basis, with changes in fair value presented within change in fair value of warrant liabilities in the unaudited condensed consolidated statements of operations.

The Private Placement Warrants are valued using a modified Black Scholes Option Pricing Model, which is considered to be a Level 3 fair value measurement. The modified Black Scholes model’s primary unobservable input utilized in determining the fair value of the Private Placement Warrants is the expected volatility of the common stock. The expected volatility as of the initial public offering date was derived from observable public warrant pricing on comparable ‘blank-check’ companies without an identified target. The expected volatility as of subsequent valuation dates was implied from the Company’s own Public Warrant pricing. A Monte Carlo simulation methodology was used in estimating the fair value of the public warrants for periods where no observable traded price was available, using the same expected volatility as was used in measuring the fair value of the Private Placement Warrants. For periods subsequent to the detachment of the warrants from the Units, the close price of the Public Warrants was used as the fair value of the Public Warrants as of each relevant date. The measurement of the Public Warrants after the detachment of the Public Warrants from the Units is classified as Level 1 due to the use of an observable market quote in an active market.

F-24

ILEARNINGENGINES, INC.

(FORMERLY KNOWN AS ARROWROOT ACQUISITION CORP.)

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2024

The Forward Purchase Agreement is measured at 2,500,000 shares at a price of $0.60 per share. This is considered to be a Level 3 fair value measurement as the price is based on a contractual amount which is not based on an observable input that reflects quoted prices.

The key inputs into the modified Black Scholes model for the Level 3 Warrants were as follows:

Input	March 31, 2024			December 31, 2023
Market price of public shares	$	10.85		$	10.47
Risk-free rate		4.21	%		3.81	%
Dividend yield		0.00	%		0.00	%
Exercise price	$	11.50		$	11.50
Volatility		0.0	%		0.0	%
Term to expiration (years)		0.04			0.25

The following tables present the changes in the fair value of Level 3 warrant liabilities:

	Private Placement
Fair value as of January 1, 2024	$	660,000
Change in fair value		825,000
Fair value as of March 31, 2024	$	1,485,000

	Private Placement Warrants
Fair value as of January 1, 2023	$	40,000
Change in fair value		950,000
Fair value as of March 31, 2023	$	990,000

Transfers to/from Levels 1, 2 or 3 are recognized at the end of the reporting period in which a change in valuation technique or methodology occurs. There were no transfers from a Level 3 measurement to a Level 1 during the period ended March 31, 2024 and December 31, 2023.

There was no change in the fair value of the Forward Purchase Agreement as of March 31, 2024 and December 31, 2023.

NOTE 10. SUBSEQUENT EVENTS

The Company evaluated subsequent events and transactions that occurred after the balance sheet date up to the date that the unaudited condensed consolidated financial statements were issued. Based upon this review, the Company did not identify any subsequent events, other than below, that would have required adjustment or disclosure in the unaudited condensed consolidated financial statements.

F-25

ILEARNINGENGINES, INC.

(FORMERLY KNOWN AS ARROWROOT ACQUISITION CORP.)

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2024

On April 16, 2024 (the “Closing Date”), as contemplated in the Merger Agreement the Company consummated the merger transactions contemplated by the Merger Agreement, following the approval by Arrowroot’s stockholders at a special meeting of stockholders held on April 1, 2024 (the “ARRW Stockholder Meeting”), whereby Merger Sub merged with and into Legacy iLearningEngines with the separate corporate existence of Merger Sub ceasing (the “Merger” and, together with the other transactions contemplated by the Merger Agreement, the “Business Combination”).

The Business Combination is being accounted for as a reverse recapitalization, in accordance with U.S. GAAP. Under this method of accounting, although the Company issued shares for outstanding equity interests of Legacy iLearningEngines in the business combination, Arrowroot is treated as the “acquired” company for financial reporting purposes. Accordingly, the Business Combination is treated as the equivalent of the Company issuing stock for the net assets of Arrowroot, accompanied by a recapitalization. The net assets of Arrowroot is stated at historical cost, with no goodwill or other intangible assets recorded. Operations prior to the business combination will be those of the Company.

In connection with the closing of the business combination, Arrowroot Acquisition Corp. (NASDAQ: ARRW) changed its name to “iLearningEngines, Inc.” and is listed on the NASDAQ under the new ticker symbol “AILE”.

As a result of the Merger and upon the Closing, among other things, (1) each share of Legacy iLearningEngines Common Stock issued and outstanding as of immediately prior to the Closing was exchanged for the right to receive the number of shares of common stock, par value $0.0001 per share, of New iLearningEngines equal to the exchange ratio of 0.8061480 (the “Exchange Ratio”) for an aggregate of 77,242,379 shares of New iLearningEngines Common Stock; (2) each share of Legacy iLearningEngines Common Stock held in the treasury of Legacy iLearningEngines was cancelled without any conversion thereof and no payment or distribution was or will be made with respect thereto; (3) each Vested RSU was cancelled and converted into the right to receive, subject to settlement and delivery in accordance with the Legacy iLearningEngines equity incentive plan, a number of New iLearningEngines Common Stock equal to the Exchange Ratio, for an aggregate of 5,675,890 shares of New iLearningEngines Common Stock; (4) each Unvested RSU was cancelled and converted into the right to receive a number of restricted stock units issued by the New iLearningEngines equal to the Exchange Ratio (“New iLearningEngines Converted RSU Award”), with each New iLearningEngines Converted RSU Award subject to the same terms and conditions as were applicable to the original Legacy iLearningEngines restricted stock unit award, for an aggregate of 78,730 shares of New iLearningEngines Common Stock subject to New iLearningEngines RSU Awards; (5) each share of vested Legacy iLearningEngines restricted stock was converted into the right to receive a number of shares of New iLearningEngines Common Stock equal to the Exchange Ratio, for an aggregate of 290,447 shares of New iLearningEngines Common Stock; (6) each share of unvested Legacy iLearningEngines restricted stock was converted into the right to receive a number of restricted shares of New iLearningEngines Common Stock (“New iLearningEngines Converted Restricted Stock”) equal to the Exchange Ratio, with substantially the same terms and conditions as were applicable to such unvested Legacy iLearningEngines restricted stock immediately prior to the Effective Time, which shares will be restricted subject to vesting on the books and records of Legacy iLearningEngines, for an aggregate of 32,151,912 shares of New iLearningEngines Converted Restricted Stock; and (7) each Convertible Note (as defined below) was converted into the right to receive a number of shares of New iLearningEngines Common Stock equal to the Note Balance (as defined in the Convertible Notes), divided by $10.00, for an aggregate of 13,060,608 shares of New iLearningEngines Common Stock.

In connection with the ARRW Stockholder Meeting (and related postponements) and the Business Combination, the holders of an aggregate of 460,114 shares of Arrowroot’s Class A common stock, par value $0.0001 per share (the “Class A Common Stock”), exercised their right to redeem their shares for cash at a redemption price of approximately $10.36 per share, for an aggregate redemption amount of approximately $4.8 million. Upon the Closing, the Company received approximately $52.7 million in gross proceeds, comprising approximately $5.9 million from the Arrowroot trust account, approximately $17.4 million from the 2023 Convertible Notes (as defined below) and approximately $29.4 million from the 2024 Convertible Notes (as defined below).

F-26

ILEARNINGENGINES, INC.

(FORMERLY KNOWN AS ARROWROOT ACQUISITION CORP.)

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2024

On April 16, 2024, upon the filing of New iLearningEngines’ Amended and Restated Certificate of Incorporation (the “Certificate of Incorporation”), each outstanding share of Arrowroot’s Class A Common Stock and Class B common stock, par value $0.0001 per share (the “Class B Common Stock”) was redesignated into one validly issued, fully paid and non-assessable share of New iLearningEngines Common Stock. In addition, at the Closing, Arrowroot instructed its transfer agent to separate its public units into their component securities, and, as a result, Arrowroot’s public units no longer trade as a separate security and were delisted from The Nasdaq Stock Market LLC (“Nasdaq”).

After giving effect to the Business Combination and the conversion of each Convertible Note, there (i) were 134,970,114 issued and outstanding shares of New iLearningEngines Common Stock, consisting of the following: (a) 77,242,379 shares issued to holders of Legacy iLearningEngines common stock immediately prior to the Effective Time; (b) 32,442,359 shares issued to holders of Legacy iLearningEngines restricted stock awards immediately prior to the Effective Time; (c) 13,060,608 shares issued to the holders of convertible notes immediately prior to the Effective Time; (d) 556,886 shares held by former Arrowroot Class A Common Stockholders; (e) 6,705,409 shares held by former Arrowroot Class B Common Stockholders; (f) an aggregate of 4,419,998 shares issued to Venture Lending & Leasing IX, Inc. (“Venture Lending”) and WTI Fund X, Inc. (“WTI Fund X” and together with Venture Lending, the “Lenders”) pursuant to the Second Omnibus Amendment to Loan Documents with In2vate, L.L.C. and the Lenders; (g) an aggregate of 82,091 shares issued to certain investors pursuant to a non-redemption agreement with certain investors; and (h) an aggregate of 460,384 shares issued to the Sponsor; and (ii) warrants to purchase 22,624,975 shares of New iLearningEngines Common Stock, consisting of 14,374,975 public warrants, each exercisable for one share of New iLearningEngines Common Stock at a price of $11.50 per share, and 8,250,000 private warrants, each exercisable for one share of New iLearningEngines Common Stock at a price of $11.50 per share.

The Company negotiated concessions on accounts payable to other third-party vendors in several forms. The form of concessions include: (1) providing a discount to the total amount payable, (2) the option to settle certain payables in common stock, and (3) entering into a deferred payment agreement for certain payables. The concessions became effective on the Closing Date.

2023 Convertible Notes

Prior to the Closing, on April 27, 2023, Legacy iLearningEngines entered into a convertible note purchase agreement (the “2023 Convertible Note Purchase Agreement”), with certain investors (collectively, with all investors who may become party to the 2023 Convertible Note Purchase Agreement thereafter, the “2023 Convertible Note Investors”), pursuant to which, among other things, Legacy iLearningEngines issued and sold to the 2023 Convertible Note Investors convertible notes due in October 2025 (“2023 Convertible Notes”) with aggregate principal amount of $17,400,000, including to affiliates of the Sponsor. Each 2023 Convertible Note accrued interest at a rate of (i) 15% per annum until the aggregate accrued interest thereunder equals 25% of the principal amount of such note, and (ii) 8% per annum thereafter. Immediately prior to the consummation of the Business Combination, each 2023 Convertible Note automatically converted into 4,971,076 shares of Legacy iLearningEngines thereby entitling the holder thereof to receive, in connection with the consummation of the Business Combination, a number of shares New iLearningEngines Common Stock (rounded down to the nearest whole share) equal to (i) 2.75, multiplied by the outstanding principal under such 2023 Convertible Note, plus all accrued and unpaid interest thereon, divided by (ii) $10.00. A description of the 2023 Convertible Notes is included in the Proxy Statement/Prospectus in the section entitled “Certain Arrowroot Relationships and Related Party Transactions — Promissory Notes” beginning on page 126 of the Proxy Statement/Prospectus, which is incorporated herein by reference.

F-27

ILEARNINGENGINES, INC.

(FORMERLY KNOWN AS ARROWROOT ACQUISITION CORP.)

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2024

2024 Convertible Notes

In addition, on March 21, 2024, Legacy iLearningEngines entered into the 2024 convertible note purchase agreement (the “2024 Convertible Note Purchase Agreement”) with an investor (the “March Investor”), pursuant to which, among other things, Legacy iLearningEngines issued and sold a 2024 Convertible Note to the March Investor with an aggregate principal amount of $700,000. On April 16, 2024, Legacy iLearningEngines entered into the 2024 Convertible Note Purchase Agreement with certain investors (collectively, the “April Investors” and, together with the March Investor, the “2024 Convertible Note Investors”), pursuant to which, among other things, Legacy iLearningEngines issued and sold to the April Investors convertible notes due in October 2026 (“2024 Convertible Notes”) with an aggregate principal amount of $28,714,500. Each 2024 Convertible Note accrued interest at a rate of (i) 15% per annum until the aggregate accrued interest thereunder equals 25% of the principal amount of such note, and (ii) 8% per annum thereafter. Immediately prior to the consummation of the Business Combination, each 2024 Convertible Note automatically converted into shares of Legacy iLearningEngines thereby entitling the holder thereof to receive, in connection with the consummation of the Business Combination, a number of shares New iLearningEngines Common Stock (rounded down to the nearest whole share) equal to (i) 2.75, multiplied by the outstanding principal under such Convertible Note, plus all accrued and unpaid interest thereon, divided by (ii) $10.00. The price per share at which the Principal (as defined in the 2024 Convertible Notes), together with accrued but unpaid interest, on each 2024 Convertible Note converts into Incentive Shares (as defined in the 2024 Convertible Note Purchase Agreement) is referred to as the “Conversion Price” herein.

Revolving Loan Agreement

On April 17, 2024 (the “Loan Closing Date”), Legacy iLearningEngines entered into a Loan and Security Agreement (the “Revolving Loan Agreement”), by and among Legacy iLearningEngines as borrower (“Borrower”), the lenders party thereto (the “Lenders”) and East West Bank, as administrative agent and collateral agent for the Lenders (“Agent”). The Revolving Loan Agreement provides for (i) a revolving credit facility in an aggregate principal amount of up to $40.0 million and (ii) an uncommitted accordion facility allowing the Borrower to increase the revolving commitments by an additional principal amount of $20.0 at Borrower’s option and upon Agent’s approval (collectively, the “Revolving Loans”). Borrower drew $40.0 million in Revolving Loans on the Loan Closing Date, which was used (x) to repay in full Borrower’s existing indebtedness under the (i) Loan and Security Agreement, dated as of December 30, 2020, between Legacy iLearningEngines and Venture Lending & Leasing IX, Inc., (ii) Loan and Security Agreement, dated as of October 21, 2021, between Legacy iLearningEngines, and Venture Lending & Leasing IX, Inc. and WTI Fund X, Inc. and (iii) Loan and Security Agreement, dated as of October 31, 2023, between Legacy iLearningEngines and WTI Fund X, Inc. (the “WTI Loan Agreements”) and which will be used for (y) for general corporate purposes.

The obligations under the Revolving Loan Agreement are secured by a perfected security interest in substantially all of the Borrower’s assets except for certain customary excluded property pursuant to the terms of the Revolving Loan Agreement. On the Loan Closing Date, the Company and In2Vate, L.L.C., an Oklahoma limited liability company (the “Guarantors”) and wholly-owned subsidiary of Legacy iLearningEngines entered into a Guaranty and Suretyship Agreement (the “Guaranty”) with the Agent, pursuant to which the Guarantors provided a guaranty of Borrower’s obligations under the Revolving Loan Agreement and provided a security interest in substantially all of the Guarantors’ assets except for certain customary excluded property pursuant to the terms of the Guaranty.

The interest rate applicable to the Revolving Loans is Adjusted Term SOFR (with an interest period of 1 or 3 months at the Borrower’s option) plus 3.50% per annum, subject to an Adjusted Term SOFR floor of 4.00%.

F-28

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Stockholders and the Board of Directors of

Arrowroot Acquisition Corp.:

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated balance sheets of Arrowroot Acquisition Corp. (the “Company”) as of December 31, 2023 and 2022, the related consolidated statements of operations, changes in stockholders’ deficit, and cash flows for the years then ended, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.

Going Concern

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the consolidated financial statements, if the Company is unable to raise additional funds to alleviate liquidity needs and complete a business combination by August 6, 2024 then the Company will cease all operations except for the purpose of liquidating. The liquidity condition and date for mandatory liquidation and subsequent dissolution raise substantial doubt about the Company’s ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 1. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company's consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

We have served as the Company's auditor since 2020.

/s/ WithumSmith+Brown, PC

New York, New York

April 1, 2024

PCAOB Number 100

F-29

ARROWROOT ACQUISITION CORP.

CONSOLIDATED BALANCE SHEETS

	December 31, 2023			December 31, 2022
ASSETS
Current assets
Cash	$	145,669		$	145,980
Prepaid expenses		48,319			76,350
Prepaid income tax		65,585			—
Total Current Assets		259,573			222,330

Cash and investments held in Trust Account		46,744,889			290,737,917
TOTAL ASSETS	$	47,004,462		$	290,960,247

LIABILITIES, CLASS A COMMON STOCK SUBJECT TO POSSIBLE REDEMPTION AND STOCKHOLDERS’ DEFICIT
Current liabilities
Accounts payable and accrued expenses	$	4,099,162		$	1,063,841
Income tax payable		—			383,410
Excise tax payable		2,472,591			—
Promissory note – related party		2,180,000			—
Forward purchase agreement liability		1,500,000			—
Convertible promissory notes – related party		2,620,000			1,500,000
Total Current Liabilities		12,871,753			2,947,251

Deferred underwriting fee payable		10,062,500			10,062,500
Warrant liabilities		1,810,000			110,000
Total Liabilities		24,744,253			13,119,751

Commitments and Contingencies

Class A common stock subject to possible redemption, $0.0001 par value; 4,445,813 and 28,750,000 shares issued and outstanding at approximately $10.51 and $10.10 per share redemption value as of December 31, 2023 and 2022, respectively		46,744,889			290,317,507

Stockholders’ Deficit
Preferred stock, $0.0001 par value; 1,000,000 shares authorized; none issued or outstanding as of December 31, 2023 and 2022		—			—
Class A common stock, $0.0001 par value; 200,000,000 shares authorized, none issued and outstanding (excluding 4,445,813 and 28,750,000 subject to possible redemption), respectively, as of December 31, 2023 and 2022		—			—
Class B common stock, $0.0001 par value; 20,000,000 shares authorized; 7,187,500 shares issued and outstanding as of December 31, 2023 and 2022		719			719
Accumulated deficit		(24,485,399	)		(12,477,730	)
Total Stockholders’ Deficit		(24,484,680	)		(12,477,011	)
TOTAL LIABILITIES, CLASS A COMMON STOCK SUBJECT TO POSSIBLE REDEMPTION AND STOCKHOLDERS’ DEFICIT	$	47,004,462		$	290,960,247

The accompanying notes are an integral part of the consolidated financial statements.

F-30

ARROWROOT ACQUISITION CORP.

CONSOLIDATED STATEMENTS OF OPERATIONS

	Year Ended December 31,			Year Ended December 31,
	2023			2022

General and administrative expenses	$	5,487,905		$	1,555,038
Loss from operations		(5,487,905	)		(1,555,038	)

Other income (expense):
Change in fair value of warrant liabilities		(1,700,000	)		11,881,250
Forward purchase agreement		(1,500,000	)		—
Interest expense - promissory note		(89,408	)		—
Interest earned on cash and investments held in Trust Account		3,492,690			3,945,497
Total other income (expense), net		203,282			15,826,747

(Loss) income before provision for income taxes		(5,284,623	)		14,271,709
Provision for income taxes		(564,005	)		(750,410	)
Net (loss) income	$	(5,848,628	)	$	13,521,299

Weighted average shares outstanding, Class A common stock		8,574,195			28,750,000

Basic and diluted net (loss) income per share, Class A common stock	$	(0.37	)	$	0.38

Weighted average shares outstanding, Class B common stock		7,187,500			7,187,500

Basic and diluted net (loss) income per share, Class B common stock	$	(0.37	)	$	0.38

The accompanying notes are an integral part of the consolidated financial statements.

F-31

ARROWROOT ACQUISITION CORP.

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIT

FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022

	Class A Common Stock				Class B Common Stock				Additional Paid-in		Accumulated			Total Stockholders’
	Shares		Amount		Shares		Amount		Capital		Deficit			Deficit
Balance – January 1, 2022		—	$	—		7,187,500	$	719	$	—	$	(23,181,522	)	$	(23,180,803	)
Accretion of Class A common stock subject to possible redemption		—		—		—		—		—		(2,817,507	)		(2,817,507	)
Net income		—		—		—		—		—		13,521,299			13,521,299

Balance – December 31, 2022		—		—		7,187,500		719		—		(12,477,730	)		(12,477,011	)
Accretion of Class A common stock subject to possible redemption		—		—		—		—		—		(3,686,450	)		(3,686,450	)
Excise tax payable attributable to redemption of common stock		—		—		—		—		—		(2,472,591	)		(2,472,591	)
Net loss		—		—		—		—		—		(5,848,628	)		(5,848,628	)
Balance – December 31, 2023		—	$	—		7,187,500	$	719	$	—	$	(24,485,399	)	$	(24,484,680	)

The accompanying notes are an integral part of the consolidated financial statements.

F-32

ARROWROOT ACQUISITION CORP.

CONSOLIDATED STATEMENTS OF CASH FLOWS

	Year Ended December 31,			Year Ended December 31,
	2023			2022

Cash Flows from Operating Activities:
Net (loss) income	$	(5,848,628	)	$	13,521,299
Adjustments to reconcile net (loss) income to net cash used in operating activities:
Interest earned on cash and investments held in Trust Account		(3,492,690	)		(3,945,497	)
Change in fair value of warrant liabilities		1,700,000			(11,881,250	)
Forward purchase agreement		1,500,000			—
Changes in operating assets and liabilities:
Prepaid expenses		28,031			438,203
Prepaid income tax		(65,585	)		—
Accrued expenses		3,035,321			(114,070	)
Income tax payable		(383,410	)		383,410
Net cash used in operating activities		(3,526,961	)		(1,597,905	)

Cash Flows from Investing Activities:
Investment of cash into Trust Account		(1,600,000	)		—
Cash withdrawn from Trust Account to pay franchise and income taxes		1,826,650			731,214
Cash withdrawn from Trust Account in connection with redemption		247,259,068			—
Net cash provided by investing activities		247,485,718			731,214

Cash Flows from Financing Activities:
Proceeds from promissory note – related party		2,180,000			—
Proceeds from convertible promissory note – related party		1,120,000			750,000
Redemption of common stock		(247,259,068	)		—
Net cash (used in) provided by financing activities		(243,959,068	)		750,000

Net Change in Cash		(311	)		(116,691	)
Cash – Beginning of the year		145,980			262,671
Cash – End of the year	$	145,669		$	145,980

Supplementary cash flow information:
Cash paid for income taxes	$	1,013,000		$	367,000

Non-cash investing and financing activities:
Excise tax payable attributable to redemption of common stock	$	2,472,591		$	—

The accompanying notes are an integral part of the consolidated financial statements.

F-33

ARROWROOT ACQUISITION CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2023

NOTE 1. DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS

Arrowroot Acquisition Corp. (the “Company”) is a blank check company incorporated in Delaware on November 5, 2020. The Company was formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses (the “Business Combination”).

As of December 31, 2023, the Company had not commenced any operations. All activity through December 31, 2023 relates to the Company’s formation, the initial public offering (“Initial Public Offering”), which is described below, and identifying a target company for a Business Combination, including activities in connection with the Business Combination (as defined and discussed below). The Company will not generate any operating revenues until after the completion of a Business Combination, at the earliest. The Company generates non-operating income in the form of interest income from the cash held in the Trust Account (as defined below).

On February 28, 2023, the Company’s stockholders held a special meeting (the “Special Meeting”) and approved and adopted an amendment to its Amended and Restated Certificate of Incorporation (the “Certificate of Incorporation”) to extend the period of time for which the Company is required to consummate a Business Combination from March 4, 2023 (the “Original Termination Date”) to July 6, 2023 (the “Charter Extension Date”) and to allow the Company, without another stockholder vote, to elect to extend the Termination Date to consummate an initial Business Combination on a monthly basis for up to seven times by an additional one month each time after the Charter Extension Date, by resolution of the Board if requested by the Sponsor, and upon five days’ advance notice prior to the applicable Termination Date, until February 4, 2024 (each, an “Additional Charter Extension Date”) for a total of up to eleven months after the Original Termination Date, unless the closing of an initial Business Combination shall have occurred prior thereto (the “Extension”, such extension deadline, the “Extension Date”, and such proposal, the “Extension Proposal”). In connection with the Extension, shareholders holding 24,304,187 shares of the Company’s Class A common stock exercised their right to redeem such shares for a pro rata portion of the funds in the Company’s Trust Account at a redemption price of approximately $10.17 per share. As a result, following the Special Meeting, approximately $247,259,068 in cash was removed from the Trust Account to pay such holders.

On February 2, 2024, the Company held a special meeting of stockholders (the “Extension Special Meeting”) to approve an amendment to Arrowroot’s amended and restated certificate of incorporation, as amended, (the “Charter Amendment”) to extend the Termination Date from February 4, 2024 to March 6, 2024 (the “Initial Subsequent Charter Extension Date”) and to allow the Company, without another stockholder vote, to elect to extend the Termination Date to consummate an initial business combination on a monthly basis up to five times by an additional one month each time after the Initial Subsequent Charter Extension Date (the Initial Subsequent Charter Extension Date, as further extended by Arrowroot, the “Subsequent Extension Date”), by resolution of the Company’s board of directors, if requested by the Sponsor, and upon five days’ advance notice prior to the applicable Termination Date, until August 6, 2024, unless the closing of an initial business combination shall have occurred prior thereto (the “Subsequent Extension Proposal”). The stockholders of the Company approved the Subsequent Extension Proposal at the Extension Special Meeting and on February 2, 2024, the Company filed the Charter Amendment with the Delaware Secretary of State.

Transaction costs amounted to $16,392,714, consisting of $5,750,000 in cash underwriting fees, net of reimbursements, $10,062,500 of deferred underwriting fees and $580,214 of other offering costs.

F-34

ARROWROOT ACQUISITION CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2023

The Company’s management has broad discretion with respect to the specific application of the net proceeds of the Initial Public Offering and the sale of Private Placement Warrants, although substantially all of the net proceeds are intended to be applied generally toward consummating a Business Combination. There is no assurance that the Company will be able to complete a Business Combination successfully. The Company must complete one or more initial Business Combinations with one or more operating businesses or assets with a fair market value equal to at least 80% of the net assets held in the Trust Account (excluding any deferred underwriting fees and taxes payable on the interest earned on the Trust Account). The Company will only complete a Business Combination if the post-transaction company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires a controlling interest in the target business sufficient for it not to be required to register as an investment company under the Investment Company Act.

The Company will provide the holders of the outstanding Public Shares (the “Public Stockholders”) with the opportunity to redeem all or a portion of their Public Shares upon the completion of a Business Combination either (i) in connection with a stockholder meeting called to approve the Business Combination or (ii) by means of a tender offer. The decision as to whether the Company will seek stockholder approval of a Business Combination or conduct a tender offer will be made by the Company. The Public Stockholders will be entitled to redeem their Public Shares for a pro rata portion of the amount then in the Trust Account (initially $10.00 per Public Share, plus any pro rata interest then in the Trust Account, net of taxes payable). There will be no redemption rights upon the completion of a Business Combination with respect to the Company’s warrants.

