|
|
|
(State or other jurisdiction of incorporation or organization)
|
(I.R.S. Employer Identification No.)
|
Title of each class
|
Trading Symbol(s)
|
Name of each exchange on which
registered
|
||
|
|
|
||
|
|
|
||
|
|
|
Large accelerated filer
|
☐
|
Accelerated filer
|
☐ | |
|
☒ |
Smaller reporting company
|
||
Emerging growth company
|
Page
|
||
1 |
||
1 |
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1 |
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2
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3
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4
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5
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20 |
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24 |
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24
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24 |
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24
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24
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24
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25
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25
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25
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26
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27
|
Item 1. |
Interim Financial Statements
|
March 31,
2023
|
December 31,
2022
|
|||||||
(Unaudited)
|
||||||||
ASSETS
|
||||||||
Current assets
|
||||||||
Cash
|
$
|
|
$
|
|
||||
Prepaid expenses
|
|
|
||||||
Total Current Assets
|
|
|
||||||
Cash and investments held in Trust Account
|
|
|
||||||
TOTAL ASSETS
|
$
|
|
$
|
|
||||
LIABILITIES, CLASS A COMMON STOCK SUBJECT TO POSSIBLE REDEMPTION AND STOCKHOLDERS’ DEFICIT
|
||||||||
Current liabilities
|
||||||||
Accounts payable and accrued expenses
|
$
|
|
$
|
|
||||
Income tax payable
|
||||||||
Promissory note - related party
|
||||||||
Convertible promissory notes - related party
|
||||||||
Total Current Liabilities
|
|
|
||||||
Deferred underwriting fee payable
|
|
|
||||||
Warrant liabilities
|
|
|
||||||
Total Liabilities
|
|
|
||||||
Commitments and Contingencies
|
||||||||
Class A common stock subject to possible redemption, $
|
|
|
||||||
Stockholders’ Deficit
|
||||||||
Preferred stock, $
|
|
|
||||||
Class A common stock, $
|
|
|
||||||
Class B common stock, $
|
|
|
||||||
Additional paid-in capital
|
|
|
||||||
Accumulated deficit
|
(
|
)
|
(
|
)
|
||||
Total Stockholders’ Deficit
|
(
|
)
|
(
|
)
|
||||
TOTAL LIABILITIES, CLASS A COMMON STOCK SUBJECT TO POSSIBLE REDEMPTION AND STOCKHOLDERS’ DEFICIT
|
$
|
|
$
|
|
For The Three Months Ended
March 31,
|
||||||||
2023
|
2022
|
|||||||
General and administrative expenses
|
$
|
|
$
|
|
||||
Loss from operations
|
(
|
)
|
(
|
)
|
||||
Other (loss) income:
|
||||||||
Change in fair value of warrant liabilities
|
(
|
)
|
|
|||||
Change in fair value of convertible promissory notes
|
||||||||
Interest earned on cash and investments held in Trust Account
|
|
|
||||||
Total other (loss) income, net
|
|
|
||||||
Income before provision for income taxes |
||||||||
Provision for income taxes |
( |
) | ||||||
Net (loss) income
|
$
|
(
|
)
|
$
|
|
|||
Weighted average shares outstanding, Class A common stock
|
|
|
||||||
Basic and diluted net (loss) income per share, Class A common stock
|
$
|
(
|
)
|
$
|
|
|||
Weighted average shares outstanding, Class B common stock
|
|
|
||||||
Basic and diluted net (loss) income per share, Class B common stock
|
$
|
(
|
)
|
$
|
|
|
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
|
|
$
|
|
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
(
|
)
|
||||||||||||||
