424B3 1 f424b30224_arrowroot.htm PROSPECTUS

Filed Pursuant to Rule 424(b)(3)
Registration No. 333-
274333

PROXY STATEMENT/PROSPECTUS

Arrowroot Acquisition Corp.
4553 Glencoe Ave, Suite 200
Marina Del Rey, CA 90292

NOTICE OF
SPECIAL MEETING
TO BE HELD ON
FEBRUARY 12, 2024

Dear Arrowroot Acquisition Corp. Stockholders:

You are cordially invited to attend the special meeting in lieu of the 2023 annual meeting of the stockholders (the “special meeting”) of Arrowroot Acquisition Corp., a Delaware corporation (“Arrowroot”) to be held at 9:00 a.m. Eastern Time, on February 12, 2024. The special meeting will be conducted exclusively over the Internet by means of a live video webcast, which can be accessed by visiting https://www.virtualshareholdermeeting.com/ARRW2024SM. Arrowroot is a Delaware blank check company established for the purpose of entering into a merger, capital stock exchange, asset acquisition, stock purchase, reorganization, or similar business combination with one or more businesses. On April 27, 2023, Arrowroot, ARAC Merger Sub, Inc., a Delaware corporation and a direct, wholly owned subsidiary of Arrowroot (“Merger Sub”), and iLearningEngines Inc., a Delaware corporation (“iLearningEngines”), entered into an Agreement and Plan of Merger and Reorganization (the “Merger Agreement”), pursuant to which Merger Sub will merge (the “Merger”) with and into iLearningEngines, whereupon the separate corporate existence of Merger Sub will cease and iLearningEngines, which will be renamed iLearningEngines Holdings, Inc., will be the surviving company and continue in existence as a wholly owned subsidiary of Arrowroot, on the terms and subject to the conditions set forth therein (collectively with the other transactions described in the Merger Agreement, the “Business Combination”). In connection with the consummation of the Business Combination, Arrowroot will be renamed “iLearningEngines, Inc.” The combined company after the Business Combination is referred to in the proxy statement/prospectus as “New iLearningEngines.”

Arrowroot’s Class A common stock (the “Arrowroot Class A Common Stock”), units (the “Arrowroot Units”) and public warrants (the “Public Warrants”) are currently listed on the Nasdaq Capital Market under the symbols “ARRW,” “ARRWU,” and “ARRWW,” respectively. At the effective time of the Business Combination (the “Effective Time”), each share of iLearningEngines common stock, par value $0.0001 per share (the “iLearningEngines Common Stock”) issued and outstanding immediately prior to the Effective Time (but excluding shares the holders of which perfect rights of appraisal under Delaware law) will be converted into the right to receive a number of shares of Arrowroot Class A Common Stock (rounded down to the nearest whole share) based on an exchange ratio, (i) the numerator of which is equal to (1)(A) $1,285,000,000, minus (B) the dollar value of shares of Incentive Shares (as defined below) forfeited or assigned by the Company, such dollar value not to exceed $100 million, plus (C) the aggregate exercise price of the iLearningEngines warrants, minus (D) the Convertible Note Balance (as defined below), divided by (2) $10.00, and (ii) the denominator of which is equal to the fully-diluted capitalization of iLearningEngines immediately prior to the consummation of the Business Combination, including shares of restricted stock of iLearningEngines, shares of iLearningEngines issuable upon settlement of iLearningEngines restricted stock units and shares of iLearningEngines issuable upon exercise of iLearningEngines warrants, but excluding shares issuable upon conversion of the Convertible Notes (as defined below). Arrowroot intends to apply to list the shares of Arrowroot Class A Common Stock and the Public Warrants of New iLearningEngines on the Nasdaq Capital Market under the symbols “AILE,” and “AILEW,” respectively, upon the closing of the Business Combination.

Arrowroot Acquisition LLC, a Delaware limited liability company (the “Sponsor”), and Arrowroot’s officers and directors have agreed to (a) vote all of their shares of Class B common stock, par value $0.0001 per share (the “Arrowroot Class B Common Stock”) and all of their shares of Arrowroot Class A Common Stock in favor of the Business Combination, and (b) certain restrictions on their shares of Arrowroot Class A Common Stock and Arrowroot Class B Common Stock (collectively, the “Arrowroot Common Stock”). In addition, in connection with an election not to redeem Public Shares by any holder of Public Shares, each of iLearningEngines and Arrowroot agreed, as necessary, to consent to the assignment or forfeiture of shares of Arrowroot Class A Common Stock issuable to iLearningEngines or shares of Arrowroot Class A Common Stock issuable upon conversion of the Arrowroot Class B Common Stock held by the Sponsor (with the corresponding shares of Arrowroot Class B Common Stock irrevocably forfeited by the Sponsor and canceled), as applicable, to such non-redeeming stockholders as further described in the accompanying proxy statement/prospectus (such assigned or forfeited shares, the “Incentive Shares”).

 

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In order to finance transaction costs in connection with an initial business combination, the Sponsor or an affiliate of the Sponsor, or certain of Arrowroot’s officers and directors may, but are not obligated to, loan Arrowroot funds as may be required (“Working Capital Loans”). If Arrowroot completes an initial business combination, Arrowroot would repay the Working Capital Loans out of the proceeds of the Trust Account released to Arrowroot. Otherwise, the Working Capital Loans would be repaid only out of funds held outside the Trust Account. In the event that an initial business combination does not close, Arrowroot 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. 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-initial business combination entity at a price of $1.00 per warrant. The warrants would be identical to the Private Placement Warrants.

On December 21, 2020, the Sponsor issued an unsecured promissory note to the Company (the “IPO Promissory Note”), pursuant to which the Company may borrow up to an aggregate principal amount of $300,000. 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.

On December 29, 2021, Arrowroot issued an unsecured promissory note (the “First Promissory Note”) to the Sponsor pursuant to which the Sponsor agreed to loan Arrowroot 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 Arrowroot 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, Arrowroot drew down the remaining $550,000 pursuant to the terms of the First Promissory Note. Following this draw down, 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. The First Promissory Note does not bear interest. The principal balance of the note will be payable on the earliest to occur of (i) the date on which Arrowroot consummates its initial business combination or (ii) the date that the winding up of Arrowroot is effective (such date, the “Note Maturity Date”). In the event Arrowroot consummates its initial business combination, the Sponsor has the option on the Note 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. As of September 30, 2023, $1,500,000 was outstanding under this First Promissory Note.

On February 23, 2023, Arrowroot 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 does not bear interest and matures on the Note Maturity Date. The Second Promissory Note is not convertible into Working Capital Warrants. As of September 30, 2023, Arrowroot had a $500,000 outstanding balance under this Second Promissory Note.

On February 28, 2023, Arrowroot held a special meeting of stockholders (“Extension Meeting”) pursuant to which its stockholders approved an amendment to Arrowroot’s amended and restated certificate of incorporation (the “Charter Extension Amendment”) to extend the date (the “Termination Date”) by which Arrowroot has to consummate an initial business combination from March 4, 2023 (the “Original Termination Date”) to July 6, 2023 (the “Charter Extension Date”) and to allow Arrowroot, without another stockholder vote, to elect to extend the Termination Date to consummate an initial business combination on a monthly basis up to seven times by an additional one month each time after the Charter Extension Date (“Additional Charter Extension Date”), by resolution of Arrowroot’s board of directors, if requested by the Sponsor, and upon five days’ advance notice prior to the applicable Termination Date, until February 4, 2024, for a total of up to eleven months after the Original Termination Date (the “Extension Deadline”), unless the closing of an initial business combination shall have occurred prior thereto (the “Extension,” and such proposal, the “Extension Proposal”). In connection with the Extension, on March 6, 2023, Arrowroot issued an unsecured promissory note (the “Third Promissory Note”) in the principal amount of up to $1,760,000 to the Sponsor. The Third Promissory Note does not bear interest and matures on the Note Maturity Date. Following the Extension Proposal being approved, the Sponsor funded $1,760,000 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 Extension 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 Extension Meeting (if all seven additional monthly extensions are exercised). If Arrowroot completes an initial business combination, Arrowroot will, at the option of the Sponsor, repay the amounts loaned under the Third Promissory Note or convert a portion or all of the

 

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amounts loaned under such promissory note into warrants, which warrants will be identical to the Private Placement Warrants issued in connection with Arrowroot’s initial public offering. If Arrowroot does not complete an initial business combination by the Extension Deadline, such promissory note will be repaid only from funds held outside of the Trust Account or will be forfeited, eliminated or otherwise forgiven. As of September 30, 2023, Arrowroot had a $1,120,000 outstanding balance under this Third Promissory Note.

On June 13, 2023, Arrowroot issued an unsecured promissory note in the principal amount of $2,000,000 (the “Fourth Promissory Note,” and collectively with the IPO Promissory Note, First Promissory Note, Second Promissory Note and Third Promissory Note, the “Promissory Notes”) to the Sponsor, of which $700,000 was funded by the Sponsor upon execution. On September 27, 2023, Arrowroot 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. There remains $800,000 available under the Fourth Promissory Note for future drawdowns. The Fourth Promissory Note bears interest at 15% per annum and matures on the Note Maturity Date. In the event that Arrowroot 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 Note Maturity Date upon request by Arrowroot subject to the Sponsor’s approval.

Notwithstanding the original terms the Promissory Notes, Arrowroot 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 (as defined in the Merger Agreement) 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.

Also, on April 27, 2023, iLearningEngines entered into a convertible note purchase agreement (the “Convertible Note Purchase Agreement”), with certain investors (collectively, with any future investors who may become party to the Convertible Note Purchase Agreement, the “Convertible Note Investors”), pursuant to which, among other things, iLearningEngines may issue and sell to the Convertible Note Investors convertible notes due in October 2025 (“Convertible Notes”) with aggregate principal amount of up to $50,000,000, of which iLearningEngines has issued and sold Convertible Notes with aggregate principal amount of $17,400,000, including to affiliates of our Sponsor. Each Convertible Note accrues 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 Convertible Note will automatically convert into shares of iLearningEngines thereby entitling the holder thereof to receive, in connection with the consummation of the Business Combination, a number of shares Arrowroot Class A 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 (the “Convertible Note Balance”), divided by (ii) $10.00 (such shares, the “Convertible Note Shares”).

Affiliates of our Sponsor have purchased an aggregate of $9,900,000 of Convertible Notes, convertible into 2,810,846 shares of New iLearningEngines Common Stock.

Arrowroot is holding a special meeting in order to obtain the stockholder approvals necessary to complete the Business Combination. At the Arrowroot special meeting, which will be held on February 12, 2024, at 9:00 a.m., Eastern time, via live webcast at https://www.virtualshareholdermeeting.com/ARRW2024SM, Arrowroot will ask its stockholders to approve and adopt the Merger Agreement and the Business Combination and to approve the other proposals described in the accompanying proxy statement/prospectus. You will need the 16 digit meeting control number that is printed on your proxy card to enter the special meeting. Arrowroot recommends that you log in at least 15 minutes before the special meeting to ensure you are logged in when the special meeting starts. Please note that you will not be able to attend the special meeting in person.

As described in the accompanying proxy statement/prospectus, certain stockholders of iLearningEngines are parties to a support agreement with Arrowroot whereby such stockholders agreed to vote all of their shares of iLearningEngines Common Stock in favor of approving the Business Combination.

 

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After careful consideration, the Arrowroot board of directors (the “Arrowroot Board”) has unanimously approved the Merger Agreement and the other proposals described in the accompanying proxy statement/prospectus, and the Arrowroot Board has determined that it is advisable to consummate the Business Combination. The Arrowroot Board recommends that you vote “FOR” the proposals described in the accompanying proxy statement/prospectus (including each of the sub-proposals).

Arrowroot is providing the accompanying proxy statement/prospectus and proxy card to you in connection with the solicitation of proxies to be voted at the special meeting and at any adjournments or postponements of the special meeting. Your vote is very important. If you are a registered stockholder, please vote your shares as soon as possible by completing, signing, dating and returning the enclosed proxy card in the postage-paid envelope provided. If you hold your shares in “street name” through a bank, broker or other nominee, you will need to follow the instructions provided to you by your bank, broker or other nominee to ensure that your shares are represented and voted at the special meeting.

More information about Arrowroot, iLearningEngines and the Business Combination is contained in the accompanying proxy statement/prospectus. Arrowroot and iLearningEngines urge you to read the accompanying proxy statement/prospectus, including the financial statements and annexes and other documents referred to herein, carefully and in their entirety. In particular, you should carefully consider the matters discussed under “Risk Factors” beginning on page 48 of the accompanying proxy statement/prospectus.

TO EXERCISE YOUR REDEMPTION RIGHTS, YOU MUST ELECT TO HAVE Arrowroot REDEEM YOUR SHARES FOR A PRO RATA PORTION OF THE FUNDS HELD IN THE TRUST ACCOUNT AND TENDER YOUR SHARES TO ARROWROOT’S TRANSFER AGENT AT LEAST TWO BUSINESS DAYS PRIOR TO THE VOTE AT THE VIRTUAL SPECIAL MEETING. YOU MAY TENDER YOUR SHARES BY EITHER DELIVERING YOUR SHARE CERTIFICATE TO THE TRANSFER AGENT OR BY DELIVERING YOUR SHARES ELECTRONICALLY USING THE DEPOSITORY TRUST COMPANY’S DWAC (DEPOSIT WITHDRAWAL AT CUSTODIAN) SYSTEM. IF THE BUSINESS COMBINATION IS NOT COMPLETED, THEN THESE SHARES WILL NOT BE REDEEMED FOR CASH. IF YOU HOLD THE SHARES IN STREET NAME, YOU WILL NEED TO INSTRUCT THE ACCOUNT EXECUTIVE AT YOUR BANK OR BROKER TO WITHDRAW THE SHARES FROM YOUR ACCOUNT IN ORDER TO EXERCISE YOUR REDEMPTION RIGHTS.

On behalf of our board of directors, I thank you for your support and look forward to the successful completion of the Business Combination.

 

Sincerely,

February 2, 2024

 

/s/ Matthew Safaii

   

Matthew Safaii

   

Chief Executive Officer

The accompanying proxy statement/prospectus is dated February 2, 2024 and is first being mailed to the stockholders of Arrowroot on or about February 2, 2024.

NEITHER THE U.S. SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES REGULATORY AGENCY HAS APPROVED OR DISAPPROVED THE TRANSACTIONS DESCRIBED IN THE ACCOMPANYING PROXY STATEMENT/PROSPECTUS OR ANY OF THE SECURITIES TO BE ISSUED IN THE BUSINESS COMBINATION, PASSED UPON THE MERITS OR FAIRNESS OF THE BUSINESS COMBINATION OR RELATED TRANSACTIONS OR PASSED UPON THE ADEQUACY OR ACCURACY OF THE DISCLOSURE IN THE ACCOMPANYING PROXY STATEMENT/PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY CONSTITUTES A CRIMINAL OFFENSE.

 

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Arrowroot Acquisition Corp.
4553 Glencoe Ave
Suite 200
Marina Del Rey, CA 90292

NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD ON 
FEBRUARY 12, 2024

To the Stockholders of Arrowroot Acquisition Corp.:

NOTICE IS HEREBY GIVEN that a special meeting of stockholders (the “special meeting”) of Arrowroot Acquisition Corp., a Delaware corporation (“Arrowroot,” “we,” “our” or “us”), will be held on February 12, 2024, at 9:00 a.m., Eastern time, via live webcast at the following address: https://www.virtualshareholdermeeting.com/ARRW2024SM. You will need the 16-digit meeting control number that is printed on your proxy card to enter the special meeting. Arrowroot recommends that you log in at least 15 minutes before the special meeting to ensure you are logged in when the special meeting starts. Please note that you will not be able to attend the special meeting in person. You are cordially invited to attend the special meeting, which will be held for the following purposes:

Proposal No. 1 — The “Business Combination Proposal” — to consider and vote upon a proposal to approve and adopt the Agreement and Plan of Merger and Reorganization, dated as of April 27, 2023 (as may be amended from time to time, the “Merger Agreement”), by and among Arrowroot, ARAC Merger Sub, Inc., a Delaware corporation and a wholly owned subsidiary of Arrowroot (“Merger Sub”), and iLearningEngines Inc., a Delaware corporation (“iLearningEngines”), pursuant to which Merger Sub will merge with and into iLearningEngines (the “Merger”), with iLearningEngines surviving the Merger as a wholly owned subsidiary of Arrowroot and approve the Merger and the other transactions contemplated by the Merger Agreement (the “Business Combination” and such proposal, the “Business Combination Proposal”). A copy of the Merger Agreement is attached to the accompanying proxy statement/prospectus as Annex A (“Proposal No. 1”).

Proposal No. 2 — The “Organizational Documents Proposal” — to approve and adopt, assuming the Business Combination Proposal is approved and adopted, the proposed amended and restated Certificate of Incorporation (the “Proposed Charter”), a copy of which is attached to the accompanying proxy statement/prospectus as Annex B, and the proposed Amended and Restated Bylaws, a copy of which is attached to the accompanying proxy statement/prospectus as Annex C (the “Proposed Bylaws”), of New iLearningEngines as the post-Business Combination company, which, if approved, would take effect substantially concurrently with the Effective Time (“Proposal No. 2”).