The Company will only proceed with a Business Combination if the Company has net tangible assets of at least $5,000,001 following any related redemptions and, if the Company seeks stockholder approval, a majority of the shares voted are voted in favor of the Business Combination. If a stockholder vote is not required by applicable law or stock exchange listing requirements and the Company does not decide to hold a stockholder vote for business or other reasons, the Company will, pursuant to its Certificate of Incorporation, conduct the redemptions pursuant to the tender offer rules of the U.S. Securities and Exchange Commission (“SEC”) and file tender offer documents with the SEC prior to completing a Business Combination. If, however, stockholder approval of the transaction is required by applicable law or stock exchange listing requirements, or the Company decides to obtain stockholder approval for business or other reasons, the Company will offer to redeem shares in conjunction with a proxy solicitation pursuant to the proxy rules and not pursuant to the tender offer rules. If the Company seeks stockholder approval in connection with a Business Combination, the Sponsor has agreed to vote its Founder Shares (as defined in Note 5) and any Public Shares purchased during or after the Initial Public Offering in favor of approving a Business Combination. Additionally, each Public Stockholder may elect to redeem their Public Shares without voting, and if they do vote, irrespective of whether they vote for or against the proposed transaction.

Notwithstanding the foregoing, if the Company seeks stockholder approval of a Business Combination and it does not conduct redemptions pursuant to the tender offer rules, the Certificate of Incorporation provides that a Public Stockholder, together with any affiliate of such stockholder or any other person with whom such stockholder is acting in concert or as a “group” (as defined under Section 13 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), will be restricted from redeeming its shares with respect to more than an aggregate of 15% of the Public Shares, without the prior consent of the Company.

The Sponsor has agreed (a) to waive its redemption rights with respect to the Founder Shares and Public Shares held by it in connection with the completion of a Business Combination, (b) to waive its liquidation rights with respect to the Founder Shares if the Company fails to complete a Business Combination by the Subsequent Charter Extension Date and (c) not to propose an amendment to the Certificate of Incorporation (i) to modify the substance or timing of the Company’s obligation to allow redemptions in connection with a Business Combination or to redeem 100% of its Public Shares if the Company does not complete a Business Combination within the Combination Period (as defined below) or (ii) with respect to any other provision relating to stockholders’ rights or pre-Business Combination activity, unless the Company provides the Public Stockholders with the opportunity to redeem their Public Shares in conjunction with any such amendment. However, if the Sponsor acquires Public Shares in or after the Initial Public Offering, such Public Shares will be entitled to liquidating distributions from the Trust Account if the Company fails to complete a Business Combination within the Combination Period.

F-35

ARROWROOT ACQUISITION CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2023

The Company has until the Subsequent Charter Extension Date to complete a Business Combination (the “Combination Period”). If the Company has not completed a Business Combination within the Combination Period, the Company will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the Public Shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest earned on the funds held in the Trust Account and not previously released to pay taxes (less up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding Public Shares, which redemption will completely extinguish Public Stockholders’ rights as stockholders (including the right to receive further liquidating distributions, if any), and (iii) as promptly as reasonably possible following such redemption, subject to the approval of the Company’s remaining stockholders and the Company’s board of directors, dissolve and liquidate, subject in each case to the Company’s obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. There will be no redemption rights or liquidating distributions with respect to the Company’s warrants, which will expire worthless if the Company fails to complete a Business Combination within the Combination Period.

In order to protect the amounts held in the Trust Account, the Sponsor has agreed to be liable to the Company if and to the extent any claims by a third party for services rendered or products sold to the Company, or a prospective target business with which the Company has discussed entering into a transaction agreement, reduce the amount of funds in the Trust Account to below the lesser of (i) $10.00 per Public Share and (ii) the actual amount per Public Share held in the Trust Account as of the date of the liquidation of the Trust Account, if less than $10.00 per public Share due to reductions in the value of the trust assets, less taxes payable, provided that such liability will not apply to any claims by a third party or prospective target business who executed a waiver of any and all rights to monies held in the Trust Account nor will it apply to any claims under the Company’s indemnity of the underwriter of the Initial Public Offering against certain liabilities, including liabilities under the Securities Act of 1933, as amended (the “Securities Act”). Moreover, in the event that an executed waiver is deemed to be unenforceable against a third party, the Sponsor will not be responsible to the extent of any liability for such third-party claims. The Company will seek to reduce the possibility that the Sponsor will have to indemnify the Trust Account due to claims of creditors by endeavoring to have all vendors, service providers (except for the Company’s independent registered public accounting firm), prospective target businesses and other entities with which the Company does business, execute agreements with the Company waiving any right, title, interest or claim of any kind in or to monies held in the Trust Account.

Proposed Business Combination

On April 27, 2023, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with ARAC Merger Sub, Inc., a Delaware corporation and a wholly owned subsidiary of the Company (“Merger Sub”), and iLearningEngines, Inc., a Delaware corporation (“iLearningEngines”).

(i)

at the closing of the Business Combination (the “Closing”), in accordance with the Delaware General Corporation Law, as amended (“DGCL”), Merger Sub will merge with and into iLearningEngines, the separate corporate existence of Merger Sub will cease and iLearningEngines will be the surviving corporation (the “Surviving Corporation”) and a wholly owned subsidiary of the Company (the “Merger”); and

(ii)

as a result of the Merger, among other things, the outstanding shares of common stock of iLearningEngines (other than shares subject to iLearningEngines equity awards, treasury shares and dissenting shares) will be cancelled in exchange for the right to receive a number of shares of common stock of the Surviving Corporation equal to (x) the sum of (i) the Base Purchase Price (as defined below), minus (ii) the dollar value of the Company Incentive Amount (as defined below), plus (iii) the aggregate exercise price of the Company Warrants (as defined in the Merger Agreement) that are issued and outstanding immediately prior to the Effective Time, minus (iv) the aggregate amount of Note Balance (as defined in the Merger Agreement) divided by (y) $10.00. The “Base Purchase Price” means an amount equal to $1,285,000,000. The “Company Incentive Amount” means (x) the number of shares of the Company Class A Common Stock issuable to iLearningEngines securityholders (excluding, for the avoidance of doubt, the holders of Company Convertible Notes) at the Closing which iLearningEngines and the Company agree, at least two (2) business days prior to the Closing, to issue to certain private placement investors and non-redeeming stockholders (which amount will equal 82.03125% of all such shares issued to such investors and non-redeeming stockholders, with the remainder being contributed by the Sponsor), multiplied by (y) $10.00.

F-36

ARROWROOT ACQUISITION CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2023

The Merger Agreement is subject to the satisfaction or waiver of certain customary closing conditions, including, among others, (i) approval of the Business Combination and related agreements and transactions by the respective shareholders of the Company and iLearningEngines, (ii) effectiveness of the registration statement on Form S-4 to be filed by the Company in connection with the Business Combination, (iii) expiration or termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act, (iv) the absence of any injunction, order, statute, rule, or regulation enjoining or prohibiting the consummation of the Merger, (v) that the Company have at least $5,000,001 of net tangible assets upon Closing and (vi) receipt of approval for listing on Nasdaq the shares of common stock of the Surviving Corporation to be issued in connection with the Merger.

Other conditions to the Company’s obligations to consummate the Merger include, among others, that as of the Closing, (i) iLearningEngines shall have performed all covenants in all material respects and (ii) no Company Material Adverse Effect (as defined in the Merger Agreement) shall have occurred between the date of the Merger Agreement and Closing.

Other conditions to iLearningEngines’s obligations to consummate the Merger include, among others, that as of the Closing, (i) the Company shall have performed all covenants in all material respects (ii) no Acquiror Material Adverse Effect (as defined in the Merger Agreement) shall have occurred between the date of the Merger Agreement and Closing and (iii) the amount of cash available in the Trust Account into which substantially all of the proceeds of the Company’s initial public offering and private placement of its warrants have been deposited for the benefit of its public shareholders, together with the proceeds of certain private placement investments in the Company or iLearningEngines prior to closing and subject to the deductions and conditions set forth in the Merger Agreement, including deductions for certain the Company transaction expenses, is at least equal to or greater than $100,000,000.

The Merger Agreement contains additional covenants, including, among others, providing for (i) the parties to conduct their respective businesses in the ordinary course through the Closing, (ii) the parties to not solicit, initiate any negotiations or enter into any agreements for certain alternative transactions, (iii) iLearningEngines to prepare and deliver to the Company certain audited and consolidated financial statements of iLearningEngines, (iv) the Company to prepare and file a registration statement on Form S-4 and take certain other actions to obtain the requisite approval of the Company’s stockholders of certain proposals regarding the Business Combination and (v) the parties to use reasonable best efforts to obtain necessary approvals from governmental agencies.

Liquidity and Going Concern

On December 29, 2021, the Company issued an unsecured convertible promissory note (the “First Promissory Note”) with the Sponsor pursuant to which the Sponsor agreed to loan the Company up to an aggregate principal amount of $1,500,000. Upon issuance, $750,000 was drawn down on the note with an additional $200,000 drawn down on March 17, 2022. On April 21, 2022, the Company drew down the remaining $550,000 pursuant to the terms of the First Promissory Note. Following this drawdown, the full $1,500,000 available under the First Promissory Note was outstanding. There are no remaining funds available under the First Promissory Note for future drawdowns. As of December 31, 2023 and 2022, $1,500,000 and $1,500,000 were outstanding under this First Promissory Note, respectively.

On February 23, 2023, the Company issued an unsecured promissory note in the principal amount of $500,000 in favor of the Sponsor (the “Second Promissory Note”), which was funded in full by the Sponsor upon execution of the Second Promissory Note. The Second Promissory Note is not convertible into Working Capital Warrants or any other security pursuant to its terms. As of December 31, 2023, the Company had $500,000 outstanding balance under this Second Promissory Note.

F-37

ARROWROOT ACQUISITION CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2023

In connection with the approval by the Company’s stockholders of the Extension Date at the Special Meeting, the Sponsor issued to the Company an unsecured promissory note that matures upon the Company closing its initial Business Combination (the “Third Promissory Note”). Following the Extension Proposal being approved, the Sponsor funded $640,000 of the Third Promissory Note. Pursuant to the terms of the Third Promissory Note, on each Additional Charter Extension Date, the Sponsor must fund the lesser of (a) $160,000 or (b) $0.04 for each public share that is not redeemed in connection with the Special Meeting for an aggregate deposit of up to the lesser of (x) $1,120,000 or (y) $0.28 for each public share that is not redeemed in connection with the Special Meeting (if all seven additional monthly extensions are exercised). As of December 31, 2023, the Company had $1,600,000 outstanding balance under this Third Promissory Note. Additionally, on January 5, 2024, the Company drew down an additional $160,000 pursuant to the Third Promissory Note. If the Company completes an initial Business Combination, the Company will, at the option of the Sponsor, repay the amounts loaned under the Third Promissory Note or convert a portion or all of the amounts loaned under such promissory note into warrants, which warrants will be identical to the private placement warrants issued in connection with the Company’s initial public offering. If the Company does not complete an initial Business Combination by the Subsequent Charter Extension Date, such promissory note will be repaid only from funds held outside of the Trust Account or will be forfeited, eliminated or otherwise forgiven.

On June 13, 2023, the Company issued an unsecured promissory note (the “Fourth Promissory Note” and together with the First Promissory Note, the Second Promissory Note and the Third Promissory Note, the “Promissory Notes”) in the principal amount of $2,000,000 to the Sponsor. The Fourth Promissory Note bears interest at 15% per annum and matures upon closing of the Company’s initial Business Combination. In the event that the Company does not consummate an initial Business Combination, the Fourth Promissory Note will be repaid only from funds held outside of the Trust Account or will be forfeited, eliminated or otherwise forgiven. The Fourth Promissory Note may be further drawn down from time to time prior to the Maturity Date upon request by the Company subject to the Sponsor’s approval. The Fourth Promissory Note is subject to customary events of default, the occurrence of certain of which automatically triggers the unpaid principal balance of the Fourth Promissory Note and all other sums payable with regard to the Fourth Promissory Note becoming immediately due and payable. As of December 31, 2023, the Company had a $1,200,000 principal outstanding under this Fourth Promissory Note. An additional $50,000 was drawn on the Fourth Promissory Note on March 11, 2024.

Notwithstanding the original terms of the Promissory Notes, the Company and iLearningEngines have agreed, pursuant to the Merger Agreement, that if the Closing occurs, the Sponsor will have the option for the principal and interest outstanding under the Promissory Notes to be repaid in cash or convert into common stock of the Surviving Corporation at a price per share equal to $10.00 per share at the Closing; provided, however, that to the extent the Acquiror Transaction Expenses (as defined in the Merger Agreement) exceed $30,000,000 then the Promissory Notes will be settled by the conversion of an amount equal to the lesser of (i) the principal and interest outstanding under the Promissory Notes and (ii) the Excess Transaction Expenses (as defined in the Merger Agreement) into common stock of the Surviving Corporation at a price per share equal to $10.00 per share.

As of December 31, 2023, the Company had $145,669 of cash held outside its Trust Account for use as working capital, $46,744,889 in cash held in the Trust Account to be used for a Business Combination or to repurchase or redeem its common stock in connection therewith and working capital deficit of $12,612,180. As of December 31, 2023, $686,759 of the deposit in the Trust Account represented interest income, which is available to pay the Company’s tax obligations. As of December 31, 2023, the Company withdrew an aggregate amount of $1,826,650 to pay income and franchise taxes and $247,259,068 in connection with redemption. In order to finance transaction costs in connection with a Business Combination, the Sponsor or an affiliate of the Sponsor or certain of the Company’s officers and directors may, but are not obligated to, provide the Company working capital loans, as defined below.

F-38

ARROWROOT ACQUISITION CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2023

Management expects to incur significant costs in pursuit of its acquisition plans. In order to fund working capital deficiencies or finance transaction costs in connection with a Business Combination, the Sponsor, or certain of the Company’s officers and directors or their affiliates may, but are not obligated to, loan the Company funds as may be required. If the Company completes a Business Combination, it would repay such loaned amounts. The Company will be using these funds for paying existing accounts payable, identifying and evaluating prospective initial Business Combination candidates, performing due diligence on prospective target businesses, paying for travel expenditures, selecting the target business to merge with or acquire, and structuring, negotiating and consummating the Business Combination.

In connection with the Company’s assessment of going concern considerations in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Update (“ASU”) 2014-15, “Disclosures of Uncertainties about an Entity’s Ability to Continue as a Going Concern,” management has determined that if the Company is unable to raise additional funds to alleviate liquidity needs, obtain approval for an extension of the deadline or complete a Business Combination by the Extension Date, then the Company will cease all operations except for the purpose of liquidating. The liquidity condition and date for mandatory liquidation and subsequent dissolution raise substantial doubt about the Company’s ability to continue as a going concern. No adjustments have been made to the carrying amounts of assets or liabilities should the Company be required to liquidate after the Extension Date. The Company intends to complete a Business Combination before the mandatory liquidation date or obtain approval for an extension.

NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying consolidated financial statements are presented in U.S. dollars and have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and pursuant to the accounting and disclosure rules and regulations of the SEC.

Principles of Consolidation

The accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiary. All significant intercompany balances and transactions have been eliminated in consolidation.

Emerging Growth Company

Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s consolidated financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.

F-39

ARROWROOT ACQUISITION CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2023

Use of Estimates

The preparation of the consolidated financial statements in conformity with U.S. GAAP requires the Company’s management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods.

Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the consolidated financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. One of the more significant accounting estimates included in these consolidated financial statements is the determination of the fair value of the warrant liabilities. Such estimates may be subject to change as more current information becomes available and accordingly, the actual results could differ significantly from those estimates.

Cash and Cash Equivalents

Cash and Investments Held in Trust Account

Prior to the Special Meeting, the Company’s portfolio of cash and investments held in Trust Account was comprised solely of U.S. government securities, within the meaning set forth in Section 2(a)(16) of the Investment Company Act, with a maturity of 185 days or less, or investments in money market funds that invest in U.S. government securities, or a combination thereof. The Company’s investments held in the Trust Account were classified as trading securities. Trading securities are presented on the consolidated balance sheets at fair value at the end of each reporting period. Gains and losses resulting from the change in fair value of these investments are included in interest earned on cash and investments held in Trust Account in the accompanying consolidated statements of operations. The estimated fair values of investments held in the Trust Account are determined using available market information. In connection with the Special Meeting, the Company liquidated its portfolio of investments held in the Trust Account and converted it into cash held in the Trust Account.

Offering Costs

Offering costs consisted of legal, accounting, underwriting fees and other costs incurred through the consolidated balance sheet date that are directly related to the Initial Public Offering. Offering costs associated with warrant liabilities were expensed as incurred in the consolidated statements of operations. Offering costs associated with the Class A common stock issued were initially charged to temporary equity and then accreted to Class A common stock subject to possible redemption upon the completion of the Initial Public Offering. Offering costs amounted to $16,392,714, of which $760,022 was allocated to the warrant liabilities and charged to the consolidated statements of operations.

F-40

ARROWROOT ACQUISITION CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2023

Class A Common Stock Subject to Possible Redemption

At December 31, 2023 and 2022, the Class A common stock subject to possible redemption reflected in the consolidated balance sheets is reconciled in the following table:

Gross proceeds	$	287,500,000
Less:
Proceeds allocated to Public Warrants		(13,081,250	)
Class A common stock issuance costs		(15,632,692	)
Plus:
Remeasurement of carrying value to redemption value		31,531,449
Class A common stock subject to possible redemption at December 31, 2022		290,317,507
Less:
Redemption		(247,259,068	)
Plus:
Remeasurement of carrying value to redemption value		3,686,450
Class A common stock subject to possible redemption at December 31, 2023	$	46,744,889

Warrant Liabilities

F-41

ARROWROOT ACQUISITION CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2023

For issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of additional paid-in capital at the time of issuance. For issued or modified warrants that do not meet all the criteria for equity classification, the warrants are required to be recorded at their initial fair value on the date of issuance, and each balance sheet date thereafter. Changes in the estimated fair value of the warrants are recognized as a non-cash gain or loss on the consolidated statements of operations. Pursuant to the Initial Public Offering, the Company sold 28,750,000 Units, including a full exercise by the underwriter of their over-allotment option in the amount of 3,750,000 Units, at a price of $10.00 per Unit. Each Unit consists of one share of Class A common stock and one-half of one redeemable warrant (“Public Warrant”). The Public Warrants for periods where no observable traded price was available were valued using a Monte Carlo simulation. The Private Placement Warrants are valued using a modified Black-Scholes Option Pricing Model. For periods subsequent to the detachment of the Public Warrants from the Units, the close price of the Public Warrant price was used as the fair value of the Public Warrants as of each relevant date (see Note 10).

Income Taxes

The Company accounts for income taxes under ASC 740, “Income Taxes.” ASC 740 requires the recognition of deferred tax assets and liabilities for both the expected impact of differences between the consolidated financial statements and tax basis of assets and liabilities and for the expected future tax benefit to be derived from tax loss and tax credit carryforwards. ASC 740 additionally requires a valuation allowance to be established when it is more likely than not that all or a portion of deferred tax assets will not be realized. As of December 31, 2023 and 2022, the Company’s deferred tax asset had a full valuation allowance recorded against it.

ASC 740-270-25-2 requires that an annual effective tax rate be determined and such annual effective rate applied to year to date income in interim periods under ASC 740-270-30-5. The Company’s effective tax rate was (10.67)% and (5.20)% for the years ended December 31, 2023 and 2022, respectively. The effective tax rate differs from the statutory tax rate of 21% for the years ended December 31, 2023 and 2022, due to changes in fair value in forward purchase agreement, and warrant liability, and the valuation allowance on the deferred tax assets.

The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. There were no unrecognized tax benefits and no amounts accrued for interest and penalties as of December 31, 2023 and 2022. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position.

The Company has identified the United States as its only “major” tax jurisdiction. The Company has been subject to income taxation by major taxing authorities since inception. These examinations may include questioning the timing and amount of deductions, the nexus of income among various tax jurisdictions and compliance with federal and state tax laws. The Company’s management does not expect that the total amount of unrecognized tax benefits will materially change over the next twelve months.

Net (Loss) Income per Common Share

The Company complies with accounting and disclosure requirements of FASB ASC Topic 260, “Earnings Per Share”. The Company has two classes of common stock, which are referred to as Class A common stock and Class B common stock. Income and losses are shared pro rata between the two classes of common stock. Net (loss) income per common stock is computed by dividing net (loss) income by the weighted average number of common stock outstanding for the period. Accretion associated with the redeemable shares of Class A common stock is excluded from (loss) income per common share as the redemption value approximates fair value.

The Company has not considered the effect of warrants sold in the Initial Public Offering and private placement to purchase 22,625,000 shares of Class A common stock in the calculation of diluted income per share, since the exercise of the warrants are contingent upon the occurrence of future events and the inclusion of such warrants would be anti-dilutive. As of December 31, 2023 and 2022, the Company did not have any dilutive securities or other contracts that could, potentially, be exercised or converted into common stock and then share in the earnings of the Company. As a result, diluted net (loss) income per common share is the same as basic net (loss) income per common share for the periods presented.

F-42

ARROWROOT ACQUISITION CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2023

The following table reflects the calculation of basic and diluted net (loss) income per common share (in dollars, except per share amounts):

	Year Ended December 31, 2023						Year Ended December 31, 2022
	Class A			Class B			Class A		Class B
Basic and diluted net (loss) income per common stock
Numerator:
Allocation of net (loss) income, as adjusted	$	(3,181,592	)	$	(2,667,036	)	$	10,817,039	$	2,704,260
Denominator:
Basic and diluted weighted average shares outstanding		8,574,195			7,187,500			28,750,000		7,187,500

Basic and diluted net (loss) income per common share	$	(0.37	)	$	(0.37	)	$	0.38	$	0.38

Concentration of Credit Risk

Fair Value of Financial Instruments

The fair value of the Company’s assets and liabilities, which qualify as financial instruments under ASC Topic 820, “Fair Value Measurement,” approximates the carrying amounts represented in the accompanying consolidated balance sheets, primarily due to their short-term nature, other than the warrant liabilities (see Note 10).

Recent Accounting Standards

In August 2020, the FASB issued ASU 2020-06, “Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40)” (“ASU 2020-06”), to simplify accounting for certain financial instruments. ASU 2020-06 eliminates the current models that require separation of beneficial conversion and cash conversion features from convertible instruments and simplifies the derivative scope exception guidance pertaining to equity classification of contracts in an entity’s own equity. The new standard also introduces additional disclosures for convertible debt and freestanding instruments that are indexed to and settled in an entity’s own equity. ASU 2020-06 amends the diluted earnings per share guidance, including the requirement to use the if-converted method for all convertible instruments. As a smaller reporting company, ASU 2020-06 is effective January 1, 2024 for fiscal years beginning after December 15, 2023 and should be applied on a full or modified retrospective basis, with early adoption permitted beginning on January 1, 2021. The Company is currently assessing the impact, if any, that ASU 2020-06 would have on its financial position, results of operations or cash flows.

Management does not believe that any other recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on the Company’s consolidated financial statements.

NOTE 3. INITIAL PUBLIC OFFERING

NOTE 4. PRIVATE PLACEMENT

Simultaneously with the closing of the Initial Public Offering, the Sponsor purchased an aggregate of 8,250,000 Private Placement Warrants, at a price of $1.00 per warrant, or $8,250,000 in the aggregate. Each Private Placement Warrant is exercisable to purchase one share of Class A common stock at an exercise price of $11.50 per share, subject to adjustment (see Note 8). A portion of the proceeds from the Private Placement Warrants was added to the proceeds from the Initial Public Offering held in the Trust Account. If the Company does not complete a Business Combination within the Combination Period, the proceeds from the sale of the Private Placement Warrants held in the Trust Account will be used to fund the redemption of the Public Shares (subject to the requirements of applicable law), and the Private Placement Warrants will expire worthless.

F-43

ARROWROOT ACQUISITION CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2023

NOTE 5. RELATED PARTY TRANSACTIONS

Founder Shares

Administrative Support Agreement

The Company entered into an agreement, commencing on March 4, 2021, through the earlier of the Company’s consummation of a Business Combination and its liquidation, to pay the Sponsor a total of $20,000 per month for office space, secretarial, and administrative support services. For the years ended December 31, 2023 and 2022, the Company incurred and paid $240,000 and $240,000 in fees for these services, respectively. There were no amounts outstanding in fees for these services at December 31, 2023 and 2022.

Promissory Notes — Related Parties

Related Party Loans

In order to finance transaction costs in connection with a Business Combination, the Sponsor or an affiliate of the Sponsor, or certain of the Company’s officers and directors may, but are not obligated to, loan the Company funds as may be required (“Working Capital Loans”). If the Company completes a Business Combination, the Company would repay the Working Capital Loans out of the proceeds of the Trust Account released to the Company. Otherwise, the Working Capital Loans would be repaid only out of funds held outside the Trust Account. In the event that a Business Combination does not close, the Company may use a portion of proceeds held outside the Trust Account to repay the Working Capital Loans, but no proceeds held in the Trust Account would be used to repay the Working Capital Loans. Except for the foregoing, the terms of such Working Capital Loans, if any, have not been determined and no written agreements exist with respect to such loans. The Working Capital Loans would either be repaid upon consummation of a Business Combination, without interest, or, at the lender’s discretion, up to $1,500,000 of such Working Capital Loans may be convertible into warrants of the post-Business Combination entity at a price of $1.00 per warrant. The warrants would be identical to the Private Placement Warrants.

F-44

ARROWROOT ACQUISITION CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2023

On February 23, 2023, the Company issued an unsecured promissory note in the principal amount of $500,000 in favor of the Sponsor (the “Second Promissory Note”), which was funded in full by the Sponsor upon execution of the Second Promissory Note. The Second Promissory Note is not convertible into Working Capital Warrants or any other security pursuant to its terms. As of December 31, 2023 and 2022, the Company had $500,000 and $0 outstanding balance under this Second Promissory Note, respectively.

In connection with the approval by the Company’s stockholders of the Extension Date at the Special Meeting, the Sponsor issued to the Company an unsecured promissory note that matures upon the Company closing its initial Business Combination (the “Third Promissory Note”). Following the Extension Proposal being approved, the Sponsor funded $640,000 of the Third Promissory Note. Pursuant to the terms of the Third Promissory Note, on each Additional Charter Extension Date, the Sponsor must fund the lesser of (a) $160,000 or (b) $0.04 for each public share that is not redeemed in connection with the Special Meeting for an aggregate deposit of up to the lesser of (x) $1,120,000 or (y) $0.28 for each public share that is not redeemed in connection with the Special Meeting (if all seven additional monthly extensions are exercised). As of December 31, 2023, the Company had a $1,600,000 outstanding balance under this Third Promissory Note. Additionally, on January 5, 2024, the Company drew down an additional $160,000 pursuant to the Third Promissory Note If the Company completes an initial Business Combination, the Company will, at the option of the Sponsor, repay the amounts loaned under the Third Promissory Note or convert a portion or all of the amounts loaned under such promissory note into warrants, which warrants will be identical to the private placement warrants issued in connection with the Company’s initial public offering. If the Company does not complete an initial Business Combination by the Subsequent Charter Extension Date, such promissory note will be repaid only from funds held outside of the Trust Account or will be forfeited, eliminated or otherwise forgiven.

