UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(MARK ONE)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarter ended September 30, 2022

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number: 001-835972

ARROWROOT ACQUISITION CORP.

(Exact Name of Registrant as Specified in Its Charter)

Delaware		85-3961600
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

4553 Glencoe Ave, Suite 200

Marina Del Rey, California 90292

(Address of principal executive offices)

(310) 566-5966

(Issuer’s telephone number)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Units, each consisting of one share of Class A common stock, $0.0001 par value, and one-half of one redeemable warrant	ARRWU	The Nasdaq Stock Market LLC
Shares of Class A common stock included as part of the units	ARRW	The Nasdaq Stock Market LLC
Redeemable warrants included as part of the units, each whole warrant exercisable for one share of Class A common stock at an exercise price of $11.50	ARRWW	The Nasdaq Stock Market LLC

Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company”, and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
		Emerging growth company	☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☒ No ☐

As of November 14, 2022, there were 28,750,000 shares of Class A common stock, $0.0001 par value and 7,187,500 shares of Class B common stock, $0.0001 par value, issued and outstanding.

ARROWROOT ACQUISITION CORP.

FORM 10-Q FOR THE QUARTER ENDED SEPTEMBER 30, 2022

TABLE OF CONTENTS

		Page
Part I. Financial Information
	Item 1. Interim Financial Statements
	Condensed Balance Sheets as of September 30, 2022 (Unaudited) and December 31, 2021	1
	Unaudited Condensed Statements of Operations for the Three and Nine Months Ended September 30, 2022 and 2021	2
	Unaudited Condensed Statements of Changes in Stockholders’ Deficit for the Three and Nine Months Ended September 30, 2022 and 2021	3
	Unaudited Condensed Statements of Cash Flows for the Nine Months Ended September 30, 2022 and 2021	4
	Notes to Unaudited Condensed Financial Statements	5
	Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	18
	Item 3. Quantitative and Qualitative Disclosures About Market Risk	22
	Item 4. Controls and Procedures	22
Part II. Other Information
	Item 1. Legal Proceedings	22
	Item 1A. Risk Factors	22
	Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	23
	Item 3. Defaults Upon Senior Securities	24
	Item 4. Mine Safety Disclosures	24
	Item 5. Other Information	24
	Item 6. Exhibits	24
Part III. Signatures		25

Table of Contents

PART I - FINANCIAL INFORMATION

Item 1.

Interim Financial Statements.

ARROWROOT ACQUISITION CORP.

CONDENSED BALANCE SHEETS

	September 30, 2022			December 31, 2021
	(Unaudited)
ASSETS
Current assets
Cash	$	351,365		$	262,671
Prepaid expenses		205,748			514,553
Total Current Assets		557,113			777,224

Cash and investments held in trust account		288,776,642			287,523,634
TOTAL ASSETS	$	289,333,755		$	288,300,858

LIABILITIES, CLASS A COMMON STOCK SUBJECT TO POSSIBLE REDEMPTION AND STOCKHOLDERS’ DEFICIT
Current liabilities
Accounts payable and accrued expenses	$	1,053,549		$	1,177,911
Income tax payable		207,764			—
Convertible promissory note - related party		1,500,000			750,000
Total Current Liabilities		2,761,313			1,927,911

Deferred underwriting fee payable		10,062,500			10,062,500
Warrant liabilities		910,000			11,991,250
Total Liabilities		13,733,813			23,981,661

Commitments and Contingencies

Class A common stock subject to possible redemption, $0.0001 par value; 28,750,000 shares issued and outstanding at approximately $10.02 and $10.00 per share redemption value at September 30, 2022 and December 31, 2021, respectively		288,218,064			287,500,000