Proposals No. 3 — The “Advisory Organizational Documents Proposals” — to approve, on a non-binding advisory basis, certain governance provisions in the Proposed Charter and the Proposed Bylaws, which are being presented separately in accordance with the U.S. Securities and Exchange Commission (“SEC”) guidance to give stockholders the opportunity to present their separate views on important corporate governance provisions, as four sub-proposals (collectively, “Proposals No. 3”):

Proposal No. 3A — to increase the authorized shares of New iLearningEngines Common Stock (as defined in the accompanying proxy statement/prospectus) to 700,000,000 shares and increase the authorized shares of preferred stock to 10,000,000 shares (“Proposal No. 3A”);

Proposal No. 3B — to require an affirmative vote of 66 2/3% of the outstanding shares of New iLearningEngines Common Stock to adopt, amend, or repeal the Proposed Bylaws (as defined in the accompanying proxy statement/prospectus) (“Proposal No. 3B”);

Proposal No. 3C — to require an affirmative vote of 66 2/3% of the outstanding shares of New iLearningEngines Common Stock to alter, amend, or repeal ARTICLE V, ARTICLE VI, ARTICLE VII, ARTICLE VIII, and ARTICLE IX of the Proposed Charter (“Proposal No. 3C”);

Proposal No. 3D — to approve and adopt the Proposed Charter that includes the approval of Proposal No. 2, Proposals No. 3 and Proposal No. 4 and provides for certain additional changes, including changing Arrowroot’s name from “Arrowroot Acquisition Corp.” to “iLearningEngines, Inc.,” which the board of directors of Arrowroot (the “Arrowroot Board”) believes are necessary to adequately address the needs of Arrowroot immediately following the consummation of the Business Combination (“Proposal No. 3D”);

 

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Proposal No. 4 — The “Election of Directors Proposal” — to consider and vote upon a proposal to elect, effective at the Closing (as defined in the accompanying proxy statement/prospectus), five directors to serve staggered terms on the New iLearningEngines Board (as defined in the accompanying proxy statement/prospectus) until the 2024, 2025 and 2026 annual meetings of stockholders, respectively, and until their respective successors are duly elected and qualified (“Proposal No. 4”);

Proposal No. 5 — The “Equity Incentive Plan Proposal” — to consider and vote upon a proposal to approve and adopt the iLearningEngines 2024 Equity Incentive Plan, which is an incentive compensation plan for directors and employees of New iLearningEngines following the Business Combination (“Proposal No. 5”);

Proposal No. 6 — The “Employee Stock Purchase Plan Proposal” — to consider and vote upon a proposal to approve and adopt the iLearningEngines 2024 Employee Stock Purchase Plan (the “ESPP”), to assist New iLearningEngines in aligning the long-term financial interests of its employees with the financial interests of its stockholders, as well as attracting, retaining and motivating employees and encouraging them to devote their best efforts to the New iLearningEngines’ business and financial success (“Proposal No. 6”);

Proposal No. 7 — The “Nasdaq Proposal” — to consider and vote upon a proposal to approve, for purposes of complying with the applicable listing rules of The Nasdaq Stock Market LLC, the issuance of shares of Arrowroot Class A Common Stock to the iLearningEngines stockholders in the Merger pursuant to the Merger Agreement and to the Convertible Note Investors in the Convertible Note Investment (each as defined in this the accompanying proxy statement/prospectus) in connection with the Business Combination (“Proposal No. 7”); and

Proposal No. 8 — The “Adjournment Proposal” — to consider and vote upon a proposal to adjourn the special meeting to a later date or dates, if necessary, to permit further solicitation and vote of proxies if, based upon the tabulated vote at the time of the special meeting, there are not sufficient votes to approve one or more proposals presented to stockholders for vote.

These items of business are described in the attached proxy statement/prospectus. We encourage you to read the attached proxy statement/prospectus in its entirety, including the Annexes and accompanying financial statements, before voting. IN PARTICULAR, WE URGE YOU TO CAREFULLY READ THE SECTION ENTITLED “RISK FACTORS.

Only holders of record of shares of Arrowroot’s Class A common stock and Arrowroot’s Class B common stock at the close of business on January 18, 2024 (the “Record Date”) are entitled to notice of the special meeting and to vote at the special meeting and any adjournments or postponements of the special meeting. A complete list of our stockholders of record entitled to vote at the special meeting will be available for ten days before the special meeting at our principal executive offices for inspection by stockholders during ordinary business hours for any purpose germane to the special meeting. During the special meeting, stockholders will also be able to view the list of our stockholders of record entitled to vote at the special meeting by logging into the webcast.

Pursuant to our Existing Charter (as defined in the accompanying proxy statement/prospectus), we are providing the holders of shares of Arrowroot Class A Common Stock originally sold as part of the units issued in our initial public offering (the “IPO” and such holders, the “Public Stockholders”) with the opportunity to redeem, upon the Closing, shares of Arrowroot Class A Common Stock then held by them for cash equal to their pro rata share of the aggregate amount then on deposit (as of two business days prior to the Closing) in the trust account (the “Trust Account”) that holds the proceeds (including interest not previously released to Arrowroot to pay its taxes) from the IPO and a concurrent private placement of warrants to our Sponsor. On February 28, 2023, in connection with Arrowroot’s extension of the period of time to consummate an initial business combination, 24,304,187 shares of Arrowroot Class A Common Stock (representing approximately 84.54% of the then outstanding shares of Arrowroot Class A Common Stock) were tendered for redemption and redeemed, resulting in 4,445,813 shares of Arrowroot Class A Common Stock remaining issued and outstanding. As a result and as of the date hereof, the Sponsor and Arrowroot’s current and former officers and directors, who are the holders of all of the issued and outstanding shares of Arrowroot Class B Common Stock, own approximately 61.78% of the outstanding shares of Arrowroot Common Stock.

For illustrative purposes, based on the funds held in the Trust Account as of September 30, 2023 of approximately $46.1 million, the estimated per share redemption price would have been approximately $10.36. Public Stockholders may elect to redeem their shares whether or not they are holders as of the Record Date and whether or not they vote for the Business Combination Proposal. Notwithstanding the foregoing redemption rights, a Public

 

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Stockholder, together with any of his, her or its affiliates or any other person with whom he, she or it is acting in concert or as a “group” (as defined under Section 13(d)(3) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), will be restricted from redeeming in the aggregate his, her or its shares or, if part of such a group, the group’s shares, in excess of 15% of the outstanding shares of Arrowroot Class A Common Stock sold in the IPO. Holders of Arrowroot’s outstanding warrants sold in the IPO, which are exercisable for shares of Arrowroot Class A Common Stock under certain circumstances, do not have redemption rights in connection with the Business Combination. Our Sponsor, officers and directors have agreed to waive their redemption rights in connection with the consummation of the Business Combination with respect to any shares of Arrowroot Class A Common Stock they may hold. Shares of Arrowroot Class B Common Stock will be excluded from the pro rata calculation used to determine the per share redemption price. As of the Record Date, our Sponsor, and current and former officers and directors collectively owned approximately 61.78% of our issued and outstanding shares of Arrowroot Class A Common Stock and Arrowroot Class B Common Stock, including all of the shares of Arrowroot Class B Common Stock. Our Sponsor, officers and directors have agreed to vote any shares of Arrowroot Class A Common Stock and Arrowroot Class B Common Stock owned by them in favor of the Business Combination.

We may not consummate the Business Combination unless each of the Business Combination Proposal, Organizational Documents Proposal, Election of Directors Proposal, and Nasdaq Proposal (collectively, the “Required Proposals”) are approved at the special meeting. The Advisory Organizational Documents Proposals, Election of Directors Proposal, Equity Incentive Plan Proposal and Employee Stock Purchase Plan Proposal are all conditioned on the approval of the Business Combination Proposal, Nasdaq Proposal and the Organizational Documents Proposal. The Adjournment Proposal is not conditioned on the approval of any other proposal set forth in the accompanying proxy statement/prospectus.

The Arrowroot Board has unanimously approved the Merger Agreement and the transactions contemplated thereby and recommends that you vote “FOR” the Business Combination Proposal, “FOR” the Organizational Documents Proposal, “FOR” each of the Advisory Organizational Documents Proposals, “FOR” the Election of Directors Proposal, “FOR” the Equity Incentive Plan Proposal, “FOR” the Employee Stock Purchase Plan Proposal, “FOR” the Nasdaq Proposal and “FOR” the Adjournment Proposal (if necessary).

Your attention is directed to the proxy statement/prospectus accompanying this notice (including the financial statements and annexes attached thereto) for a more complete description of the proposed Business Combination and related transactions and each of our proposals. We encourage you to read the accompanying proxy statement/prospectus carefully. If you have any questions or need assistance voting your shares, please call our proxy solicitor, Okapi Partners LLC, at (855) 208-8903; banks and brokers can call collect at (212) 297-0720.

 

By Order of the Board of Directors,

February 2, 2024

 

/s/ Matthew Safaii

   

Matthew Safaii

   

Chief Executive Officer

 

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iLearningEngines CEO LETTER

A Vision is Born

Fourteen years ago, my mother was diagnosed with Stage 4 breast cancer. My world was turned upside down.

During many long flights to be at her side during treatment, I truly struggled with her diagnosis. Why was this terrible disease discovered so late? Were there any warning signs we missed? I quickly realized that healthcare is focused on reacting to sickness, not on actively managing any of the specific health risks of individual patients.

In my heart, I knew there must be a way to sift through mountains of data to distinguish the “Signal” from the “Noise.” If we can only find the Signal, we can vastly improve everything from healthcare to education and beyond, for our communities and our society generally.

The data is there. It is continually being generated, but its power is lost as quickly as it is created.

I founded iLearningEngines on the belief that vital content must be delivered in real time and in context for our society to leap forward. I spent nearly five years at Sun MicroSystems leveraging AI principles to vastly improve computing power, which underpinned my conclusion that AI is the key to achieving my vision.

What Have We Accomplished So Far?

Fast forward to today. iLearningEngines is one of the fastest growing technology companies in North America. We have invested substantial time and resources into R&D to create an AI platform to advance the future of work for enterprises everywhere.

Companies rely on us to “productize” their institutional knowledge and transform it into critical IP that drives better outcomes. Today, we serve over 1,000 enterprise end customers with more than 4 million licensed users across a variety of verticals.

We believe our approach has disrupted the worlds of learning, learning automation and work automation — not unlike what Apple did with smartphones and Slack and Zoom have done for communications.

We are tremendously excited about the power of scalable AI that we are harnessing to serve our customers across various end markets.

The Future is Bright

iLearningEngines sits at the intersection of the growing global AI, hyperautomation, and global e-Learning markets, three of the most exciting sectors in the world right now. Global AI and global e-Learning markets are each estimated to exceed $200 billion.

AI is anything but new to us. It is at the core of our identity as a company. The path we have painstakingly paved is now a springboard for transformational change as scalable AI fundamentally revolutionizes the way businesses operate.

I am excited about our partnership with Arrowroot and our upcoming public listing. I hope you will join us for the next chapter of iLearningEngines’ story as we empower companies to make themselves better at what they do.

/s/ Harish Chidambaran

   

Harish Chidambaran

   

Founder and CEO

   

 

Table of Contents

TABLE OF CONTENTS

 

Page

MARKET AND INDUSTRY DATA

 

1

ABOUT THIS PROXY STATEMENT/PROSPECTUS

 

2

FREQUENTLY USED TERMS

 

3

QUESTIONS AND ANSWERS ABOUT THE BUSINESS COMBINATION

 

8

SUMMARY OF THE PROXY STATEMENT/PROSPECTUS

 

25

SELECTED HISTORICAL CONSOLIDATED FINANCIAL INFORMATION OF ILEARNINGENGINES

 

39

SELECTED HISTORICAL FINANCIAL INFORMATION OF ARROWROOT

 

41

SUMMARY UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

 

43

UNAUDITED HISTORICAL COMPARATIVE AND PRO FORMA COMBINED PER SHARE DATA OF ARROWROOT AND ILEARNINGENGINES

 

45

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

 

46

RISK FACTORS

 

48

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

 

107

SPECIAL MEETING OF ARROWROOT STOCKHOLDERS

 

120

PROPOSALS TO BE CONSIDERED BY ARROWROOT’S STOCKHOLDERS PROPOSAL NO. 1 — THE BUSINESS COMBINATION PROPOSAL

 

126

THE BUSINESS COMBINATION

 

127

THE MERGER AGREEMENT

 

159

CERTAIN AGREEMENTS RELATED TO THE BUSINESS COMBINATION

 

171

MATERIAL U.S. FEDERAL INCOME TAX CONSIDERATIONS OF THE REDEMPTION AND THE BUSINESS COMBINATION

 

174

PROPOSAL NO. 2 — THE ORGANIZATIONAL DOCUMENTS PROPOSAL

 

179

PROPOSALS NO. 3 — THE ADVISORY ORGANIZATIONAL DOCUMENTS PROPOSALS

 

180

PROPOSAL NO. 4 — THE ELECTION OF DIRECTORS PROPOSAL

 

183

PROPOSAL NO. 5 — THE EQUITY INCENTIVE PLAN PROPOSAL

 

184

PROPOSAL NO. 6 — THE EMPLOYEE STOCK PURCHASE PLAN PROPOSAL

 

190

PROPOSAL NO. 7 — THE NASDAQ PROPOSAL

 

193

PROPOSAL NO. 8 — THE ADJOURNMENT PROPOSAL

 

195

INFORMATION ABOUT ILEARNINGENGINES

 

196

ILEARNINGENGINES’ EXECUTIVE AND DIRECTOR COMPENSATION

 

209

ILEARNINGENGINES MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 

219

CERTAIN ILEARNINGENGINES RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

 

243

INFORMATION ABOUT ARROWROOT

 

246

ARROWROOT MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 

256

CERTAIN ARROWROOT RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

 

261

DIRECTORS AND EXECUTIVE OFFICERS AFTER THE BUSINESS COMBINATION

 

264

DESCRIPTION OF ARROWROOT’S SECURITIES

 

273

SHARES ELIGIBLE FOR FUTURE SALE

 

283

COMPARISON OF CORPORATE GOVERNANCE AND STOCKHOLDERS’ RIGHTS

 

285

TICKER SYMBOL, MARKET PRICE AND DIVIDEND POLICY

 

288

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

 

289

ADDITIONAL INFORMATION

 

292

WHERE YOU CAN FIND MORE INFORMATION

 

294

INDEX TO FINANCIAL STATEMENTS

 

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MARKET AND INDUSTRY DATA

Certain information contained in this proxy statement/prospectus relates to or is based on studies, publications, surveys and other data obtained from third-party sources and our own internal estimates and research. While we are not aware of any misstatements regarding such third-party information and data presented in this proxy statement/prospectus, such information and data involves risks and uncertainties and is subject to change based on various factors, including, potentially, those discussed under the section entitled “Risk Factors” starting on page 48 of this proxy statement/prospectus. Furthermore, such information and data cannot always be verified with complete certainty due to limits on the availability and reliability of raw data, the voluntary nature of the data gathering process and other limitations and uncertainties inherent in any statistical survey. Finally, while we believe our own internal estimates and research are reliable, and are not aware of any misstatements regarding such information and data presented in this proxy statement/prospectus, such research has not been verified by any independent source. Notwithstanding anything in this proxy statement/prospectus to the contrary, we are responsible for all disclosures in this proxy statement/prospectus.

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ABOUT THIS PROXY STATEMENT/PROSPECTUS

This document, which forms part of a registration statement on Form S-4 filed with the SEC by Arrowroot (File No. 333-273444) (the “Registration Statement”), constitutes a prospectus of Arrowroot under Section 5 of the Securities Act, with respect to the shares of Arrowroot Class A Common Stock to be issued if the Business Combination described below is consummated. This document also constitutes a notice of meeting and a proxy statement under Section 14(a) of the Exchange Act with respect to the special meeting of Arrowroot stockholders at which Arrowroot stockholders will be asked to consider and vote upon a proposal to approve the Business Combination by the approval and adoption of the Merger Agreement, among other matters.

Arrowroot files reports, proxy statements/prospectuses and other information with the SEC as required by the Exchange Act. You can read Arrowroot’s SEC filings, including this proxy statement/prospectus, over the Internet at the SEC’s website at http://www.sec.gov.

If you would like additional copies of this proxy statement/prospectus or if you have questions about the Business Combination or the proposals to be presented at the special meeting, you should contact us by telephone or in writing:

Arrowroot Acquisition Corp.
Address: 4553 Glencoe Ave, Suite 200, Marina Del Rey, California 90292

Telephone: (310) 566-5966

You may also obtain these documents by requesting them in writing or by telephone from our proxy solicitor at:

Okapi Partners LLC
1212 Avenue of the Americas, 17th Floor
New York, NY 10036

Individuals call toll-free: (855) 208-8903
Banks and brokers call: (212) 297-0720
Email: info@okapipartners.com

If you are a stockholder of Arrowroot and would like to request documents, please do so by January 24, 2024 (one week prior to the Special Meeting) to receive them before the special meeting. If you request any documents from us, we will mail them to you by first class mail, or another equally prompt means.

You may also obtain additional information about Arrowroot from documents filed with the SEC by following the instructions in the section entitled “Where You Can Find More Information.”

If you intend to seek redemption of your Public Shares (as defined in the accompanying proxy statement/prospectus), you will need to send a letter demanding redemption and deliver your shares electronically to our transfer agent at least two business days prior to the special meeting in accordance with the procedures detailed under the question “How do I exercise my redemption rights?” in the section entitled “Questions and Answers About the Business Combination.” If you have questions regarding the certification of your position or delivery of your shares, please contact:

Continental Stock Transfer & Trust Company
One State Street Plaza, 30th Floor
New York, New York 10004
E-mail: spacredemptions@continentalstock.com

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FREQUENTLY USED TERMS

In this document:

“Adjournment Proposal” means a proposal to adjourn the special meeting to a later date or dates, if necessary, to permit further solicitation and vote of proxies if, based upon the tabulated vote at the time of the special meeting, there are not sufficient votes to approve one or more proposals presented to stockholders for vote.