On June 13, 2023, the Company issued an unsecured promissory note in the principal amount of $2,000,000 in favor of the Sponsor (the “Fourth Promissory Note” and together with the First Promissory Note, the Second Promissory Note and the Third Promissory Note, the “Promissory Notes”), of which $700,000 was funded by the Sponsor upon execution of the Note. On September 27, 2023, the Company drew down an additional amount of $500,000 pursuant to the terms of the Fourth Promissory Note, after which $1,200,000 was outstanding under the Note. An additional $50,000 was drawn on the Fourth Promissory Note on March 11, 2024. There remains $750,000 available under the Note for future drawdowns. The Fourth Promissory Note bears interest at 15% per annum and matures upon closing of the Company’s initial business combination or the date that the winding up of the Company is effective (such date, the “Maturity Date”). The Fourth Promissory Note is not convertible into Working Capital Warrants or any other security. In the event that the Company does not consummate an initial business combination, the Fourth Promissory Note will be repaid only from funds held outside of the Trust Account established in connection with the Company’s initial public offering or will be forfeited, eliminated or otherwise forgiven. The Fourth Promissory Note may be further drawn down from time to time prior to the Maturity Date upon request by the Company subject to the Sponsor’s approval. The Fourth Promissory Note is subject to customary events of default, the occurrence of certain of which automatically triggers the unpaid principal balance of the Fourth Promissory Note and all other sums payable with regard to the Fourth Promissory Note becoming immediately due and payable. As of December 31, 2023, the Company had a $1,200,000 outstanding balance under this Fourth Promissory Note. As of December 31, 2023, the Company incurred $89,408 of interest expense, which is included in Accrued Expenses on the balance sheet. An additional $50,000 was drawn on the Fourth Promissory Note on March 11, 2024.

F-45

ARROWROOT ACQUISITION CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2023

Notwithstanding the original terms the Promissory Notes, the Company and iLearningEngines have agreed, pursuant to the Merger Agreement, that if the Closing occurs, the Sponsor will have the option for the principal and interest outstanding under the Promissory Notes to be repaid in cash or convert into common stock of the Surviving Corporation at a price per share equal to $10.00 per share at the Closing; provided, however, that to the extent the Acquiror Transaction Expenses (as defined in the Merger Agreement) exceed $30,000,000, then the Promissory Notes will be settled by the conversion of an amount equal to the lesser of (i) the principal and interest outstanding under the Promissory Notes and (ii) the Excess Transaction Expenses (as defined in the Merger Agreement) into common stock of the Surviving Corporation at a price per share equal to $10.00 per share.

F-46

ARROWROOT ACQUISITION CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2023

The Third Promissory Note does not bear interest and matures upon closing of the Company’s initial business combination. In the event that the Company does not consummate an initial business combination, the Third Promissory Note will be repaid only from funds remaining outside of the Company’s Trust Account, if any, or will be forfeited, eliminated, or otherwise forgiven. Up to $1,760,000 of the total principal amount of the Third Promissory Note may be converted, in whole or in part, at the option of the Lender into warrants of the Company at a price of $1.00 per warrant, which warrants will be identical to the private placement warrants issued to the Lender at the time of the initial public offering of the Company.

In the event that the Company does not consummate an initial business combination, the Note will be repaid only from funds remaining outside of the Company’s Trust Account, if any, or will be forfeited, eliminated, or otherwise forgiven. Up to $1,760,000 of the total principal amount of the Note may be converted, in whole or in part, at the option of the Lender into warrants of the Company at a price of $1.00 per warrant, which warrants will be identical to the private placement warrants issued to the Lender at the time of the initial public offering of the Company.

Forward Purchase Agreement

F-47

ARROWROOT ACQUISITION CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2023

NOTE 6. COMMITMENTS AND CONTINGENCIES

Risks and Uncertainties

Management continues to evaluate the impact of the COVID-19 pandemic and has concluded that while it is reasonably possible that the virus could have a negative effect on the Company’s financial position, results of its operations and/or search for a target company, the specific impact is not readily determinable as of the date of these consolidated financial statements. Although a number of vaccines for COVID-19 have been developed and are in the process of being deployed in certain countries, including the United States, the timing for widespread vaccination is uncertain, and these vaccines may be less effective against new mutated strains of the virus. The impact of this coronavirus continues to evolve and is affecting the economies of many nations, individual companies and markets in general and may continue to last for an extended period of time. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

In February 2022, the Russian Federation and Belarus commenced a military action with the country of Ukraine. As a result of this action, various nations, including the United States, have instituted economic sanctions against the Russian Federation and Belarus. Further, the impact of this action and related sanctions on the world economy is not determinable as of the date of these consolidated financial statements. The specific impact on the Company’s financial condition, results of operations, and cash flows is also not determinable as of the date of these consolidated financial statements.

Registration Rights

Underwriting Agreement

F-48

ARROWROOT ACQUISITION CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2023

Merger Agreement

As described in greater detail in Note 1, on April 27, 2023, the Company entered into the Merger Agreement.

The Merger

(i)

at the Closing, in accordance with the DGCL, Merger Sub will merge with and into iLearningEngines, the separate corporate existence of Merger Sub will cease and iLearningEngines will be the surviving corporation and a wholly owned subsidiary of the Company; and

(ii)

as a result of the Merger, among other things, the outstanding shares of common stock of iLearningEngines (other than shares subject to iLearningEngines equity awards, treasury shares and dissenting shares) will be cancelled in exchange for the right to receive a number of shares of common stock of the Surviving Corporation equal to (x) the sum of (i) the Base Purchase Price (as defined below), minus (ii) the dollar value of the Company Incentive Amount (as defined below), plus (iii) the aggregate exercise price of the Company Warrants (as defined in the Merger Agreement) that are issued and outstanding immediately prior to the Effective Time, minus (iv) the aggregate amount of Note Balance (as defined in the Company Convertible Notes (as defined in the Merger Agreement)) divided by (y) $10.00. The “Base Purchase Price” means an amount equal to $1,285,000,000. The “Company Incentive Amount” means (x) the number of shares of the Company Class A Common Stock issuable to iLearningEngines securityholders (excluding, for the avoidance of doubt, the holders of Company Convertible Notes) at the Closing which iLearningEngines and the Company agree, at least two (2) business days prior to the Closing, to issue to certain private placement investors and non-redeeming stockholders (which amount will equal 82.03125% of all such shares issued to such investors and non-redeeming stockholders, with the remainder being contributed by the Sponsor), multiplied by (y) $10.00.

Sponsor Support Agreement

On April 27, 2023, concurrently with the execution of the Merger Agreement, the Company and iLearningEngines entered into an agreement (the “Sponsor Support Agreement”), pursuant to which, among other things, in connection with the Closing, the Sponsor agreed to (i) vote all its shares of the Company common stock in favor of the Business Combination, (ii) discharge any Excess Transaction Expenses (as defined in the Merger Agreement) by payment in cash or elect, at the option of Sponsor, to have the Company discharge any Excess Transaction Expenses by payment in cash against a corresponding cancellation of shares of the Company common stock held by Sponsor (or any combination thereof), (iii) loan all amounts contemplated by the proxy statement filed by the Company on or about February 13, 2023, pursuant to which the Company stockholders approved the extension of the deadline by which the Company must complete its Business Combination to July 6, 2023, including any amounts required in connection with any additional extension of such deadline, (iv) contribute the Sponsor Incentive Shares (as defined in the Merger Agreement), (v) waive any adjustment to the conversion ratio set forth in the governing documents of the Company or any other anti-dilution or similar protection with respect to the Class B common stock of the Company, in each case, on the terms and subject to the conditions set forth in the Sponsor Support Agreement, and (vi) agree to be bound by any restrictions on transfer set forth in the Company’s bylaws, in each case, on the terms and subject to the conditions set forth therein.

F-49

ARROWROOT ACQUISITION CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2023

As of December 31, 2023, the value of the Forward Purchase Agreement was $1,500,000.

BTIG Fee Agreement

NOTE 7. STOCKHOLDERS’ DEFICIT

Preferred Stock — The Company is authorized to issue 1,000,000 shares of preferred stock with a par value of $0.0001 per share with such designation, rights and preferences as may be determined from time to time by the Company’s board of directors. As of December 31, 2023 and 2022, there were no shares of preferred stock issued or outstanding.

Class A Common Stock — The Company is authorized to issue 200,000,000 shares of Class A common stock with a par value of $0.0001 per share. Holders of Class A common stock are entitled to one vote for each share. At December 31, 2023 and 2022, there were 4,445,813 and 28,750,000 shares of Class A common stock issued and outstanding, respectively, which are subject to possible redemption and presented as temporary equity.

Class B Common Stock — The Company is authorized to issue 20,000,000 shares of Class B common stock with a par value of $0.0001 per share. Holders of Class B common stock are entitled to one vote for each share. As of December 31, 2023 and 2022, there were 7,187,500 shares of common stock issued and outstanding.

NOTE 8. WARRANT LIABILITIES

As of December 31, 2023 and 2022, there were 14,375,000 Public Warrants outstanding. Only whole warrants are exercisable. No fractional warrants will be issued upon separation of the units and only whole warrants will trade. The Public Warrants will become exercisable on the later of 30 days after the completion of the initial Business Combination or 12 months from the closing of the initial public offering and will expire five years after the completion of the initial Business Combination or earlier upon redemption or the Company’s liquidation.

F-50

ARROWROOT ACQUISITION CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2023

The Company will not be obligated to deliver any shares of Class A common stock pursuant to the exercise of a warrant and will have no obligation to settle such warrant exercise unless a registration statement under the Securities Act covering the issuance of the shares of Class A common stock underlying the warrants is then effective and a prospectus relating thereto is current, subject to the Company satisfying its obligations with respect to registration. No warrant will be exercisable and the Company will not be obligated to issue shares of Class A common stock upon exercise of a warrant unless Class A common stock issuable upon such warrant exercise has been registered, qualified or deemed to be exempt under the securities laws of the state of residence of the registered holder of the warrants.

Once the warrants become exercisable, the Company may call the warrants for redemption for cash:

	●	in whole and not in part;

	●	at a price of $0.01 per warrant;

	●	upon not less than 30 days’ prior written notice of redemption to each warrant holder; and

	●	if, and only if, the closing price of the common stock equals or exceeds $18.00 per share (as adjusted stock splits, stock capitalizations, reorganizations, recapitalizations and the like) for any 20 trading days within a 30-trading day period commencing after the warrants become exercisable and ending three business days before the Company sends to the notice of redemption to the warrant holders.

F-51

ARROWROOT ACQUISITION CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2023

As of December 31, 2023 and 2022, there were 8,250,000 Private Placement Warrants outstanding. Private Placement Warrants are identical to the Public Warrants underlying the Units sold in the Initial Public Offering, except that the Private Placement Warrants and the Class A common stock issuable upon the exercise of the Private Placement Warrants will not be transferable, assignable or salable until 30 days after the completion of a Business Combination, subject to certain limited exceptions. Additionally, the Private Placement Warrants will be exercisable on a cashless basis and be non-redeemable, except as described above, so long as they are held by the initial purchasers or their permitted transferees. If the Private Placement Warrants are held by someone other than the initial purchasers or their permitted transferees, the Private Placement Warrants will be redeemable by the Company and exercisable by such holders on the same basis as the Public Warrants.

NOTE 9. INCOME TAXES

The Company did not have any significant deferred tax assets or liabilities as of December 31, 2023 and 2022.

The Company’s net deferred tax assets are as follows:

	December 31, 2023			December 31, 2022
Deferred tax assets
Net operating loss carryforward	$	—		$	—
Start-up/organization expenses		1,891,958			890,822
Total deferred tax assets		1,891,958			890,822
Valuation allowance		(1,891,958	)		(890,822	)
Deferred tax assets, net of allowance	$	—		$	—

F-52

ARROWROOT ACQUISITION CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2023

The income tax provision consists of the following:

	Year Ended December 31, 2023			Year Ended December 31, 2022
Federal
Current	$	564,005		$	750,410
Deferred		(1,001,136	)		(244,686	)

State
Current		—			—
Deferred		—			—

Change in valuation allowance		1,001,136			244,686
Income tax provision	$	564,005		$	750,410

As of December 31, 2023 and 2022, the Company has $0 and $177,640 of U.S. federal and state net operating loss carryovers available to offset future taxable income, respectively.

In assessing the realization of the deferred tax assets, management considers whether it is more likely than not that some portion of all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which temporary differences representing net future deductible amounts become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment. After consideration of all of the information available, management believes that significant uncertainty exists with respect to future realization of the deferred tax assets and has therefore established a full valuation allowance. For the years ended December 31, 2023 and 2022, the change in the valuation allowance was $1,001,136 and $244,686, respectively.

A reconciliation of the federal income tax rate to the Company’s effective tax rate at December 31, 2023 and 2022 is as follows:

	December 31, 2023			December 31, 2022

Statutory federal income tax rate		21.00	%		21.00	%
State taxes, net of federal tax benefit		0.00	%		0.00	%
Change in fair value of warrant liabilities		(6.76	)%		(17.50	)%
Change in fair value of forward purchase agreement		(5.96	)%		0.00	%
Transaction costs allocable to warrant liabilities		0.00	%		0.00	%
Franchise tax – fines and penalties		(0.01	)%		0.00	%
Change in valuation allowance		(18.94	)%		1.70	%
Income tax provision		(10.67	)%		5.20	%

The Company files income tax returns in the U.S. federal jurisdiction in various state and local jurisdictions and is subject to examination by the various taxing authorities.

F-53

ARROWROOT ACQUISITION CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2023

NOTE 10. FAIR VALUE MEASUREMENTS

Level 1:

Level 2:

Level 3:

Unobservable inputs based on assessment of the assumptions that market participants would use in pricing the asset or liability.

At December 31, 2023, assets held in the Trust Account were comprised of $46,744,889 in cash. At December 31, 2022, assets held in the Trust Account were comprised of $279,107,161 in U.S. Treasury Bills and U.S. Treasury Notes and $11,338,046 in money market funds which are invested primarily in U.S. Treasury Securities and $292,710 in cash. During the year ended December 31, 2023, the Company withdrew an amount of $1,826,650 in interest income from the Trust Account to pay franchise and income taxes and $247,259,068 in connection with redemptions.

The following table presents information about the Company’s assets and liabilities that are measured at fair value on a recurring basis at December 31, 2023 and 2022 and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value:

Description	Level	December 31, 2023		December 31, 2022
Assets:
Investments held in Trust Account	1	$	—	$	290,737,917

Liabilities:
Warrant Liabilities – Public Warrants	1	$	1,150,000	$	70,000
Warrant Liabilities – Private Placement Warrants	3	$	660,000	$	40,000
Forward Purchase Agreement	3	$	1,500,000	$	—

The Warrants are accounted for as liabilities in accordance with ASC 815-40 and are presented within warrant liabilities in the accompanying consolidated balance sheets. The warrant liabilities are measured at fair value at inception and on a recurring basis, with changes in fair value presented within change in fair value of warrant liabilities in the consolidated statements of operations.

F-54

ARROWROOT ACQUISITION CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2023

The key inputs into the modified Black Scholes model for the Level 3 Warrants were as follows:

Input	December 31, 2023			December 31, 2022
Market price of public shares	$	10.47		$	10.04
Risk-free rate		3.81	%		3.94	%
Dividend yield		0.00	%		0.00	%
Exercise price	$	11.50		$	11.50
Volatility		0.0	%		0.0	%
Term to expiration (years)		0.25			0.42

The following tables present the changes in the fair value of Level 3 warrant liabilities:

	Private Placement
Fair value as of January 1, 2023	$	40,000
Change in fair value		620,000
Fair value as of December 31, 2023	$	660,000

	Private Placement
Fair value as of January 1, 2022	$	4,372,500
Change in fair value		(4,332,500	)
Fair value as of December 31, 2022	$	40,000

There was no change in the fair value of the Forward Purchase Agreement as of December 31, 2023.

NOTE 11. SUBSEQUENT EVENTS

The Company evaluated subsequent events and transactions that occurred after the balance sheet date up to the date that the consolidated financial statements were issued. Based upon this review, the Company did not identify any subsequent events, other than below, that would have required adjustment or disclosure in the consolidated financial statements.

The Company approved an additional draw of an aggregate of $160,000 pursuant to the Third Promissory Note, which Extension Funds were deposited into the Company’s Trust Account for its public stockholders on January 5, 2024. This deposit enables the Company to extend the date by which it must complete its initial business combination from January 6, 2024 to February 6, 2024 (the “Seventh Extension”). The Seventh Extension is the final of seven one-month extensions permitted under the Company’s Certificate of Incorporation and provides the Company with additional time to complete its initial business combination.

On January 8, 2024, the Company received a notice (the “Annual Meeting Notice”) from the Listing Qualifications Department of The Nasdaq Stock Market LLC (“Nasdaq”) stating that the Company failed to hold an annual meeting of stockholders within 12 months after its fiscal year ended December 31, 2022, as required by Nasdaq Listing Rule 5620(a). In accordance with Nasdaq Listing Rule 5810(c)(2)(G), the Company had 45 calendar days (or until February 22, 2024) to submit a plan to regain compliance and, if Nasdaq accepts the plan, Nasdaq may grant the Company up to 180 calendar days from its fiscal year end, or until June 28, 2024, to regain compliance. The Company submitted a plan to regain compliance on February 22, 2024. While the compliance plan is pending, the Company’s securities will continue to trade on Nasdaq.

On February 2, 2024, the Company held a special meeting of stockholders (the “Extension Special Meeting”) to approve an amendment to Arrowroot’s amended and restated certificate of incorporation, as amended (the “Charter Amendment”), to extend the Termination Date from February 4, 2024 to March 6, 2024 (the “Initial Subsequent Charter Extension Date”) and to allow the Company, without another stockholder vote, to elect to extend the Termination Date to consummate an initial business combination on a monthly basis up to five times by an additional one month each time after the Initial Subsequent Charter Extension Date (the Initial Subsequent Charter Extension Date, as further extended by the Company, the “Subsequent Extension Date”), by resolution of the Company’s board of directors, if requested by the Sponsor, and upon five days’ advance notice prior to the applicable Termination Date, until August 6, 2024, unless the closing of an initial business combination shall have occurred prior thereto (the “Subsequent Extension Proposal”).

F-55

ARROWROOT ACQUISITION CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2023

On February 2, 2024, the Company entered into a Non-Redemption Agreement (the “Non-Redemption Agreement”) with a certain public stockholder of Arrowroot (the “Public Stockholder”) eligible to redeem its shares of the Company’s Class A common stock (the “Class A Common Stock”) at the special meeting of stockholders held on February 2, 2024 (the “Extension Special Meeting”). Pursuant to the Non-Redemption Agreement, the Public Stockholder agreed not to request redemption of 410,456 shares of Class A Common Stock (the “Non-Redeemed Shares”) in connection with the Extension Special Meeting. In consideration of the Public Stockholder entering into the Non-Redemption Agreement, immediately following the closing of the Company’s initial business combination, Arrowroot Acquisition LLC, a Delaware limited liability company (the “Sponsor”) agreed to forfeit 82,091 shares of Class B common stock (the “Class B Common Stock”), or 41,046 shares of Class B Common Stock in the event the initial business combination is consummated in February 2024 (“Forfeited Shares”). Pursuant to the terms of the Non-Redemption Agreement, the Company agreed to issue to the Public Stockholder and the Public Stockholder agreed to acquire from the Company, a number of newly issued shares of common stock promptly following the consummation of the Company’s initial business combination.

On March 5, 2024, the Company received a notice (the “Deadline Notice”) from the staff of the Listing Qualifications Department of Nasdaq indicating that, unless the Company timely requests a hearing before the Nasdaq Hearings Panel (the “Panel”) by March 12, 2024, trading of the Company’s securities on The Nasdaq Capital Market would be suspended at the opening of business on March 14, 2024, due to the Company’s non-compliance with Nasdaq IM-5101-2, which requires that a special purpose acquisition company complete one or more business combinations within 36 months of the effectiveness of its IPO registration statement. The Company timely requested a hearing before the Panel to request sufficient time to complete the Company’s previously disclosed proposed business combination (the “Business Combination”) with iLearningEngines, Inc., a Delaware corporation (“iLearningEngines”). In addition, the Deadline Notice indicated that the Company should be prepared to address the concerns raised in the Annual Meeting Notice in its hearing before the Panel related to the Deadline Notice.

On March 11, 2024, the Company drew down an additional amount of $50,000 pursuant to the Fourth Promissory Note, after which $1,250,000 was outstanding under the Fourth Promissory Note. There remains $750,000 available under the Fourth Promissory Note for future drawdowns.

On March 12, 2024, the Company received notice from Nasdaq that the hearing will be held on May 7, 2024. The hearing request will result in a stay of any suspension or delisting action pending the outcome of the hearing. There can be no assurance that the Company will be able to satisfy Nasdaq’s continued listing requirements, regain compliance with Nasdaq IM-5101-2 or Nasdaq Listing Rule 5620(a), and maintain compliance with other Nasdaq listing requirements.

In connection with the Business Combination, the Sponsor has agreed to forfeit 400,000 Founder Shares upon the Closing. In addition, on March 27, 2024, pursuant to the terms of the Merger Agreement, the Company elected to convert approximately $5 million of Acquiror Transaction Expenses (as defined in the Merger Agreement) into shares of common stock of the Surviving Corporation (as defined in the Merger Agreement).

On March 27, 2024, the Company and Cantor Fitzgerald & Co. (“Cantor”) entered into the Fee Reduction Agreement, pursuant to which Cantor agreed to forfeit $4,062,500 of deferred underwriting fees payable in connection with the IPO, resulting in a remainder of $6,000,000 of deferred underwriting fees payable by the Company to Cantor subject to the closing of the Business Combination (the “Reduced Deferred Fee”). The Reduced Deferred Fee shall be payable to Cantor in the form of shares of New iLearningEngines Common Stock issuable upon the filing with the SEC of a resale registration statement. The number of shares of New iLearningEngines Common Stock issuable to Cantor in satisfaction of the Reduced Deferred Fee will be equal to the greater of (i) the Reduced Fee divided by $10.00 and (ii) the Reduced Fee divided by the VWAP (as defined in the Fee Reduction Agreement) over the seven (7) trading days preceding the date of filing of such resale registration statement. Under the Fee Reduction Agreement, the combined company will be subject to, among others, certain obligations with respect to the filing of the resale registration statement and maintaining the continued effectiveness of the resale registration statement, and a failure of the combined company to discharge such obligations may result in the ability of Cantor to require the combined company to pay the Reduced Deferred Fee in cash.

On March 27, 2024, BTIG and the Company amended the BTIG Engagement Letter (the “BTIG Amendment”) to provide that, in lieu of payment in cash of the full amount of any advisory fees or other fees and expenses owed under the BTIG Engagement Letter, the Company will pay to BTIG $3,000,000 in advisory fees (the “BTIG Advisory Fee”) and $400,000 in expenses (the “BTIG Expenses”). The BTIG Expenses will be paid in cash upon the consummation of the Business Combination. The BTIG Advisory Fee will be payable to BTIG in the form of shares of New iLearningEngines Common Stock in an amount of shares equal to the greater of (i) $3,000,000, divided by $10.00 and (ii) the quotient obtained by dividing (x) $3,000,000 by (y) the VWAP (as defined in the BTIG Amendment) of New iLearningEngines Common Stock over the seven (7) trading days immediately prior to the initial filing of the Resale Registration Statement (as defined in the BTIG Amendment). Under the BTIG Amendment, the combined company will be subject to, among others, certain obligations with respect to the filing of the resale registration statement and maintaining the continued effectiveness of the resale registration statement, and a failure of the combined company to discharge such obligations may result in the ability of BTIG to require the combined company to pay the BTIG Advisory Fee in cash.

F-56

ILEARNINGENGINES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share amounts)

	As of
	March 31, 2024 (Unaudited)			December 31, 2023
Assets
Current assets:
Cash	$	815		$	4,763
Restricted cash		-			2,000
Accounts receivable, net of provision for credit loss of $510 and $336, respectively		82,904			73,498
Contract asset		297			509
Prepaid expenses		93			62
Total current assets		84,109			80,832
Receivable from Technology Partner		14,880			13,602
Receivable from related party		-			465
Other assets		672			729
Deferred tax assets, net		5,248			5,703
Deferred transaction costs		6,882			3,990
Total assets	$	111,791		$	105,321
Liabilities and shareholders’ deficit
Current liabilities:
Trade accounts payable	$	7,044		$	3,753
Accrued expenses		3,850			2,982
Current portion of long-term debt, net		26,026			10,517
Contract liability		1,447			2,765
Payroll taxes payable		3,037			3,037
Loan restructuring share liability		2,813			-
Other current liabilities		139			116
Total current liabilities		44,356			23,170
Convertible notes		37,712			31,547
Warrant liability		26,988			11,870
Long-term debt, net		-			10,679
Subordinated payable to Technology Partner		49,789			49,163
Other non-current liabilities		63			74
Total liabilities		158,908			126,503

Shareholders’ deficit:
Common Shares $0.0001 par value: 200,000,000 shares authorized: 95,782,605 shares issued and outstanding at March 31, 2024 and December 31, 2023		10			10
Additional paid-in capital		36,384			36,384
Accumulated deficit		(83,511	)		(57,576	)
Total shareholders’ deficit		(47,117	)		(21,182	)
Total liabilities and shareholders’ deficit	$	111,791		$	105,321

The accompanying notes are an integral part of these condensed consolidated financial statements.

F-57

ILEARNINGENGINES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

(In thousands, except share and per share amounts)

	Three Months Ended March 31,
	2024			2023

Revenue	$	124,935		$	93,980
Cost of revenue		38,714			31,551
Gross profit		86,221			62,429
Operating expenses:
Selling, general, and administrative expenses		41,223			31,612
Research and development expenses		37,099			28,582
Total operating expenses		78,322			60,194
Operating income		7,899			2,235
Other expense:
Interest expense		(1,986	)		(1,588	)
Change in fair value of warrant liability		(15,118	)		(280	)
Change in fair value of convertible notes		(5,465	)		-
Loss on debt extinguishment		(10,041	)		-
Other expense		-			(60	)
Foreign exchange loss		(2	)		(8	)
Total other expense		(32,612	)		(1,936	)
Net (loss) income before income taxes		(24,713	)		299
Income tax (expense) benefit		(1,222	)		152
Net (loss) income	$	(25,935	)	$	451

Net (loss) income per share – basic and diluted	$	(0.27	)	$	0.00
Weighted average common shares outstanding – basic		95,782,605			95,782,605
Weighted average common shares outstanding – diluted		95,782,605			95,782,605

The accompanying notes are an integral part of these condensed consolidated financial statements.

F-58

ILEARNINGENGINES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ DEFICIT (UNAUDITED)
(In thousands, except share amounts)

					Additional					Total
	Common Stock				Paid-In		Accumulated			Shareholders’
	Shares		Amount		Capital		Deficit			Deficit
Balances at December 31, 2023		95,782,605	$	10	$	36,384	$	(57,576	)	$	(21,182	)
Net loss		—		—		—		(25,935	)		(25,935	)
Balances at March 31, 2024		95,782,605	$	10	$	36,384	$	(83,511	)	$	(47,117	)

					Additional					Total
	Common Stock				Paid-In		Accumulated			Shareholders’
	Shares		Amount		Capital		Deficit			Deficit
Balances at December 31, 2022		95,782,605	$	10	$	36,384	$	(53,169	)	$	(16,775	)
Net income		—		—		—		451			451
Balances at March 31, 2023		95,782,605	$	10	$	36,384	$	(52,718	)	$	(16,324	)

The accompanying notes are an integral part of these condensed consolidated financial statements.