Accretion of Class A common Stock Subject to Redemption
|
— | — | ( |
) | ( |
) | ||||||||||||||||||||||
Cash received in excess of fair value of convertible promissory note |
— | — | ||||||||||||||||||||||||||
Net loss
|
—
|
|
—
|
|
|
(
|
)
|
(
|
)
|
|||||||||||||||||||
Balance – March 31, 2023 (unaudited)
|
|
$
|
|
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
(
|
)
|
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
|
|
$
|
|
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
(
|
)
|
||||||||||||||
Net income
|
— | — |
||||||||||||||||||||||||||
Balance – March 31, 2022 (unaudited)
|
|
$
|
|
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
(
|
)
|
|
For the Three Months Ended
March 31,
|
|||||||
2023 |
2022 |
|||||||
Cash Flows from Operating Activities:
|
||||||||
Net (loss) income
|
$
|
(
|
)
|
$
|
|
|||
Adjustments to reconcile net (loss) income to net cash used in operating activities:
|
||||||||
Interest earned on investments held in Trust Account
|
(
|
)
|
(
|
)
|
||||
Change in fair value of warrant liabilities
|
|
(
|
)
|
|||||
Change in fair value of convertible promissory notes
|
( |
) | ||||||
Changes in operating assets and liabilities:
|
||||||||
Prepaid expenses
|
(
|
)
|
|
|||||
Accrued expenses
|
|
(
|
)
|
|||||
Income tax payable
|
||||||||
Net cash used in operating activities
|
(
|
)
|
(
|
)
|
||||
|
||||||||
Cash Flows from Investing Activities:
|
||||||||
Investment of cash in Trust Account
|
(
|
)
|
|
|||||
Cash withdrawn from Trust Account for payment of franchise tax obligations
|
|
|
||||||
Cash withdrawn from Trust Account in connection with redemptions
|
||||||||
Net cash provided by investing activities
|
|
|
||||||
|
||||||||
Cash Flows from Financing Activities:
|
||||||||
Proceeds from non-convertible promissory note – related party | ||||||||
Proceeds from convertible promissory note – related party
|
||||||||
Redemption of common stock
|
(
|
)
|
|
|||||
Net cash (used in) provided by financing activities
|
(
|
)
|
|
|||||
|
||||||||
Net Change in Cash
|
|
(
|
)
|
|||||
Cash – Beginning of the period
|
|
|
||||||
Cash – End of the period
|
$
|
|
$
|
|
||||
|
||||||||
Supplementary cash flow information: |
||||||||
Cash paid for income taxes |
$ | $ | ||||||
Non-cash investing and financing activities:
|
||||||||
Cash received in excess of fair value of convertible note
|
$
|
|
$
|
|
(i) |
at the closing of the Proposed 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) $
|
Gross proceeds
|
$
|
|
||
Less:
|
||||
Proceeds allocated to Public Warrants
|
(
|
)
|
||
Class A common stock issuance costs
|
(
|
)
|
||
Plus:
|
||||
Remeasurement of carrying value to redemption value
|
|
|||
Class A common stock subject to possible redemption at December 31, 2022
|
|
|||
Less: | ||||
Redemption
|
( |
) | ||
Plus: | ||||
Remeasurement of carrying value to redemption value
|
||||
Class A common stock subject to possible redemption at March 31, 2023 | $ |
For the Three Months Ended
March 31,
|
||||||||||||||||
2023
|
2022 |
|||||||||||||||
Class A
|
Class B
|
Class A
|
Class B
|
|||||||||||||
Basic net (loss) income per common stock
|
||||||||||||||||
Numerator:
|
||||||||||||||||
Allocation of net (loss) income, as adjusted
|
$
|
(
|
)
|
$
|
(
|
)
|
$ | $ | ||||||||
Denominator:
|
||||||||||||||||
Basic weighted average shares outstanding
|
||||||||||||||||
|
||||||||||||||||
Basic net (loss) income per common share
|
$
|
(
|
)
|
$
|
(
|
)
|
$ | $ |
• |
in whole and not in part;
|
• |
at a price of $
|
• |
upon not less than
|
• |
if, and only
if, the closing price of the common stock equals or exceeds $
|
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.