“Advisory Organizational Documents Proposals” means the separate proposals for amendments to the Existing Charter, which are reflected in the Proposed Charter, the full text of which is attached to this proxy statement/prospectus as Annex B.

“Alternative Transaction” means any merger, consolidation, or acquisition of stock or assets or any other business combination involving iLearningEngines and any other corporation, partnership or other business organization other than Arrowroot.

“Arrowroot” means Arrowroot Acquisition Corp., a Delaware corporation.

“Arrowroot Alternative Transaction” means any merger, consolidation, or acquisition of stock or assets or any other business combination involving Arrowroot and any other corporation, partnership or other business organization other than iLearningEngines and iLearningEngines’ subsidiaries.

“Arrowroot Board” means Arrowroot’s board of directors prior to the Business Combination.

“Arrowroot Board Recommendations” means the recommendation of the Arrowroot Board to the Arrowroot stockholders that they approve and adopt the Merger Agreement and all other transactions contemplated thereby, approve the Merger and approve the proposals contained in this proxy statement/prospectus.

“Arrowroot Class A Common Stock” means Arrowroot’s Class A common stock, par value $0.0001 per share.

“Arrowroot Class B Common Stock” means Arrowroot’s Class B common stock, par value $0.0001 per share.

“Arrowroot Common Stock” means Arrowroot Class A Common Stock and Arrowroot Class B Common Stock, collectively.

“Arrowroot Proposals” means the proposals to be voted on at the special meeting of Arrowroot stockholders as described in this proxy statement/prospectus.

“Arrowroot Unit” means one share of Arrowroot Class A Common Stock and one half of one redeemable Arrowroot Warrant.

“Arrowroot Warrants” means the Private Placement Warrants and the Public Warrants issued under the Arrowroot Warrant Agreement, with each whole warrant exercisable for one share of Arrowroot Class A Common Stock at an exercise price of $11.50.

“Arrowroot Warrant Agreement” means the Warrant Agreement, dated as of March 4, 2021, by and between Arrowroot and Continental Stock Transfer & Trust Company, governing the outstanding Arrowroot Warrants.

“Broker non-vote” means the failure of an Arrowroot stockholder, who holds his or her shares in “street name” through a broker or other nominee, to give voting instructions to such broker or other nominee.

“Business Combination” means the transactions described in the Merger Agreement.

“Business Combination Proposal” means the proposal to approve the adoption of the Merger Agreement and the Business Combination.

“Business Days” means any day other than Saturday, Sunday or a day on which banks are closed in New York City, New York.

“Closing” means the consummation of the Business Combination.

“Closing Date” means the date on which the Closing occurs.

“Closing Price” means, for each Trading Day, the closing price (based on such Trading Day) of shares of Arrowroot Common Stock on the Trading Market, as reported on Nasdaq.com.

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“Code” means the Internal Revenue Code of 1986, as amended.

“Code of Conduct” means the Code of Business Conduct and Ethics to be adopted by the New iLearningEngines Board and applicable to all of New iLearningEngines’ employees, executive officers and directors.

“Contracted customers” means VARs, direct end customers and end customers who purchase iLearningEngines’ services directly through channel partners, that have purchased one or more of iLearningEngines’ products under a unique customer identification number since iLearningEngines’ inception for iLearningEngines’ perpetual license products and individuals or entities that have an active maintenance and support agreement for at least one of iLearningEngines’ maintenance and support products. Each unique customer identification number constitutes a separate customer regardless of the amount purchased. iLearningEngines may have multiple purchasers of its products within a single organization, each of which may be assigned a unique customer identification number and deemed a separate customer.

“Convertible Notes” means the 15.0% Convertible Notes due in October 2025 and that are convertible into a number of Convertible Note Shares (rounded down to the nearest whole share) equal to (i) the Convertible Note Balance divided by (ii) $10.00.

“Convertible Note Balance” means the outstanding principal under such Convertible Note, plus all accrued and unpaid interest thereon.

“Convertible Note Investment” means the issuance and sale of Convertible Notes to Convertible Note Investors pursuant to the Convertible Note Purchase Agreement.

“Convertible Note Investors” means certain institutional investors, including affiliates of the Sponsor, that have invested, and may in the future invest, in the Convertible Note Investment.

“Convertible Note Purchase Agreement” means that certain convertible note purchase agreement entered into on April 27, 2023, by and among iLearningEngines and the Convertible Note Investors, pursuant to which such Convertible Note Investors may purchase up to an aggregate of $50,000,000 in the Convertible Note Investment, and substantially in the form attached hereto as Annex H, of which Convertible Notes with aggregate principal amount of $17,400,000 have been issued and sold to Convertible Note Investors.

“Convertible Note Shares” means a number of shares of Arrowroot Class A Common Stock (rounded down to the nearest whole share) equal to (i) the Convertible Note Balance divided by (ii) $10.00, issuable in connection with the Business Combination as consideration for iLearningEngines shares upon conversion of the Convertible Notes, in accordance with the terms and subject to the conditions of the Convertible Note Purchase Agreement and the Convertible Notes.

“Customer” or “customers” as used in this proxy statement/prospectus to refer to customers of iLearningEngines means all direct purchasers, including VARs, enterprise end customers and licensed users of iLearningEngines’ platform. See “Information About iLearningEngines — Customers.

“Debt Financing” means iLearningEngines’ entry into a credit facility with certain lenders, pursuant to which the lenders intend to provide iLearningEngines with a four-year credit facility in an aggregate principal amount of $100.0 million with an estimated interest rate of 8.5% for the use of refinancing the existing debt, general corporate purposes, and paying the Business Combination-related transaction fees. See “Unaudited Pro Forma Condensed Combined Financial Information — Description of the Business Combination — Debt Financing.”

“DGCL” means the Delaware General Corporation Law, as amended.

“DOJ” means the Department of Justice.

“Effective Time” means the time of filing of a certificate of merger with the Secretary of State of the State of Delaware upon consummation of the Merger or such later time as may be agreed by the parties to the Merger Agreement and specified in such certificate of merger.

“Election of Directors Proposal” means the proposal to elect, effective at the Closing, five directors to serve staggered terms on our board of directors until the 2024, 2025 and 2026 annual meetings of stockholders, respectively, and until their respective successors are duly elected and qualified.

“Employee Stock Purchase Plan Proposal” means the proposal to approve and adopt the employee stock purchase plan established to be effective after the Closing of the Business Combination.

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“Enterprise end customer” means entities or organizations that have 250 or more licensed users on iLearningEngines’ AI and automation platform. See “Information About iLearningEngines — Customers.

“Equity Incentive Plan Proposal” means the proposal to approve and adopt the incentive equity plan established to be effective after the Closing of the Business Combination.

“Excess Shares” means the Public Shares held in excess of 15% of the total Public Shares issued which any individual public shareholder, together with any affiliate of such shareholder or any other person with whom such shareholder is acting in concert or as a “group” (as defined under Section 13 of the Exchange Act), that exceeds 15% of the total Public Shares issued by Arrowroot; such Excess Shares will be restricted from seeking redemption rights without Arrowroot’s prior consents.

“Exchange Act” means the U.S. Securities Exchange Act of 1934, as amended.

“Existing Charter” means Arrowroot’s Amended and Restated Certificate of Incorporation, dated as of March 3, 2021, as amended on March 1, 2023.

“Founder Shares” means the outstanding shares of Arrowroot Class B Common Stock originally issued to the Sponsor.

“Fourth Promissory Note” means the unsecured promissory note in the principal amount of $2,000,000 in favor of the Sponsor Arrowroot issued on June 13, 2023.

“FTC” means the Federal Trade Commission.

“GAAP” means U.S. generally accepted accounting principles.

“HSR Act” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended.

“iLearningEngines” means iLearningEngines Inc., a Delaware corporation, prior to the Business Combination, which will be renamed iLearningEngines Holdings, Inc.

“iLearningEngines Board” means iLearningEngines’ board of directors prior to the Business Combination.

“iLearningEngines Business Combination Proposal” means the proposal to the iLearningEngines stockholders to consider and vote upon the proposal to approve the adoption of the Merger Agreement and the Business Combination.

“iLearningEngines Capital Stock” means iLearningEngines Common Stock.

“iLearningEngines Common Stock” means the shares of common stock of iLearningEngines, par value $0.0001 per share, other than iLearningEngines Restricted Stock.

“iLearningEngines Restricted Stock” means shares of common stock of iLearningEngines that are subject to vesting in accordance with a contract between iLearningEngines and the holder of such shares, par value $0.0001 per share.

“iLearningEngines RSU” means each outstanding restricted stock unit (“RSU”) award covering shares of iLearningEngines Common Stock under iLearningEngines’ equity incentive plans, or, if the context otherwise requires, any specific iLearningEngines equity incentive plan.”

“iLearningEngines Warrant” means each outstanding warrant to purchase shares of iLearningEngines Common Stock.”

“Investment Company Act” means the Investment Company Act of 1940, as amended.

“IPO” means Arrowroot’s initial public offering of Arrowroot Units, consummated on March 4, 2021.

“IPO Promissory Note” means an unsecured promissory note the Sponsor issued to the Company on December 21, 2020, pursuant to which the Company may borrow up to an aggregate principal amount of $300,000.

“JOBS Act” means the Jumpstart Our Business Startups Act of 2012, as amended.

“Key Company Stockholders” means the persons and entities listed on Schedule I of the Stockholder Support Agreement.

“Letter Agreement” means the Letter Agreement, dated as of March 4, 2021, by and between Arrowroot and Cantor Fitzgerald & Co., entered into in connection with the IPO.

“Merger” means the merger of Merger Sub with and into iLearningEngines.

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“Merger Agreement” means the Agreement and Plan of Merger and Reorganization, dated as of April 27, 2023, as may be amended from time to time, by and among Arrowroot, Merger Sub and iLearningEngines.

“Merger Consideration” means a number of shares of Arrowroot Class A Common Stock equal to the quotient obtained by dividing (i) the sum of (a) the base purchase price, minus (b) the dollar value of the Company incentive amount plus (c) the aggregate exercise price of the Company warrants that are issued and outstanding immediately prior to the Effective Time, minus (d) the aggregate amount of Convertible Note Balance by (ii) $10.00.

“Merger Sub” means ARAC Merger Sub, Inc., a Delaware corporation.

“Minimum Cash Condition” means the condition requiring the Available Acquiror Cash (as defined in the Merger Agreement) to be no less than $100,000,000.

“Nasdaq” means the Nasdaq Capital Market.

“Nasdaq Proposal” means the proposal to approve, for purposes of complying with the applicable listing rules of the Nasdaq Stock Market, the issuance of shares of Arrowroot Class A Common Stock to the iLearningEngines stockholders in the Merger pursuant to the Merger Agreement and to the Convertible Note Investors in the Convertible Note Investment.

“New iLearningEngines” means Arrowroot immediately following the consummation of the Business Combination and approval of the Proposed Charter.

“New iLearningEngines Board” means New iLearningEngines’ board of directors following the consummation of the Business Combination and the election of directors pursuant to the Election of Directors Proposal.

“New iLearningEngines Common Stock” means, following the consummation of the Business Combination and approval of the Proposed Charter, New iLearningEngines’ common stock, par value $0.0001 per share, as authorized under the Proposed Charter.

“Organizational Documents Proposal” means the proposal to be considered at the special meeting to approve and adopt, assuming the Business Combination Proposal is approved and adopted, the Proposed Charter and Proposed Bylaws of New iLearningEngines as the post-Business Combination company, which, if approved, would take effect substantially concurrently with the Effective Time.

“Permitted Withdrawals” means the withdrawals Arrowroot is allowed to take from the Trust Account for taxes payable, and in the event of the dissolution of Arrowroot, up to $100,000 of interest to pay dissolution expenses.

“PIPE Investors” means certain third-party investors that are expected to enter into subscription agreements pursuant to which the PIPE Investors are anticipated to respectively subscribe for 700,000 newly-issued shares of Class A Common Stock to be issued at the closing of the merger. For more information see “Unaudited Pro Forma Condensed Combined Financial Information — Description of the Business Combination — The PIPE Investment.”

“Polar” means Polar Multi-Strategy Master Fund, a Cayman Islands exempted company.

“Preferred Stock” means Arrowroot Preferred stock, par value $0.0001 per share.

“Private Placement” means the sale of the Private Placement Warrants that occurred simultaneously with the completion of the IPO.

“Private Placement Warrants” means the warrants to purchase shares of Arrowroot Class A Common Stock sold in the Private Placement to our Sponsor that occurred simultaneously with the completion of the IPO.

“Promissory Notes” means, collectively, the IPO Promissory Note, First Promissory Note, Second Promissory Note, Third Promissory Note and Fourth Promissory Note.

“Proposed Bylaws” means the proposed Amended and Restated Bylaws of Arrowroot, the full text of which is attached to this proxy statement/prospectus as Annex C.

“Proposed Charter” means the proposed Second Amended and Restated Certificate of Incorporation of Arrowroot, the full text of which is attached to this proxy statement/prospectus as Annex B.

“Public Shares” means shares of Arrowroot Class A Common Stock issued as part of the units sold in the IPO.

“Public Stockholders” means the holders of shares of Arrowroot Class A Common Stock.

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“Public Warrants” means the redeemable warrants included in the Arrowroot Units sold in the IPO, each whole warrant of which is exercisable for one share of Arrowroot Class A Common Stock, in accordance with its terms.

“Record Date” means January 18, 2024, the record date for the special meeting of Arrowroot stockholders as described in this proxy statement/prospectus.

“Requisite Approval” means the written consent or affirmative vote of the holders of a majority of the outstanding shares of iLearningEngines Common Stock.

“Sarbanes-Oxley Act” means the Sarbanes-Oxley Act of 2002.

“SEC” means the U.S. Securities and Exchange Commission.

“Second Promissory Note” means an unsecured promissory note in the principal amount of $500,000 in favor of the Sponsor Arrowroot issued on February 23, 2023.

“Securities Act” means the U.S. Securities Act of 1933, as amended.

“Sponsor” means Arrowroot Acquisition LLC, a Delaware limited liability company.

“Sponsor Support Agreement” means that Sponsor Support Agreement, dated as of April 27, 2023, by and among Arrowroot, iLearningEngines, the Sponsor and certain of Arrowroot’s officers and directors.

“Stockholder Support Agreement” means that Stockholder Support Agreement, dated as of April 27, 2023, by and among Arrowroot, iLearningEngines and certain of iLearningEngines’ stockholders.

“Trading Market” means the stock market on which shares of Arrowroot Common Stock shall be trading at the time of determination of the Closing Price.

“Trust Account” means the trust account that holds a portion of the proceeds of the IPO and the concurrent sale of the Private Placement Warrants.

“VAR” or “VARs” means value-added resellers who typically develop their own solutions which integrate other software and platforms and then sell their solutions directly to their end customers. See “Information About iLearningEngines — Customers.

“2020 Term Loans” means the term loan facility pursuant to that Loan and Security Agreement, dated as of December 30, 2020, by and between iLearningEngines Inc. and Venture Lending & Leasing IX, Inc.

“2021 Term Loans” means the term loan facility pursuant to that Loan and Security Agreement, dated as of October 21, 2021, by and between iLearningEngines Inc., Venture Lending & Leasing IX, Inc. and WTI Fund X, Inc.

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QUESTIONS AND ANSWERS ABOUT THE BUSINESS COMBINATION

The following questions and answers briefly address some commonly asked questions about the proposals to be presented at the special meeting of Arrowroot stockholders, including with respect to the proposed Business Combination. The following questions and answers may not include all the information that is important to Arrowroot and iLearningEngines stockholders. Stockholders are urged to read carefully this entire proxy statement/prospectus, including the financial statements and annexes attached hereto and the other documents referred to herein.

Questions and Answers about the Special Meeting of Arrowroot’s Stockholders and the Related Proposals

Q.     Why am I receiving this proxy statement/prospectus?

A.     Arrowroot has entered into the Merger Agreement with iLearningEngines and the other parties thereto pursuant to which Merger Sub will merge with and into iLearningEngines, whereupon the separate corporate existence of Merger Sub will cease and iLearningEngines will be the surviving company and continue in existence as a wholly owned subsidiary of Arrowroot. A copy of the Merger Agreement is attached to this proxy statement/prospectus as Annex A.

Arrowroot stockholders are being asked to consider and vote upon the Business Combination Proposal to approve the adoption of the Merger Agreement and the Business Combination, among other proposals.

Arrowroot Units, Arrowroot Class A Common Stock and the Public Warrants are currently listed on the Nasdaq Capital Market, under the symbols “ARRWU,” “ARRW,” and “ARRWW,” respectively. Arrowroot has applied to continue the listing of New iLearningEngines Common Stock and Public Warrants on the Nasdaq Capital Market under the symbol “AILE” and “AILEW” upon the Closing. At the Closing, each Arrowroot Unit will separate into its components consisting of one share of Arrowroot Class A Common Stock and one-half of one redeemable Public Warrant, and therefore there will be no Nasdaq listing of the Arrowroot Units following the consummation of the Business Combination.

The Sponsor and Arrowroot’s officers and directors have agreed to (a) vote all of their shares of Arrowroot Class B Common Stock and all of their shares of Arrowroot Class A Common Stock in favor of the Business Combination, and (b) certain restrictions on their shares of Arrowroot Common Stock. In addition, in connection with an election not to redeem Public Shares by any holder of Public Shares, each of iLearningEngines and Arrowroot agreed, as necessary, to consent to the assignment or forfeiture of shares of Arrowroot Class A Common Stock issuable to iLearningEngines or shares of Arrowroot Class A Common Stock issuable upon conversion of the Arrowroot Class B Common Stock held by the Sponsor (with the corresponding shares of Arrowroot Class B Common Stock irrevocably forfeited by the Sponsor and canceled), as applicable, to such non-redeeming stockholders as further described in the accompanying proxy statement/prospectus (such assigned or forfeited shares, the “Incentive Shares”).