F-59

ILEARNINGENGINES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

(In thousands)

	Three Months Ended March 31,
	2024			2023
Cash flows used in operating activities:
Net (loss) income	$	(25,935	)	$	451
Adjustments to reconcile net (loss) income to net cash flows used in operating activities:
Depreciation and amortization		54			26
Amortization of debt issuance costs		631			531
Change in deferred taxes		455			324
Accretion of interest on subordinated payable to Technology Partner		626			417
Change in fair value of warrant liability		15,118			280
Change in fair value of convertible notes		5,465			-
Loss on debt extinguishment		10,041			-
Provision for current expected credit losses		174			-
Changes in operating assets and liabilities:
Accounts receivable		(9,580	)		(8,104	)
Receivable from related party		465			130
Contract asset		212			5,880
Prepaid expenses and other current assets		(31	)		6
Receivable from Technology Partner		(1,278	)		(2,405	)
Trade accounts payable		958			(19	)
Accrued expenses and other liabilities		429			(574	)
Contract liability		(1,318	)		552
Payroll taxes payable		-			305
Deferred transaction costs		(96	)		-
Net cash flows used in operating activities		(3,610	)		(2,200	)
Cash flows from investing activities:
Purchases of property and equipment		(9	)		-
Net cash flow used in investing activities		(9	)		-
Cash flows from financing activities:
Proceeds from term loans		-			5,000
Repayments of term loans		(3,029	)		(2,063	)
Proceeds from convertible note		700			-
Net cash flows (used in) provided by financing activities		(2,329	)		2,937
Net change in cash		(5,948	)		737
Cash, beginning of year		6,763			856
Cash, end of period	$	815		$	1,593
Supplemental disclosure of cash flow information:
Cash paid during the period for interest	$	702		$	670
Supplemental disclosure of non-cash investing and financing activities:
Issuance of warrant to purchase common shares	$	-		$	514
Transaction costs capitalized which are included in trade accounts payable and accrued expenses	$	3,286		$	-

The accompanying notes are an integral part of these condensed consolidated financial statements.

F-60

ILEARNINGENGINES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

1. Nature of the Business and Basis of Presentation

iLearningEngines, Inc. (together with its subsidiaries, the “Company,” or “ILE”), a company headquartered in Maryland, United States of America, was incorporated in Delaware on November 17, 2010. The Company offers an Artificial Intelligence (“AI”) platform focused on automation of learning and enabling organizations to drive mission critical outcomes at scale. The AI Learning and Engagement platform has cloud-based, mobile, offline and multimedia capabilities that can be used to deliver highly personalized learning and engagement modules. The Company has developed an in-process learning platform that enables organizations to deliver learning in the flow of day-to-day activities.

Basis of Presentation

The accompanying condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and the rules and regulations of the Securities and Exchange Commission (“SEC”). The condensed consolidated financial statements include the accounts of iLearningEngines, Inc. and its wholly-owned subsidiaries.

A description of the Company’s significant accounting policies is included in the audited consolidated financial statements for the year ended December 31, 2023. No changes to significant accounting policies have occurred since December 31, 2023, other than new policy elections related to a debt amendment discussed in Note 5. Results of operations and cash flows for the interim periods presented herein are not necessarily indicative of the results that would be achieved during a full year of operations or in future periods. These unaudited condensed consolidated financial statements and notes thereto should be read in conjunction with the consolidated financial statements and notes thereto, included in the Company’s consolidated financial statements for the year ended December 31, 2023.

Business Combination

On April 27, 2023, the Company entered into an Agreement and Plan of Merger and Reorganization (the “Merger Agreement”) with Arrowroot Acquisition Corp. (NASDAQ: ARRW) (“Arrowroot”), a special-purpose acquisition company (“SPAC”), and ARAC Merger Sub, Inc., a Delaware corporation and a direct, wholly owned subsidiary of Arrowroot (“Merger Sub”). Upon closing of the Merger Agreement and upon approval by the shareholders of Arrowroot, the combined company will be renamed to “iLearningEngines, Inc.” and will be listed on the NASDAQ under the new ticker symbol “AILE.” Arrowroot has agreed to acquire all of the outstanding equity interests of the Company. Completion of the “SPAC Transaction” described herein, is subject to certain customary regulatory consents and approval by stockholders of Arrowroot and the Company.

The merger with Arrowroot closed on April 16, 2024. Refer to Note 14 for additional discussion.

2. Summary of Significant Accounting Policies

Concentration of Credit Risk and Major Sales Channels

Financial investments that potentially subject the Company to credit risk consist of cash. The Company places its cash with certain U.S. financial institutions. At various times, the Company’s cash deposits with any one financial institution may exceed the amount insured by the Federal Deposit Insurance Corporation (the “FDIC”). The Company has not experienced any losses of such amounts and management believes it is not exposed to any significant credit risk on its cash.

During the three months ended March 31, 2024, there were four customers, representing 16.7%, 13.5%, 11.3%, and 10.3%, respectively, who individually accounted for 10% or more of the Company’s revenue. During the three months ended March 31, 2023, there were four customers, representing 21.5%, 17.7%, 13.0% and 11.8%, respectively, who individually accounted for 10% or more of the Company’s revenue.

Fair Value Option (“FVO”) Election

The Company has convertible notes (refer to Note 6) and debt (refer to Note 5) which are accounted under the “fair value option election” discussed below.

Under Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 815, Derivative and Hedging, (“ASC 815”), a financial instrument containing embedded features and /or options may be required to be bifurcated from the financial instrument host and recognized as separate derivative asset or liability, with the bifurcated derivative asset or liability initially measured at estimated fair value as of the transaction issue date and then subsequently remeasured at estimated fair value as of each reporting period balance sheet date.

F-61

The estimated fair value adjustment of convertible notes, including the component related to interest expense, is presented in a single line item, “Change in fair value of convertible notes”, within the condensed consolidated statement of operations (as provided for by ASC 825-10-50-30(b)). As further discussed in Note 5, there was no change in the fair value of the Amended Term Loans between the date of the amendment on March 27, 2024 and March 31, 2024.

Further, as required by ASC 825-10-45-5, to the extent a portion of the fair value adjustment is attributed to a change in the instrument-specific credit risk, such portion would be recognized as a component of other comprehensive income (“OCI”), however there have been no such adjustments with respect to the convertible notes or debt which are accounted for under the fair value option.

Deferred Transaction Costs

The Company has incurred direct and incremental transaction costs related to the merger with Arrowroot. Transaction costs of $6.9 million and $4.0 million were deferred and capitalized to the “Deferred transaction costs” line item within the condensed consolidated balance sheets as of March 31, 2024 and December 31, 2023, respectively.

After consummation of the merger, these costs will be recorded to shareholders’ deficit as a reduction of additional paid-in capital generated as a result of the merger. As of March 31, 2024, and December 31, 2023, $2.8 million and $1.1 million of unpaid transaction costs are included within the “Trade accounts payable” line item, and $0.5 million and $1.6 million are included within the “Accrued expenses” line item, within the condensed consolidated balance sheets, respectively.

Accounts Receivable and Provision for Credit Losses

Accounts receivable are uncollateralized, noninterest bearing customer obligations due under normal trade terms and generally requiring payment within 30 to 90 days of the invoice date. Accounts receivable are stated at the amount billed to the customer, net of provision for credit losses in accordance with ASC 326, Financial Instruments-Credit Losses. Payments of accounts receivable are allocated to the specific invoices identified on the customer’s remittance advice, or, if unspecified, are applied to the earliest unpaid invoice.

The estimation of the provision for credit loss is based on an analysis of historical loss experience, current receivables aging, any known or expected changes to the customers’ ability to fulfill their payment obligations, and management’s assessment of current conditions and estimated future conditions. The general CECL reserve is measured on a collective (pool) basis when similar risk characteristics exist for multiple financial instruments. The Company notes its account receivables do not similar risks, and the Company measures the CECL reserve on an individual customer account basis.

At the end of each reporting period, the provision for credit losses is reviewed relative to management’s expected credit loss model and is adjusted as necessary. The expense associated with the provision for expected credit losses is recognized in selling, general, and administrative expenses in the consolidated statements of operations. Accounts receivable write-offs are recorded when management believes it is probable a receivable will not be recovered. The provision for credit losses as of March 31, 2024 and December 31, 2023 were $0.5 million and $0.3 million, respectively.

The following table shows the change in the Company’s provision for credit losses recognized for receivables between December 31, 2023 and March 31, 2024 (in thousands):

	Balance
Provision for credit losses as of December 31, 2023	$	336
Change in provision for credit losses during the three months ended March 31, 2024		174
Provision for credit losses as of March 31, 2024	$	510

F-62

Revenue Recognition

Disaggregation of Revenue

The Company disaggregates revenue into categories that depict the nature, amount, and timing of revenue and cash flows based on differing economic risk profiles for each category. In concluding such disaggregation, the Company evaluated the nature of the products and services, consumer markets, sales terms, and sales channels which have similar characteristics such that the level of disaggregation provides an understanding of the Company’s business activities and historical performance. The level of disaggregation is evaluated annually and as appropriate for changes to the Company or its business, either from internal growth, acquisitions, divestitures, or otherwise. Revenue from implementation services and combined software license and maintenance is recognized over the respective performance obligation period. As such, there is no disaggregation of revenue by point in time as all of the Company’s revenue is recognized over time.

With respect to the Company’s disaggregation of revenue by customer geography, geography is primarily determined based on the location of the customer identified in the contract. Under certain arrangements, the Company enters contracts with the Technology Partner (refer to Note 4 for additional information about the Company’s contractual arrangements with the Technology Partner) though which the Technology Partner purchases and integrates the ILE platform into the Technology Partner’s own software solution provided to one of the Technology Partner’s customers. In this type of contractual arrangement, the Company identifies the Technology Partner as its customer. In contractual arrangements in which the Technology Partner is identified as the customer, the Technology Partner’s end customer may or may not be known by the Company In cases in which the Technology Partner’s customer is known to the Company, the geography is determined based on the location of the Technology Partner’s customer and conversely, in cases in which the Technology Partner’s customer is not known, the customer geography is determined based on the geography of the Technology Partner. The following table presents this disaggregation of revenue by customer geography:

	Three Months Ended March 31,
	2024		2023
	(In thousands)
North America	$	54,317	$	45,011
India		51,873		34,795
Other⁽¹⁾		18,745		14,174
Total Revenues	$	124,935	$	93,980

(1)	Other includes customers in Middle East and Europe.

The following table presents to disaggregation of revenue by type of revenue:

	Three Months Ended March 31,
	2024		2023
	(In thousands)
Revenue related to implementation services	$	5,200	$	4,660
Combined software license and maintenance revenues		119,735		89,320
Total Revenues	$	124,935	$	93,980

Contract asset

Contract asset balances represent amounts for which the Company has recognized revenue, pursuant to its revenue recognition policy, for software licenses already delivered, implementation services, and maintenance services already performed but invoiced in arrears. As of March 31, 2024 and December 31, 2023 contract assets were $0.3 million and $0.5 million, respectively.

Contract liability

Contract liability represents either customer advance payments or billings for which the revenue recognition criteria has not yet been met. Contract liability is primarily unearned revenue related to combined software and maintenance services. As of March 31, 2024 and December 31, 2023, the contract liability balance was $1.4 million and $2.8 million.

F-63

Remaining performance obligations

As of March 31, 2024, the total remaining performance obligations under the Company’s contracts with customers was $447.0 million, and the Company expects to recognize approximately 86% of the remaining performance obligations as revenue within the next twelve months. As of December 31, 2023, the total remaining performance obligations under the Company’s contracts with customers was $409.6 million, and the Company recognized revenues on approximately 90% of these remaining performance obligations over the year ended December 31, 2023.

Recent Accounting Pronouncements Not Yet Adopted

In November 2023, the Financial Accounting Standards Board (FASB) issued Accounting Standard Update (ASU) No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which requires a public entity to disclose significant segment expenses and other segment items on an annual and interim basis and provide in interim periods all disclosures about a reportable segment’s profit or loss and assets that are currently required annually. Additionally, it requires a public entity to disclose the title and position of the Chief Operating Decision Maker (CODM). The ASU does not change how a public entity identifies its operating segments, aggregates them, or applies the quantitative thresholds to determine its reportable segments. The new standard is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. A public entity should apply the amendments in this ASU retrospectively to all prior periods presented in the financial statements. The Company is still evaluating the impact of this standard on its condensed consolidated financial statements.

In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which focuses on the rate reconciliation and income taxes paid. ASU No. 2023-09 requires a public business entity (PBE) to disclose, on an annual basis, a tabular rate reconciliation using both percentages and currency amounts, broken out into specified categories with certain reconciling items further broken out by nature and jurisdiction to the extent those items exceed a specified threshold. In addition, all entities are required to disclose income taxes paid, net of refunds received disaggregated by federal, state/local, and foreign and by jurisdiction if the amount is at least 5% of total income tax payments, net of refunds received. For PBEs, the new standard is effective for annual periods beginning after December 15, 2024, with early adoption permitted. An entity may apply the amendments in this ASU prospectively by providing the revised disclosures for the period ending December 31, 2025 and continuing to provide the pre-ASU disclosures for the prior periods, or may apply the amendments retrospectively by providing the revised disclosures for all period presented. The Company is still evaluating the impact of this standard on its condensed consolidated financial statements.

3. Accrued Expenses

The following table presents the components of accrued expenses as of March 31, 2024 and December 31, 2023:

	As of
	March 31, 2024		December 31, 2023
	(In thousands)
Accrued income taxes	$	2,495	$	1,742
Other accrued expenses⁽¹⁾		1,355		1,240
Total	$	3,850	$	2,982

(1)	Other Accrued Expense includes accrued professional service fees, accrued interest, accrued compensation and benefits, and other current liabilities.

4. Technology Partner

In 2019, the Company entered a Master Agreement (“MA”) with the Technology Partner, which allows for quarterly netting of amounts collected by the Technology Partner from end-users, against the cost of the Technology Partner’s services rendered and billable to the Company. The MA has an initial term of five years with an automatic renewal for five additional years.

On January 1, 2021, the Company amended the interest rate with the Technology Partner which changed from a 12-month LIBOR rate plus 2.0% to a fixed rate of 3.99% through December 31, 2023. On January 5, 2024, the Company amended the interest rate with the Technology Partner to a fixed rate of 5.99% through December 31, 2024. The Company is not required to repay any outstanding balance or accrued interest until the tenth anniversary of the effective date of termination of the MA. As of the date of these condensed consolidated financial statements, the MA has not been terminated.

F-64

The following table summarizes the expenses charged to Company by the Technology Partner that are presented within “Cost of revenue”, “Selling, general and administrative expenses”, and “Research and development expenses” on the condensed consolidated statements of operations for the three months ended March, 31 2024 and 2023:

	Three Months Ended March 31,
	2024		2023
	(In thousands)
Cost of revenue	$	38,673	$	31,541
Selling, general and administrative expense		37,063		29,533
Research and development expense		37,048		28,581
	$	112,784	$	89,655

Subordinated Payable to the Technology Partner

On December 30, 2020, the Company and the Technology Partner entered into a subordination agreement whereby the payable to the Technology Partner became subordinated to the 2020 and 2021 Term Loans (refer to Note 5).

The following table presents a reconciliation of the change in subordinated payable to the Technology Partner between December 31, 2023 and March 31, 2024 (in thousands):

	Subordinated payable to Technology Partner

Balance as of December 31, 2023	$	49,163
Accrued interest		626
Balance as of March 31, 2024	$	49,789

Interest expense related to the subordinated payable to the Technology Partner was $0.6 million for the three months ended March 31, 2024.

Net Receivable from Technology Partner

Subsequent to the execution of the subordination agreement, the Company and the Technology Partner resumed quarterly netting of collections and the cost of services provided with the same interest rate terms defined above.

The following table presents a reconciliation of the changes in the net receivable from Technology Partner between December 31, 2023 and March 31, 2024 (in thousands):

	Net Receivable from Technology Partner

Balance of receivable from Technology Partner as of December 31, 2023	$	13,602
Collections by Technology Partner		113,732
Cost of services provided by Technology Partner		(112,784	)
Net cash transfers between Company and Technology Partner		330
Balance of receivable from Technology Partner as of March 31, 2024	$	14,880

F-65

5. Debt

The following table presents the components of the Company’s debt as of March 31, 2024 and December 31, 2023:

	March 31, 2024		December 31, 2023
	(In thousands)
2020 Term Loans	$	-	$	2,697
2021 Term Loans		-		12,299
2023 Term Loans		-		10,000
Amended Term Loans		26,026		-
		26,026		24,996
Less: Discount on debt		-		3,800
		26,026		21,196
Less: Current portion		26,026		10,517
Long-term portion of debt	$	-	$	10,679

Contractual interest expense related to the 2020 Term Loan, 2021 Term Loan, and 2023 Term Loan (collectively, the “Term Loans”), was $0.7 million and $0.7 million for the three months ended March 31, 2024 and March 31, 2023 and the amortization of debt issuance costs was $0.7 million and $0.5 million for the three months ended March 31, 2024 and March 31, 2023, respectively.

Amendment to 2020, 2021 and 2023 Term Loans

On March 27, 2024, ILE entered into an agreement to amend the 2020, 2021 and 2023 Term Loans (the “Amendment”). The amended terms consisted of:

(i)

revision to the amortization schedule for the Term Loans in exchange for 1,019,999 shares of “NewCo” (defined in Note 14 - Subsequent Events) common stock to be issued upon completion of the SPAC Transaction (the “Loan Restructuring Shares”)

(ii)

agreement to terminate the outstanding warrants issued in connection with the Term Loans and the respective put rights associated with each, in exchange for the Company’s agreement to provide the respective lenders with an aggregate amount of 3,399,999 shares of NewCo common stock to be issued upon completion of the SPAC Transaction.

Pursuant to the Amendment, if the Company repays the “Amended Term Loans” in full, on or before (i) April 15, 2024, then 90% of the Loan Restructuring Shares will be canceled, (ii) May 1, 2024, then 80% of the Loan Restructuring Shares will be canceled, and (iii) July 1, 2024, then 50% of the Loan Restructuring Shares will be canceled.

In addition, the Amendment provides that, if the Company prepays the Amended Term Loans, then at the Company’s option, the Company may prepay 50% of the amount of scheduled but unpaid payments of interest that would have accrued after the prepayment date by issuing a number of shares of NewCo common stock obtained by dividing (A) the product of (x) the unpaid scheduled interest payments and (y) 2.75, by (B) the volume-weighted average price of NewCo common stock over the seven (7) trading days immediately preceding the date of issuance.

The Loan Restructuring Shares were determined to be classified as a liability initially measured at fair value with subsequent changes in fair value recorded in earnings. The initial fair value of the Loan Restructuring Shares was determined to be $2.8 million. The Loan Restructuring Shares are presented within “Loan restructuring share liability” in the accompanying consolidated balance sheet. There was no change in fair value between the date of the initial fair value determined on March 27, 2024 and March 31, 2024.

The Amendment was accounted for as a debt extinguishment under US GAAP, through which the Company recorded a $10.0 million loss on debt extinguishment within the accompanying condensed consolidated statement of operations.

F-66

The Company elected to account for the Amended Term Loans under the fair value option. Under the fair value option, the balance is subsequently measured at fair value for each reporting period with changes in fair value, including changes due to instrument specific credit risk, recorded in earnings. The initial fair value of the Amended Term Loans was determined to be $26.0 million and there were no changes in fair value between the date of the Amendment on March 27, 2024 and March 31, 2024:

	Amended Term Loans
	(In thousands)
Fair value on March 27, 2024	$	26,026
Change in fair value of term loan due to instrument-specific credit risk		-
Remaining changes in fair value		-
Fair value as of March 31, 2024	$	26,026

On April 18, 2024, the Company prepaid the full amount of the Amended Term Loans using a combination of cash and 159,379 shares of NewCo common stock. Based on the timing of the prepayment, 815,999 Loan Restructuring Shares were canceled.

Debt Covenant Compliance

The Company’s 2020, 2021, and 2023 Term Loans were subject to covenant clauses. Covenant breaches related to timely filing of payroll tax returns and failure to maintain $2.0 million of restricted cash were waived by the respective lenders as part of the Amendment. Due to the waivers obtained, as of March 31, 2024, the Company is in compliance with all debt covenants.

Warrants

The following is a schedule of changes in warrants issued and outstanding from December 31, 2023 to March 31, 2024:

	Units
Outstanding as of December 31, 2023		1,094,299
Warrants issued		-
Outstanding as of March 31, 2024		1,094,299

The fair value of the warrant liability was determined using an option pricing model, see Note 11, Fair Value Measurements, for disclosure in assumption of the warrant liability.

6. Convertible Notes

The following is a schedule of the Company’s convertible notes at fair value as of March 31, 2024, and December 31, 2023:

	March 31, 2024		December 31, 2023
	(In thousands)
2023 Convertible Notes	$	35,936	$	31,547
2024 Convertible Notes		1,776		-
Total	$	37,712	$	31,547

On April 27, 2023, the Company entered into the 2023 convertible note purchase agreement (the “2023 Convertible Note Purchase Agreement”) pursuant to which the Company issued and sold 2023 Convertible Notes with an aggregate principal amount of $17.4 million. The 2023 Convertible Notes mature on October 27, 2025, unless converted earlier, redeemed, or repurchased prior to the maturity date.

On March 21, 2024 (“Issuance Date”), the Company entered into the 2024 convertible note purchase agreement (the “2024 Convertible Notes”) pursuant to which the Company issued and sold 2024 Convertible Notes with an aggregate principal amount of $0.7 million. The 2024 Convertible Notes mature 30 months after the Issuance Date.

The 2024 Convertible Notes contain a make whole provision, such that for each share of each common stock converted under the 2024 Convertible Notes, a number of additional incentive shares (rounded down to the nearest whole share) equal to (i) $10.00 (the “Conversion Price”), divided by the greater of (i) the volume-weighted average price of the NewCo common shares over the ten trading days immediately preceding November 30, 2024 (the “Reference Date”) and (ii) $1.00 (the “Reference Price”), minus (ii) one will be issued. The Conversion Price and Reference Price shall be appropriately adjusted for any stock dividend, stock split, stock combination, recapitalization or other similar transaction during the period beginning on the date the NewCo common shares are issued upon conversion of the 2024 Convertible Notes and ending on the Reference Date.

F-67

The 2023 and 2024 Convertible Notes bear simple interest, accrued on a daily basis in arrears, at a rate of 15.0% per annum until aggregate accrued interest is greater than 25.0% of the principal amount, and at a rate of 8.0% per annum thereafter.

The 2023 and 2024 Convertible Notes are convertible to shares including under the following circumstances:

●

upon the occurrence of an equity financing, the lender can elect to exchange the convertible notes into the number of shares of equity securities issued in such equity financing equal to the note balance divided by the equity price in such equity financing and

●

immediately prior to the consummation of a qualified de-SPAC transaction, the convertible notes shall automatically convert, in whole, into shares of common stock of the Company thereby entitling the lender to receive a number of shares equal to (i) 2.75, multiplied by the outstanding principal under each convertible note, plus all accrued and unpaid interest thereon, divided by (ii) $10.00.

Additionally, pursuant to the respective convertible note purchase agreements, the Company may prepay the 2023 and 2024 Convertible Notes in cash without the consent of the holders, at an amount equal to the balance of the note before maturity.

As of March 31, 2024, the fair value of the 2023 and 2024 Convertible Notes was $35.9 million and $1.8 million, respectively, and the corresponding change in fair value recorded within the accompanying condensed consolidated statements of operations for the three months ended March 31, 2024 was $5.5 million. The fair value of the 2023 Convertible Notes as of December 31, 2023 was $31.5 million.

7. Share-Based Compensation

On August 12, 2021, the Company adopted the 2020 Equity Incentive Plan (the “Plan”). The total restricted stock units (“RSUs”) granted under the Plan as of March 31, 2024 and December 31, 2023 was 8,338,438. The awards have a four year service requirement with a one-year cliff vesting starting on the employment date and are subject to the Liquidity Event provision defined below.

As of March 31, 2024 and December 31, 2023, the Company had 39,883,388 shares of restricted stock awards outstanding with the Company’s founders with a ten-year service requirements starting on the day of the Liquidity Event (defined below) (the “Founder Restricted Shares”) and 360,290 restricted shares outstanding with a former employee, in which the service requirement had been deemed met on the grant date (together with the Founder Restricted Shares, the “Restricted Shares”). The Company’s 40,243,678 outstanding Restricted Shares participate on par with common shares in all distributions from the Company, as the holders of these restricted shares are entitled to non-forfeitable dividend rights. Each of the RSUs and Restricted Shares is subject to a change of control provision; an effective registration statement under the Securities Act of 1933, as amended (the “Securities Act”); a direct listing on the Nasdaq Global Select Market or New York Stock Exchange; or the Company’s completion of a merger or consolidation with a SPAC whereby the surviving company’s common stock are publicly traded in a public offering pursuant to an effective registration statement under the Securities Act (collectively, the “Liquidity Events”).

The summary of nonvested RSUs and Restricted Shares whose vesting is subject to the achievement of a Liquidity Event for the period ended March 31, 2024 is disclosed below:

	Shares		Weighted Average Grant Date Fair Value
RSUs
Nonvested as of January 1, 2024		8,338,438	$	4.09
Granted		-		-
Nonvested as of March 31, 2024		8,338,438	$	4.09

	Shares		Weighted Average Grant Date Fair Value
Restricted Shares
Nonvested as of January 1, 2024		40,243,678	$	3.53
Granted		-		-
Nonvested as of March 31, 2024		40,243,678	$	3.53

F-68

The aggregate unrecognized compensation expense for these awards whose vesting is subject to the achievement of a Liquidity Event is $176.1 million as of March 31, 2024.

The vesting of these RSUs and Restricted Shares is contingent upon the Liquidity Events that are considered not probable of occurring until it actually occurs, therefore no share-based compensation expense will be recognized until any of the Liquidity Events are achieved.

8. Income Taxes

The Company’s income tax provision is computed based on the federal statutory rate and the average state statutory rates, net of the related federal benefit. For the three months ended March 31, 2024 and 2023, the Company recorded an income tax expense of $1.2 million and income tax benefit of $0.2 million, respectively.

The Company’s estimate of the realizability of the deferred tax asset is dependent on estimates of projected future levels of taxable income. In analyzing future taxable income levels, the Company considered all evidence currently available, both positive and negative. Accordingly, as of March 31, 2024 and December 31, 2023, the Company no longer maintains a valuation allowance outside of the Australia and India jurisdiction.

9. Net (Loss) Income Per Share

Basic net (loss) income per share is computed using the weighted-average number of common shares outstanding during the period. Diluted net (loss) income per share is computed using the weighted-average number of common shares and, if dilutive, common share equivalents outstanding during the period.

