Potomac Tech Wire - Sept. 3
Potomac Tech Wire - Sept. 3
Hindenburg Research Accuses Bethesda-based iLearningEngines of Major Accounting Irregularities and "Largely Fake" Earnings
o Bethesda-based iLearningEngines Accused of Major Irregularities
o DC-based Last Energy Raised $40 Million in Series B Round
o Steve Schorer Named President, CEO of Reston-based Peraton
o Germantown-based AEM Acquires NJ-based WeatherWorks
o Briefly Noted: Amida Technology Solutions, VSE
Hindenburg Research Accuses Bethesda-based iLearningEngines of Major Accounting Irregularities
Bethesda, Md. – Hindenburg Research, the high-profile stock analyst firm that hunts for accounting irregularities and unethical corporate behavior and then often shorts the stock, issued a blistering report on Bethesda-based iLearningEngines, an AI software company that went public through a merger with a SPAC earlier this year. iLearningEngines’ stock price fell 55% on Thursday after the Hindenburg Research report was issued that detailed a host of accounting and compliance irregularities. In a statement, iLearningEngines said it believes that Hidenburg’s report “contains misleading statements, speculations and innuendos.” On its website, Hindenburg outlined some of its key allegations against iLearningEngines that are listed below:
The company claims to be a fast growing and high margin “early pioneer in enterprise AI” operating in the corporate and educational learning space. We disagree. We suspect both the company’s revenue and expenses are largely fake.
iLearningEngines was borderline insolvent when it merged with a desperate SPAC sponsor that was quickly running out of time to get a deal done. It had just $800,000 in cash and $22 million in debt prior to the merger.
Nearly all of company’s revenue and expenses (~96% of revenue and ~100% of CoGs in 2022) seem to be run through an undisclosed related party, an unnamed “Technology Partner”.
Despite claiming to generate vast and growing revenue, iLearningEngines has no obvious industry presence, doesn’t name key customers or partners and does not appear to do the volume of business it claims.
For example, iLearningEngines claims its Indian market has an annual revenue run rate of $216 million. The financials for its sole Indian subsidiary reported ~$853,471 in revenue for its latest fiscal year, or ~99.4% less than iLearningEngines’ claimed revenue in the country.
DC-based Last Energy Raised $40 Million in Series B Round
Washington, DC – Last Energy, a DC-based developer of micro-nuclear power plants, announced that it raised $40 million in a Series B round that closed earlier thie year. The company, founded in 2019, has now raised a total of $64 million. Investors in the latest round included Gigafund, the Autodesk Foundation, and various family offices.
“By drastically simplifying the design-construction-operations process, leveraging technology and talent from Autodesk, Last Energy’s approach to micro-modular nuclear power has the potential to fundamentally change how we think about energy production – offering a rapid, scalable, and economically viable solution to decarbonize heavy industry,” said Ryan Macpherson, the director of Climate Innovation & Investment at the Autodesk Foundation.
Steve Schorer Named President, CEO of Reston-based Peraton
Reston, Va. – Peraton, the Reston-based government technology provider backed by Veritas Capital, has named Steve Schorer as its new president, CEO and chairman. He succeeds Stu Shea who held the positions for the past seven years. Prior to Peraton, Schorer was the CEO of Alion Science and Technology. Before Alion, he was president of DynCorp International.
Germantown-based AEM Acquires NJ-based WeatherWorks
Germantown, Md. – AEM, a Germantown-based firm providing intelligence and analytics on the environment, announced that it has acquired New Jersey-based WeatherWorks, a meteorological consulting firm. Financial terms of the deal were not disclosed. One of WeatherWork’s main products is its Certified Snowfall Totals (CST), a third-party snowfall verification product.
“After nearly 40 years of specializing in top-tier consultation and forecasting solutions, I've observed our clients' growing need to address a wider range of weather impacts,” said Frank Lombardo, the CEO of WeatherWorks. “By combining WeatherWorks' capabilities with AEM’s multi-hazard solutions, we are excited to provide organizations with a more comprehensive set of tools to manage a broad spectrum of weather-related challenges.”
Briefly Noted:
(Washington, DC) Amida Technology Solutions, a DC-based provider of software and technology services company, has named Mark Forman as its chief strategy officer. Forman previously served as the nation's first administrator for E-Government and Information Technology (now called the Federal CIO), and also developed and led IT services teams at IBM, KPMG, SAIC, Unisys, and several start-ups.
(Alexandria, Va.) Alexandria-based VSE, a provider of aftermarket distribution and repair services for the aerospace industry, has named Adam Cohn as its CFO and Garry Snow as its chief growth officer. Cohn most recently served as the CFO of Valence Surface Technologies, and Snow was the head of sales and marketing for business and general aviation at Boeing Global Services.