At the Closing, as a result of the Business Combination, (i) each outstanding share of iLearningEngines Common Stock (excluding shares the holders of which perfect rights of appraisal under Delaware law) will be cancelled and automatically converted into the right to receive a number of shares of Arrowroot Class A Common Stock equal to the product of such shares and an exchange ratio, (I) the numerator of which is equal to (1)(A) $1,285,000,000, minus (B) the dollar value of shares of Incentive Shares (as defined below) forfeited or assigned by the Company, such dollar value not to exceed $100 million, plus (C) the aggregate exercise price of the iLearningEngines warrants, minus (D) the Convertible Note Balance (as defined below), divided by (2) $10.00, and (II) the denominator of which is equal the fully-diluted capitalization of iLearningEngines immediately prior to the consummation of the Business Combination, including shares of restricted stock of iLearningEngines, shares of iLearningEngines issuable upon settlement of iLearningEngines restricted stock units and shares of iLearningEngines issuable upon exercise of iLearningEngines warrants, but excluding shares issuable upon conversion of the Convertible Notes (as defined below) (the “Exchange Ratio”), (ii) each vested iLearningEngines RSU or portion thereof will be cancelled and automatically converted into the right to receive, subject to settlement and delivery, a number of shares of Arrowroot Class A Common Stock equal to the product of such shares and the Exchange Ratio, (iii) each unvested iLearningEngines RSU or portion thereof will be cancelled and automatically converted into a right to receive a number of restricted stock units of New iLearningEngines Common Stock equal to the product of such shares and the Exchange Ratio, with substantially the same terms and conditions as were applicable to such iLearningEngines RSU immediately

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prior to the consummation of the Business Combination, (iv) each share of vested iLearningEngines Restricted Stock will be cancelled and automatically converted into the right to receive a number of shares of Arrowroot Class A Common Stock equal to the product of such shares and Exchange Ratio, (v) each share of unvested iLearningEngines Restricted Stock will be canceled and converted into the right to receive a number of restricted shares of New iLearningEngines Common Stock, with substantially the same terms and conditions as were applicable to such share of iLearningEngines Restricted Stock immediately prior to the consummation of the Business Combination, (vi) each Convertible Note will automatically converted into the right to receive a number of shares of Arrowroot Class A Common Stock equal to (x) the Convertible Note Balance divided by (y) $10.00, and (vii) each iLearningEngines Warrant will be converted into the right to receive a number of shares of Arrowroot Class A Common Stock determined in accordance with the terms of such iLearningEngines Warrant. See the section entitled “The Business Combination” on page 127 of the attached proxy statement/prospectus for further information on the consideration being paid to the stockholders of iLearningEngines.

This proxy statement/prospectus and its annexes contain important information about the proposed Business Combination and the proposals to be acted upon at the special meeting. You should read this proxy statement/prospectus and its annexes carefully and in their entirety. This document also constitutes a prospectus of Arrowroot with respect to the Arrowroot Class A Common Stock issuable in connection with the Business Combination.

Q.     What matters will stockholders consider at the special meeting?

A.     The Business Combination Proposal — a proposal to approve the adoption of the Merger Agreement and the Business Combination.

The Organizational Documents Proposal — a proposal to approve the Proposed Charter and the Proposed Bylaws.

The Advisory Organizational Documents Proposals — four proposals to amend Arrowroot’s Existing Charter.

The Election of Directors Proposal — a proposal to elect the directors comprising the board of directors of New iLearningEngines.

The Equity Incentive Plan Proposal — a proposal to approve and adopt the incentive equity plan established to be effective after the Closing of the Business Combination.

The Employee Stock Purchase Plan Proposal — a proposal to approve and adopt the employee stock purchase plan established to be effective after the Closing of the Business Combination.

The Nasdaq Proposal — a proposal to approve, for purposes of complying with the applicable listing rules of Nasdaq, the issuance of shares of Arrowroot Class A Common Stock to the iLearningEngines stockholders in the Merger pursuant to the Merger Agreement and to the Convertible Note Investors in the Convertible Note Investment in connection with the Business Combination.

The Adjournment Proposal — a proposal to adjourn the special meeting to a later date or dates, if necessary, to permit further solicitation and vote of proxies if, based upon the tabulated vote at the time of the special meeting, there are not sufficient votes to approve one or more proposals presented to stockholders for vote.

Q.     What vote is required to approve the proposals presented at the special meeting?

A.     The approval of the Organizational Documents Proposal requires the affirmative vote (in person or by proxy) of the majority of the issued and outstanding shares of each of the Arrowroot Class A Common Stock and Arrowroot Class B Common Stock, voting separately, as well as the vote of a majority of the issued and outstanding shares of Arrowroot Class A Common Stock and Arrowroot Class B Common Stock, voting together as a single class. Accordingly, an Arrowroot stockholder’s failure to vote by proxy or to vote in person online at the special meeting, an abstention from voting or a broker non-vote will have the same effect as a vote against the Organizational Documents Proposals.

The approval of the Business Combination Proposal, the Advisory Organizational Documents Proposals, Equity Incentive Plan Proposal, Employee Stock Purchase Plan Proposal, Nasdaq Proposal and Adjournment Proposal require the affirmative vote (in person online or by proxy) of the holders of a majority of the shares of Arrowroot

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Common Stock, voting together as a single class, that are cast thereon at the special meeting. Accordingly, an Arrowroot stockholder’s failure to vote by proxy or to vote in person online at the special meeting, an abstention from voting or a broker non-vote will have no effect on the outcome of any vote on these Proposals.

The approval of the election of each director nominee pursuant to the Election of Directors Proposal requires the affirmative vote of the holders of a plurality of the shares of Arrowroot Common Stock, voting together as a single class, that are cast thereon at the special meeting. Accordingly, an Arrowroot stockholder’s failure to vote by proxy or to vote in person online at the special meeting, an abstention from voting or a broker non-vote will have no effect on the outcome of any vote on the Election of Directors Proposal.

Pursuant to the Merger Agreement, the Business Combination is conditioned upon the approval of holders of at least sixty-five percent (65%) of the outstanding shares of Arrowroot Common Stock entitled to vote, who attend and vote thereupon at the special meeting.

As of the Record Date, our Sponsor, and current and former officers and directors collectively owned approximately 61.78% of our issued and outstanding shares of Arrowroot Class A Common Stock and Arrowroot Class B Common Stock, including all of the shares of Arrowroot Class B Common Stock. The Sponsor, officers and directors have agreed to vote any shares of Arrowroot Class A Common Stock and Arrowroot Class B Common Stock owned by them in favor of the Business Combination pursuant to the Letter Agreement and the Sponsor Support Agreement. Accordingly, assuming all of the outstanding shares of Arrowroot Common Stock vote “FOR” each proposal, each of the Advisory Organizational Documents Proposals, Business Combination Proposal, Equity Incentive Plan Proposal, Employee Stock Purchase Plan Proposal, Nasdaq Proposal and Adjournment Proposal will be approved even if none of the outstanding Arrowroot Class A Common Stock vote in favor of such proposals and the Organizational Documents Proposal will require the affirmative vote of a majority of the Arrowroot Class A Common Stock (in person or by proxy) in order to be approved. Directors are elected by a plurality of the votes cast, in person online or by proxy at the special meeting. This means that the five nominees will be elected if they receive more affirmative votes than any other nominee for the same position.

Q.     Are any of the proposals conditioned on one another?

A.     The Organizational Documents Proposal, Advisory Organizational Documents Proposals, Election of Directors Proposal, Equity Incentive Plan Proposal and Employee Stock Purchase Plan Proposal are all conditioned on the approval of the Business Combination Proposal and the Nasdaq Proposal. The Nasdaq Proposal is conditioned on the approval of the Business Combination Proposal. The Business Combination Proposal is conditioned on the approval of the Nasdaq Proposal and the Organizational Documents Proposal. The Adjournment Proposal does not require the approval of any other proposal to be effective.

It is important for you to note that in the event that the Business Combination Proposal is not approved, then Arrowroot will not consummate the Business Combination. If Arrowroot does not consummate the Business Combination and fails to complete an initial business combination by July 6, 2023 (or up to February 4, 2024, if the Arrowroot Board elects to extend the period of time to consummate a business combination on a monthly basis for up to seven times by an additional one month each time after July 6, 2023 if requested by the Sponsor (the “Extension Deadline”)), then Arrowroot will be required to dissolve and liquidate. The Arrowroot Board approved a draw of an aggregate of $1,760,000 (the “Extension Funds”) pursuant to the Third Promissory Note (as defined below), which Extension Funds were deposited into the Trust Account. The deposit enables Arrowroot to extend the date by which it must complete its initial business combination to February 4, 2024 (the “Additional Extension”). The Additional Extension is the final one-month extension permitted under the Existing Charter, and provides the Company with additional time to complete its initial business combination.

Q.     What will happen upon the consummation of the Business Combination?

A.     On the Closing Date, Merger Sub will be merged with and into iLearningEngines, with iLearningEngines surviving the Merger as a wholly owned subsidiary of Arrowroot. The Merger will have the effects specified under Delaware law. At the Closing, as a result of the Business Combination, (i) each outstanding share of iLearningEngines Common Stock (excluding shares the holders of which perfect rights of appraisal under Delaware law) will be cancelled and automatically converted into the right to receive a number of shares of Arrowroot Class A Common Stock equal to the product of such shares and the Exchange Ratio, (ii) each vested iLearningEngines RSU or portion thereof will be cancelled and automatically converted into the right to receive, subject to settlement and

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delivery, a number of shares of Arrowroot Class A Common Stock equal to the product of such shares and the Exchange Ratio, (iii) each unvested iLearningEngines RSU or portion thereof will be cancelled and automatically converted into a right to receive a number of restricted stock units of New iLearningEngines equal to the product of such units and the Exchange Ratio, with substantially the same terms and conditions as were applicable to such iLearningEngines RSU immediately prior to the consummation of the Business Combination, (iv) each share of vested iLearningEngines Restricted Stock will be cancelled and automatically converted into the right to receive a number of shares of Arrowroot Class A Common Stock equal to the product of such shares and the Exchange Ratio, (v) each share of unvested iLearningEngines Restricted Stock will be cancelled and converted into the right to receive a number of restricted shares of Arrowroot Class A Common Stock, with substantially the same terms and conditions as were applicable to such share of iLearningEngines restricted stock immediately prior to the consummation of the Business Combination, (vi) each Convertible Note will automatically convert into the right to receive a number of shares of Arrowroot Class A Common Stock equal to (x) the Convertible Note Balance divided by (y) $10.00, and (vii) each iLearningEngines Warrant will be converted into the right to receive a number of shares of Arrowroot Class A Common Stock determined in accordance with the terms of such iLearningEngines Warrant. Following the consummation of the Business Combination and upon effectiveness of the Proposed Charter, all outstanding shares of Arrowroot Class A Common Stock will be reclassified as shares of New iLearningEngines Common Stock on a one-to-one basis. Following the consummation of the Business Combination and upon effectiveness of the Proposed Charter, all outstanding shares of Arrowroot Class A Common Stock will be reclassified as shares of New iLearningEngines Common Stock on a one-to-one basis.

Q.     Why is Arrowroot proposing the Business Combination Proposal?

A.     Arrowroot was organized for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses. Arrowroot is not limited to any particular industry or sector.

Arrowroot received net proceeds of $287,500,000 from its IPO (including from the exercise by the underwriters of their over-allotment option) and sale of the Private Placement Warrants, which was placed into the Trust Account immediately following the IPO. In accordance with the Existing Charter, the funds held in the Trust Account will be released upon the consummation of the Business Combination. See the question “What happens to the funds held in the Trust Account upon consummation of the Business Combination?” below.

As of the Record Date, there were 4,445,813 shares of Arrowroot Class A Common Stock issued and outstanding and 7,187,500 shares of Arrowroot Class B Common Stock issued and outstanding. In addition, as of the Record Date, there were 22,625,000 Arrowroot Warrants issued and outstanding, consisting of 14,375,000 Public Warrants and 8,250,000 Private Placement Warrants. Each whole Arrowroot Warrant entitles the holder thereof to purchase one share of Arrowroot Class A Common Stock at a price of $11.50 per share. The Arrowroot Warrants will become exercisable 30 days after the completion of a business combination, and expire at 5:00 p.m., New York City time, five years after the completion of a business combination or earlier upon redemption or liquidation. The Private Placement Warrants, however, are non-redeemable so long as they are held by their initial purchasers or their permitted transferees.

Under the Existing Charter, Arrowroot must provide all holders of Public Shares with the opportunity to have their Public Shares redeemed upon the consummation of Arrowroot’s initial business combination in conjunction with a stockholder vote.

Q.     Who is iLearningEngines?

A.      iLearningEngines is an out-of-the-box AI platform that empowers customers to “productize” their institutional knowledge and generate and infuse insights in the flow-of-work to drive mission critical business outcomes. iLearningEngines’ customers “productize” their institutional knowledge by transforming it into actionable intellectual property that enhances outcomes for employees, customers and other stakeholders. Their platform enables enterprises to build intelligent “Knowledge Clouds” that incorporate large volumes of structured and unstructured information across disparate internal and external systems, and to automate organizational processes that leverage these Knowledge Clouds to improve performance. Their Learning Automation offering addresses the corporate learning market and their Information Intelligence offering addresses the information management, analytics and automation markets. They combine their offerings with vertically focused capabilities and data models to operationalize AI and automation to effectively and efficiently address critical challenges facing their customers. Their customers utilize their platform to analyze and address employee knowledge gaps, provide personalized

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cognitive assistants or chatbots, and make predictive decisions based on real-time insights. They serve more than 1,000 enterprise end customers with over 4 million licensed users across a variety of verticals, including education, healthcare, insurance, manufacturing, cybersecurity and energy and utilities. In 2022, they generated $309 million of revenue, representing 42% growth over the prior year, with 70% gross margins and positive GAAP net income.

Q.     What equity stake will current Arrowroot stockholders and iLearningEngines stockholders have in New iLearningEngines?

A.     It is anticipated that, upon the completion of the Business Combination, the ownership of New iLearningEngines will be as follows:

        current iLearningEngines stockholders will own 123,480,367 shares of New iLearningEngines Common Stock (excluding any Convertible Notes Shares), representing 87.5% of the total shares outstanding under the no redemption scenario, 88.1% of the total shares outstanding under the 50% of maximum redemption scenario and 88.8% of the total shares outstanding under the maximum redemption scenario;

        the Convertible Note Investors (not including affiliates of the Sponsor) will own 2,110,895 shares of New iLearningEngines Common Stock acquired as Convertible Note Shares, representing 1.5% of the total shares outstanding under the no redemption scenario, 1.5% of the total shares outstanding under the 50% of maximum redemption scenario and 1.5% of the total shares outstanding under the maximum redemption scenario;

        the PIPE Investors will own 700,000 shares of New iLearningEngines Common Stock, representing 0.5% of the total shares outstanding under the no redemption scenario, 0.5% of the total shares outstanding under the 50% of maximum redemption scenario and 0.5% of the total shares outstanding under the maximum redemption scenario;

        current and former affiliates of our Sponsor will own 10,391,609 shares of New iLearningEngines Common Stock (including 2,810,846 shares acquired as Convertible Note Shares and 393,263 shares from conversion of Arrowroot Promissory Notes), representing 7.3% of the total shares outstanding under the no redemption scenario, 7.4% of the total shares outstanding under the 50% of maximum redemption scenario and 7.4% of the total shares outstanding under the maximum redemption scenario; and

        Under the no redemption scenario, current Arrowroot Public Stockholders will own 4,445,813 shares of New iLearningEngines Common Stock (excluding any Convertible Note Shares), representing 3.2% of the total shares outstanding, under the 50% of maximum redemption scenario, current Arrowroot stockholders will own 3,472,907 shares of New iLearningEngines Common Stock (excluding any Convertible Note Shares), representing 2.5% of the total shares outstanding and under the maximum redemption scenario, current Arrowroot stockholders will own 2,500,000 shares of New iLearningEngines Common Stock (excluding any Convertible Note Shares), representing 1.8% of the total shares outstanding.

The numbers of shares and percentage interests set forth above (i) reflect different redemption scenarios laid out below, (ii) assumes an Exchange Ratio equal to 0.85644, and (iii) are calculated based on the capitalization of iLearningEngines and Arrowroot as of December 31, 2023.

No redemption scenario:    This presentation assumes that no Public Stockholders exercise redemption rights with respect to their Public Shares.

50% of maximum redemption scenario:    This presentation assumes that the Public Stockholders holding approximately 22% of the Public Shares exercise redemption rights with respect to their Public Shares (assuming that Polar purchases and elects not to redeem 2,500,000 Public Shares as per the Forward Purchase Agreement, as defined below). This scenario assumes that 972,906 Public Shares are redeemed for an aggregate redemption payment of approximately $10.08 million, including a pro rata portion of interest accrued on the Trust Account of $0.348 million. This 50% of maximum redemption scenario is based on a minimum cash condition of $100 million at the Closing of the Business Combination, consisting of Trust Account funds, and Convertible Note Investment proceeds and certain private placement and debt financing proceeds less transaction expenses and the aggregate amount of cash proceeds that will be required to satisfy the redemption of the Public Shares.