Stockholders’ Deficit
Preferred stock, $0.0001 par value; 1,000,000 shares authorized; none issued or outstanding		—			—
Class A common stock, $0.0001 par value; 200,000,000 shares authorized, none issued and outstanding (excluding 28,750,000 subject to possible redemption)		—			—
Class B common stock, $0.0001 par value; 20,000,000 shares authorized; 7,187,500 shares issued and outstanding as of September 30, 2022 and December 31, 2021		719			719
Additional paid-in capital		—			—
Accumulated deficit		(12,618,841	)		(23,181,522	)
Total Stockholders’ Deficit		(12,618,122	)		(23,180,803	)
TOTAL LIABILITIES, CLASS A COMMON STOCK SUBJECT TO POSSIBLE REDEMPTION AND STOCKHOLDERS’ DEFICIT	$	289,333,755		$	288,300,858

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

Table of Contents

ARROWROOT ACQUISITION CORP.

CONDENSED STATEMENTS OF OPERATIONS

(UNAUDITED)

	For The Three Months Ended September 30,						For The Nine Months Ended September 30,
	2022			2021			2022			2021

General and administrative expenses	$	355,529		$	1,615,840		$	1,126,963		$	3,013,121
Loss from operations		(355,529	)		(1,615,840	)		(1,126,963	)		(3,013,121	)

Other income:
Change in fair value of warrant liabilities		240,000			6,561,250			11,081,250			7,775,000
Interest earned on investments held in Trust Account		1,229,862			7,248			1,592,222			16,386
Total other income, net		1,469,862			6,568,498			12,673,472			7,791,386

Income before provision for income taxes		1,114,333			4,952,658			11,546,509			4,778,265
Provision for income taxes		(244,044	)		—			(265,764	)		—
Net income	$	870,289		$	4,952,658		$	11,280,745		$	4,778,265

Weighted average shares outstanding, Class A common stock		28,750,000			28,750,000			28,750,000			22,115,385

Basic and diluted net income per share, Class A common stock	$	0.02		$	0.14		$	0.31		$	0.16

Weighted average shares outstanding, Class B common stock		7,187,500			7,187,500			7,187,500			6,971,154

Basic and diluted net income per share, Class B common stock	$	0.02		$	0.14		$	0.31		$	0.16

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

Table of Contents

ARROWROOT ACQUISITION CORP.

CONDENSED STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIT

(UNAUDITED)

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 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	)

Net income		—		—		—		—		—		5,921,767			5,921,767

Balance – March 31, 2022		—		—		7,187,500		719		—		(17,259,755	)		(17,259,036	)

Accretion of class A common stock subject to redemption amount		—		—		—		—		—		(63,459	)		(63,459	)

Net income		—		—		—		—		—		4,488,689			4,488,689

Balance – June 30, 2022		—		—		7,187,500		719		—		(12,834,525	)		(12,833,806	)

Accretion of class A common stock subject to redemption amount		—		—		—		—		—		(654,605	)		(654,605	)

Net income		—		—		—		—		—		870,289			870,289

Balance – September 30, 2022		—	$	—		7,187,500	$	719	$	—	$	(12,618,841	)	$	(12,618,122	)

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2021

	Class A Common Stock				Class B Common Stock				Additional Paid-in			Accumulated			Total Stockholders’
	Shares		Amount		Shares		Amount		Capital			Deficit			Equity (Deficit)
Balance – January 1, 2021		—	$	—		7,187,500	$	719	$	29,281		$	(1,724	)	$	28,276

Accretion of Class A common Stock Subject to Redemption amount		—		—		—		—		(689,281	)		(28,024,661	)		(28,713,942	)

Cash paid in excess of fair value of 8,250,000 Private Placement Warrants		—		—		—		—		660,000			—			660,000

Net income		—		—		—		—		—			1,630,620			1,630,620

Balance – March 31, 2021		—		—		7,187,500		719		—			(26,395,765	)		(26,395,046	)

Net loss		—		—		—		—		—			(1,805,013	)		(1,805,013	)

Balance – June 30, 2021		—		—		7,187,500		719		—			(28,200,778	)		(28,200,059	)

Net income		—		—		—		—		—

SEC Form 10-Q filed by Arrowroot Acquisition Corp.