|
Description
|
Level
|
March 31,
2023
|
December 31,
2022
|
|||||||||
Assets:
|
||||||||||||
Investments held in Trust Account
|
1
|
$
|
|
$ |
||||||||
Liabilities:
|
||||||||||||
Warrant Liabilities – Public Warrants
|
1
|
$ |
|
$ |
|
|||||||
Warrant Liabilities – Private Placement Warrants
|
3
|
$ |
|
$ |
|
|||||||
Convertible Promissory Note – Related Party – First Note
|
3
|
$ |
$ |
|||||||||
Convertible Promissory Note – Related Party – Third Note |
3
|
$ |
$ |
Input
|
March 31,
2023
|
December 31,
2022
|
||||||
Market price of public shares
|
$
|
|
$
|
|
||||
Risk-free rate
|
|
%
|
|
%
|
||||
Dividend yield
|
|
%
|
|
%
|
||||
Exercise price
|
$
|
|
$
|
|
||||
Volatility
|
|
%
|
|
%
|
||||
Term to expiration (years)
|
|
|
|
Private
Placement
Warrants
|
|||
Fair value as of January 1, 2023
|
$
|
|
||
|
|
|||
Fair value as of March 31, 2023
|
$ |
|
Private
Placement
Warrants
|
||||
Fair value as of January 1, 2022
|
$
|
|
||
|
(
|
)
|
||
Fair value as of March 31, 2022
|
$
|
|
|
First
Promissory
Note
|
|||
Fair value as of January 1, 2023
|
$
|
|
||
|
(
|
)
|
||
Fair value as of March 31, 2023
|
$
|
|
Third
Promissory
Note
|
||||
Fair value as of January 1, 2023
|
$
|
|
||
Drawdown on promissory note |
||||
|
(
|
)
|
||
Fair value as of March 31, 2023
|
$
|
|
Input
|
March 31,
2023
|
|||
Market price of public shares
|
$
|
|
||
Risk-free rate
|
|
%
|
||
Dividend yield
|
|
%
|
||
Exercise price
|
$
|
|
||
Volatility
|
|
%
|
||
Term to expiration (years)
|
|
(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) $
|
Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
Item 3. |
Quantitative and Qualitative Disclosures About Market Risk
|
Item 4. |
Controls and Procedures
|
Item 1. |
Legal Proceedings
|
Item 1A. |
Risk Factors
|
Item 2. |
Unregistered Sales of Equity Securities and Use of Proceeds.
|
Item 3. |
Defaults Upon Senior Securities
|
Item 4. |
Mine Safety Disclosures
|
Item 5. |
Other Information
|
Item 6. |
Exhibits
|
No.
|
Description of Exhibit
|
|
Agreement and Plan of Merger, dated as of April 27, 2023 by and among Arrowroot Acquisition Corp., ARAC Merger Sub, Inc. and iLearningEngines, Inc., incorporated by reference to Exhibit 2.1 to the Current
Report on Form 8-K (File No. 001-40129), filed May 2, 2023
|
||
Amended and Restated Certificate of Incorporation, incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K (File No. 001-40129), filed March 5, 2021
|
||
Amendment to the Amended and Restated Certificate of Incorporation of the Company, dated March 1, 2023, incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K (File No. 001-40129), filed
February 23, 2023
|
||
Bylaws, incorporated by reference to Exhibit 3.4 to the Registration Statement on Form S-1 (File No. 333-25299), originally filed February 11, 2021
|
||
Certification of Principal Executive Officer Pursuant to Securities Exchange Act Rules 13a-14(a), as adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
||
Certification of Principal Financial Officer Pursuant to Securities Exchange Act Rules 13a-14(a), as adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
||
Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
||
Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
||
101.INS*
|
XBRL Instance Document
|
|
101.SCH*
|
XBRL Taxonomy Extension Schema Document
|
|
101.CAL*
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|
101.DEF*
|
XBRL Taxonomy Extension Definition Linkbase Document
|
|
101.LAB*
|
XBRL Taxonomy Extension Labels Linkbase Document
|
|
101.PRE*
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
*
|
Filed herewith.
|
**
|
Furnished herewith.
|
ARROWROOT ACQUISITION CORP.
|
||
Date: May 15, 2023
|
By:
|
/s/ Matthew Safaii
|
Name:
|
Matthew Safaii
|
|
Title:
|
Chief Executive Officer
|
|
(Principal Executive Officer)
|
||
Date: May 15, 2023
|
By:
|
/s/ Thomas Olivier
|
Name:
|
Thomas Olivier
|
|
Title:
|
Chief Financial Officer
|
|
(Principal Financial and Accounting Officer)
|