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Maximum redemption scenario:    This presentation assumes that the Public Stockholders holding approximately 44% of the Public Shares exercise redemption rights with respect to their Public Shares (assuming that Polar purchases and elects not to redeem 2,500,000 Public Shares as per the Forward Purchase Agreement). This scenario assumes that 1,945,813 Public Shares are redeemed for an aggregate redemption payment of approximately $20.2 million, including a pro rata portion of interest accrued on the Trust Account of $0.697 million. This maximum redemption scenario is based on a minimum cash condition of $100 million at the Closing of the Business Combination, consisting of Trust Account funds, and Convertible Note Investment proceeds and certain private placement and debt financing proceeds less transaction expenses and the aggregate amount of cash proceeds that will be required to satisfy the redemption of the Public Shares.

For the ownership percentages presented above, the ownership percentages with respect to New iLearningEngines do not take into account (i) the issuance of any additional shares upon the closing of the Business Combination under the 2024 Plan or ESPP, (ii) any exercise of Public Warrants or Private Placement Warrants to purchase New iLearningEngines Common Stock that will be outstanding immediately following the Effective Time, or (iii) any shares of New iLearningEngines Common Stock covered by unvested iLearningEngines RSUs that will be held by current equityholders of iLearningEngines immediately following the Effective Time. The presentation set forth above also does not give effect to any performance vesting provisions applicable to any of the Arrowroot Class B Common Stock. The numbers of shares and percentage interests set forth above have been presented for illustrative purposes only and do not necessarily reflect what New iLearningEngines’ share ownership will be upon completion of the Business Combination. See the section entitled “Unaudited Pro Forma Condensed Combined Financial Information.”

Q.     Are there any arrangements to enable ARRW to obtain sufficient funds, together with the proceeds in its Trust Account, to satisfy the Minimum Cash Condition?

A.     In order to satisfy the Minimum Cash Condition for the benefit of iLearningEngines, the Available Acquiror Cash (as defined in the Merger Agreement) is required to be at least $100 million or iLearningEngines would need to agree to revise or waive the condition in order to consummate the Business Combination. The funds remaining in the Trust Account (approximately $46.1 million as of September 30, 2023) on the Closing Date that are not redeemed in connection with the Business Combination will count toward the Available Acquiror Cash. In addition, proceeds from any PIPE financing received by Arrowroot prior to or substantially concurrently with the Closing, Permitted Interim Financing (as defined in the Merger Agreement) actually received by iLearningEngines prior to or substantially concurrently with the Closing provided by one or more third parties unaffiliated with any Company Securityholder (as defined in the Merger Agreement) or any of their respective affiliates, the proceeds from the issuance of any debt security by Arrowroot (excluding any Working Capital Loans) that is actually funded to Arrowroot prior to or substantially concurrently with the Closing, solely to the extent that such financing proceeds exceed the outstanding principal and accrued interest (as of the Closing) of any indebtedness required to be repaid by Arrowroot or iLearningEngines in connection with the Closing or the funding or such debt financing, the proceeds of the issuance of any debt security by iLearningEngines provided by one or more third parties unaffiliated with any Company Securityholder or any of their respective affiliates that is actually funded to iLearningEngines prior to or substantially concurrently with the Closing, solely to the extent that such financing proceeds exceed the outstanding principal and accrued interest (as of the Closing) of any indebtedness required to be repaid by Arrowroot or iLearningEngines in connection with the Closing or the funding or such debt financing, will also count toward the Available Acquiror Cash. Available Acquiror Cash is reduced by Permitted Transaction Expenses (as defined in the Merger Agreement) (approximately $17 million as of January 5, 2024) and any Excess Transaction Expenses (as defined in the Merger Agreement) ($0 as of January 5, 2024) to be paid by Arrowroot against a corresponding cancellation of shares of Arrowroot Common Stock held by Sponsor. As of the date of this proxy statement/prospectus, iLearningEngines and Arrowroot have not obtained the Debt Financing or any subscriptions for a PIPE transaction or entered into any non-redemption agreements. In the event that Arrowroot obtains the Debt Financing, or such subscriptions or enters into non-redemption agreements prior to the Closing, Arrowroot will disclose the Debt Financing, such subscriptions and/or non-redemption agreements in a supplement to this proxy statement/prospectus. Even if there are no redemptions, Arrowroot and iLearningEngines would need to obtain at least $100 million of additional financing in order to satisfy the Minimum Cash Condition.

On April 26, 2023, Arrowroot and Polar entered into the Forward Purchase Agreement, pursuant to which, among other things, Arrowroot agreed to purchase up to 2,500,000 shares of Arrowroot Class A Common Stock from Polar at the price equal to the redemption price of the Public Shares at the Closing, plus $0.60 (the “FPA Redemption Price”). In exchange for Arrowroot’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

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Agreement provides that at Closing, Arrowroot will pre-pay to Polar for the forward purchase an amount equal to the Prepayment Amount (as defined in the Forward Purchase Agreement). The Maturity Date of the forward transaction is one year from the Closing of the Business Combination, 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 Arrowroot. If Polar terminates the Forward Purchase Agreement with respect to some or all of the shares prior to the Maturity Date, Polar will return the terminated shares and Arrowroot will make a payment equal to the number of such terminated shares multiplied by the FPA Redemption Price. Arrowroot can terminate the Forward Purchase Agreement prior to the redemption deadline if Arrowroot pays Polar a $300,000 break-up fee. On the Maturity Date, Arrowroot 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, minus the Prepayment Amount.

Depending on the level of redemptions preceding the special meeting, Arrowroot may not currently have in place sufficient financing arrangements, on a committed basis, to satisfy the Minimum Cash Condition. Therefore, in order for the Business Combination to close, Arrowroot may need to obtain additional financing or iLearningEngines will need to waive or reduce the Minimum Cash Condition.

Q.     Who will be the officers and directors of Arrowroot if the Business Combination is consummated?

A.     Immediately following the consummation of the Business Combination, it is expected that the New iLearningEngines Board will be comprised of five members, including Harish Chidambaran, Balakrishnan Arackal, Matthew Barger, Bruce Mehlman and Thomas Olivier. Immediately following the consummation of the Business Combination, we expect that the executive officers of New iLearningEngines will be: Harish Chidambaran as Chief Executive Officer, S. Farhan Naqvi as Chief Financial Officer and Treasurer, Balakrishnan Arackal as President and Chief Business Officer, David Samuels as Chief Legal Officer, Executive Vice President Corporate Affairs and Secretary, and Ramakrishnan Parameswaran as Senior Vice President — Technology and Products.

Q.     What conditions must be satisfied to complete the Business Combination?

A.     There are a number of closing conditions in the Merger Agreement, including that Arrowroot’s stockholders have approved and adopted the Merger Agreement. For a summary of the conditions that must be satisfied or waived prior to completion of the Business Combination, see the section entitled “The Merger Agreement — Conditions to Closing of the Merger Agreement.”

Q.     What happens if I sell my shares of Arrowroot Class A Common Stock before the special meeting?

A.     The Record Date for the special meeting will be earlier than the date the Business Combination is expected to be completed. If you transfer your shares of Arrowroot Class A Common Stock after the Record Date, but before the special meeting, unless the transferee obtains from you a proxy to vote those shares, you will retain your right to vote at the special meeting.

Q.     Do iLearningEngines’ stockholders need to approve the Business Combination?

A.     Yes. Shortly following the execution of the Merger Agreement, iLearningEngines and the holders of iLearningEngines Capital Stock holding a majority of the shares of iLearningEngines Common Stock outstanding as of the date of the Merger Agreement entered into the Stockholder Support Agreement, pursuant to which, among other things and subject to the terms and conditions therein, such iLearningEngines stockholders agreed to vote or provide their written consent with respect to all iLearningEngines Common Stock beneficially owned by such stockholders in favor of adoption and approval of the Merger Agreement and the approval of the transactions contemplated by the Merger Agreement, including the Business Combination, and, among other things, not to (a) transfer any of their iLearningEngines Common Stock (or enter into any arrangement with respect thereto) or (b) enter into any agreement, or amend or modify any existing agreement, that would restrict, limit or interfere with the Stockholder Support Agreement. Collectively, as of September 30, 2023, the iLearningEngines stockholders who had previously entered into the Stockholder Support Agreement held approximately 83% of the outstanding shares of iLearningEngines Capital Stock on a fully diluted basis. For further information, please see the section entitled “Certain Agreements Related to the Business Combination — Stockholder Support Agreement.”

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Q.     May Arrowroot or Arrowroot’s directors, officers or advisors, or their affiliates, purchase shares in connection with the Business Combination?

A.     In connection with the stockholder vote to approve the proposed Business Combination, the Sponsor and the Arrowroot Board, officers, advisors or their affiliates may, without the prior written consent of iLearningEngines, privately negotiate transactions to purchase shares prior to the Closing from stockholders who would have otherwise elected to have their shares redeemed for a per share pro rata portion of the Trust Account. In connection with an election not to redeem Public Shares by any holder of Public Shares, iLearningEngines and Arrowroot agreed, as necessary, to consent to the assignment or forfeiture of shares of Arrowroot Class A Common Stock issuable to iLearningEngines or shares of Arrowroot Class A Common Stock issuable upon conversion of the Arrowroot Class B Common Stock (with the corresponding shares of Arrowroot Class B Common Stock irrevocably forfeited by the Sponsor and canceled), as applicable, to such non-redeeming stockholders. For further information, please see the section entitled “The Merger Agreement.” None of the Sponsor, directors, officers or advisors, or their respective affiliates, will make any such purchases when they are in possession of any material non-public information not disclosed to the seller of such shares. Such a purchase would include a contractual acknowledgement that such stockholder, although still the record holder of such shares, is no longer the beneficial owner thereof and therefore agrees not to exercise its redemption rights. In the event that our Sponsor, directors, officers or advisors, or their affiliates, purchase shares in privately negotiated transactions from Public Stockholders who have already elected to exercise their redemption rights, such selling stockholders would be required to revoke their prior elections to redeem their shares. Any such privately negotiated purchases may be effected at purchase prices that are in excess of the per share pro rata portion of the Trust Account. The purpose of these purchases would be to increase the amount of cash available to Arrowroot for use in the Business Combination.

Q.     How many votes do I have at the special meeting?

A.     Arrowroot’s stockholders are entitled to one vote at the special meeting for each share of Arrowroot Class A Common Stock or Arrowroot Class B Common Stock held of record as of the Record Date. As of the close of business on the Record Date, there were 4,445,813 shares of Arrowroot Class A Common Stock outstanding and 7,187,500 shares of Arrowroot Class B Common Stock outstanding.

Q.     What interests do Arrowroot’s current officers and directors have in the Business Combination?

A.     The Arrowroot Board and executive officers may have interests in the Business Combination that are different from or in addition to (or which may conflict with) your interests as a stockholder. The Arrowroot Board was aware of and considered these interests to the extent such interests existed at the time, among other matters, in making their recommendation that you vote in favor of the approval of the Business Combination and the transactions contemplated thereby. These interests were considered by the Arrowroot Board when it approved the Business Combination. For further information, please see the section entitled “The Business Combination — Interests of Arrowroot Directors and Officers in the Business Combination.”

Q.     Did the Arrowroot Board obtain a third-party valuation or fairness opinion in determining whether or not to proceed with the Business Combination?

A.     Arrowroot obtained a fairness opinion from its independent financial advisor, Lincoln International LLC (“Lincoln”), with respect to the fairness to the holders of Arrowroot Class A Common Stock (other than (i) holders of Arrowroot Class A Common Stock who elect to redeem their shares prior to or in connection with the Business Combination, (ii) officers, directors, or affiliates of Arrowroot or the Sponsor, and (iii) the Sponsor), from a financial point of view, of the consideration to be paid by Arrowroot in the Business Combination. Additionally, Arrowroot’s officers and directors have substantial experience in evaluating the operating and financial merits of companies from a wide range of industries and concluded that their experience and backgrounds, together with the experience and sector expertise of Arrowroot’s advisors and consultants, enabled them to make the necessary analyses and determinations regarding the Business Combination. In addition, Arrowroot’s officers, directors, and advisors have substantial experience with mergers and acquisitions.

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Q.     What happens if the Business Combination Proposal is not approved?

A.     If the Business Combination Proposal is not approved and Arrowroot does not consummate the Business Combination and fails to complete an initial business combination by the Extension Deadline or amend its Existing Charter to extend the date by which Arrowroot must consummate an initial business combination, then Arrowroot will be required to dissolve and liquidate the Trust Account.

Q.     Do I have redemption rights?

A.     If you are a holder of Public Shares, you may redeem your Public Shares for cash equal to your pro rata share of the aggregate amount on deposit in the Trust Account, which holds the proceeds of the IPO, as of two business days prior to the consummation of the Business Combination, including interest earned on the funds held in the Trust Account (which interest will be net of taxes payable), upon the consummation of the Business Combination. The per share amount Arrowroot will distribute to holders who properly redeem their shares will not be reduced by the deferred underwriting commissions Arrowroot will pay to the underwriters of its IPO if the Business Combination is consummated. Holders of the outstanding Public Warrants do not have redemption rights with respect to such warrants in connection with the Business Combination. Our Sponsor has agreed to waive its redemption rights with respect to their shares of Arrowroot Class B Common Stock and any Public Shares that it may have acquired during or after the IPO in connection with the completion of Arrowroot’s initial business combination. The shares of Arrowroot Class B Common Stock will be excluded from the pro rata calculation used to determine the per share redemption price. For illustrative purposes, based on funds in the Trust Account of $46,049,915 on September 30, 2023, the estimated per share redemption price would have been approximately $10.36. This is greater than the $10.00 IPO price of Arrowroot Units. Additionally, Public Shares properly tendered for redemption will only be redeemed if the business Combination is consummated; otherwise holders of such shares will only be entitled to a pro rata portion of the Trust Account (including interest but net of Permitted Withdrawals) in connection with the liquidation of the Trust Account. If the Business Combination is not consummated, Arrowroot may enter into an alternative business combination and close such transaction by the Extension Deadline.

Q.     Is there a limit on the number of shares I may redeem?

A.     A Public Stockholder, together with any affiliate of his or any other person with whom he is acting in concert or as a “group” (as defined in Section 13(d)(3) of the Exchange Act) will be restricted from seeking redemption rights with respect to 15% or more of the Public Shares. Accordingly, all shares in excess of 15% of the Public Shares owned by a holder will not be redeemed. On the other hand, a Public Stockholder who holds less than 15% of the Public Shares may redeem all of the Public Shares held by him or her for cash.

Q.     Will how I vote affect my ability to exercise redemption rights?

A.     No. You may exercise your redemption rights whether you vote your Public Shares for or against the Business Combination Proposal or do not vote your shares. As a result, the Business Combination Proposal can be approved by stockholders who will redeem their Public Shares and no longer remain stockholders, leaving stockholders who choose not to redeem their Public Shares holding shares in a company with a less liquid Trading Market, fewer stockholders, less cash and the potential inability to meet the listing standards of Nasdaq.

Q.     How do I exercise my redemption rights?

A.     In order to exercise your redemption rights, you must, prior to 5:00 p.m., Eastern time, on January 29, 2024 (two business days before the special meeting), (i) submit a written request to Arrowroot’s transfer agent that Arrowroot redeem your Public Shares for cash and (ii) deliver your stock to Arrowroot’s transfer agent physically or electronically through The Depository Trust Company (“DTC”). The address of Continental Stock Transfer & Trust Company, Arrowroot’s transfer agent, is listed under the question “Who can help answer my questions?” below. Arrowroot requests that any requests for redemption include the identity as to the beneficial owner making such request. Electronic delivery of your stock generally will be faster than delivery of physical stock certificates.

A physical stock certificate will not be needed if your stock is delivered to Arrowroot’s transfer agent electronically. In order to obtain a physical stock certificate, a stockholder’s broker and/or clearing broker, DTC and Arrowroot’s transfer agent will need to act to facilitate the request. It is Arrowroot’s understanding that stockholders should generally allot at least one week to obtain physical certificates from the transfer agent. However, because Arrowroot does not have any control over this process or over the brokers or DTC, it may

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take significantly longer than one week to obtain a physical stock certificate. If it takes longer than anticipated to obtain a physical certificate, stockholders who wish to redeem their shares may be unable to obtain physical certificates by the deadline for exercising their redemption rights and thus will be unable to redeem their shares.

Any demand for redemption, once made, may be withdrawn at any time until the deadline for exercising redemption requests and thereafter, with Arrowroot’s consent, until the vote is taken with respect to the Business Combination. If you delivered your shares for redemption to Arrowroot’s transfer agent and decide within the required timeframe not to exercise your redemption rights, you may request that Arrowroot’s transfer agent return the shares (physically or electronically). You may make such request by contacting Arrowroot’s transfer agent at the phone number or address listed under the question “Who can help answer my questions?” below.

Q.     What are the U.S. federal income tax consequences of exercising my redemption rights?

A.     The U.S. federal income tax consequences of the redemption depends on particular facts and circumstances. Please see the section entitled “Material U.S. Federal Income Tax Considerations of the Redemption and the Business Combination — U.S. Federal Income Tax Considerations for Holders of Arrowroot Class A Common Stock Exercising Redemption Rights” for additional information. Accordingly, you are urged to consult your tax advisor to determine your tax consequences from the exercise of your redemption rights, including the applicability and effect of U.S. federal, state, local and non-U.S. income and other tax laws in light of your particular circumstances.

Q.     How do the Public Warrants differ from the Private Placement Warrants and what are the related risks for any Public Warrant holders post-initial business combination?