The computation of basic and diluted net (loss) income per share and weighted-average shares of the Company’s common stock outstanding during the periods presented is as follows:

	Three Months Ended March 31,
	2024			2023
	(In thousands, except share and per share amounts)
Basic net (loss) income per share:
Net (loss) income	$	(25,935	)	$	451
Income allocated to participating securities		-			(133	)
Net (loss) income attributable to common stockholders – basic	$	(25,935	)	$	318

Diluted net (loss) income per share:
Net (loss) income attributable to common stockholders – basic	$	(25,935	)	$	451
Interest expense on the 2019 Convertible Notes		-			(133	)
Net (loss) income attributable to common stockholders – diluted	$	(25,935	)	$	318

Shares used in computation:
Weighted-average common shares outstanding		95,782,605			95,782,605
Weighted-average effect of dilutive securities:
Diluted weighted-average common shares outstanding		95,782,605			95,782,605

Net (loss) income per share attributable to common stockholders:
Basic	$	(0.27	)	$	0.00
Diluted	$	(0.27	)	$	0.00

F-69

There were no dividends declared or accumulated on the common shares during the three months ended March 31, 2024 and 2023. The Company applies the two-class method to its Restricted Shares, which contains non-forfeitable dividend rights and thereby meets the definition of participating securities, which requires earnings available to common stockholders for the period to be allocated between common stock and participating securities based upon their respective rights to receive dividends as if all earnings for the period had been distributed. Net loss is not allocated to participating securities in accordance with the contractual terms. The Company’s weighted average restricted shares outstanding was 40,243,678 for the three months ended March 31, 2024 and 2023. The Company excluded the following securities, presented based on amounts outstanding at each period end, from the computation of diluted net (loss) income per share attributable to common stockholders for the periods indicated, as including them would have had an anti-dilutive effect:

	Three Months Ended March 31,
	2024		2023
Warrants to purchase common stock⁽¹⁾		1,094,299		873,618
RSUs⁽²⁾		8,338,438		7,138,438
Contingent consideration to In2vate⁽³⁾		34,030		34,030
Convertible Notes⁽⁴⁾		5,157,432		-
Restricted Shares⁽⁵⁾		40,243,678		40,243,678
Loan restructuring share liability⁽⁵⁾		1,019,999		-

(1)

Warrants of 220,681 are out-of-the-money during the three months ended March 31, 2024. The warrants of 873,618 are in-the-money during the three months ended March 31, 2024, however, are not considered exercised as the Company is in a net loss position.. The warrants of 873,618 are out-of-the money during the three-months ended March 31, 2023. Therefore, all warrants are excluded from the dilutive EPS calculation.

(2)

RSUs are subject to the vesting condition under the Liquidity Event, as discussed in Note 7 – Share Based Compensation. As these securities are considered as contingently issuable shares where the contingency has not been met at the end of the reporting period, they are excluded from the dilutive net income (loss) per share calculation for the periods presented.

(3)	Contingencies underlying contingent consideration payable to In2vate was not met as of the end of the reporting period. Therefore, these shares have been excluded from the dilutive net (loss) income per share calculation for the periods presented.

(4)	If-converted method was applied to the Convertible Notes, in which the impact was anti-dilutive for the three months ended March 31, 2024. Therefore, they are excluded from the dilutive EPS calculation.

(5)	Restricted Shares and Loan Restructuring Shares were excluded from dilutive earnings per share calculation for the three months ended March 31, 2024 as the impact of including such shares would be anti-dilutive.

10. Payroll Taxes Payable

The Company has not paid or filed employment payroll tax returns for any period from inception through December 31, 2020. The federal and state withholding tax, employer payroll taxes, penalties, and interest liability from inception of the Company through December 31, 2023 and related penalties and interest were recorded within Payroll Taxes Payable on the condensed consolidated balance sheets. The total liability was $3.0 million each as of March 31, 2024 and December 31, 2023, respectively. The related charge for these accruals is recorded to “Selling, general, and administrative expenses” within the condensed consolidated statements of operations.

11. Fair Value Measurements

The Company’s financial instruments consist of warrant liability, 2020 Term Loans, 2021 Term Loans, 2023 Term Loans, Amended Term Loans, 2023 and 2024 Convertible Notes, Loan Restructuring and Subordinated Payable to Technology Partner.

F-70

The carrying value and estimated fair value of the Company’s 2020 Term Loans, 2021 Term Loans, 2023 Term Loans, Amended Term Loans, 2023 Convertible Notes, 2024 Convertible Notes, Loan Restructuring and Subordinated Payable to Technology Partner as of March 31, 2024 and December 31, 2023, were as follows:

	March, 31, 2024						December, 31, 2023
	Principal amount		Carrying amount		Fair value		Principal amount		Carrying amount		Fair value
	(In thousands)
2020 Term Loans	$	-	$	-	$	-	$	2,697	$	2,483	$	2,697
2021 Term Loans		-		-		-		12,299		11,498		12,299
2023 Term Loan		-		-		-		10,000		7,215		10,000
Amended Term Loans		21,967		26,026		26,026		-		-		-
2023 Convertible Notes		17,400		35,936		35,936		17,400		31,547		31,547
2024 Convertible Notes		700		1,776		1,776		-		-		-
Subordinated payable to Technology Partner		49,789		49,789		49,789		49,163		49,163		49,163
Loan restructuring share liability		-		2,813		2,813		-		-		-
	$	89,856	$	116,340	$	116,340	$	91,559	$	101,906	$	105,706

With respect to the 2020 Term Loans, 2021 Term Loans, 2023 Term Loans, the Company concluded the fair values as of December 31, 2023 approximated the principal value. For Subordinated Payable to Technology Partner, the Company determined that the fair value approximated the principal value as of March 31, 2024 and December 31, 2023. The 2023 and 2024 Convertible Notes and the Loan restructuring share liability are presented are carried at fair value for each period presented.

The fair values of the 2023 and 2024 Convertible Notes, Loan restructuring share liability and Amended Term Loans are estimated using a scenario-based approach which considers the conversion feature and related payoffs within each scenario.

The level 3 inputs used in the valuation model for the Amended Term Loans as of March 31, 2024 included the following:

	March 31, 2024
Redemption Event	Prepay by April 15, 2024			Prepay by May 1, 2024			Prepay by July 1, 2024			Hold-to- Maturity			Private Sale
Discount spread		27.90	%		27.90	%		27.90	%		27.90	%		27.90	%
Probability		5	%		48	%		38	%		5	%		5	%
Term matched risk- free rate		5.49	%		5.49	%		5.46%-5.49	%		4.47%-5.49	%		4.47%-5.49	%

The level 3 inputs used in the valuation model for the 2024 Convertible Notes as of March 31, 2024 included the following:

	March 31, 2024
Redemption Event	De-SPAC Transaction			Hold-to- Maturity
Probability		95	%		5	%
Time to event date (years)		0.04			2.48
Discount spread		574.2	%		574.2	%
Risk-free rate		5.6	%		4.6	%
Discount yield		579.8	%		578.8	%

The level 3 inputs used in the valuation model for the 2023 Convertible Notes as of March 31, 2024 and December 31, 2023 included the following:

	March 31, 2024
Redemption Event	De-SPAC Transaction			Hold-to- Maturity
Probability		95	%		5	%
Time to event date (years)		0.04			1.58
Discount spread		574.2	%		574.2	%
Risk-free rate		5.6	%		4.8	%
Discount yield		579.8	%		579.0	%

F-71

	December 31, 2023
Redemption Event	Equity Financing			De-SPAC Transaction			Hold-to- Maturity
Probability		8.0	%		90.0	%		2.0	%
Time to event date (years)		0.13			0.13			1.82
Discount spread		574.2	%		574.2	%		574.2	%
Risk-free rate		5.6	%		5.6	%		4.4	%
Discount yield		579.8	%		579.8	%		578.6	%

The fair value of the warrant liability and Loan restructuring share liability was determined using an option pricing model which utilized the following level 3 inputs:

	March 31, 2024
	Private Sale Scenario (5% Probability)			SPAC Scenario (95% Probability)
Volatility		65.0	%		45.0	%
Risk-free interest rate		5.1	%		5.42	%
Dividend yield		0.0	%		0.0	%
Exercise price for $6.94 warrants	$	6.94		$	6.94
Exercise price for $10.14 warrants	$	10.14		$	10.14
Discount for Lack of Marketability		0.0	%		2.0	%
Term		0.75 Years			0.04 Years
Equity value⁽¹⁾	$	588,496,671		$	1,233,314,103

(1)	Equity value was derived from weighted average of discounted cash flow, guideline company method, and transaction methodologies.


	December 31, 2023
	Private Sale Scenario (10% Probability)			SPAC Scenario (90% Probability)
Volatility		60.0	%		50.0	%
Risk-free interest rate		4.7	%		5.5	%
Dividend yield		0.0	%		0.0	%
Exercise price for $6.94 warrants	$	6.94		$	6.94
Exercise price for $10.14 warrants	$	10.14		$	10.14
Term		1.0 Years			0.1 Years
Equity value⁽¹⁾	$	585,798,557		$	1,235,675,336

(1)	Equity value was derived from weighted average of discounted cash flow, guideline company method, and transaction methodologies.

The Company’s liabilities measured at fair value on a recurring basis were categorized as follows within the fair value hierarchy.

	March 31, 2024
	Level 1		Level 2		Level 3		Total
	(In thousands)
Liabilities
Warrant liabilities	$	-	$	-	$	26,988	$	26,988
Amended Term Loans		-		-		26,026		26,026
2023 Convertible Notes		-		-		35,936		35,936
2024 Convertible Notes		-		-		1,776		1,776
Loan restructuring share liability		-		-		2,813		2,813
Total liabilities	$	-	$	-	$	93,539	$	93,539

F-72

	December 31, 2023
	Level 1		Level 2		Level 3		Total
	(In thousands)
Liabilities
Warrant liability	$	-	$	-	$	11,870	$	11,870
2023 Convertible Notes		-		-		31,547		31,547
Total liabilities	$	-	$	-	$	43,417	$	43,417

The following table summarizes the activity for the Company’s Level 3 liabilities measured at fair value:

	Warrant Liability		Convertible Notes		Loan Restructuring		Amended Term Loans
	(In thousands)
Balance as of December 31, 2023	$	11,870	$	31,547	$	-	$	-
Issuance		-		700		2,813		26,026
Change in fair value		15,118		5,465		-		-
Balance as of March 31, 2024	$	26,988	$	37,712	$	2,813	$	26,026

During the three months ended March 31, 2024 and 2023, there were no transfers between Level 1 and Level 2, nor into and out of Level 3.

12. Commitments and Contingencies

Contingencies

The Company evaluates for any potential impact of loss contingencies that are probable and reasonably estimable. As of March 31, 2024, there were no loss contingencies recorded.

While the Company does not anticipate that the resolution of any ongoing matters will have a material impact on its results of operations, financial condition, or cash flows, it is important to note that the ultimate outcome of these matters remains uncertain. In the event of an unfavorable resolution of one or more of these contingencies, it could have a material effect on the Company’s financial condition, results of operations, or cash flows.

The Company will continue to monitor these matters and disclose any significant developments or changes in future financial statements as necessary.

Purchase Commitments

The Company entered into a long-term software licensing contract with a major customer that commenced in 2018 and is set to expire in June 2024, subject to an additional 5-year renewal. The contract has an annual value of $50.3 million. As part of the agreement, the Company installs its software licenses on the customer’s servers, and in exchange, the customer pays an annual fee for access to the software license and related maintenance services. Additionally, the Company has a separate contract with the customer for the purchase of the customer’s end-user data. This data is essential for the Company’s development and utilization of its next-generation artificial intelligence platform. The annual price for this data acquisition amounts to approximately $30.0 million.

The sale of the software license and the purchase of the customer’s end-user data are treated as distinct and independent transactions. Furthermore, the software licensing contract and the data acquisition contract can be canceled individually without affecting the other contract, with the data acquisition contract requiring twelve months notice for cancellation by either party. Due to the distinct nature of the data acquisition from the customer, which is obtained at fair value and used primarily for research and development purposes, the revenue generated from the software licensing contract is recognized on a gross basis. Conversely, the expenses associated with the data acquisition are also recognized on a gross basis and classified as research and development expenses.

F-73

Financial Advisor Agreement

The Company has a financial advisory agreement in place with a designated financial advisor to assist with any future equity fundraising activities. According to the terms of the agreement, the financial advisor will receive compensation based on the following structure:

For equity raises comprising less than a majority of the Company’s equity capitalization, the financial advisor will be entitled to a fee equal to 5.0% of the gross proceeds generated from the equity raise.

In the event of an equity raise comprising a majority of the Company’s equity capitalization, the financial advisor’s compensation will be calculated based on the greater of the following:

A flat fee of $3.5 million.

ii)

1.0% of the aggregate value of the equity raise up to $1.0 billion, plus an additional 1.5% of the portion of the aggregate value of the equity raise that exceeds $1.0 billion.

These compensation terms outline the financial advisor’s entitlement to fees based on the successful completion of equity fundraising activities. For non-equity transactions the specific fee is open to negotiation on a transaction-by-transaction basis to ensure that the financial advisor’s compensation aligns with the scale and significance of the equity raise, considering the Company’s equity capitalization and the total value of the funds raised.

On March 27, 2024, the Company and the financial advisor amended the financial advisory agreement to provide that, in lieu of payment in cash of the full amount of any advisory fees or other fees or expenses owed under the financial advisor agreement, the Company will pay the financial advisor $7,500,000 in cash or NewCo shares, at the sole discretion of the Company. As of March 31, 2024 and December 31, 2023, the financial advisor’s fees were not yet probable of being paid, nor was the amount of the payment determinable. As a result, no amount is accrued within the condensed consolidated balance sheets at either period, for the potential compensation outlined within the financial advisor agreement.

Litigation

The Company is involved in litigation arising in the normal course of business. Such litigation is not expected to have a material effect on the Company’s financial condition, results of operations, and cash flows.

13. Related-Party Transactions

Receivable from related party

The Company had outstanding receivables from Directors in the amount of $0.5 million as of December 31, 2023, related to expenses that the Company incurred on behalf of the Directors.

In February 2024, the Company collected the full amount of the related party receivable from each Director. There is no outstanding balance as of March 31, 2024.

14. Subsequent Events

The Company has evaluated all events subsequent to March 31, 2024 and through May 15, 2024, which represents the date these condensed consolidated financial statements were available to be issued. The Company is not aware of any subsequent event that would require recognition or disclosure in the condensed consolidated financial statements other than those described below.

Closing of the Merger and Related Transactions

On April 16, 2024, (the “Closing Date”), the Company consummated the previously announced merger contemplated by the Merger Agreement dated April 27, 2023 (the “SPAC Transaction”). Refer to Note 1 for additional detail.

The business combination is being accounted for as a reverse recapitalization, in accordance with U.S. GAAP. Under this method of accounting, although Arrowroot issued shares for outstanding equity interests of iLearningEngines, Inc. in the business combination, Arrowroot is treated as the “acquired” company for financial reporting purposes. Accordingly, the business combination is treated as the equivalent of the Company issuing stock for the net assets of Arrowroot, accompanied by a recapitalization. The net assets of Arrowroot is stated at historical cost, with no goodwill or other intangible assets recorded. Operations prior to the business combination will be those of the Company.

In connection with the closing of the business combination, Arrowroot Acquisition Corp. (NASDAQ: ARRW) changed its name to “iLearningEngines, Inc.” (“NewCo”) and is listed on the NASDAQ under the new ticker symbol “AILE”.

F-74

On the Closing Date, the following transactions occurred pursuant to the terms of the Merger Agreement:

(i)

Current ILE stockholders own 109,684,738 shares of NewCo common stock on the Closing Date in exchange for former ILE shares;

(ii)

Former Arrowroot public stockholders own 638,977 shares of NewCo common stock on the Closing Date in exchange for former Arrowroot public shares;

(iii)

Current and former affiliates of Arrowroot own 8,674,617 shares of NewCo common stock on the Closing Date in exchange for former Arrowroot convertible and promissory notes;

(iv)

Convertible note investors (not including affiliates of Arrowroot) own 11,551,784 shares of NewCo common stock on the Closing Date in exchange for former ILE convertible notes (see “Convertible Note Purchase Agreement” below for portion of convertible notes entered into on Closing Date);

(v)

The 2020 Lender, 2021 Lender and 2023 Lender own 4,419,998 shares of NewCo common stock on the Closing Date based on amendments to term loans (see “Amendments to 2020, 2021 and 2023 Term Loan” below for further details). Upon repayment of the term loans on April 18, 2024, 815,999 of the shares of NewCo common stock were cancelled.

Convertible Note Purchase Agreement

In connection with the SPAC Transaction, the Company issued and converted $29.4 million of 2024 Convertible Notes. The Company issued $0.7 million of convertible notes on March 21, 2024, and $28.7 million of convertible notes on the Closing Date (collectively, the “2024 Convertible Notes”). The 2024 Convertible Notes were converted to 8,089,532 common shares of NewCo on the Closing Date.

Negotiation of Payables to Third-Party Vendors

Proposed 2024 Equity Incentive Plan

The Company proposed a new equity incentive plan for 2024 and the plan was approved on April 1, 2024.

East West Bank Financing

The interest rate applicable to the Revolving Loans is Adjusted Term Secured Overnight Financing Rate (“SOFR”) (with an interest period of 1 or 3 months at the Borrower’s option) plus 3.50% per annum, subject to an Adjusted Term SOFR floor of 4.00%.

The maturity date of the Revolving Loans is April 17, 2027. The Revolving Loan Agreement contains customary representations and warranties and customary affirmative and negative covenants, including, among other things, restrictions on indebtedness, liens, investments, mergers, dispositions, prepayment of other indebtedness and dividends and other distributions. Borrower is also required to comply with the following financial covenants, which are more fully set forth in the Revolving Loan Agreement (i) minimum liquidity, (ii) minimum revenue performance to plan, (iii) minimum fixed charge coverage ratio and (iv) maximum leverage ratio.

The Revolving Loan Agreement also includes customary events of default, including failure to pay principal, interest or certain other amounts when due, material inaccuracy of representations and warranties, violation of covenants, specified cross-default and cross-acceleration to other material indebtedness, certain bankruptcy and insolvency events, certain undischarged judgments, material invalidity of guarantees or grant of security interest, material adverse effect and change of control, in certain cases subject to certain thresholds and grace periods. If one or more events of default occurs and continues beyond any applicable cure period, the Agent may, with the consent of the Lenders holding a majority of the loans and commitments under the facility, or will, at the request of such Lenders, terminate the commitments of the Lenders to make further loans and declare all of the obligations of the Company under the Revolving Loan Agreement to be immediately due and payable.

F-75

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholders and Board of Directors of

iLearningEngines, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of iLearningEngines, Inc. (the “Company”) as of December 31, 2023 and 2022, the related consolidated statements of operations, changes in shareholders’ deficit and cash flows for each of the three years ended December 31, 2023, 2022 and 2021, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows for the years ended December 31, 2023, 2022 and 2021, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB and in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

/s/ Marcum llp

Marcum llp

We have served as the Company’s auditor since 2021.

Philadelphia, PA
April 22, 2024

F-76

ILEARNINGENGINES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands, except share amounts)

	As of December 31,
	2023			2022
Assets
Current assets:
Cash	$	4,763		$	856
Restricted cash		2,000			-
Accounts receivable, net of provision for credit loss of $336 and $0, respectively		73,498			34,698
Contract asset		509			9,408
Prepaid expenses		62			88
Total current assets		80,832			45,050
Receivable from Technology Partner		13,602			10,217
Receivable from related party		465			595
Other assets		729			885
Deferred tax assets, net		5,703			6,798
Deferred transaction costs		3,990			-
Total assets	$	105,321		$	63,545
Liabilities and shareholders’ deficit
Current liabilities:
Trade accounts payable	$	3,753		$	787
Accrued expenses		2,982			1,284
Current portion of long-term debt, net		10,517			8,138
Contract liability		2,765			2,106
Payroll taxes payable		3,037			2,789
Other current liabilities		116			237
Total current liabilities		23,170			15,341
Convertible notes		31,547			-
Warrant liability		11,870			7,645
Long-term debt, net		10,679			9,713
Subordinated payable to Technology Partner		49,163			47,495
Other non-current liabilities		74			126
Total liabilities		126,503			80,320

Shareholders’ deficit:
Common Shares $0.0001 par value: 200,000,000 shares authorized: 95,782,605 shares issued and outstanding at December 31, 2023 and December 31, 2022		10			10
Additional paid-in capital		36,384			36,384
Accumulated deficit		(57,576	)		(53,169	)
Total shareholders’ deficit		(21,182	)		(16,775	)
Total liabilities and shareholders’ deficit	$	105,321		$	63,545

The accompanying notes are an integral part of these consolidated financial statements.

F-77

ILEARNINGENGINES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except share and per share amounts)

	Year Ended December 31,
	2023			2022			2021
Revenue	$	420,582		$	309,170		$	217,867
Cost of revenue		132,154			93,890			64,834
Gross profit		288,428			215,280			153,033
Operating expenses:
Selling, general, and administrative expenses		140,897			105,966			74,434
Research and development expenses		128,544			97,436			70,913
Total operating expenses		269,441			203,402			145,347
Operating income		18,987			11,878			7,686
Other (expense) income:
Interest expense		(6,274	)		(6,614	)		(5,047	)
Change in fair value of warrant liability		(771	)		248			(83	)
Change in fair value of convertible notes		(14,147	)		-			-
Other expense		(45	)		(21	)		(3	)
Total other expense, net		(21,237	)		(6,387	)		(5,133	)
Net (loss) income before income tax (expense) benefit		(2,250	)		5,491			2,553
Income tax (expense) benefit		(2,157	)		5,975			(32	)
Net (loss) income	$	(4,407	)	$	11,466		$	2,521
Net (loss) income per share – basic	$	(0.05	)	$	0.08		$	0.02
Net (loss) income per share – diluted	$	(0.05	)	$	0.08		$	0.02
Weighted average common shares outstanding – basic		95,782,605			95,728,760			94,697,428
Weighted average common shares outstanding – diluted		95,782,605			95,728,760			98,042,878

The accompanying notes are an integral part of these consolidated financial statements.

F-78

ILEARNINGENGINES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ DEFICIT
(In thousands, except share amounts)

					Additional						Total
	Common Stock				Paid-In			Accumulated			Shareholders’
	Shares		Amount		Capital			Deficit			Deficit
Balances at January 1, 2021		94,483,835	$	9	$	34,928		$	(67,156	)	$	(32,219	)
Capital contribution from related party		—		—		574			—			574
Issuance of shares for cash		1,082,800		1		(1	)		—			—
Net income		—		—		—			2,521			2,521
Balances at December 31, 2021		95,566,635		10		35,501			(64,635	)		(29,124	)
Issuance of shares from acquisition		215,970		—		883			—			883
Net income		—		—		—			11,466			11,466
Balances at December 31, 2022		95,782,605		10		36,384			(53,169	)		(16,775	)
Net loss		—		—		—			(4,407	)		(4,407	)
Balances at December 31, 2023		95,782,605	$	10	$	36,384		$	(57,576	)	$	(21,182	)

The accompanying notes are an integral part of these consolidated financial statements.

F-79

ILEARNINGENGINES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)

	Years ended December 31,
	2023			2022			2021
Cash flows used in operating activities:
Net (loss) income	$	(4,407	)	$	11,466		$	2,521
Adjustments to reconcile net income to net cash flows used in operating activities:
Depreciation and amortization		128			77			—
Share based compensation expense		—			—			39
Amortization of debt discount and debt issuance costs		2,103			3,248			2,186
Provision for deferred taxes		1,095			(6,798	)		—
Accretion of interest on subordinated payable to Technology Partner		1,668			1,667			1,668
Change in fair value of warrant liability		771			(248	)		83
Change in fair value of convertible debts		14,147			—			—
Provision for credit losses		336			—			—
Changes in operating assets and liabilities:
Accounts receivable		(39,136	)		(18,740	)		(5,395	)
Receivable from related party		130			20			(350	)
Contract asset		8,899			7,645			2,115
Advance to customer		—			362			(362	)
Prepaid expenses and other current assets		26			(31	)		(56	)
Receivable from Technology Partner		(3,385	)		(9,490	)		(727	)
Trade accounts payable		1,906			163			536
Accrued expenses and other current liabilities		(47	)		702			(718	)
Contract liability		659			613			613
Subordinated payable to Technology Partner		—			—			(10,503	)
Payroll taxes payable		248			401			116
Deferred transaction costs		(1,307	)		—			—
Net cash flows used in operating activities		(16,166	)		(8,943	)		(8,234	)
Cash flows (used in) provided by investing activities:
Purchase of property and equipment		(24	)		—			(18	)
Cash acquired from business acquisition		—			161			—
Net cash flows (used in) provided by investing activities:		(24	)		161			(18	)
Cash flows provided by financing activities:
Proceeds from term loans		15,000			10,000			7,000
Repayment of term loans		(10,303	)		(4,766	)		(272	)
Proceeds from convertible notes		17,400			—			—
Other financing activities		—			(3	)		1
Net cash flows provided by financing activities:		22,097			5,231			6,729
Net change in cash		5,907			(3,551	)		(1,523	)
Cash and restricted cash, beginning of year		856			4,407			5,930
Cash and restricted cash, end of year	$	6,763		$	856		$	4,407

Supplemental disclosure of cash flows information:
Cash paid during the year for interest	$	2,510		$	3,557		$	922
Supplemental disclosure of non-cash investing and financing information:
Issuance of warrants to purchase common shares	$	3,455		$	1,027		$	3,193
Issuance of equity for acquisition of In2vate, LLC	$	—		$	883		$	—
Accrued transaction costs	$	2,683		$	—		$	—
Capital contribution from cancellation of convertible notes	$	—		$	—		$	574
Reconciliation of cash and restricted cash
Cash	$	4,763		$	856		$	4,407
Restricted cash	$	2,000		$	—		$	—
Total cash and restricted cash at end of year	$	6,763		$	856		$	4,407

The accompanying notes are an integral part of these consolidated financial statements.

F-80

ILEARNINGENGINES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. Nature of the Business and Basis of Presentation

During the year ended December 31, 2021, the Company’s management incorporated iLearningEngines FZ-LLZ (“ILE Dubai”), a free zone company incorporated in the Dubai Development Authority Zone. The objective of this entity is to develop ILE’s customer based in the Middle East. ILE Dubai operates under the direction and supervision of ILE. The Company has determined that it has a variable interest in ILE Dubai and is the primary beneficiary, therefore the Company has consolidated ILE Dubai as a variable interest entity (“VIE”).

During the year ended December 31, 2021, the Company acquired a majority ownership in iLearningEngines India Private Limited, a private limited company formed under the laws of India (“ILE India”). The objective of this acquisition was for ILE India to develop employees and support operations in India, with hiring of talent and employees through ILE India for utilization within the Company. ILE India operates under the direction and supervision of ILE. The Company has determined that it has a variable interest in ILE India and is the primary beneficiary, therefore the Company has consolidated ILE India as a VIE.

During the year ended December 31, 2022, the Company registered iLearningEngines Australia as a wholly-owned subsidiary. The objective of this subsidiary is to develop new sales and channel partners in Australia, New Zealand, and Southeast Asia.

During the year ended December 31, 2022, the Company acquired all outstanding equity of In2vate, LLC (“In2vate”), a risk management and learning platform provider.

Proposed Business Combination

On April 27, 2023, the Company entered into an Agreement and Plan of Merger and Reorganization (the “Merger Agreement”) with Arrowroot Acquisition Corp. (NASDAQ: ARRW) (“Arrowroot”), a special-purpose acquisition company (“SPAC”), and ARAC Merger Sub, Inc., a Delaware corporation and a direct, wholly owned subsidiary of Arrowroot (“Merger Sub”). Upon closing of the Merger Agreement and upon approval by the shareholders of Arrowroot, the combined company will be renamed to “iLearningEngines, Inc.” and will be listed on the NASDAQ under the new ticker symbol “AILE.” Arrowroot has agreed to acquire all of the outstanding equity interests of the Company. Completion of the transaction is subject to certain customary regulatory consents and approval by stockholders of Arrowroot and the Company.