A.     The Public Warrants are identical to the Private Placement Warrants in material terms and provisions, except that the Private Placement Warrants cannot be transferred, assigned or sold until 30 days after the initial business combination (except in limited circumstances) and will not be redeemable by Arrowroot so long as they are held by the Sponsor, any of Arrowroot’s officers or directors, or any of their permitted transferees. If the Private Placement Warrants are held by holders other than the Sponsor, Arrowroot’s officers or directors, or any of their permitted transferees, they will be redeemable by Arrowroot and exercisable by the holders on the same basis as the Public Warrants. Pursuant to the Letter Agreement, the Sponsor and certain of Arrowroot’s officers and directors agreed not to transfer, assign or sell any of the Private Placement Warrants, including the Arrowroot Class A Common Stock issuable upon exercise of the warrants, until 30 days after the Business Combination.

Following the Business Combination, we may redeem your unexpired Public Warrants prior to their exercise at a time that is disadvantageous to you, thereby making your warrants worthless. We have the ability to redeem outstanding Public Warrants at any time after they become exercisable and prior to their expiration, at a price of $0.01 per Public Warrant, provided that the last reported sales price of Arrowroot Class A Common Stock equals or exceeds $18.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations, and the like) for any 20 trading days within a 30 trading-day period ending on the third trading day prior to the date on which we give proper notice of such redemption and provided certain other conditions are met. We will not redeem the warrants as described above unless a registration statement under the Securities Act covering the Arrowroot Class A Common Stock issuable upon exercise of such warrants is effective and a current prospectus relating to those shares of Arrowroot Class A Common Stock is available throughout the 30-day redemption period. If and when the Public Warrants become redeemable by us, we may exercise our redemption right even if we are unable to register or qualify the underlying securities for sale under all applicable state securities laws. Redemption of the outstanding Public Warrants could force you (i) to exercise your Public Warrants and pay the exercise price therefor at a time when it may be disadvantageous for you to do so, (ii) to sell your Public Warrants at the then-current market price when you might otherwise wish to hold your Public Warrants or (iii) to accept the nominal redemption price which, at the time the outstanding Public Warrants are called for redemption, is likely to be substantially less than the market value of your Public Warrants. At our election, any such exercise may be required to be on a cashless basis, which would lessen the dilutive effect of a warrant redemption. None of the Private Placement Warrants will be redeemable by us so long as they are held by the Sponsor, any of Arrowroot’s officers or directors, or their permitted transferees.

Historical trading prices for shares of Arrowroot Class A Common Stock have varied between a low of approximately $9.61 per share on August 19, 2021 to a high of approximately $10.56 per share on August 17, 2023, but have not approached the $18.00 per share threshold for redemption (which, as described above, would be required for 20 trading days within a 30 trading-day period after they become exercisable and

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prior to their expiration, at which point the Public Warrants would become redeemable). In the event that Arrowroot elects to redeem all of the redeemable warrants as described above, Arrowroot will fix a date for the redemption. Notice of redemption will be mailed by first class mail, postage prepaid, by us not less than 30 days prior to the redemption date to the registered holders of the Public Warrants to be redeemed at their last addresses as they appear on the registration books. Any notice mailed in the manner provided in the warrant agreement shall be conclusively presumed to have been duly given whether or not the registered holder received such notice.

Q.     If I hold Arrowroot Warrants, can I exercise redemption rights with respect to my warrants?

A.     No. There are no redemption rights with respect to the Arrowroot Warrants.

Q.     Do I have appraisal rights if I object to the proposed Business Combination?

A.     No. There are no appraisal rights available to holders of shares of Arrowroot Common Stock or Arrowroot Warrants in connection with the Business Combination under the DGCL.

Q.     What happens to the funds held in the Trust Account upon consummation of the Business Combination?

A.     If the Business Combination is consummated, the funds held in the Trust Account will be released to pay (i) Arrowroot stockholders who properly exercise their redemption rights and (ii) expenses incurred by iLearningEngines and Arrowroot in connection with the Business Combination, to the extent not otherwise paid prior to the Closing. Any additional funds available for release from the Trust Account will be used for general corporate purposes of New iLearningEngines following the Business Combination.

Q.     What happens if a substantial number of stockholders vote in favor of the Business Combination Proposal and exercise redemption rights?

A.     Public Stockholders may vote in favor of the Business Combination and still exercise their redemption rights and are not required to vote in any way to exercise their redemption rights. Accordingly, the Business Combination may be consummated even though the funds available from the Trust Account and the number of Public Shares are substantially reduced as a result of redemptions by Public Stockholders (however, pursuant to the Existing Charter, Arrowroot must have at least $5,000,001 of net tangible assets upon consummation of the Business Combination). Also, with fewer Public Shares and Public Stockholders, the Trading Markets for Arrowroot Class A Common Stock following the closing of the Business Combination may be less liquid than the market for Arrowroot Class A Common Stock was prior to the Business Combination and New iLearningEngines may not be able to meet the listing standards of a national securities exchange, including Nasdaq. In addition, with fewer funds available from the Trust Account, the capital infusion from the Trust Account into New iLearningEngines’ business will be reduced and New iLearningEngines may not be able to achieve its business plans. In addition, without additional funds from a PIPE transaction in connection with the closing of the Business Combination, it is possible that a maximum redemption scenario would result in a cash deficit, in which event the parties would need to find additional sources of funding in order for the Business Combination to become effective.

The table below presents the Trust Account value per share to a Public Stockholder that elects not to redeem its shares across a range of varying redemption scenarios. This Trust Account value per share includes the per share cost of the deferred underwriting commission of $10,062,500.

 

As of
September 30,
2023

Trust Account Value

 

$

46,049,915

Total shares of Redeemable Arrowroot Class A Common Stock

 

 

4,445,813

Trust Account Value per share of Redeemable Arrowroot Class A Common Stock

 

$

10.36

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Assuming
No Additional
Redemptions

 

Assuming 50%
of Maximum
Redemptions

 

Assuming
Maximum
Redemptions
(1)

Redemptions ($)

 

$

 

 

$

(10,079,306

)

 

$

(20,158,623

)

Redemptions (Shares)

 

 

 

 

 

972,906

 

 

 

1,945,813

 

Deferred underwriting commission

 

$

(10,062,500

)

 

$

(10,062,500

)

 

$

(10,062,500

)

Cash left in the Trust Account post redemptions less deferred underwriting commission

 

$

35,987,415

 

 

$

25,908,109

 

 

$

15,828,792

 

Arrowroot Class A Common Stock post redemptions

 

 

4,445,813

 

 

 

3,472,907

 

 

 

2,500,000

 

Remaining Trust Proceeds Per Share

 

$

8.09

 

 

$

7.46

 

 

$

6.33

(2)

____________

(1)      This scenario assumes that an additional 1,945,813 shares of Arrowroot Class A Common Stock are redeemed in connection with the Business Combination for an aggregate payment of $20.2 million from the Trust Account based on an approximate redemption price of $10.36 per share (based on the aggregate amount on deposit in the Trust Account as of September 30, 2023). This scenario reflects the maximum number of shares that could be redeemed while satisfying the condition that Arrowroot have at least $5,000,001 in tangible net assets after redemptions pursuant to the Existing Charter.

(2)      The redemptions and deferred underwriting commissions exceed the amount held in Trust Account. Furthermore, to the extent that holders of shares of Arrowroot Class A Common Stock redeem their shares in connection with the Business Combination, their Public Warrants will remain issued and outstanding notwithstanding the redemption of their shares of Arrowroot Class A Common Stock. The Sponsor holds an aggregate of 8,250,000 Private Placement Warrants. Following the consummation of the Business Combination, all of Arrowroot’s outstanding warrants will become warrants to acquire shares of New iLearningEngines Common Stock on the same terms as Arrowroot’s currently outstanding warrants.

For information on the relative ownership levels of holders of outstanding shares of New iLearningEngines Common Stock following the Business Combination under varying redemption scenarios and the fully diluted relative ownership levels of holders of shares of New iLearningEngines Common Stock following the Business Combination under varying redemption scenarios, see the section entitled “The Business Combination — Ownership of New iLearningEngines After the Closing.”

Q.     What happens if the Business Combination is not consummated?

A.     There are certain circumstances under which the Merger Agreement may be terminated. See the section entitled “The Merger Agreement — Termination” for information regarding the parties’ specific termination rights.

If, as a result of the termination of the Merger Agreement or otherwise, Arrowroot is unable to complete a business combination by the Extension Deadline, the Existing Charter provides that Arrowroot 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, subject to lawfully available funds therefor, redeem 100% of the outstanding Public Shares, at a per share price, payable in cash, equal to the quotient obtained by dividing (A) the aggregate amount then on deposit in the Trust Account, including interest earned on the funds held in the Trust Account (which interest shall be net of taxes payable and up to $100,000 of interest to pay dissolution expenses), by (B) the total number of then outstanding Public Shares, which redemption will completely extinguish the Public Stockholders’ rights as stockholders (including the right to receive further liquidating distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of the remaining stockholders and the Arrowroot Board in accordance with applicable law, dissolve and liquidate, subject (in the case of (ii) and (iii) above) to Arrowroot’s obligations under Delaware law to provide for claims of creditors and other requirements of applicable law. There will be no redemption rights or liquidating distributions with respect to the Arrowroot Warrants, which will expire worthless if Arrowroot fails to complete a business combination by the Extension Deadline. See the sections entitled “Risk Factors — Arrowroot may not be able to consummate an initial business combination within the required time period, in which case it would cease all operations except for the purpose of winding up and it would redeem the Public Shares and liquidate, in which case the Public Stockholders may only receive $10.00 per share, or less than such amount in certain circumstances, and the Public Warrants will expire worthless” and “Risk Factors — Arrowroot stockholders may be held liable for claims by third parties against Arrowroot to the extent of distributions received by them upon redemption of their shares.” Our Sponsor has waived any right to any liquidation distribution with respect to the Arrowroot Class B Common Stock.

Q.     When is the Business Combination expected to be completed?

A.     It is currently anticipated that the Business Combination will be consummated promptly following the special meeting, provided that all other conditions to the consummation of the Business Combination have been satisfied or waived.

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For a description of the conditions to the completion of the Business Combination, see the section entitled “The Merger Agreement — Conditions to Closing of the Merger Agreement.”

Q.     Are there risks of going public through the Business Combination rather than a traditional underwritten initial public offering?

A.     Yes. Arrowroot has applied to list the New iLearningEngines Stock and warrants on Nasdaq, but the Business Combination is different from a traditional underwritten initial public offering. Among other things, there is no independent third-party underwriter selling the shares of New iLearningEngines Common Stock, and, accordingly, the scope of due diligence conducted in conjunction with the Business Combination may be different than would typically be conducted in the event iLearningEngines pursued an underwritten initial public offering. Before entering into the Merger Agreement, Arrowroot and iLearningEngines performed a due diligence review of each other’s business, operations and disclosure. However, in a typical initial public offering, the underwriters of the offering conduct independent due diligence on the company to be taken public, and following the offering, the underwriters are subject to liability under Section 11 of the Securities Act to private investors for any material misstatements or omissions in the registration statement. Due diligence reviews typically include an independent investigation of the background of the company, any advisors and their respective affiliates, review of the offering documents, assessment of significant risks of the business operations, and independent analysis of the plan of business and any underlying financial assumptions. The lack of an independent due diligence review and investigation means that you must rely on the information included in this proxy statement/prospectus. Further, while potential investors in an initial public offering typically have a private right of action against the underwriters of the offering for any such material misstatements or omissions, there are no third-party underwriters of the New iLearningEngines Common Stock that will be issued pursuant to the Business Combination, and therefore no corresponding right of action is available to investors in the Business Combination against any such third parties, including any financial advisors of iLearningEngines and Arrowroot, for any material misstatements or omissions in this proxy statement/prospectus.

In addition, because there are no underwriters engaged in connection with the Business Combination, prior to the opening of trading on Nasdaq on the trading day immediately following the Closing Date, there will be no book building process and no price at which underwriters initially sold shares to the public to help inform efficient and sufficient price discovery with respect to the initial post-closing trades on Nasdaq. Therefore, buy and sell orders submitted prior to and at the opening of initial post-closing trading of the New iLearningEngines Common Stock on Nasdaq will not have the benefit of being informed by a published price range or a price at which the underwriters initially sold shares to the public, as would be the case in an underwritten initial public offering. There will be no underwriters assuming risk in connection with an initial resale of shares of the New iLearningEngines Common Stock or helping to stabilize, maintain or affect the public price of the New iLearningEngines Common Stock following the Closing Date. Moreover, we will not engage in, and have not and will not, directly or indirectly, request the financial advisors to engage in, any special selling efforts or stabilization or price support activities in connection with the New iLearningEngines Common Stock that will be outstanding immediately following the Closing Date. All of these differences from an underwritten public offering of iLearningEngines’ securities could result in a more volatile price for the New iLearningEngines Common Stock following the Closing Date.

Further, we will not conduct a traditional “roadshow” with underwriters prior to the opening of initial post-closing trading of the New iLearningEngines Common Stock on Nasdaq. There can be no guarantee that any information made available in this proxy statement/prospectus and/or otherwise disclosed or filed with the SEC will have the same impact on investor education as a traditional “roadshow” conducted in connection with an underwritten initial public offering. As a result, there may not be efficient or sufficient price discovery with respect to the New iLearningEngines Common Stock or sufficient demand among potential investors immediately after the Closing Date, which could result in a more volatile price for the New iLearningEngines Common Stock.

In addition, our initial stockholders, including our Sponsor, have interests in the Business Combination that are different from or are in addition to our stockholders and that would not be present in an underwritten public offering of iLearningEngines’ securities. Such interests may have influenced our Board in making its recommendation that you vote in favor of the approval of the Business Combination Proposal and the other proposals described in this proxy statement/prospectus. These actual or potential conflicts of interest are, to the extent material, described in the section entitled “Proposal No. 1 — The Business Combination Proposal — Interests of Arrowroot Directors and

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Officers in the Business Combination” and “Proposal No. 1 — The Business Combination Proposal — Interests of iLearningEngines Directors and Executive Officers in the Business Combination” beginning on page 151 of this proxy statement/prospectus.

Accordingly, as an investor in the Business Combination, you may be exposed to increased risk when compared to investing in a traditional underwritten initial public offering.

Q.     What do I need to do now?

A.     You are urged to carefully read and consider the information contained in this proxy statement/prospectus, including the financial statements and annexes attached hereto, and to consider how the Business Combination will affect you as a stockholder. You should then vote as soon as possible in accordance with the instructions provided in this proxy statement/prospectus on the enclosed proxy card or, if you hold your shares through a brokerage firm, bank or other nominee, on the voting instruction form provided by the broker, bank or nominee.

Q.     When and where is the special meeting?

A.      The special meeting will take place on February 12, 2024, at 9:00 a.m. Eastern Time and conducted exclusively over the Internet by means of a live video webcast, or such other date, time and place to which such meeting may be adjourned or postponed, for the purposes set forth in the accompanying notice. There will not be a physical location for the meeting, and you will not be able to attend the meeting in person. You may attend the live video webcast of the meeting by accessing the web portal located at https://www.virtualshareholdermeeting.com/ARRW2024SM and following the instructions set forth on your proxy card. Stockholders participating in the meeting will be able to listen only and will not be able to speak during the webcast. However, in order to maintain the interactive nature of the meeting, virtual attendees will be able to: vote via the web portal during the meeting webcast; and submit questions or comments to Arrowroot’s directors and officers during the meeting via the meeting webcast. Stockholders may submit questions or comments during the meeting through the webcast by typing in the “Submit a question” box.

Q.     Who may vote?

A.     Only holders of record of Arrowroot Common Stock as of the close of business on January 18, 2024 may vote. Please see the section entitled “Special Meeting of Arrowroot Stockholders — Record Date and Voting” for further information.

Q.     How do I vote?

A.     You may vote with respect to the applicable proposals in person online at the special meeting, by internet, by phone, or by completing, signing, dating and returning the enclosed proxy card in the postage-paid envelope provided. If you choose to vote by internet, visit http://www.proxyvote.com, 24 hours a day, seven days a week, until 11:59 p.m., Eastern time, on January 30, 2024 (have your proxy card in hand when you visit the website). If you choose to vote by phone, call toll-free (within the U.S. or Canada) 1-800-690-6903 (have your proxy card in hand when you call). If you choose to participate in the special meeting, you can vote your shares electronically during the special meeting via live webcast by visiting https://www.virtualshareholdermeeting.com/ARRW2024SM. You will need the 16-digit meeting control number that is printed on your proxy card to enter the special meeting. Arrowroot recommends that you log in at least 15 minutes before the special meeting to ensure you are logged in when the special meeting starts.

If on the Record Date your shares were held, not in your name, but rather in an account at a brokerage firm, bank, dealer or other similar organization, then you are the beneficial owner of shares held in “street name” and these proxy materials are being forwarded to you by that organization. As a beneficial owner, you have the right to direct your broker or other agent on how to vote the shares in your account. You are also invited to attend the special meeting in person online. However, since you are not the stockholder of record, you may not vote your shares in person online at the special meeting unless you first request and obtain a valid legal proxy from your broker or other agent.

Q.     Are there risks associated with the Business Combination that I should consider in deciding how to vote?

A.     Yes. There are a number of risks related to the Business Combination and other transactions contemplated by the Merger Agreement that are discussed in this proxy statement/prospectus. Please read with particular care the detailed description of the risks described in “Risk Factors” beginning on page 48 of this proxy statement/prospectus.

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Q.     What will happen if I abstain from voting or fail to instruct my bank, brokerage firm or nominee to vote at the special meeting?

A.     At the special meeting, Arrowroot will count a properly executed proxy marked “ABSTAIN” with respect to a particular proposal as present for purposes of determining whether a quorum is present. For purposes of approval, an abstention or failure to vote will have the same effect as a vote against the Organizational Documents Proposal, and will have no effect on any of the other proposals.

Q.     What will happen if I sign and return my proxy card without indicating how I wish to vote?

A.     Signed and dated proxies received by Arrowroot without an indication of how the stockholder intends to vote on a proposal will be voted in favor of each proposal presented to the stockholders.

Q.     How can I attend the special meeting?

A:     You may attend the special meeting and vote your shares in person online during the special meeting via live webcast by visiting https://www.virtualshareholdermeeting.com/ARRW2024SM. As a registered stockholder, you received a proxy card, which contains instructions on how to attend the special meeting in person online, including the URL address, along with your 16-digit meeting control number. You will need the 16-digit meeting control number that is printed on your proxy card to enter the special meeting. If you do not have your 16-digit meeting control number, contact Arrowroot’s Secretary at (310) 566-5966 or e-mail Arrowroot’s Secretary at tolivier@arrowrootcapital.com. Please note that you will not be able to physically attend the special meeting in person, but may attend the special meeting in person online by following the instructions below.

Prior to or at the start of the special meeting you will need to log in using your 16-digit meeting control number and will also be prompted to enter your 16-digit meeting control number if you vote in person online during the special meeting. Arrowroot recommends that you log in at least 15 minutes before the special meeting to ensure you are logged in when the special meeting starts.

If your shares are held in “street name,” you may attend the special meeting. You will need to contact your broker, bank, or other nominee to receive a 16-digit meeting control number and gain access to the special meeting. Please allow up to 72 hours prior to the special meeting for processing your 16-digit meeting control number.

Q.     Do I need to attend the special meeting in person online to vote my shares?

A.     No. You are invited to attend the special meeting in person online to vote on the proposals described in this proxy statement/prospectus. However, you do not need to attend the special meeting in person online to vote your shares. Instead, you may submit your proxy by signing, dating and returning the applicable enclosed proxy card(s) in the pre-addressed postage-paid envelope. Your vote is important. Arrowroot encourages you to vote as soon as possible after carefully reading this proxy statement/prospectus.

Q.     If I am not going to attend the special meeting in person online, should I return my proxy card instead?

A.     Yes. After carefully reading and considering the information contained in this proxy statement/prospectus, please submit your proxy, as applicable, by completing, signing, dating and returning the enclosed proxy card in the postage-paid envelope provided.

Q.     If my shares are held in “street name,” will my broker, bank or nominee automatically vote my shares for me?

A.     No. If your broker holds your shares in its name and you do not give the broker voting instructions, under the applicable stock exchange rules, your broker may not vote your shares on any of the Arrowroot Proposals. If you do not give your broker voting instructions and the broker does not vote your shares, this is referred to as a “broker non-vote.” Broker non-votes will be counted for purposes of determining the presence of a quorum at the special meeting. Your bank, broker, or other nominee can vote your shares only if you provide instructions on how to vote. You should instruct your broker to vote your shares in accordance with directions you provide. However, in no event will a broker non-vote have the effect of exercising your redemption rights for a pro rata portion of the Trust Account, and therefore no shares as to which a broker non-vote occurs will be redeemed in connection with the proposed Business Combination unless the holder of these shares properly follows the procedures for redemption described in this proxy statement/prospectus with respect to these shares.

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Q.     May I change my vote after I have mailed my signed proxy card?

A.     Yes. You may change your vote by sending a later-dated, signed proxy card to Arrowroot’s Secretary at the address listed below prior to the vote at the special meeting, or attend the special meeting and vote in person online. You also may revoke your proxy by sending a notice of revocation to Arrowroot’s Secretary, provided such revocation is received prior to the vote at the special meeting. If your shares are held in street name by a broker or other nominee, you must contact the broker or nominee to change your vote.

Q.     What should I do if I receive more than one set of voting materials?

A.     You may receive more than one set of voting materials, including multiple copies of this proxy statement/prospectus and multiple proxy cards or voting instruction cards. For example, if you hold your shares in more than one brokerage account, you will receive a separate voting instruction card for each brokerage account in which you hold shares. If you are a holder of record and your shares are registered in more than one name, you will receive more than one proxy card. Please complete, sign, date and return each proxy card and voting instruction card that you receive in order to cast your vote with respect to all of your shares.

Q.     What is the quorum requirement for the special meeting?

A.     For all the proposals other than the Organizational Documents Proposal, a quorum will be present at the special meeting if a majority of the Arrowroot Common Stock outstanding and entitled to vote at the special meeting is represented in person online or by proxy. Based on the number of shares outstanding and entitled to vote as of the Record Date, 5,816,657 shares of Arrowroot Common Stock will be required to be present at the special meeting to achieve a quorum.

For the Organizational Documents Proposal, a quorum will be present at the special meeting if a majority of the Arrowroot Class A Common Stock outstanding and entitled to vote at the special meeting, a majority of the Arrowroot Class B Common Stock outstanding and entitled to vote at the special meeting, and a majority of the Arrowroot Common Stock outstanding and entitled to vote at the special meeting are represented in person online or by proxy. Based on the number of shares outstanding and entitled to vote as of the Record Date, 5,816,657 shares of Arrowroot Common Stock, 2,222,907 shares of Arrowroot Class A Common Stock and 3,593,751 shares of Arrowroot Class B Common Stock will be required to be present at the special meeting to achieve a quorum.

Your shares will be counted towards the quorum only if you submit a valid proxy (or your broker, bank or other nominee submits one on your behalf) or if you vote in person online at the special meeting. Abstentions and broker non-votes will be counted towards the quorum requirement. If there is no quorum, a majority of the shares represented by stockholders present in person online at the special meeting or by proxy may authorize adjournment of the special meeting to another date.

Q.     What happens to the Arrowroot Warrants I hold if I vote my shares of Arrowroot Common Stock against approval of the Business Combination Proposal and validly exercise my redemption rights?

A.     Properly exercising your redemption rights as an Arrowroot stockholder does not result in either a vote “FOR” or “AGAINST” the Business Combination Proposal. If the Business Combination is not completed, you will continue to hold your Arrowroot Warrants, and if Arrowroot does not otherwise consummate an initial business combination by the Extension Deadline or obtain the approval of Arrowroot stockholders to extend the deadline for Arrowroot to consummate an initial business combination, Arrowroot will be required to dissolve and liquidate, and your Arrowroot Warrants will expire worthless.

Q.     Following the Business Combination, will Arrowroot securities continue to trade on a stock exchange?

A.     Yes. We anticipate that, following the Business Combination, New iLearningEngines Common Stock and Public Warrants will continue trading on Nasdaq under the new symbols “AILE” and “AILEW,” respectively. The Arrowroot Units will automatically separate into the component securities upon consummation of the Business Combination and, as a result, will no longer trade as a separate security.

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Q.     How does the Sponsor intend to vote on the proposals?

A.     Our Sponsor, directors and officers have agreed to vote any shares of Arrowroot Common Stock owned by them in favor of the Business Combination, including their shares of Arrowroot Class B Common Stock and any Public Shares purchased after our IPO (including in open market and privately negotiated transactions). As of the Record Date, our Sponsor, and certain current and former officers and directors beneficially own an aggregate of 61.78% of the outstanding shares of Arrowroot Common Stock.

Q.     Who will solicit and pay the cost of soliciting proxies?

A.     Arrowroot will pay the cost of soliciting proxies for the special meeting. Arrowroot has engaged Okapi Partners LLC (“Okapi”) to assist in the solicitation of proxies for the special meeting. Arrowroot has agreed to pay Okapi a fee of up to $25,000 in connection with the Business Combination. Arrowroot will reimburse Okapi for reasonable out-of-pocket expenses and will indemnify Okapi and its affiliates against certain claims, liabilities, losses, damages and expenses. Arrowroot will also reimburse banks, brokers and other custodians, nominees and fiduciaries representing beneficial owners of shares of the Public Shares for their expenses in forwarding soliciting materials to beneficial owners of Public Shares and in obtaining voting instructions from those owners. Arrowroot’s directors, officers and employees may also solicit proxies by telephone, by facsimile, by mail, on the internet or in person. They will not be paid any additional amounts for soliciting proxies.

Q.     Who can help answer my questions?

A.     If you have questions about the stockholder proposals, or if you need additional copies of this proxy statement/prospectus, the proxy card or the consent card you should contact our proxy solicitor at:

Okapi Partners LLC
1212 Avenue of the Americas, 17th Floor
New York, NY 10036

Individuals call toll-free: (855) 208-8903
Banks and brokers call: (212) 297-0720
Email: info@okapipartners.com

You may also contact Arrowroot at:

Arrowroot Acquisition Corp.
4553 Glencoe Ave
Suite 200
Marina Del Rey, CA 90292
Tel: (310) 566-5966

To obtain timely delivery, Arrowroot’s stockholders and warrant holders must request the materials no later than five business days prior to the special meeting.

You may also obtain additional information about Arrowroot from documents filed with the SEC by following the instructions in the section entitled “Where You Can Find More Information.”

If you intend to seek redemption of your Public Shares, you will need to send a letter demanding redemption and deliver your stock (either physically or electronically) to Arrowroot’s transfer agent prior to 5:00 p.m., New York time, on the second business day prior to the special meeting. If you have questions regarding the certification of your position or delivery of your stock, please contact:

Continental Stock Transfer & Trust Company
One State Street Plaza, 30th Floor
New York, New York 10004
E-mail: spacredemptions@continentalstock.com

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SUMMARY OF THE PROXY STATEMENT/PROSPECTUS

This summary highlights selected information from this proxy statement/prospectus and does not contain all of the information that is important to you. To better understand the Business Combination and the proposals to be considered at the special meeting of the Arrowroot stockholders, you should read this entire proxy statement/prospectus carefully, including the annexes. See also the section entitled “Where You Can Find More Information.”

Parties to the Business Combination

Arrowroot Acquisition Corp.

Arrowroot is a Delaware blank check company formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or other similar business combination with one or more businesses. The Arrowroot Units, Arrowroot Class A Common Stock and the Public Warrants are currently listed on Nasdaq under the symbols “ARRWU,” “ARRW” and “ARRWW,” respectively. The mailing address of Arrowroot’s principal executive office is 4553 Glencoe Ave, Suite 200, Marina Del Rey, CA 90292 and the telephone number of Arrowroot’s principal executive office is (310) 566-5966.

Arrowroot’s sponsor is Arrowroot Acquisition LLC, a Delaware limited liability company formed by Arrowroot Capital Management, LLC and Arrowroot’s management team, consisting of Matthew Safaii and Thomas Olivier. The Sponsor currently holds 7,067,500 shares of Arrowroot Class B Common Stock, and two of our directors, Dixon Doll and Will Semple, currently hold 80,000 shares of Arrowroot Class B Common Stock in the aggregate. One of Arrowroot’s former directors, Guarav Dhillon, currently holds 40,000 shares of Arrowroot Class B Common Stock. The Sponsor also currently holds 8,250,000 Private Placement Warrants, acquired for an aggregate investment of $8,250,000 at the time of the IPO. Affiliates of the Sponsor have also purchased an aggregate of $9,900,000 of Convertible Notes, convertible into 2,810,846 shares of New iLearningEngines Common Stock.

iLearningEngines

iLearningEngines is an out-of-the-box AI platform that empowers end customers to “productize” their institutional knowledge and generate and infuse insights in the flow-of-work to drive mission critical business outcomes. iLearningEngines’ customers “productize” their institutional knowledge by transforming it into actionable intellectual property that enhances outcomes for employees, customers and other stakeholders. iLearningEngines’ platform enables enterprises to build intelligent “Knowledge Clouds” that incorporate large volumes of structured and unstructured information across disparate internal and external systems, and to automate organizational processes that leverage these Knowledge Clouds to improve performance. iLearningEngines’ Learning Automation offering addresses the corporate learning market and iLearningEngines’ Information Intelligence offering addresses the information management, analytics and automation markets. iLearningEngines combines its offerings with vertically focused capabilities and data models to operationalize AI and automation to effectively and efficiently address critical challenges facing its customers. iLearningEngines’ customers utilize its platform to analyze and address employee knowledge gaps, provide personalized cognitive assistants or chatbots, and make predictive decisions based on real-time insights.

The mailing address of iLearningEngines’ principal executive office is 6701 Democracy Blvd, Suite 300, Bethesda, Maryland 20817, and its telephone number is (650) 248-9874.

For more information about iLearningEngines, see the sections entitled “Information About iLearningEngines” and “iLearningEngines Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

The Business Combination

The Merger Agreement

For more information about the Merger Agreement and the Business Combination and other transactions contemplated thereby, see the sections entitled “Proposal No. 1 — The Business Combination Proposal” and “The Merger Agreement.” A copy of the Merger Agreement is attached to this proxy statement/prospectus as Annex A.

On April 27, 2023, Arrowroot, Merger Sub and iLearningEngines entered into the Merger Agreement, pursuant to which Merger Sub and iLearningEngines will enter into the Business Combination. The Merger Agreement contains customary representations and warranties, covenants, closing conditions, and termination provisions. Merger Sub will merge with and into iLearningEngines, with iLearningEngines surviving the Merger as a wholly owned subsidiary of Arrowroot.

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The Merger will be consummated by the filing of a certificate of merger with the Secretary of State of the State of Delaware and will be effective immediately upon such filing or upon such later time as may be agreed by the parties and specified in such certificate of merger. The parties will hold the Closing immediately prior to such filing of a certificate of merger on the Closing Date, which date will occur as promptly as practicable, but in no event later than three business days, following the satisfaction or waiver of the conditions set forth in the Merger Agreement (other than those conditions that by their nature are to be satisfied at the Closing, but subject to the satisfaction or waiver of those conditions at such time), or on such other date, time or place as Arrowroot and iLearningEngines may mutually agree.

Treatment of iLearningEngines’ Securities

Common Stock.    At the Effective Time, each share of iLearningEngines Common Stock (excluding shares the holders of which perfect rights of appraisal under Delaware law) will be converted into the right to receive such number of shares of New iLearningEngines Common Stock equal to the product of such shares and the Exchange Ratio.

Restricted Stock Units and Restricted Stock.    At the Effective Time, each outstanding vested iLearningEngines RSU or portion thereof and each outstanding vested iLearningEngines restricted stock grant or portion thereof will be cancelled and automatically converted into the right to receive, subject to settlement and delivery in accordance with the iLearningEngines Plan, a number of shares of New iLearningEngines Common Stock equal to the product of such shares and the Exchange Ratio. At the Effective Time, each outstanding and unvested iLearningEngines RSU or portion thereof shall be cancelled and converted into the right to receive a number of restricted stock units issued by Arrowroot equal to the product of such units and the Exchange Ratio, with substantially the same terms and conditions as were applicable to such outstanding and unvested iLearningEngines RSU immediately prior to the Effective Time, except that such iLearningEngines RSU shall relate to the Arrowroot Class A Common Stock. At the Effective Time, each share of unvested iLearningEngines restricted stock shall be cancelled and converted into the right to receive a number of restricted shares of Arrowroot Class A Common Stock equal to the product of such shares and the Exchange Ratio, with substantially the same terms and conditions as were applicable to such unvested iLearningEngines restricted stock immediately prior to the Effective Time, which shares shall be restricted subject to vesting on the books and records of iLearningEngines.

Convertible Notes.    Immediately prior to the Effective Time, each outstanding Convertible Note will automatically be converted into the right to receive a number of shares of Arrowroot Class A Common Stock equal to the Convertible Note Balance divided by $10.00.

Warrants.    Each iLearningEngines Warrant that is outstanding and unexercised immediately prior to the Effective Time will be converted into the right to receive a number of shares of Arrowroot Class A Common Stock determined in accordance with the terms of such iLearningEngines Warrant.

Representations and Warranties

The Merger Agreement contains representations and warranties of the parties thereto that are customary for a transaction of this size and nature. The representations and warranties are, in many respects, qualified by materiality and knowledge, and will not survive the Business Combination, but their accuracy forms the basis of some of the conditions to the obligations of Arrowroot, Merger Sub and iLearningEngines to complete the Business Combination.

iLearningEngines has made representations and warranties relating to, among other things, iLearningEngines organization, subsidiaries, due authorization, absence of conflict, governmental authorities and consents, capitalization of iLearningEngines and its subsidiaries, financial statements, absence of undisclosed liabilities, litigation and proceedings, legal compliance, contracts, absence of defaults, iLearningEngines benefits plans, employees and labor relations, taxes, brokers’ fees, insurance, licenses, equipment and other tangible property, real property, intellectual property, privacy and cybersecurity, environmental matters, absence of changes, anti-corruption compliance, international trade compliance, sanctions, vendors, customers, and government contracts.

Arrowroot and Merger Sub have made representations and warranties relating to, among other things, corporate organization, absence of substantial governmental ownership interest, due authorization, absence of conflict, litigation and proceeding, SEC filings, internal controls, Nasdaq listing, financial statements, governmental

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authorities and consents, trust account, the Investment Company Act, the JOBS Act, absence of changes, absence of undisclosed liabilities, capitalization, brokers’ fees, indebtedness, taxes, business activities, stock market quotations, interested party transactions, non-foreign representation, opinion of financial advisor, and no outside reliance.

Covenants and Agreements

iLearningEngines has made covenants relating to, among other things, conduct of the business, inspection, preparation and delivery of additional financial statements, forfeiture of Incentive Shares and affiliate agreements.

Arrowroot has made covenants relating to, among other things, equity plan, employee stock purchase plan, no third party beneficiaries, trust account proceeds and related available equity, listing, conduct of business, post-closing directors and officers, indemnification and insurance, SEC filings, private placements, stockholder litigation, non-redemption agreements, forfeiture of Arrowroot Class B Common Stock, and extending the period in which Arrowroot must consummate a business combination.

iLearningEngines, Arrowroot and Merger Sub have made joint covenants relating to HSR Act and other filings, preparation of the proxy statement and registration statement, stockholders’ meetings and approvals, support of transaction, transfer taxes, compliance with Section 16(a) of the Securities Exchange Act or 1934, as amended, cooperation and consultation, and exclusivity.