Basis of Presentation

The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and the rules and regulations of the Securities and Exchange Commission (“SEC”). The consolidated financial statements include the accounts of iLearningEngines, Inc. and its subsidiaries.

Reclassifications

Certain reclassifications have been made to conform the prior period presentation.

Risks and Uncertainties

Impact of Conflicts in Ukraine and Middle East

Following Russia’s military invasion of Ukraine in February 2022, NATO deployed additional military forces to nearby countries in Eastern Europe, and the United States, European Union, and other nations announced various sanctions against Russia. The invasion of Ukraine and the retaliatory measures that have been taken, and could be taken in the future, by the United States, NATO, and other countries have created potential global security concerns and could have a lasting impact on regional and global economies, which could in turn adversely affect the Company.

In addition, although our business has experienced limited disruption as a result of the Russia-Ukraine conflict, continued escalation of this conflict as well as the Israeli-Hamas conflict and Houthi movement in the Red Sea may negatively impact the global economy and our future operating results and financial condition.

The conflicts in Ukraine and the Middle East have not presently resulted in a material impact on the Company’s financial position, operating results, or future forecasts. The Company continues to monitor these conflicts.

F-81

2. Summary of Significant Accounting Policies

Consolidation Policy

The accompanying consolidated financial statements include the accounts of the Company and all wholly-owned subsidiaries, ILE India and ILE Dubai. Consolidation of an entity is also assessed pursuant to Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 810, Consolidation, which requires a variable interest holder to consolidate a VIE if that party will absorb a majority of the expected losses of the VIE, receive a majority of the residual returns of the VIE, or both, and assesses whether an enterprise is the primary beneficiary of a VIE. The Company has determined that it has a variable interest in ILE India and ILE Dubai, and is considered the primary beneficiary for each entity, therefore the Company has fully consolidated ILE India and ILE Dubai under ASC 810. All intercompany transactions and accounts have been eliminated.

Business Combinations

In accordance with ASC 805, Business Combinations, the Company assesses whether a business acquisition meets the definition of an asset acquisition or a business combination. Business combinations are accounted for using the acquisition method. Under the acquisition method, the acquiring entity in a business combination recognizes 100% of the assets acquired and liabilities assumed, at their acquisition-date fair values. The Company utilizes valuation techniques appropriate for the assets and liabilities being measured in determining these fair values. The excess of the purchase price over the fair value of the net assets of the acquired business is goodwill.

Cash

Cash consists of funds held in checking accounts maintained at financial institutions. The Company classifies all highly liquid instruments with an original maturity of three months or less as cash equivalents. There are no cash equivalents as of December 31, 2023 and 2022.

Restricted Cash

Restricted cash consists of cash earmarked for a specific purpose and is not available for immediate and general use by the Company. The Company’s restricted cash reserve is prohibited from being spent in the ordinary course of business through a contractual arrangement with the Company’s lenders. As of December 31, 2023, the Company had $2.0 million in restricted cash.

Concentration of Credit Risk and Major Sales Channels

During the year ended December 31, 2023, there were four customers, representing 19.3%, 16.0%, 11.9%, and 11.7%, respectively, who individually accounted for 10% or more of the Company’s revenue. During the year ended December 31, 2022, there were five customers, representing 17.4%, 17.0%, 14.9%, 14.3% and 10.3%, respectively, who individually accounted for 10% or more of the Company’s revenue. During the year ended December 31, 2021, there were four customers, representing 22.8%, 20.2%, 13.1% and 11.0%, respectively, who individually accounted for 10% or more of the Company’s revenue.

Use of Estimates

The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and related disclosures of contingent assets and liabilities at the date of the consolidated financial statements as well as the reported amounts of revenues and expenses during the reporting period. Estimates are based on several factors including the facts and circumstances available at the time the estimates are made, historical experience, risk of loss, general economic conditions and trends and the assessment of the probable future outcome. Subjective and significant estimates include, but are not limited to, allowance for credit losses, and valuation of warrants. Actual results could differ from those estimates. Estimates and assumptions are reviewed periodically and the effects of changes, if any, are reflected in the consolidated statements of operations in the period that they are determined.

Segment Information

The Company determined that it has a single operating segment after considering the Company’s organizational structure and the information regularly reviewed and evaluated by the Company’s chief operating decision maker (“CODM”) in deciding how to allocate resources and assess performance. The Company has determined that its CODM is its Chief Executive Officer. The CODM reviews the Company’s financial information on a basis for purposes of evaluating financial performance and allocating resources. On the basis of these factors, the Company determined that it operates and manages its business as one operating segment, that develops, markets, and provides consumer learning automation solutions; and accordingly has one reportable segment for financial reporting purposes.

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Foreign Currency Translation and Transactions

The Company’s functional currency is the U.S. dollar. Assets and liabilities of foreign subsidiaries that operate primarily in a currency other than the U.S. dollar are remeasured and translated into U.S. dollars using the current exchange rate in effect at the balance sheet date, except for non-monetary assets and liabilities that are translated at historical exchange rates. Transactions denominated in currencies other than the Company’s functional currency are measured at the functional currency’s exchange rate in effect at the time of transaction. At the end of each reporting period, monetary assets and liabilities are remeasured to the functional currency using exchange rates in effect at the balance sheet date. Foreign currency translation adjustments are recorded as a component of accumulated other comprehensive income and are not adjusted for income taxes when they relate to permanent investments in foreign subsidiaries. Gains and losses from foreign currency transactions are included in other income in the consolidated statements of operations. Foreign currency translation adjustments were immaterial for the years ended December 31, 2023, 2022, and 2021.

Accounts Receivable and Provision for Credit Losses

Accounts receivable are uncollateralized, noninterest bearing customer obligations due under normal trade terms and generally requiring payment within 30 to 90 days of the invoice date. Accounts receivable are stated at the amount billed to the customer, net of provision for credit losses in accordance with ASC 326, Financial Instruments-Credit Losses. Payments of accounts receivable are allocated to the specific invoices identified on the customer’s remittance advice, or, if unspecified, are applied to the earliest unpaid invoice.

Costs to Obtain and Fulfill Contracts

Sales commissions tied to new customer contracts earned by the Company’s Technology Partner, discussed in Note 5, are considered incremental and recoverable costs of obtaining a contract with a customer. Sales commissions for renewal of a contract are considered commensurate with the commissions paid for the acquisition of the initial contract and are earned only as the revenue to which they relate is recognized. The Company has elected the practical expedient of expensing its costs to obtain contracts as incurred because the amortization period over which they would otherwise be amortized is one year or less.

The Company does not have any capitalizable costs to fulfill contracts. Internal and external labor costs related to providing implementation services are expensed as incurred.

Debt Issuance Costs and Deferred Financing Costs

The Company borrows from various lenders to finance its growth and operations. Costs incurred in connection with debt financings, such as origination fees, original issue discount, investment banking fees and legal fees, are classified as debt issuance costs and are presented as a deduction from the related borrowing. Debt issuance costs are amortized over the expected life of the related financing agreements as a component of interest expense under the effective interest method. Debt issuance costs are expensed immediately upon early extinguishment of the debt. In a debt modification, the initial issuance costs and any additional fees incurred as a result of the modification are amortized over the term of the modified agreement.

The Company accounts for certain debt issuance costs relating to the undrawn portion of term loan commitments as assets, which are included with deferred financing costs in the consolidated balance sheets and amortized into interest expense on a straight-line basis over the loan commitment period. Once the commitment is drawn, the pro-rata portion of the unamortized asset is reclassified as a deduction from the related borrowing.

Warrants Issued in Connection with Indebtedness

Warrants issued in connection with the issuance of indebtedness that are accounted for as liabilities are initially recorded at fair value. Proceeds are first allocated to the warrants in an amount equal to the fair value of the warrants. The residual proceeds remaining after allocation to the warrant are allocated to debt as a debt discount. The debt discount is accreted over the term of the indebtedness as interest expense, using the effective interest method. The warrants are subject to remeasurement at each balance sheet date and any change in fair value is recognized as a component of change in fair value of warrant liability in the consolidated statements of operations.

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Technology Partner

The Company has a long-term relationship with a Technology Partner. The Technology Partner provides research and development (“R&D”), sales and marketing, and implementation and support services to the Company. In addition, the Technology Partner also purchases, integrates and resells the Company’s platform to end customers.

When ILE contracts directly with the end customer, the Technology Partner provides front-end sales and marketing support to identify the end customer, but ILE contracts directly with the end customer to provide Implementation Services and the ILE platform. Separately, the Company contracts with the Technology Partner for the Technology Partner to provide implementation support services on behalf of the Company to the end customer. The Company is primarily responsible for fulfilling the promise to provide the specified goods and services over the contract term to the end customer and has discretion in establishing the price. Therefore, the Company determined the end customer is its customer, and the Technology Partner is acting as the Company’s agent.

When the Technology Partner purchases and integrates the ILE platform into the Technology Partner’s own software solution provided to the Technology Partner’s end customer, the Technology Partner identifies and contracts with the end customer to provide the integrated software solution, implementation services, and support services. In these arrangements, the Technology Partner controls the ILE platform, and the Company considers the Technology Partner to be its end customer for this contractual relationship.

Because the Technology Partner is a customer in some arrangements and a vendor in other arrangements, the Company evaluated the fees it pays the Technology Partner for the various services provided to the Company. The Company determined the services it received from the Technology Partner were distinct and the consideration paid to the Technology Partner was equivalent to an arms-length transaction. As a result, no costs incurred by the Company related to services provided by the Technology Partner have been netted against revenues earned from the Technology Partner.

The sales commissions paid to the Technology Partner are recognized in accordance with ASC 340-40. The implementation fees are presented within cost of revenue, while any fees paid for R&D services are presented in research and development expense and marketing fees are presented in selling, general and administrative expense on the consolidated statements of operations.

If at any time the services fees exceed collections resulting in a net payable to the Technology Partner, subsequent collections will first be applied to the net payable including any accrued interest on the balance. The details of the Master Arrangement are further described Note 5.

Goodwill and Indefinite-Lived Intangible Assets

The Company evaluates goodwill and indefinite-lived intangible assets for impairment annually or more frequently when an event occurs, or circumstances change that indicate the carrying value may not be recoverable. The Company may elect to utilize a qualitative assessment to evaluate whether it is more likely than not that the fair value of a reporting unit or indefinite-lived intangible asset is less than its carrying value and if so, the Company performs a quantitative test. The Company compares the carrying value of each reporting unit and indefinite-lived intangible asset to its estimated fair value and if the fair value is determined to be less than the carrying value, the Company recognizes an impairment loss for the difference. Goodwill and indefinite-lived intangible assets are presented under Other Assets in the consolidated balance sheets.

Long-Lived Assets and Finite-Lived Intangible Assets

Long-lived assets and finite-lived intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets might not be recoverable. Conditions that would necessitate an impairment assessment include a significant decline in the observable market value of an asset, a significant change in the extent or manner in which an asset is used, or any other significant adverse change that would indicate that the carrying amount of an asset or group of assets may not be recoverable.

For long-lived assets used in operations, including lease assets, impairment losses are only recorded if the asset’s carrying amount is not recoverable through its undiscounted, probability-weighted future cash flows. We measure the impairment loss based on the difference between the carrying amount and estimated fair value. Long-lived assets are considered held for sale when certain criteria are met, including when management has committed to a plan to sell the asset, the asset is available for sale in its immediate condition, and the sale is probable within one year of the reporting date.

Finite-lived intangible assets are amortized using the straight-line method over their estimated period of benefit, ranging from five to twelve years. Long-lived assets and finite-lived intangible assets are presented under Other Asset in the consolidated balance sheets.

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Fair Value Measurements

ASC 820, Fair Value Measurements and Disclosures, defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements. Fair value is to be determined based on the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants. In determining fair value, the Company uses various valuation approaches. A fair value hierarchy has been established for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are those that market participants would use in pricing the asset or liability based on market data obtained from sources independent of the Company.

Unobservable inputs reflect the Company’s assumption about the inputs that market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. The fair value hierarchy is categorized into three levels, based on the inputs, as follows:

●

Level 1 — Valuations based on quoted prices for identical instruments in active markets. Since valuations are based on quoted prices that are readily and regularly available in an active market, valuation of these instruments does not entail a significant degree of judgment.

●

Level 2 — Valuations based on observable inputs other than quoted prices included in Level 1, such as quoted prices for either similar instruments in active markets, identical or similar instruments in markets that are not active, or model-derived valuations whose inputs or significant value drivers are observable or can be corroborated by observable market data.

●

Level 3 — Valuations based on inputs that are unobservable. These valuations require significant judgment.

The availability of valuation techniques and observable inputs can vary and is affected by a wide variety of factors, including the type of asset or liability, whether the asset or liability is new and not yet established in the marketplace, and other characteristics particular to the transaction. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Those estimated values do not necessarily represent the amounts that may be ultimately realized due to the occurrence of future circumstances that cannot be reasonably determined. Because of the inherent uncertainty of valuations, those estimated values may be materially higher or lower than the values that would have been used had a ready market for the assets or liabilities existed.

The level in the fair value hierarchy within which a fair value measurement in its entirety falls is based on the lowest-level input that is significant to the fair value measurement in its entirety.

Fair Value Option (“FVO”) Election

The Company entered into a Convertible Note Purchase Agreement on April 27, 2023, referred to herein as the “Convertible Notes”, which are accounted under the “fair value option election” as discussed below.

Alternatively, FASB ASC Topic 825, Financial Instruments, (“ASC 825”) provides for the “fair value option” (“FVO”) election. In this regard, ASC 825-10-15-4 provides for the FVO election (to the extent not otherwise prohibited by ASC 825-10-15-5) to be afforded to financial instruments, wherein the financial instrument is initially measured at estimated fair value as of the transaction issue date and then subsequently remeasured at estimated fair value as of each reporting period balance sheet date, with changes in the estimated fair value recognized as other income or expense in the statement of operations. The estimated fair value adjustment of the Convertible Notes is presented in a single line item within change in fair value of convertible notes in the accompanying consolidated statement of operations (as provided for by ASC 825-10-50-30(b)). Further, as required by ASC 825-10-45-5, to the extent a portion of the fair value adjustment is attributed to a change in the instrument-specific credit risk, such portion would be recognized as a component of other comprehensive income (“OCI”) (for which there have been no such adjustments with respect to the Convertible Notes.) Under the fair value option election described the Company presents the entire change in fair value of the Convertible Notes, including the component related to interest expense, within in a single line item on the consolidated statements of operations which is captioned “Change in fair value of convertible notes”.

The fair value of the Convertible Notes as of December 31, 2023 was $31.5 million and is presented within “Convertible notes” on the consolidated balance sheets. Refer to Note 7 for additional detail regarding the Convertible Notes.

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Deferred Transaction Costs

The Company incurred direct and incremental transaction costs for the year ended December 31, 2023 related to the contemplated merger with Arrowroot. Transaction costs of $4.0 million were deferred and capitalized to the deferred transaction costs line item on the consolidated balance sheet as of December 31, 2023.

After consummation of the merger, these costs will be recorded to shareholders’ deficit as a reduction of additional paid-in capital generated as a result of the merger. If the merger with Arrowroot is subsequently aborted, the Company will review the deferred transaction costs for impairment. As of December 31, 2023, $1.1 million and $1.6 million of unpaid transaction costs are included within the trade accounts payable and accrued expenses line items on the consolidated balance sheet, respectively.

Share-Based Compensation

The Company records compensation costs related to share-based awards in accordance with ASC Topic 718, Compensation — Stock Compensation (“ASC 718”), whereby the Company measures compensation cost at the grant date based on the estimated fair value of the award. Compensation cost is recognized on a straight-line basis over the requisite service period of the award, which is generally the vesting period. Forfeitures are accounted for when they occur.

Revenue Recognition

The Company recognizes revenue in accordance with ASC Topic 606.

Revenues are recognized when control of services is transferred to the Company’s customers, in an amount that reflects the consideration ILE expects to be entitled to in exchange for those services over the term of the agreement, generally when made available to the customers. Revenues are recognized net of sales credits and allowances. Revenue is recognized net of any taxes collected from customers, which are subsequently remitted to governmental authorities.

Revenue is recognized based on the following five step model in accordance with ASC 606:

●

Identification of the contract with a customer;

●

Identification of the performance obligations in the contract;

●

Determination of the transaction price;

●

Allocation of the transaction price to the performance obligations in the contract; and

●

Recognition of revenue when, or as, the Company satisfies a performance obligation.

A performance obligation is a promise in a contract to transfer a distinct good or service to the customer and is the unit of accounting. Determining whether products and services are considered distinct performance obligations that should be accounted for separately versus together may require significant judgment. The Company’s contracts with customers include two performance obligations, (i) implementation, and (ii) combined software license and maintenance. The Company records individual performance obligations separately by allocating the contract’s total transaction price to each performance obligation of each distinct good or service in the contract.

Implementation services

All customers require implementation services prior to being able to use the ILE platform. To date ILE has outsourced these services to its Technology Partner who has been trained to provide the implementation services. Refer to Note 5 for further discussion of the Technology Partner. Implementation services generally take 1 – 3 months and consist of the phases the Company follows as part of the customer onboarding process.

The Company is primarily responsible for fulfilling the promise to provide implementation services to a customer and also has discretion in establishing pricing for these services. Accordingly, the Company is identified as the principal in the arrangement.

The implementation services do not involve significant customization or creating new software functionality. Instead, the services mainly focus on configuration and mapping customer data with the required attributes within the software platform to ensure the platform’s built-in functionalities can be utilized by the customer. Revenues from implementations are recognized over time as such services are performed using an input method of efforts expended, compared to total estimated efforts to complete the project.

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Combined software license and maintenance

The combined software license and maintenance performance obligation relates to the license to the ILE AI platform and related maintenance services (including critical support functions and updates) provided over the license term. The software licenses to the AI platform is not considered distinct from the maintenance services, because the customer cannot derive the intended value from the software without ongoing critical support services and updates that are provided by the maintenance services. ILE recognizes revenue from the combined software license and maintenance performance obligation ratably over the contract term beginning on the date that the software license is delivered to the customer and related maintenance services are made available, as the customer simultaneously receives and consumes the benefits of the combined software license and maintenance performance obligation. Contracts with customers typically include a fixed amount of consideration and are generally cancelable with 90 days to 24 months’ notice. ILE typically invoices customers quarterly in advance for ILE’s software license and maintenance services upon execution of the initial contract or subsequent renewal.

A contract’s transaction price, which is generally a fixed fee in the Company’s arrangements, is allocated to each performance obligation and recognized as revenue as the respective performance obligation is satisfied. The Company’s process for determining SSP involves significant management judgment since the Company’s performance obligations are not sold separately. In determining the SSP of implementation services, the Company estimates the cost of providing the services and adds a reasonable margin. The determination of the added margin considers what a market participant would be willing to pay and is adjusted for differences in products, geographies, customers, and other factors. The Company’s cost estimates are primarily based on historical cost data for similar implementation projects. The SSP of the combined software license and maintenance performance obligation is based on the residual approach as the Company sells the ILE AI platform and related maintenance services to different customers at a highly variable range of amounts.

Disaggregation of Revenue

With respect to the Company’s disaggregation of revenue by customer geography, geography is primarily determined based on the location of the customer identified in the contract. As described in the Technology Partner policy note above, the Company enters contracts with the Technology Partner though which the Technology Partner purchases and integrates the ILE platform into the Technology Partner’s own software solution provided to one of the Technology Partner’s customers. In this type of contractual arrangement, the Company identifies the Technology Partner as its customer. In contractual arrangements in which the Technology Partner is identified as the customer, the Technology Partner’s end customer may or may not be known by the Company. In cases in which the Technology Partner’s customer is known to the Company, the geography is determined based on the location of the Technology Partner’s customer and conversely, in cases in which the Technology Partner’s customer is not known, the customer geography is determined based on the geography of the Technology Partner. The following table presents this disaggregation of revenue by customer geography:

	Years Ended December 31,
	2023		2022		2021
	(In thousands)
India	$	162,854	$	138,048	$	126,371
North America		194,886		116,112		47,953
Other⁽¹⁾		62,842		55,010		43,543
Total Revenues	$	420,582	$	309,170	$	217,867

(1)	Other includes customers in Middle East and Europe.

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The following table presents to disaggregation of revenue by type of revenue:

	Years Ended December 31,
	2023		2022		2021
	(In thousands)
Revenue related to implementation services	$	16,491	$	15,872	$	5,495
Combined software license and maintenance revenues		404,091		293,298		212,372
Total Revenues	$	420,582	$	309,170	$	217,867

Contract asset

Contract asset balances represent amounts for which the Company has recognized revenue, pursuant to its revenue recognition policy, for software licenses already delivered, implementation services, and maintenance services already performed but invoiced in arrears. As of December 31, 2023 and 2022 contract assets were $0.5 million and $9.4 million, respectively.

Contract liability

Contract liability represents either customer advance payments or billings for which the revenue recognition criteria has not yet been met. Contract liability is primarily unearned revenue related to combined software and maintenance services. During the year ended December 31, 2023 and 2022, $2.8 million and $2.1 million of combined software and maintenance services revenue were recognized, respectively, that was included in the contract liability balances at the beginning of the period.

Remaining performance obligations

As of December 31, 2023, the total remaining performance obligations under the Company’s contracts with customers was $409.6 million, and the Company expects to recognize approximately 90% of the remaining performance obligations as revenue within the next twelve months. As of December 31, 2022, the total remaining performance obligations under the Company’s contracts with customers was $235.1 million, and the Company recognized revenues on approximately 70% of these remaining performance obligations over the year ended December 31, 2023.

Cost of Revenue

Cost of revenue is comprised of expenses related to customer support and fees paid to third parties.

Income Taxes

The Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the consolidated financial statements. Under this method, the Company determines deferred tax assets and liabilities on the basis of the differences between the consolidated financial statement and tax bases of assets and liabilities by using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in the consolidated statements of operations in the period of the enactment date.

The Company recognizes deferred tax assets to the extent that the Company believes that these assets are more likely than not to be realized. In making such a determination, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, and results of recent operations. During 2022, the Company achieved sufficient profits to release the entirety of its valuation allowance established in a prior period. Accordingly, as of December 31, 2023, the Company no longer maintains a valuation allowance outside of the Australia jurisdiction.

The Company records uncertain tax positions in accordance with ASC Topic 740, Income Taxes, (“ASC 740”) on the basis of a two-step process in which (1) the Company determines whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position and (2) for those tax positions that meet the more-likely-than-not recognition threshold, the Company will recognize the largest amount of tax benefit that is more than 50 percent likely to be realized upon ultimate settlement with the related tax authority.

The Company recognizes interest and penalties related to unrecognized tax benefits on the income tax expense line in the accompanying consolidated statements of operations. As of December 31, 2023 and 2022, no accrued interest or penalties are included on the related tax liability line in the consolidated balance sheets.

Research and Development Expenses

Software development costs are expensed as incurred until the point the Company establishes technological feasibility. Technological feasibility is established upon the completion of a working model. Costs incurred by the Company between establishment of technological feasibility and the point at which the product is ready for general release are capitalized, subject to their recoverability, and amortized over the economic life of the related products. Because the Company believes its current process for developing its software products essentially results in the completion of a working product concurrent with the establishment of technological feasibility, no software development costs have been capitalized to date. There were no software development costs required to be capitalized under ASC Topic 985-20, Costs of Software to be Sold, Leased or Marketed. The Company’s R&D costs are primarily incurred with the Company’s Technology Partner discussed in Note 5.

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Emerging Growth Company Status

The Company is an emerging growth company, as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). Under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act until such time as those standards apply to private companies. The Company has elected to use this extended transition period for complying with new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date that it (i) is no longer an emerging growth company or (ii) affirmatively and irrevocably opts out of the extended transition period provided in the JOBS Act. As a result, these consolidated financial statements may not be comparable to companies that comply with the new or revised accounting pronouncements as of public company effective dates.

Recently Adopted Accounting Pronouncements

In August 2020, the FASB issued ASU No. 2020-06, Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40) (“ASU No. 2020-06”). ASU No. 2020-06 was issued to address issues identified as a result of the complexity associated with applying generally accepted accounting principles for certain financial instruments with characteristics of liabilities and equity. For convertible instruments, the FASB decided to reduce the number of accounting models for convertible debt instruments and convertible preferred stock. In addition to eliminating certain accounting models, the FASB also decided to enhance information transparency by making targeted improvements to the disclosures for convertible instruments and earnings-per-share guidance. This update is effective for public business entities for fiscal years beginning after December 15, 2021, and interim periods within those fiscal year. For all other entities, this update is effective for fiscal years beginning after December 15, 2023, and interim periods within those fiscal years. Early adoption is permitted, but no earlier than fiscal years beginning after December 31, 2020.

On January 1, 2023, the Company adopted this standard and it did not have a material impact on the Company’s consolidated results of operations, financial position, cash flows, or related disclosures. On January 1, 2023, the Company adopted FASB ASU No. 2016-13, Financial Instruments – Credit Losses (Topic 326) (“ASU No. 2016-13”). ASU No. 2016-13 was issued to bring consistency in the accounting treatment of different types of financial instruments, require consideration of a broader range of variables when forming loss estimates, and require immediate recognition of management’s estimates of current expected credit losses (“CECL”). See “Accounts Receivable and Provision for Credit Losses” above for further information.

Recent Accounting Pronouncements Not Yet Adopted

In November 2023, the Financial Accounting Standards Board (FASB) issued Accounting Standard Update (ASU) No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which requires a public entity to disclose significant segment expenses and other segment items on an annual and interim basis and provide in interim periods all disclosures about a reportable segment’s profit or loss and assets that are currently required annually. Additionally, it requires a public entity to disclose the title and position of the Chief Operating Decision Maker (CODM). The ASU does not change how a public entity identifies its operating segments, aggregates them, or applies the quantitative thresholds to determine its reportable segments. The new standard is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. A public entity should apply the amendments in this ASU retrospectively to all prior periods presented in the financial statements. We expect this ASU to only impact our disclosures with no impacts to our results of operations, cash flows and financial condition.

In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which focuses on the rate reconciliation and income taxes paid. ASU No. 2023-09 requires a public business entity (PBE) to disclose, on an annual basis, a tabular rate reconciliation using both percentages and currency amounts, broken out into specified categories with certain reconciling items further broken out by nature and jurisdiction to the extent those items exceed a specified threshold. In addition, all entities are required to disclose income taxes paid, net of refunds received disaggregated by federal, state/local, and foreign and by jurisdiction if the amount is at least 5% of total income tax payments, net of refunds received. For PBEs, the new standard is effective for annual periods beginning after December 15, 2024, with early adoption permitted. An entity may apply the amendments in this ASU prospectively by providing the revised disclosures for the period ending December 31, 2025 and continuing to provide the pre-ASU disclosures for the prior periods, or may apply the amendments retrospectively by providing the revised disclosures for all period presented. We expect this ASU to only impact our disclosures with no impacts to our results of operations, financial position, or cash flows.

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3. Acquisitions

On April 4, 2022, the Company completed the acquisition of 100% interest of In2vate, LLC (“In2vate”). In2vate is a risk management and learning platform provider in Tulsa, Oklahoma. In2vate serves more than two million users delivering high impact risk management programs and services to enterprises, educational institutions, health systems and law enforcement organizations. Total consideration of $0.9 million was exchanged, consisting of 215,970 shares of the Company’s common stock and contingent consideration of 34,030 shares of the Company’s common stock, both at a price per share of $3.53, the contingent consideration will only vest upon the occurrence of any of the following events: an initial public offering of the Company’s common stock; a merger with a special purpose acquisition company; a merger or consolidation of the Company that is also a change of control; the sale, lease, transfer, exclusive license, or other disposition of substantially all of the assets of the Company; or the sale or disposition of one or more subsidiaries of the Company if substantially all of the assets of the Company are held by those subsidiaries. This contingent consideration meets the requirements for permanent equity classification and was recorded to Additional Paid-In Capital within the consolidated balance sheets. Transaction costs related to the acquisition totaling $0.05 million are included in selling, general and administrative expenses in the consolidated statements of operations and consist primarily of legal and other management due diligence fees, for the year ended December 31, 2022.

The following table summarizes the consideration transferred and the purchase price allocation of the fair values of the assets acquired and liabilities assumed at the acquisition date:

	Amount
	(in thousands)
Total consideration exchanged, less cash and cash equivalents of $161	$	722

Accounts receivables, net	$	60
Property and equipment, net		454
Goodwill and intangible assets		319
Other assets		1
Total assets acquired		834
Accounts payable		(84	)
Other current liabilities		(28	)
Total liabilities assumed		(112	)
Total net assets assumed	$	722

Goodwill represents the excess of the consideration paid over the fair values of the acquired net assets and is included in Other Assets in the consolidated balance sheets. The allocated value of goodwill primarily relates to the value of the existing workforce and anticipated synergies by combining existing Company functions. The results of operations of the acquired company are included in the Company’s consolidated statements of income from the date of acquisition. The goodwill is amortizable for tax purposes over 15 years.

4. Accrued Expenses

The following table presents the components of accrued expenses as of December 31, 2023, and 2022:

	As of
	December 31, 2023		December 31, 2022
	(In thousands)
Accrued income taxes	$	1,742	$	834
Other accrued expenses⁽¹⁾		1,240		450
Total	$	2,982	$	1,284

(1)	Other Accrued Expense includes accrued professional service fees, accrued interest, accrued compensation and benefits, and other current liabilities.

5. Technology Partner

On January 1, 2021, the Company amended the interest rate with the Technology Partner which changed from a 12-month LIBOR rate plus 2.0% to a fixed rate of 3.99% through December 31, 2023. Subsequent to December 31, 2023, the Company amended the interest rate with the Technology Partner to a fixed rate of 5.99% through December 31, 2024. The Company is not required to repay any outstanding balance or accrued interest until the tenth anniversary of the effective date of termination of the MA. As of the date of these consolidated financial statements, the MA has not been terminated.

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The following table summarizes the expenses charged to company by the Technology Partner that are presented within cost of revenue, selling, general and administrative expenses, and research and development expenses on the consolidated statements of operations for the years ended December 31, 2023, 2022 and 2021:

	December 31,
	2023		2022		2021
	(In thousands)
Cost of revenue	$	132,111	$	93,753	$	64,834
Selling, general and administrative expense		127,538		96,972		68,931
Research and development expense		128,539		97,396		70,836
	$	388,188	$	288,121	$	204,601

Subordinated Payable to the Technology Partner

On December 30, 2020, in conjunction with the 2020 Term Loans issuance described in Note 6 - Debt, the Company and the Technology Partner entered into a subordination agreement whereby the payable to the Technology Partner became subordinated to the 2020 and 2021 Term Loans.

	December 31,
	2023		2022
	(In thousands)
Beginning balance	$	47,495	$	45,828
Accrued interest		1,668		1,667
Subordinated payable to Technology Partner	$	49,163	$	47,495

Interest expense related to the subordinated payable to the Technology Partner was $1.7 million for each of the years ended December 31, 2023, 2022, and 2021.

Net Receivable from Technology Partner

	December 31,
	2023			2022
	(In thousands)
Opening balance of receivable from Technology Partner	$	10,217		$	727
Collections by Technology Partner		389,361			297,710
Cost of services provided by Technology Partner		(388,189	)		(288,121	)
Net cash transfers between Company and Technology Partner		2,213			(99	)
Closing balance of receivable from Technology Partner	$	13,602		$	10,217

6. Debt

The following table presents the components of the Company’s debt as of December 31, 2023 and 2022:

	December 31,
	2023		2022
	(In thousands)
2020 Term Loans	$	2,697	$	6,708
2021 Term Loans		12,299		13,377
2023 Term Loans		10,000		-
Other Loans		-		160
		24,996		20,245
Less: Discount on debt		3,800		2,394
		21,196		17,851
Less: Current portion		10,517		8,138
Long-term portion of debt	$	10,679	$	9,713

F-91

Contractual interest expense related to long-term debt was $2.5 million, $2.0 million, and $1.1million for the years ended December 31, 2023, 2022, and 2021, respectively. The amortization of debt issuance costs was $2.1 million, $3.2 million and $2.2 million for the years ended December 31, 2023, 2022, and 2021, respectively.

Aggregate annual maturities of long-term debt obligations for each of the next five years are as follows for the years ending December 31:

Year ended December 31,	Long-Term Debt
	(In thousands)
2024	$	12,745
2025		8,356
2026		3,895
Total	$	24,996

Term Loans and Warrants Issued

On December 30, 2020, the Company entered into a Loan and Security Agreement (the “2020 Term Loan”) with Venture Lending & Leasing IX, Inc. (the “2020 Lender”), pursuant to which the 2020 Lender made available to the Company a term loan facility in an aggregate principal amount of $10.0 million.

In connection with the 2020 Term Loan, the Company issued to Venture Lending & Leasing IX, LLC, an affiliate of the 2020 Lender, warrants to purchase 433,597 shares of the Company (the “2020 Warrants”). The 2020 Warrants are classified as a liability and recorded at their fair value because there are certain put rights that may obligate the Company to repurchase the 2020 Warrants in the future, based on events that are outside of the control of the Company. The 2020 Warrants have an exercise price of $6.94 per share and are exercisable through July 31, 2036. In the event that the Company participates in a preferred stock financing round, the warrant will also become exercisable for shares of preferred stock at an exercise price equal to the lowest price per share of any preferred stock financing round. The 2020 Warrants are presented within the Warrant liability line item of the December 31, 2023 and December 31, 2022 consolidated balance sheets. As of December 31, 2023, the weighted average effective interest rate for 2020 Term Loan is 32.4%.

On October 21, 2021, the Company entered into a Loan and Security Agreement (the “2021 Term Loan”, together with the 2020 Term Loan Agreement, the “Term Loan Agreement”) with Venture Lending & Leasing IX, Inc. and WTI Fund X, Inc. (collectively, the “2021 Lender”), pursuant to which the 2021 Lender made available to the Company a term loan facility in an aggregate principal amount of $20.0 million. The Company made its fourth draw on the 2021 Term Loan of $5.0 million on January 10, 2023. The 2021 Term Loan bears interest of 11.5% per annum. The Company incurred debt discounts on the 2021 Term Loan in connection with the fair value of the warrants referenced below. As of December 31, 2023, the weighted average effective interest rate for 2021 Term Loan is 19.1%.

In connection with the 2021 Term Loan, the Company issued to Venture Lending & Leasing IX, LLC and WTI Fund X, LLC, affiliates of the 2021 Lenders, warrants to purchase 440,021 common shares of the Company (the “2021 Warrants”), of which 55,005 were issued in 2023 in connection with the $5.0 million draw on the 2021 Term Loan on January 10, 2023. The 2021 Warrants are classified as a liability and recorded at their fair value because there are certain put rights that may obligate the Company to repurchase the 2021 Warrants in the future, based on events that are outside of the control of the Company. The 2021 Warrants have an exercise price of $6.94 per share and are exercisable through July 31, 2037. In the event that the Company participates in a preferred stock financing round, the warrant will also become exercisable for shares of preferred stock at an exercise price equal to the lowest price per share of any preferred stock financing round. The 2021 Warrants are presented within the Warrant liability line item of the December 31, 2023 and December 31, 2022 consolidated balance sheets.

On October 31, 2023, the Company entered a Loan and Security Agreement with WTI Fund X, Inc. (the “2023 Lender”), pursuant to which the 2023 Lender made available to the Company a term loan facility with an aggregate principal amount of $10.0 million (the “2023 Term Loan”). On October 31, 2023, the Company drew down the full principal amount of $10.0 million. In connection with the 2023 Term Loan, the Company issued to WTI Fund X, LLC, an affiliate of the 2023 Lender, warrants to purchase 220,681 common shares. The 2023 Warrants have an exercise price of $10.14 per share and are exercisable through October 31, 2038. As of December 31, 2023, the effective interest rate for 2023 Term Loan is 35.9%.

The Company’s 2020, 2021, and 2023 Term Loans are subject to covenant clauses, whereby the Company is required to pay and file all taxes in a timely manner as well as deliver audited consolidated financial statements within six months after the end of each financial reporting year. The Company did not pay or file employment payroll tax returns for any period from its inception through the year ended December 31, 2020. The Company also failed to deliver audited consolidated financial statements for the years ended December 31, 2022 and 2021 within the required time period. In addition, the Company failed to maintain $2.0 million as restricted cash in a separate bank account, as required under the terms of 2023 Term Loan, for the year ended December 31, 2023. Due to these breaches of covenant clauses, the 2020, 2021, and 2023 Lenders were contractually entitled to request immediate repayment of the outstanding 2020, 2021, and 2023 Term Loans, however agreed to waive the each of the various covenant breaches described. Accordingly, the current portion of long-term debt presented within the consolidated balance sheets represent only the principal payments contractually due within the twelve months of each balance sheet date.

F-92

The following is a schedule of changes in warrants issued and outstanding from January 1, 2022 to December 31, 2023:

	Units
Outstanding as of December 31, 2021		708,609
Warrants issued		110,004
Outstanding as of December 31, 2022		818,613
Warrants issued		275,686
Outstanding as of December 31, 2023		1,094,299

7. Convertible Notes

The Company entered into a Convertible Note Purchase Agreement on April 27, 2023 with Arrowroot Capital, to finance the proposed business combination discussed in Note 1 – Nature of the Business and Basis of Presentation. The Convertible Notes shall bear simple interest, accrued on a daily basis in arrears, at a rate of 15.0% per annum until aggregate accrued interest is greater than 25.0% of the principal amount, and at a rate of 8.0% per annum thereafter. An amount equal to the sum of the product of the outstanding principal balance times 2.75, or $47.9 million at December 31, 2023, and the unpaid accrued interest on the notes are due and payable upon the earlier of the maturity date and occurrence of any event of default, as defined in the agreement. The Convertible Notes are issuable with an aggregate principal amount up to $50.0 million payable in cash of which $17.4 million has been drawn upon as of December 31, 2023. The Convertible Notes mature on October 27, 2025, unless converted earlier, redeemed, or repurchased in accordance with their terms, prior to the maturity date.

Under the terms of the Convertible Note Purchase Agreement, the Convertible Notes will be convertible to shares including under the following circumstances after April 27, 2023:

●

upon the occurrence of an equity financing, the lender can elect to exchange the Convertible Notes into the number of shares of equity securities issued in such equity financing equal to the note balance divided by the equity price in such equity financing and

●

immediately prior to the consummation of a qualified de-SPAC transaction, the Convertible Notes shall automatically convert, in whole, into shares of common stock of the Company thereby entitling the lender to receive a number of shares equal to the note balance, divided by $10.00.

Additionally, pursuant to the note purchase agreement, the Company may prepay the Convertible Notes in cash without the consent of the holders, at an amount equal to the balance of the note, at any time prior to October 27, 2025. As of December 31, 2023, the fair value of the Convertible Notes was $31.5 million, and the corresponding change in fair value of the Convertible Notes was an increase of $14.1 million for the year ended December 31, 2023.

8. Share-Based Compensation

On August 12, 2021, the Company adopted the 2020 Equity Incentive Plan (the “Plan”). The total restricted stock units (“RSUs”) granted under the Plan as of December 31, 2023 and December 31, 2022 was 8,338,438 and 7,138,438, respectively. The awards have a four year service requirement with a one-year cliff vesting starting on the employment date and are subject to the Liquidity Event provision defined below.

As of December 31, 2023 and December 31, 2022, the Company had 39,883,388 shares of restricted stock awards outstanding with the Company’s founders with a ten year service requirements starting on the day of the Liquidity Event (defined below) (the “Founder Restricted Shares”) and 360,290 restricted shares outstanding with a former employee, in which the service requirement had been deemed met on the grant date (together with the Founder Restricted Shares, the “Restricted Shares”). The Company’s 40,243,678 outstanding Restricted Shares participate on par with common shares in all distributions from the Company, as the holders of these restricted shares are entitled to non-forfeitable dividend rights. Each of the RSUs and Restricted Shares is subject to a change of control provision; an effective registration statement under the Securities Act of 1933, as amended (the “Securities Act”); a direct listing on the Nasdaq Global Select Market or New York Stock Exchange; or the Company’s completion of a merger or consolidation with a SPAC whereby the surviving company’s common stock are publicly traded in a public offering pursuant to an effective registration statement under the Securities Act (collectively, the “Liquidity Events”).

F-93

The summary of nonvested RSUs and Restricted Shares whose vesting is subject to the achievement of a Liquidity Event for the year ended December 31, 2023 is disclosed below:

	Shares		Weighted Average Grant Date Fair Value
RSUs
Nonvested as of January 1, 2022		7,138,438	$	3.53
Granted		-		-
Nonvested as of December 31, 2022		7,138,438	$	3.53
Granted		1,200,000	$	7.39
Nonvested as of December 31, 2023		8,338,438	$	4.09

	Shares		Weighted Average Grant Date Fair Value
Restricted Shares
Nonvested as of January 1, 2022		40,243,678	$	3.53
Granted		-		-
Nonvested as of December 31, 2022		40,243,678	$	3.53
Granted		-		-
Nonvested as of December 31, 2023		40,243,678	$	3.53

The aggregate unrecognized compensation expense for these awards whose vesting is subject to the achievement of a Liquidity Event is $176.1 million as of December 31, 2023.

9. Income Taxes

(Loss) income before income tax expense (benefit) consisted of the following (in thousands):

	Years Ended December 31,
	2023			2022		2021
Domestic	$	(2,230	)	$	5,441	$	2,524
Foreign		(20	)		50		29
Net (loss) income before income tax (benefit) expense	$	(2,250	)	$	5,491	$	2,553

The components of the provision (benefit) for income taxes are as follows (in thousands):

	Years Ended December 31,
	2023			2022			2021
Current expense:
Federal	$	637		$	483		$	—
State		406			319			32
Foreign		21			21			—
Total current expense:		1,064			823			32
Deferred expense (benefit):
Federal		1,325			(6,623	)		—
State		(229	)		(172	)		—
Foreign		(3	)		(3	)		—
Total deferred benefit:		1,093			(6,798	)		—
Total income tax expense (benefit):	$	2,157		$	(5,975	)	$	32

F-94

A reconciliation of the Company’s statutory income tax rate to the Company’s effective income tax rate is as follows:

	Years Ended December 31,
	2023			2022			2021
Federal statutory rate		21.0	%		21.0	%		21.0	%
Effect of:
State taxes, net of federal tax benefit		(6.4	)%		1.6	%		2.4	%
Permanent differences		(0.3	)%		0.2	%		0.4	%
FDII provisions		28.5	%		(1.6	)%		0.0	%
Foreign rate differential		0.5	%		0.2	%		(0.2	)%
Change in fair value of securities		(139.2	)%		(0.9	)%		0.7	%
Change in state rates		2.4	%		11.0	%		71.2	%
Stock compensation		(0.9	)%		0.0	%		0.3	%
Change in valuation allowance		(1.4	)%		(140.3	)%		(94.6	)%
Effective tax rate		(95.8	)%		(108.8	)%		1.2	%

The net deferred income tax asset balance related to the following (in thousands):

	Years Ended December 31,
	2023			2022
Deferred tax assets:
Federal, state and local net operating loss carryforwards	$	3,101		$	5,579
Payroll taxes		743			643
163j disallowed interest		224			7
Capitalized R&D expenses		2,935			1,883
Accrued expenses		127			10
Total deferred tax assets before valuation allowance		7,130			8,122
Deferred tax liabilities:
Other		(80	)		(86	)
481(A) adjustment		(1,315	)		(1,238	)
Total deferred tax liabilities before valuation allowance		(1,395	)		(1,324	)
Valuation allowance		(32	)		—
Net deferred tax asset	$	5,703		$	6,798

As of December 31, 2023, 2022, and 2021, the Company had federal net operating loss carryforwards of $14.5 million, $26.3 million, and $37.8 million, respectively. As of December 31, 2023 and 2022, the Company has state net operating loss (“NOL”) carryforwards of $26.7 million and $37.4 million. The Federal net operating loss carryforwards may be carried forward indefinitely, subject to 80% of taxable income limitation. The state net operating loss carryforwards begin to expire in 2037. As of December 31, 2023, the Company had foreign NOL carryforwards of $0.1 million, primarily related to Australia. There were no foreign NOL carryforwards as of December 31, 2022.

As of December 31, 2023, the Company had interest expense carryforward for U.S. income tax purposes of $0.9 million. The entire $0.9 million has an indefinite carryforward period. These carryforwards are available, subject to certain limitations, to offset future taxable income.

Future realization of the tax benefits of existing temporary differences and net operating loss carryforwards ultimately depends on the existence of sufficient taxable income within the carryforward period. As of December 31, 2023 and 2022, the Company performed an evaluation to determine whether a valuation allowance was needed. The Company considered all available evidence, both positive and negative, which included the results of operations for the current and preceding years. With the exception of the Australia jurisdiction, the Company determined that future taxable income is probable and determined that it is more likely than not that all of the deferred tax assets will be realized. Accordingly, as of December 31, 2023, the Company no longer maintains a valuation allowance outside of the Australia jurisdiction.

F-95

The Tax Cuts and Jobs Act (“TCJA”) resulted in significant changes to the treatment of R&D expenditures under Section 174. For tax years beginning after December 31, 2021, taxpayers are required to capitalize and amortize all R&D expenditures that are paid or incurred in connection with their trade or business. Specifically, costs for U.S.-based R&D activities must be amortized over five years and costs for foreign R&D activities must be amortized over 15 years — both using a midyear convention. During the year ended December 31, 2023, the Company capitalized $4.5 million of foreign R&D expenses for income tax purposes.

Under Internal Revenue Code Section 382, if a corporation undergoes an “ownership change,” the corporation’s ability to use its pre-change NOL carryforwards and other pre-change tax attributes to offset its post-change income may be limited. The Company has not completed a study to assess whether an “ownership change” has occurred or whether there have been multiple ownership changes since ILE became a “loss corporation” as defined in Section 382. Future changes in the Company’s stock ownership, which may be outside of ILE’s control, may trigger an “ownership change.” In addition, future equity offerings or acquisitions that have equity as a component of the purchase price could result in an “ownership change.” If an “ownership change” has occurred or does occur in the future, utilization of the NOL carryforwards or other tax attributes may be limited, which could potentially result in increased future tax liability to the Company.

The calculation of the Company’s tax liabilities involves dealing with uncertainties in the application of complex tax laws and regulations for both federal taxes and the many states in which the Company operates or does business in. ASC 740 states that a tax benefit from an uncertain tax position may be recognized when it is more likely than not that the position will be sustained upon examination, including resolutions of any related appeals or litigation processes, on the basis of the technical merits.

The Company records uncertain tax positions as liabilities in accordance with ASC 740 and adjusts these liabilities when the Company’s judgment changes as a result of the evaluation of new information not previously available. Because of the complexity of some of these uncertainties, the ultimate resolution may result in a payment that is materially different from the Company’s current estimate of the unrecognized tax benefit liabilities. These differences will be reflected as increases or decreases to income tax expense in the period in which new information is available. As of December 31, 2023 and 2022, the Company has not recorded any uncertain tax positions in the Company’s financial statements.

A reconciliation of the beginning and ending amounts of unrecognized tax provision is as follows:

	Year Ended December 31,
	2023		2022
	(In thousands)
Gross tax contingencies as of beginning of year	$	—	$	1,715
Decreases in gross tax contingencies		—		(1,715	)
Gross tax contingencies as of end of year	$	—	$	—

The Company files tax returns as prescribed by the tax laws of the jurisdictions in which it operates. In the normal course of business, the Company is subject to examination by federal and state jurisdictions, where applicable. There are currently no pending tax examinations.

F-96

10. Net (Loss) Income Per Share

The computation of basic and diluted net (loss) income per share and weighted-average shares of the Company’s common stock outstanding during the periods presented is as follows:

	Year Ended December 31,
	2023			2022			2021
	(In thousands, except share and per share amounts)
Basic net (loss) income per share:
Net (loss) income	$	(4,407	)	$	11,466		$	2,521
Income allocated to participating securities		—			(3,393	)		(358	)
Net (loss) income attributable to common stockholders – basic	$	(4,407	)	$	8,073		$	2,163

Diluted net (loss) income per share:
Net (loss) income attributable to common stockholders – basic	$	(4,407	)	$	8,073		$	2,163
Interest expense on the 2019 Convertible Notes		—			—			39
Net (loss) income attributable to common stockholders – diluted	$	(4,407	)	$	8,073		$	2,202

Shares used in computation:
Weighted-average common shares outstanding		95,782,605			95,728,760			94,697,428
Weighted-average effect of dilutive securities:
Assumed conversion of the 2019 Convertible Notes		—			—			3,345,450
Diluted weighted-average common shares outstanding		95,782,605			95,728,760			98,042,878

Net (loss) income per share attributable to common stockholders:
Basic	$	(0.05	)	$	0.08		$	0.02
Diluted	$	(0.05	)	$	0.08		$	0.02

There were no dividends declared or accumulated on the common shares during the years ended December 31, 2023, 2022 and 2021.The Company applies the two-class method to its Restricted Shares, which contains non-forfeitable dividend rights and thereby meets the definition of participating securities, which requires earnings available to common stockholders for the period to be allocated between common stock and participating securities based upon their respective rights to receive dividends as if all earnings for the period had been distributed. Net loss is not allocated to participating securities in accordance with the contractual terms. The Company’s weighted average restricted shares outstanding for the years ended December 31, 2023, 2022 and 2021 are 40,243,678, 40,243,678 and 15,656,445, respectively. The Company excluded the following securities, presented based on amounts outstanding at each period end, from the computation of diluted net (loss) income per share attributable to common stockholders for the periods indicated, as including them would have had an anti-dilutive effect:

	Year Ended December 31,
	2023		2022		2021
Warrants to purchase common stock⁽¹⁾		1,094,299		818,613		708,609
RSUs⁽²⁾		8,338,438		7,138,438		6,988,938
Contingent consideration to In2vate⁽³⁾		34,030		34,030		—
Convertible Notes⁽⁴⁾		4,905,672		—		—
Restricted Shares⁽⁵⁾		40,243,678		—		—

(1)

The treasury stock method was applied to warrants, in which the impact was anti-dilutive for the year ended December 31, 2023 and 2022. Therefore, they are excluded from the dilutive EPS calculation.

(2)

RSUs are subject to the vesting condition under the Liquidity Event, as discussed in Note 8 – Share Based Compensation. As these securities are considered as contingently issuable shares where the contingency has not been met at the end of the reporting period, they are excluded from the dilutive net income (loss) per share calculation for the periods presented.

(3)

Contingencies underlying contingent consideration payable to In2vate was not met as of the end of the reporting period. Therefore, these shares have been excluded from the dilutive net (loss) income per share calculation for the periods presented.

(4)

If-converted method was applied to the Convertible Notes, in which the impact was anti-dilutive for the year ended December 31, 2023. Therefore, they are excluded from the dilutive EPS calculation.

(5)

Restricted Shares were excluded from dilutive earnings per share calculation for the year ended December 31, 2023 as the impact of including such shares would be anti-dilutive.

F-97

11. Payroll Taxes Payable

The Company has not paid or filed employment payroll tax returns for any period from inception through December 31, 2020. The federal and state withholding tax, employer payroll taxes, penalties, and interest liability from inception of the Company through December 31, 2023 and related penalties and interest were recorded within Payroll Taxes Payable on the consolidated balance sheets. The total liability was $3.0 million and $2.8 million as of December 31, 2023 and December 31, 2022, respectively. The related charge for these accruals is recorded to Selling, General, and Administrative Expenses within the consolidated statements of operations.

12. Fair Value Measurements

The Company’s financial instruments consist of its warrant liability, 2020 Term Loans, 2021 Term Loans, 2023 Term Loans, Other Loans, Convertible Notes, and Subordinated Payable to Technology Partner.

The carrying value and estimated fair value of the Company’s 2020 Term Loans, 2021 Term Loans, 2023 Term Loans, Other Loans, Convertible Notes, and Subordinated Payable to Technology Partner of December 31, 2023 and 2022, were as follows:

	December 31, 2023						December 31, 2022
	Principal Amount		Carrying Amount		Fair Value		Principal Amount		Carrying Amount		Fair Value
	(In thousands)
2020 Term Loans	$	2,697	$	2,483	$	2,697	$	6,708	$	5,615	$	6,708
2021 Term Loans		12,299		11,498		12,299		13,377		12,076		13,377
2023 Term Loans		10,000		7,215		10,000		—		—		—
Convertible Notes		17,400		31,547		31,547		—		—		—
Other Loans		—		—		—		160		160		160
Subordinated Payable to Technology Partner		49,163		49,163		49,163		47,495		47,495		47,495
	$	91,559	$	101,906	$	105,706	$	67,740	$	65,346	$	67,740

With respect to the 2020 Term Loans, 2021 Term Loans, 2023 Term Loans, Other Loans, and Subordinated Payable to Technology Partner, the Company concluded the fair value approximated the principal value as of December 31, 2023 and 2022.

The fair value of the Convertible Notes is estimated using a scenario-based approach which considers the conversion feature and related payoffs within each scenario. The level 3 inputs used in the valuation model for the Convertible Notes as of December 31, 2023, included the following:

	December 31, 2023
Redemption Event	Equity Financing			De-SPAC Transaction			Hold-to-Maturity
Probability		8.0	%		90.0	%		2.0	%
Time to Event Date (years)		0.13			0.13			1.82
Discount Spread		574.2	%		574.2	%		574.2	%
Risk free rate		5.6	%		5.6	%		4.4	%
Discount Yield		579.8	%		579.8	%		578.6	%

The fair value of the warrant liability was determined using an option pricing model which utilized the following level 3 inputs:

	December 31, 2023
	Private Sale Scenario (10% Probability )			SPAC Scenario (90% Probability)
Volatility		60	%		50	%
Risk-free interest rate		4.7	%		5.5	%
Dividend yield		0.0	%		0.0	%
Exercise price for $6.94 warrants	$	6.94		$	6.94
Exercise price for $10.14 warrants	$	10.14		$	10.14
Term		1.0 years			0.1 years
Equity value⁽¹⁾	$	585,798,557		$	1,235,675,336

(1)	Equity value was derived from weighted average of discounted cash flow, guideline company method, and transaction methodologies.

F-98

	December 31, 2022
Volatility		72.0	%
Risk-free interest rate		4.5	%
Dividend yield		0.0	%
Exercise price	$	6.94
Term		2.0 Years
Equity value⁽¹⁾	$	514,210,000

(1)	Equity value was derived from weighted average of discounted cash flow, guideline company method, and transaction methodologies.

The Company’s liabilities measured at fair value on a recurring basis were categorized as follows within the fair value hierarchy.

	December 31, 2023
	Level 1		Level 2		Level 3		Total
	(In thousands)
Liabilities
Warrant liability	$	-	$	-	$	11,870	$	11,870
Convertible Notes		-		-		31,547		31,547
Total liabilities	$	-	$	-	$	43,417	$	43,417

	December 31, 2022
	Level 1		Level 2		Level 3		Total
	(In thousands)
Liabilities
Warrant liability	$	-	$	-	$	7,645	$	7,645
Total liabilities	$	-	$	-	$	7,645	$	7,645

The following table summarizes the activity for the Company’s Level 3 liabilities measured at fair value:

	Warrant Liability
	(In thousands)
Balance as of January 1, 2022	$	6,866
Issuance		1,027
Change in fair value		(248	)
Balance as of December 31, 2022	$	7,645
Issuance		3,454
Change in fair value		771
Balance as of December 31, 2023	$	11,870

	Convertible Notes
	(In thousands)
Balance as of December 31, 2022	$	-
Issuance		17,400
Change in fair value		14,147
Balance as of December 31, 2023	$	31,547

During the years ended December 31, 2023 and 2022, there were no transfers between Level 1 and Level 2, nor into and out of Level 3.

13. Commitments and Contingencies

Contingencies

The Company evaluates for any potential impact of loss contingencies that are probable and reasonably estimable. As of December 31, 2023 and 2022, there were no loss contingencies recorded.

The Company will continue to monitor these matters and disclose any significant developments or changes in future financial statements as necessary.

F-99

Purchase Commitments

The sale of the software license and the purchase of the customer’s end-user data are treated as distinct and independent transactions. Furthermore, the software licensing contract and the data acquisition contract can be canceled individually without affecting the other contract, with the data acquisition contract requiring twelve months’ notice for cancellation by either party. Due to the distinct nature of the data acquisition from the customer, which is obtained at fair value and used primarily for research and development purposes, the revenue generated from the software licensing contract is recognized on a gross basis. Conversely, the expenses associated with the data acquisition are also recognized on a gross basis and classified as research and development expenses.

This accounting treatment accurately reflects the separate nature of these transactions and ensures appropriate recognition of revenue and expenses related to the software licensing and data acquisition activities.

Financial Advisor Agreement

In the event of an equity raise comprising a majority of the Company’s equity capitalization, the financial advisor’s compensation will be calculated based on the greater of the following:

A flat fee of $3.5 million.

ii)

1.0% of the aggregate value of the equity raise up to $1.0 billion, plus an additional 1.5% of the portion of the aggregate value of the equity raise that exceeds $1.0 billion.

These compensation terms outline the financial advisor’s entitlement to fees based on the successful completion of equity fundraising activities. For non-equity transactions the specific fee is open to negotiation on a transaction by transaction basis to ensure that the financial advisor’s compensation aligns with the scale and significance of the equity raise, considering the Company’s equity capitalization and the total value of the funds raised.

Litigation

14. Related-Party Transactions

Receivable from related party

The Company had outstanding receivables from Directors in the amounts of $0.5 million and $0.6 million as of December 31, 2023 and December 31, 2022, respectively related to expenses that the Company incurred on behalf of the Directors.

In February 2024, the Company collected the full amount of the related party receivable from each Director. No balance is outstanding after the collection.

F-100

15. Subsequent Events

The Company has evaluated all events subsequent to December 31, 2023 and through April 22, 2024, which represents the date these consolidated financial statements were available to be issued.

Closing of the Merger and Related Transactions

On the Closing Date, the following transactions occurred pursuant to the terms of the Merger Agreement:

(i)

Current ILE stockholders own 109,684,738 shares of NewCo common stock on the Closing Date in exchange for former ILE shares;

(ii)

Former Arrowroot public stockholders own 638,977 shares of NewCo common stock on the Closing Date in exchange for former Arrowroot public shares;

(iii)

Current and former affiliates of Arrowroot own 8,674,617 shares of NewCo common stock on the Closing Date in exchange for former Arrowroot convertible and promissory notes;

(iv)

(v)

Convertible Note Purchase Agreement

In connection with the SPAC Transaction, the Company issued and converted $29.4 million of 2024 convertible notes. The Company issued $0.7 million of convertible notes on March 21, 2024, and $28.7 million of convertible notes on the Closing Date (collectively, the “2024 Convertible Notes”). The 2024 Convertible Notes were converted to 8,089,532 common shares of NewCo on the Closing Date.

Amendments to 2020, 2021 and 2023 Term Loan

On March 27, 2024, ILE entered into an agreement to amend the 2020, 2021 and 2023 Term Loans (“Term Loans”). Pursuant to the amendment, the Term Loans were amended to:

(i)

revise the amortization schedule for the Term Loans in exchange for 1,019,999 shares of NewCo common stock to be issued upon completion of the SPAC Transaction (the “Loan Restructuring Shares”)

(ii)

terminate the 2020 Warrants, 2021 Warrants and 2023 Warrants and the respective put rights associated with each in exchange for our agreement to provide the 2020 Lenders, 2021 Lenders and 2023 Lender with an aggregate amount of 3,399,999 shares of NewCo common stock to be issued upon completion of the SPAC Transaction.

F-101

If the Company repays the Term Loans on or before (i) April 15, 2024, then 90% of the Loan Restructuring Shares will be cancelled, (ii) May 1, 2024, then 80% of the Loan Restructuring Shares will be cancelled, and (iii) July 1, 2024, then 50% of the Loan Restructuring Shares will be cancelled. The Company repaid the Term Loans on April 18, 2024, and 815,999 shares were cancelled.

In addition, the amendment provides that, if the Company prepays the Term Loans, then at the Company’s option, the Company may prepay 50% of the amount of scheduled but unpaid payments of interest that would have accrued after the prepayment date by issuing a number of shares of NewCo common stock obtained by dividing (A) the product of (x) the unpaid scheduled interest payments and (y) 2.75, by (B) the VWAP of NewCo common stock over the seven (7) trading days immediately preceding the date of issuance. The Company prepaid the full amount of the Term Loan on April 18, 2024 in a combination of cash and 159,379 shares of common stock.

Negotiation of Payables to Third-Party Vendors

On March 27, 2024, the Company and the financial advisor (refer to Note 13) amended the financial advisory agreement to provide that, in lieu of payment in cash of the full amount of any advisory fees or other fees or expenses owed under the financial advisory agreement, the Company will pay the financial advisor $7,500,000 in cash or NewCo shares, at the sole discretion of the Company.

The Company also negotiated concessions on accounts payable to other third-party vendors in several forms. The form of concessions include: (1) providing a discount to the total amount payable, (2) the option to settle certain payables in common stock, and (3) entering into a deferred payment agreement for certain payables. The concessions became effective on the Closing Date.

Proposed 2024 Equity Incentive Plan

The Company proposed a new equity incentive plan for 2024 and the plan was approved on April 1, 2024.

East West Bank Financing

F-102

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

Item 13. Other Expenses of Issuance and Distribution.

The following table sets forth all costs and expenses, other than underwriting discounts and commissions, payable by us in connection with the sale of the securities being registered. All amounts shown are estimates except for the SEC registration fee.

	Amount
SEC registration fee	$	118,044.01
Accountants’ fees and expenses	$	75,950.00
Legal fees and expenses	$	200,000.00
Miscellaneous fees and expenses	$	40,000.00
Total expenses	$	433,994.01

Discounts, concessions, commissions and similar selling expenses attributable to the sale of shares of Common Stock covered by this prospectus will be borne by the selling securityholders. We will pay all expenses (other than discounts, concessions, commissions and similar selling expenses) relating to the registration of the shares with the SEC, as estimated in the table above.

Item 14. Indemnification of Directors and Officers.

Section 145 of the Delaware General Corporation Law, as amended (“DGCL”) provides that a corporation may indemnify directors and officers as well as other employees and individuals against expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by such person in connection with any threatened, pending or completed actions, suits or proceedings in which such person is made a party by reason of such person being or having been a director, officer, employee or agent of the Registrant. The DGCL provides that Section 145 is not exclusive of other rights to which those seeking indemnification may be entitled under any bylaws, agreement, vote of stockholders or disinterested directors or otherwise. The Registrant’s Certificate of Incorporation and Bylaws provide for indemnification by the Registrant of its directors and officers to the fullest extent permitted by the DGCL.

Section 102(b)(7) of the DGCL permits a corporation to provide in its Certificate of Incorporation that a director of the corporation shall not be personally liable to the corporation or its stockholders for monetary damages for breach of fiduciary duty as a director, except for liability (1) for any breach of the director’s duty of loyalty to the corporation or its stockholders, (2) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (3) for unlawful payments of dividends or unlawful stock repurchases redemptions or other distributions or (4) for any transaction from which the director derived an improper personal benefit. The Registrant’s Certificate of Incorporation provides for such limitation of liability to the fullest extent permitted by the DGCL.

The Registrant has entered into indemnification agreements with each of its directors and executive officers to provide contractual indemnification in addition to the indemnification provided in our Certificate of Incorporation. Each indemnification agreement provides for indemnification and advancements by the Registrant of certain expenses and costs relating to claims, suits or proceedings arising from his or her service to the Registrant or, at our request, service to other entities, as officers or directors to the maximum extent permitted by applicable law. We believe that these provisions and agreements are necessary to attract qualified directors.

II-1

The Registrant also maintains standard policies of insurance under which coverage is provided (1) to its directors and officers against loss arising from claims made by reason of breach of duty or other wrongful act, while acting in their capacity as directors and officers of the Registrant and (2) to the Registrant with respect to payments which may be made by the Registrant to such officers and directors pursuant to any indemnification provision contained in the Registrant’s Certificate of Incorporation and Bylaws or otherwise as a matter of law.

Item 15. Recent Sales of Unregistered Securities.

The following list sets forth information regarding all unregistered securities sold by us since January 1, 2021:

(1) In November 2020, we issued an aggregate of 5,750,000 Arrowroot Class B Common Stock for a total subscription price of $30,000. On December 31, 2020, we effectuated a 5-for-4 stock split, resulting in 7,187,500 Arrowroot Class B Common Stock outstanding;

(2) In March 2021, we issued an aggregate of 8,250,000 private placement warrants to Sponsor at a price of $1.00 per private placement warrant, generating gross proceeds of $8,250,000;

(3) In April 2024, substantially concurrently with the Closing, we issued 8,089,532 shares of our Common Stock to holders of our 2024 Convertible Notes upon the conversion of the 2024 Convertible Notes originally issued in a private placement pursuant to the 2024 Convertible Note Purchase Agreement;

(4) In April 2024, substantially concurrently with the Closing, we issued 82,091 shares of Common Stock to certain investors pursuant to a non-redemption agreement with certain investors as consideration for the non-exercise of redemption rights by such investors;

(5) In April 2024, substantially concurrently with the Closing, we issued 460,384 shares of Common Stock to the Sponsor for the repayment in full of all outstanding obligations under unsecured promissory notes issued to ARRW;

(6) In April 2024, substantially concurrently with the Closing, we issued 4,419,998 shares of Common Stock to the Lenders pursuant to the Second Omnibus Amendment to Loan Documents with In2vate, L.L.C. and the Lenders as consideration for the revision of amortization schedules under the WTI Loan Agreements prior to the Business Combination. 815,999 shares of Common Stock were subsequently cancelled pursuant to the Second Omnibus Amendment to Loan Documents with In2vate, L.L.C;

(7) In April 2024, we issued 159,379 shares of Common Stock to the Lenders pursuant to the Second Omnibus Amendment to Loan Documents with In2vate, L.L.C. and the Lenders as consideration for the repayment in full of all outstanding obligations under the WTI Loan Agreements;

(8) In June 2024, we issued 511,073 shares of Common Stock to BTIG, LLC at a price of $5.87 per share pursuant to the BTIG Amendment in connection with the payment of certain Business Combination transaction expenses;

(9) In June 2024, we issued 1,022,146 shares of Common Stock to Cantor Fitzgerald & Co. in lieu of payment of deferred underwriting commissions in an aggregate amount of $6,000,000 at a price of $5.87 per share pursuant to the Fee Modification Agreement in connection with the Closing; and

(10) In June 2024, we issued 221,465 shares of Common Stock to Cooley LLP at a price of $5.87 per share pursuant to the Cooley Fee Agreement in connection with the payment of Business Combination transaction expenses.

None of the foregoing transactions involved any underwriters, underwriting discounts or commissions, or any public offering. We believe each of these transactions was exempt from registration under the Securities Act in reliance on Section 4(a)(2) of the Securities Act (and Regulation D promulgated thereunder) as transactions by an issuer not involving any public offering or Rule 701 promulgated under Section 3(b) of the Securities Act as transactions by an issuer under benefit plans and contracts relating to compensation as provided under Rule 701. The recipients of the securities in each of these transactions represented their intentions to acquire the securities for investment only and not with a view to or for sale in connection with any distribution thereof, and appropriate legends were placed on the share certificates issued in these transactions. All recipients had adequate access, through their relationships with us, to information about us. The sales of these securities were made without any general solicitation or advertising.

II-2

Item 16. Exhibits and Financial Statement Schedules

		Incorporated by Reference
Exhibit Number	Description	Schedule/ Form	File No.	Exhibit	Filing Date
2.1	Merger Agreement, dated as of April 27, 2023, by and among Arrowroot Acquisition Corp., ARAC Merger Sub, Inc., and iLearningEngines, Inc.	8-K	001-40129	2.1	May 2, 2023

3.1	Second Amended and Restated Certificate of Incorporation of iLearningEngines, Inc.	8-K	001-40129	3.1	April 22, 2024

3.2	Amended and Restated Bylaws of iLearningEngines, Inc.	8-K	001-40129	3.2	April 22, 2024

4.1	Amended and Restated Registration Rights Agreement, dated April 16, 2024, by and among iLearningEngines, Inc., members of Arrowroot Acquisition LLC, and certain former stockholders of iLearningEngines, Inc.	8-K	001-40129	10.1	April 22, 2024

4.2	Specimen Common Stock Certificate.	8-K	001-40129	4.1	April 22, 2024

4.3	Specimen Warrant Certificate.	8-K	001-40129	4.2	April 22, 2024

4.4	Warrant Agreement, dated March 4, 2021, by and between Arrowroot Acquisition Corp., and Continental Stock Transfer & Trust Company, as warrant agent.	8-K	001-40129	4.1	March 5, 2021

4.5	Form of 2020 Warrant to Acquire Shares of Exercise Stock of iLearningEngines Inc.	S-4/A	333-274333	4.6	December 8, 2023

4.6	Form of 2021 Warrant to Acquire Shares of Exercise Stock of iLearningEngines Inc.	S-4/A	333-274333	4.7	December 8, 2023

4.7	Form of 2023 Warrant to Acquire Shares of Exercise Stock of iLearningEngines Inc.	S-4/A	333-274333	4.8	December 8, 2023

4.8	Form of Restricted Stock Agreement	8-K	001-40129	4.7	April 22, 2024

5.1	Opinion of Cooley LLP	S-1	333-279908	5.1	June 3, 2024

10.1	Form of Sponsor Support Agreement, by and among Arrowroot Acquisition Corp., iLearningEngines, Inc., Arrowroot Acquisition LLC. and certain stockholders of iLearningEngines, Inc.	S-4	333-274333	10.14	September 5, 2023

10.2	Form of Stockholder Support Agreement, by and among Arrowroot Acquisition Corp., iLearningEngines, Inc. and certain stockholders of iLearningEngines, Inc.	S-4	333-274333	2.2	September 5, 2023

10.3*+	Executive Employment Agreement, dated as of January 1, 2011, by and between iHealthEngines Inc. and Harish Chidambaran	S-4/A	333-274333	10.21	December 8, 2023

10.4*+	Executive Employment Agreement, dated as of February 20, 2019, by and between iLearningEngines Inc. and Sayyed Farhan Naqvi	S-4/A	333-274333	10.22	December 8, 2023

II-3

		Incorporated by Reference
Exhibit Number	Description	Schedule/ Form	File No.	Exhibit	Filing Date
10.5*+	Executive Employment Agreement, dated as of October 10, 2018, by and between iLearningEngines Inc. and Balakrishnan Arackal	S-4/A	333-274333	10.23	December 8, 2023

10.6*#	Employment Offer Letter, dated as of September 15, 2022, by and between iLearningEngines FZ-LLC and Ramakrishnan Parameswaran	S-4/A	333-274333	10.24	December 8, 2023

10.7*	Executive Employment Agreement, dated as of October 12, 2023, by and between iLearningEngines Inc. and David Samuels	S-4/A	333-274333	10.25	December 8, 2023

10.8*	iLearningEngines Inc. 2020 Equity Incentive Plan	S-4/A	333-274333	10.19	December 8, 2023

10.9*	Form of Restricted Stock Unit Agreement and Grant Notice under the iLearningEngines Inc. 2020 Equity Incentive Plan	S-4/A	333-274333	10.20	December 8, 2023

10.10*	iLearningEngines, Inc. 2024 Equity Incentive Plan.	8-K	001-40129	10.11	April 22, 2024

10.11*	Form of Stock Option Grant Notice and Form of Stock Option Agreement under 2024 Equity Incentive Plan.	8-K	001-40129	10.12	April 22, 2024

10.12*+	Form of Restricted Stock Unit Grant Notice and Form of Restricted Stock Unit Agreement under 2024 Equity Incentive Plan.	8-K	001-40129	10.13	April 22, 2024

10.13*	iLearningEngines, Inc. 2024 Employee Stock Purchase Plan.	8-K	001-40129	10.14	April 22, 2024

10.14*	Form of Indemnification Agreement by and between the Company and its directors and executive officers.	8-K	001-40129	10.15	April 22, 2024

10.15+	Loan and Security Agreement, dated as of December 30, 2020, between iLearningEngines Inc. and Venture Lending & Leasing IX, Inc.	S-4/A	333-274333	10.26	December 8, 2023

10.16+#	Supplement to the Loan and Security Agreement, dated as of December 30, 2020, between iLearningEngines Inc. and Venture Lending & Leasing IX, Inc.	S-4/A	333-274333	10.27	December 8, 2023

10.17	Amendment No. 1 to the Loan and Security Agreement, dated as of October 21, 2021, between iLearningEngines Inc. and Venture Lending & Leasing IX, Inc.	S-4/A	333-274333	10.28	December 8, 2023

10.18+	Loan and Security Agreement, dated as of October 21, 2021, between iLearningEngines Inc., and Venture Lending & Leasing IX, Inc. and WTI Fund X, Inc.	S-4/A	333-274333	10.29	December 8, 2023

10.19+#	Supplement to the Loan and Security Agreement, dated as of October 21, 2021, between iLearningEngines Inc., and Venture Lending & Leasing IX, Inc. and WTI Fund X, Inc.	S-4/A	333-274333	10.30	December 8, 2023

10.20+	Loan and Security Agreement, dated as of October 31, 2023, between iLearningEngines Inc., and WTI Fund X, Inc.	S-4/A	333-274333	10.31	December 8, 2023

II-4

		Incorporated by Reference
Exhibit Number	Description	Schedule/ Form	File No.	Exhibit	Filing Date
10.21+#	Supplement to the Loan and Security Agreement, dated as of October 31, 2023, between iLearningEngines Inc., and WTI Fund X, Inc.	S-4/A	333-274333	10.32	December 8, 2023

10.22+#	Intellectual Property Security Agreement, dated as of December 30, 2020, between iLearningEngines Inc. and Venture Lending & Leasing IX, Inc.	S-4/A	333-274333	10.33	December 8, 2023

10.23+#	Intellectual Property Security Agreement, dated as of October 21, 2021, between iLearningEngines Inc., and Venture Lending & Leasing IX, Inc. and WTI Fund X, Inc.	S-4/A	333-274333	10.34	December 8, 2023

10.24+#	Intellectual Property Security Agreement, dated as of October 31, 2023, between iLearningEngines Inc., and WTI Fund X, Inc.	S-4/A	333-274333	10.35	December 8, 2023

10.25	Form of 2023 Convertible Note Purchase Agreement.	S-4	333-274333	10.15	September 5, 2023

10.26	Form of 2023 Convertible Note.	S-4/A	333-274333	10.16	January 5, 2024

10.27	Form of 2024 Convertible Note Purchase Agreement.	8-K	001-40129	10.28	April 22, 2024

10.28+	Form of 2024 Convertible Note.	8-K	001-40129	10.29	April 22, 2024

10.29	Form of Subordination Agreement.	8-K	001-40129	10.30	April 22, 2024

10.30+#	Loan and Security Agreement, dated April 17, 2024, by and among iLearningEngines Holdings, Inc., as borrower, East West Bank, as agent, and the lenders.	8-K	001-40129	10.31	April 22, 2024

10.31+	Intellectual Property Security Agreement, dated April 17, 2024, by and among iLearningEngines Holdings, Inc. and In2vate, L.L.C, as grantors, for the benefit of East West Bank.	8-K	001-40129	10.32	April 22, 2024

10.32	Guaranty and Suretyship Agreement, dated April 17, 2024, by and among iLearningEngines Holdings, Inc. and In2vate, L.L.C, as debtors, and East West Bank as agent for the lenders.	8-K	001-40129	10.33	April 22, 2024

10.33	Subordination Agreement, dated April 17, 2024, by and among iLearningEngines Holdings, Inc, and Experion Technologies, FZ LLC.	8-K	001-40129	10.34	April 22, 2024

10.34+#	Second Omnibus Amendment to Loan Documents by and among iLearningEngines Holdings, Inc., as borrower, and In2vate, L.L.C, Venture Lending & Leasing IX, Inc., and WTI Fund X, Inc. as the lenders.	8-K	001-40129	10.35	April 22, 2024

10.35	Fee Reduction Agreement, dated March 27, 2024, by and among Cantor Fitzgerald & Co., Arrowroot Acquisition Corp. and iLearningEngines Inc.	8-K	001-40129	10.36	April 22, 2024

10.36	Amendment No. 1, dated March 27, 2024, to the Letter Agreement, dated June 5, 2020, by and among Mizuho Securities USA LLC, iLearningEngines Inc. and Arrowroot Acquisition Corp.	8-K	001-40129	10.37	April 22, 2024

II-5

		Incorporated by Reference
Exhibit Number	Description	Schedule/ Form	File No.	Exhibit	Filing Date
10.37	Amendment to the Letter Agreement, dated March 27, 2024, between BTIG, LLC and Arrowroot Acquisition Corp.	8-K	001-40129	10.38	April 22, 2024

10.38	Fee Equitization Agreement, dated March 27, 2024, by and among Cooley LLP, Arrowroot Acquisition Corp. and iLearningEngines Inc.	S-1	333-279908	10.38	June 3, 2024

10.39	Amendment No. 1 to Fee Equitization Agreement, dated May 31, 2024, by and among iLearningEngines, Inc. and Cooley LLP	S-1/A	333-279908	10.39	July 1, 2024

10.40	Forward Purchase Agreement, dated April 26, 2023	S-4/A	333-274333	10.16	November 6, 2023

10.41	Letter Agreement, dated April 9, 2024, by and among Polar Multi-Strategy Master Fund, Arrowroot Acquisition Corp. and iLearningEngines Inc.	S-1/A	333-279908	10.41	July 1, 2024

10.42	First Amendment to Loan and Security Agreement, among iLearningEngines Holdings, Inc., as borrower, East West Bank, as administrative agent, and the lenders party thereto	S-1/A	333-279908	10.42	July 1, 2024

16.1	Letter from WithumSmith+Brown, PC to the SEC.	8-K	001-40129	16.1	April 22, 2024

21.1	List of Subsidiaries of iLearningEngines, Inc.	8-K	001-40129	21.1	April 22, 2024

23.1^	Consent of Marcum LLP, independent registered public accounting firm

23.2^	Consent of WithumSmith+Brown, PC, independent registered public accounting firm

23.3	Consent of Cooley LLP (included in Exhibit 5.1).	S-1	333-279908	23.3	June 3, 2024

24.1	Power of Attorney (included on signature page)	S-1	333-279908	24.1	June 3, 2024

101.INS	Inline XBRL Instance Document.

101.SCH	Inline XBRL Taxonomy Extension Schema Document.

101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document.

101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document.

101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document.

101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document.

104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

107	Filing Fee Table	S-1	333-279908	107	June 3, 2024

^	Filed herewith.

+	The schedules and exhibits to this agreement have been omitted pursuant to Item 601(a)(5) of Regulation S-K. A copy of any omitted schedule and/or exhibit will be furnished to the SEC upon request.

Certain portions of this Exhibit have been omitted in accordance with Regulation S-K Item 601(b)(10)(iv) because they are not material and are the type of information that the Registrant treats as private or confidential. The Registrant agrees to furnish supplementally an unredacted copy of the Exhibit, or any section thereof, to the SEC upon request

*	Indicates management contract or compensatory plan or arrangement.

II-6

Item 17. Undertakings

The undersigned Registrant hereby undertakes:

(a)

To file, during any period in which offers or sales are being made, a post-effective amendment to this Registration Statement:

(i)

To include any prospectus required by section 10(a)(3) of the Securities Act of 1933;

(ii)

To reflect in the prospectus any facts or events arising after the effective date of this Registration Statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in this Registration Statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than 20% change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement; and

(iii)

To include any material information with respect to the plan of distribution not previously disclosed in this Registration Statement or any material change to such information in this Registration Statement.

(b)

That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

(c)

To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.

(d)

That, for the purpose of determining liability under the Securities Act of 1933 to any purchaser, each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A, shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such date of first use.

(e)

That, for the purpose of determining liability of the registrant under the Securities Act of 1933 to any purchaser in the initial distribution of the securities, the undersigned registrant undertakes that in a primary offering of securities of the undersigned registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications,

(i)

Any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424;

(ii)

Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant;

(iii)

The portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant or its securities provided by or on behalf of the undersigned registrant; and

(iv)

Any other communication that is an offer in the offering made by the undersigned registrant to the purchaser.

Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the Registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been advised that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act of 1933 and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by them is against public policy as expressed in the Securities Act of 1933 and will be governed by the final adjudication of such issue.

II-7

SIGNATURES

Pursuant to the requirements of the Securities Act, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in Bethesda, Maryland, on July 22, 2024.

ILEARNINGENGINES, INC.

By:	/s/ Harish Chidambaran
	Name:	Harish Chidambaran
	Title:	Chief Executive Officer

Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and on the dates indicated.

Signature	Title	Date

/s/ Harish Chidambaran	Chief Executive Officer and Chairman of the Board	July 22, 2024
Harish Chidambaran	(Principal Executive Officer)

*	Chief Financial Officer	July 22, 2024
Farhan Naqvi	(Principal Financial and Accounting Officer)

*	Director	July 22, 2024
Balakrishnan Arackal

*	Director	July 22, 2024
Matthew Barger

*	Director	July 22, 2024
Ian Davis

*	Director	July 22, 2024
Bruce Mehlman

*	Director	July 22, 2024
Michael Moe

*	Director	July 22, 2024
Thomas Olivier

*By: /s/ Harish Chidambaran
Harish Chidambaran

Attorney-in-Fact

II-8