Conditions to Closing

The consummation of the Business Combination is conditioned upon, among other things, (i) the approval of the holders of sixty-five (65%) of the outstanding shares of Arrowroot Common Stock entitled to vote, who attend and vote thereupon at the special meeting, (ii) the Requisite Approval, (iii) the registration statement (of which this proxy statement/prospectus is a part) will have been declared effective under the Securities Act, (iv) all applicable waiting periods (and any extensions thereof) under the HSR Act shall have expired or been terminated, (v) no governmental authority with jurisdiction over the parties with respect to the Business Combination will have issued any statute, rule or regulation enjoining or prohibiting the consummation of the Business Combination, (vi) Arrowroot shall have at least $5,000,001 of net tangible assets (as determined in accordance with Rule 3a51-1(g)(1) of the Exchange Act), and (vii) the New iLearningEngines Common Stock to be issued in connection with the Business Combination shall have been approved for listing on Nasdaq.

The obligations of Arrowroot and Merger Sub to consummate the Business Combination are further conditioned upon, among other things: (i) the representations and warranties of iLearningEngines being true and correct to applicable standards, (ii) each of the covenants of iLearningEngines contained in the Merger Agreement having been performed or complied with in all material respects, and (iii) no Company Material Adverse Effect (as defined below) occurring prior the Closing Date.

The obligations of iLearningEngines to consummate the Business Combination are further conditioned upon, among other things, (i) the representations and warranties of Arrowroot and Merger Sub being true and correct to applicable standards, (ii) each of the covenants of Arrowroot contained in the Merger Agreement having been performed or complied with in all material respects, (iii) no Acquiror Material Adverse Effect (as defined below) occurring prior the Closing Date, (iv) the Available Acquiror Cash (as defined in the Merger Agreement) shall be no less than $100,000,000 (the “Minimum Cash Condition”), (v) the market value of publicly held shares (as defined in Nasdaq’s listing requirements) of the outstanding Arrowroot Class A Common Stock (excluding any shares held by Arrowroot and certain related parties), after certain adjustments specified in the Merger Agreement, must be greater than or equal to $100,000,000, and (vi) except for the individuals identified in the company disclosure letter, the directors and officers of Arrowroot will have resigned, effective as of the Effective Time.

Any party to the Merger Agreement may, at any time prior to the Closing Date, by action taken by its board of directors or equivalent governing body, or officers thereunto duly authorized, waive any of the terms or conditions of the Merger Agreement, including the conditions to closing set forth above, to the extent permitted by applicable laws and, in the case of Arrowroot, the Existing Charter.

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Termination

The Merger Agreement may be terminated and the Business Combination abandoned:

        by written consent of iLearningEngines and Arrowroot;

        by iLearningEngines or Arrowroot if the Business Combination is permanently enjoined or prevented by the terms of a final, non-appealable order, judgement, injunction, decree, writ, stipulation, determination or award, in each case, entered by or with any governmental authority, or a statute, rule, or regulation;

        by iLearningEngines if the stockholders of Arrowroot fail to approve the Required Proposals;

        by iLearningEngines if the Arrowroot Board withdraws, amends, qualifies or modifies its recommendations to vote in favor of the Business Combination and the other proposals in connection with the same;

        by written notice by a party to the other party if such other party has breached any of its representations, warranties, covenants or agreements set forth in the Merger Agreement such that the conditions to closing the Business Combination under the Merger Agreement would not be satisfied at the Closing Date, provided that such other party will have 30 days to cure such breach, to the extent curable;

        by Arrowroot if the Requisite Approval is not obtained within two (2) business days after the Registration Statement is declared effective by the SEC; or

        by written notice to Arrowroot from iLearningEngines if (i) there is any breach of any representation, warranty, covenant or agreement on the part of Arrowroot or Merger Sub set forth in the Merger Agreement, such that the conditions specified with respect to (a) the representations and warranties of Arrowroot or Merger Sub or (b) the performance of covenants by Arrowroot or Merger Sub, would not be satisfied at the Closing (a “Terminating Acquiror Breach”), except that, if any such Terminating Acquiror Breach is curable by Arrowroot through the exercise of its reasonable best efforts, then, for a period of up to thirty (30) days after receipt by Arrowroot of notice from iLearningEngines of such breach, but only as long as Arrowroot continues to exercise such reasonable best efforts to cure such Terminating Acquiror Breach (the “Acquiror Cure Period”), such termination shall not be effective, and such termination shall become effective only if the Terminating Acquiror Breach is not cured within the Acquiror Cure Period or (ii) the Closing has not occurred on or before the Agreement end date, unless iLearningEngines is in material breach.

Ownership of New iLearningEngines After the Closing

As of the Record Date, there are 4,445,813 shares of Arrowroot Class A Common Stock issued and outstanding and 7,187,500 shares of Arrowroot Class B Common Stock issued and outstanding. There were also outstanding an aggregate of 22,625,000 warrants, which includes 8,250,000 Private Placement Warrants and 14,375,000 public warrants. Each warrant entitles the holder thereof to purchase one share of Arrowroot Class A Common Stock and, following the Business Combination, will entitle the holder thereof to purchase one share of New iLearningEngines Common Stock.

Under the “no additional redemptions” scenario, upon completion of the Business Combination, Arrowroot’s public stockholders would retain an ownership interest of approximately 3.2% in New iLearningEngines, the Convertible Note Investors will own approximately 1.5% of New iLearningEngines, the Sponsor and its affiliates and certain current and former directors, as the sole holders of Founder Shares, will retain an ownership interest of approximately 7.3% of New iLearningEngines, and the iLearningEngines stockholders will own approximately 87.5% of New iLearningEngines.

Under the “50% of maximum redemptions” scenario, upon completion of the Business Combination, Arrowroot’s public stockholders would retain an ownership interest of approximately 2.5% in New iLearningEngines, the Convertible Note Investors will own approximately 1.5% of New iLearningEngines, the Sponsor and its affiliates and certain current and former directors, as the sole holders of Founder Shares, will retain an ownership interest of approximately 7.4% of New iLearningEngines, and the iLearningEngines stockholders will own approximately 88.1% of New iLearningEngines.

Under the “maximum redemptions” scenario, upon completion of the Business Combination, Arrowroot’s public stockholders would retain an ownership interest of approximately 1.8% in New iLearningEngines, the Convertible Note Investors will own approximately 1.5% of New iLearningEngines, the Sponsor and its affiliates and certain current and former directors, as the sole holders of Founder Shares, will retain an ownership interest of approximately 7.4% of New iLearningEngines, and the iLearningEngines stockholders will own approximately 88.8% of New iLearningEngines.

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The following summarizes the pro forma ownership of New iLearningEngines Common Stock following the Business Combination assuming the no additional redemptions, 50% of maximum redemptions and maximum redemptions scenarios.

Given the current uncertainties around timing, amount, structure, and other variables with respect to the additional funds, Arrowroot has elected to present the scenarios without additional funds. As of the date of this proxy statement/prospectus, Arrowroot has not obtained any binding commitments for a PIPE transaction or entered into any agreements pursuant to which Public Stockholders would not exercise redemption rights. If Arrowroot enters into a PIPE transaction or non-redemption agreements after the date of this proxy statement/prospectus, Arrowroot will present a scenario that incorporates the additional funds that would permit completion of the Business Combination, including satisfying the Minimum Cash Condition.

The ownership percentages reflected in the table are based upon the number of shares of iLearningEngines Common Stock and Arrowroot Common Stock expected to be issued and outstanding as of December 31, 2023 and are subject to the following additional assumptions:

        the total shares of New iLearningEngines Common Stock to be issued to holders of iLearningEngines Common Stock will be 123,480,367;

        the exercise of iLearningEngines Warrants pursuant to the Merger Agreement occur on December 31, 2023 and that the Exchange Ratio as of December 31, 2023 is 0.85644;

        the issuance of the shares of New iLearningEngines Common Stock to the PIPE Investors;

        all vested restricted stock units as of December 31, 2023 covering shares of New iLearningEngines Common Stock that will be held by equityholders of iLearningEngines immediately following the Effective Time have been converted;

        the PIPE Investment is consummated in accordance with its terms for $7 million, with 700,000 shares of Class A Common Stock issued to the PIPE Investors;

        no unvested restricted stock units as of December 31, 2023 covering shares of New iLearningEngines Common Stock that will be held by equityholders of iLearningEngines immediately following the Effective Time have been converted;

        the shares to be issued to iLearningEngines stockholders do not account for the issuance of any additional shares upon the closing of the Business Combination under the 2024 Plan and ESPP;

        no exercise of Arrowroot Warrants; and

        no issuance of additional securities by Arrowroot prior to the Effective Time.

If any of these assumptions are not correct, these percentages will be different.

For purposes of the table:

        Assuming no redemption scenario:    This presentation assumes that no Public Stockholders exercise redemption rights with respect to their Public Shares.

        Assuming 50% of maximum redemption scenario:    This presentation assumes that the Public Stockholders holding approximately 22% of the Public Shares exercise redemption rights with respect to their Public Shares (assuming that Polar purchases and elects not to redeem 2,500,000 Public Shares as per the Forward Purchase Agreement). This scenario assumes that 972,906 Public Shares are redeemed for an aggregate redemption payment of approximately $10.08 million, including a pro rata portion of interest accrued on the Trust Account of $0.348 million. This 50% of maximum redemption scenario is based on a minimum cash condition of $100 million at the Closing of the Business Combination, consisting of Trust Account funds, and Convertible Note Investment proceeds and certain private placement and debt financing proceeds less transaction expenses and the aggregate amount of cash proceeds that will be required to satisfy the redemption of the Public Shares.

        Assuming maximum redemption scenario:    This presentation assumes that the Public Stockholders holding approximately 44% of the Public Shares exercise redemption rights with respect to their Public Shares (assuming that Polar purchases and elects not to redeem 2,500,000 Public Shares as per the Forward Purchase Agreement). This scenario assumes that 1,945,813 Public Shares are redeemed for an aggregate redemption payment of approximately $20.2 million, including a pro rata portion of interest accrued on the Trust Account of $0.697 million. This maximum redemption scenario is based on a minimum cash condition of

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$100 million at the Closing of the Business Combination, consisting of Trust Account funds, and Convertible Note Investment proceeds and certain private placement and debt financing proceeds less transaction expenses and the aggregate amount of cash proceeds that will be required to satisfy the redemption of the Public Shares.

 

Assuming No
Additional Redemptions

 

Assuming 50% of
Maximum Redemptions

 

Assuming Maximum
Redemptions

   

Shares

 

Percentage

 

Shares

 

Percentage

 

Shares

 

Percentage

Former iLearningEngines equity holders

 

123,480,367

 

87.5

%

 

123,480,367

 

88.1

%

 

123,480,367

 

88.8

%

Former Arrowroot Class A common stockholders

 

4,445,813

 

3.2

%

 

3,472,907

 

2.5

%

 

2,500,000

 

1.8

%

Convertible Notes(1)

 

2,110,895

 

1.5

%

 

2,110,895

 

1.5

%

 

2,110,895

 

1.5

%

PIPE Investors

 

700,000

 

0.5

%

 

700,000

 

0.5

%

 

700,000

 

0.5

%

Sponsor affiliates and certain current and former Arrowroot directors(2)

 

10,391,609

 

7.3

%

 

10,391,609

 

7.4

%

 

10,391,609

 

7.4

%

Total shares of New iLearningEngines Common Stock outstanding at closing

 

141,128,684

 

100.0

%

 

140,155,778

 

100.0

%

 

139,182,871

 

100.0

%

____________

(1)      Excludes Convertible Notes held by affiliates of the Sponsor.

(2)      Excludes 8,250,000 Private Warrants held by the Sponsor and includes 2,810,846 shares from conversion of Convertible Notes from Arrowroot Capital and 393,263 shares from conversion of Arrowroot Promissory Notes.

Stockholders will experience additional dilution to the extent New iLearningEngines issues additional shares of New iLearningEngines Common Stock after the closing of the Business Combination. The table above excludes (a) 22,625,000 shares of New iLearningEngines Common Stock that will be issuable upon the exercise of the 8,250,000 Private Placement Warrants and 14,375,000 public warrants; (b) 97,893 shares of New iLearningEngines Common Stock that will be issuable upon the conversion of unvested iLearningEngines RSUs; (c) 14,112,868 shares of New iLearningEngines Common Stock that will initially be available for issuance under the 2024 Plan in the “no additional redemptions” scenario, 14,015,577 shares of New iLearningEngines Common Stock that will initially be available for issuance under the 2024 Plan in the “50% of maximum redemptions” scenario and 13,918,287 shares of New iLearningEngines Common Stock that will initially be available for issuance under the 2024 Plan in the “maximum redemptions” scenario; and (d) 2,822,573 shares of New iLearningEngines Common Stock that will be available for issuance under the ESPP in the “no additional redemptions” scenario, 2,803,115 shares of New iLearningEngines Common Stock that will be available for issuance under the ESPP in the “50% of maximum redemptions” scenario and 2,783,657 shares of New iLearningEngines Common Stock that will initially be available for issuance under the ESPP in the “maximum redemptions” scenario. The following table illustrates the impact on relative ownership levels assuming the issuance of all such shares:

 

Assuming No Additional
Redemptions

 

Assuming 50% of
Maximum Redemptions

 

Assuming Maximum
Redemptions

   

Shares

 

Percentage

 

Shares

 

Percentage

 

Shares

 

Percentage

Total shares of New iLearningEngines Common Stock outstanding at closing

 

141,128,684

 

78.0

%

 

140,155,778

 

78.0

%

 

139,182,871

 

77.9

%

Shares underlying public warrants

 

14,375,000

 

8.0

%

 

14,375,000

 

8.0

%

 

14,375,000

 

8.1

%

Shares underlying Private Placement Warrants

 

8,250,000

 

4.6

%

 

8,250,000

 

4.6

%

 

8,250,000

 

4.6

%

Shares underlying New iLearningEngines Assumed
RSUs

 

97,893

 

0.1

%

 

97,893

 

0.1

%

 

97,893

 

0.1

%

Shares initially reserved for issuance under the 2024 Plan(a)

 

14,112,868

 

7.8

%

 

14,015,577

 

7.8

%

 

13,918,287

 

7.8

%

Shares initially reserved for issuance under the ESPP(b)

 

2,822,573

 

1.5

%

 

2,803,115

 

1.5

%

 

2,783,657

 

1.5

%

Total shares

 

180,787,018

 

100.0

%

 

179,697,363

 

100.0

%

 

178,607,708

 

100.0

%

____________

(a)      Subject to the discretion of New iLearningEngines Board, on the first trading day in January each calendar year, beginning with January 1, 2025, and continuing through January 1, 2034, the number of shares of New iLearningEngines Common

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____________

Stock available for issuance under the 2024 Plan will automatically increase by five percent (5%) of the total number of shares of New iLearningEngines Common Stock outstanding on the last trading day of December of the immediately preceding calendar year.

    

(b)      Subject to the discretion of New iLearningEngines Board, on the first trading day in January each calendar year, beginning with January 1, 2025, and continuing through January 1, 2034, the number of shares of New iLearningEngines Common Stock available for issuance under the ESPP will automatically increase by one percent (1%) of the total number of shares of New iLearningEngines Common Stock outstanding on the last trading day of December of the immediately preceding calendar year.

For more information, please see the sections entitled “Unaudited Pro Forma Condensed Combined Financial Information” and “Proposal 1 — The Business Combination Proposal — Ownership of New iLearningEngines After the Closing.”

Other Agreements Related to the Merger Agreement

Stockholder Support Agreement

Concurrently with the execution of the Merger Agreement, Arrowroot, iLearningEngines, and the stockholders of iLearningEngines holding sufficient shares of iLearningEngines Common Stock to meet the Requisite Approval entered into the Stockholder Support Agreement, pursuant to which, among other things, such stockholders of iLearningEngines agreed to: (i) not transfer, arrange to transfer or announce any transfer of any iLearningEngines shares such stockholders hold or may acquire, other than transfers to other stockholders of iLearningEngines that are party to the Stockholder Support Agreement, transfers for estate planning purposes or pursuant to intestacy laws, transfers that are a distribution to partners, members or affiliates of such stockholder or transfers of Incentive Shares; (ii) approve and adopt the Merger Agreement, the ancillary agreements thereto and the transactions contemplated thereby, (iii) vote against or withhold consent with respect to any merger, purchase of all or substantially all of iLearningEngines’ assets or other business combination transactions other than the Business Combination, (iv) vote against or withhold consent any proposal, action or agreement that would impede or frustrate the Business Combination, result in a breach of any representation, warranty or covenant in the Merger Agreement or result in a condition to the Business Combination being unfulfilled, (v) not commence or join any class in a class action challenging the validity of the Business Combination or alleging a breach of fiduciary duty by any person in connection with the Business Combination, and (vi) waive dissenters’ rights, appraisal rights or similar rights under Delaware law. The Stockholder Support Agreement will terminate upon the earliest to occur of: (i) the Effective Time of the Merger Agreement, (ii) the termination of the Merger Agreement and (iii) as to each iLearningEngines stockholder a party thereto, upon the written agreement of Arrowroot, iLearningEngines and such iLearningEngines stockholder.

Sponsor Support Agreement

Concurrently with the execution of the Merger Agreement, Arrowroot entered into the Sponsor Support Agreement with the Sponsor, Dixon Doll, Will Semple and iLearningEngines, pursuant to which each of the Sponsor and Messrs. Doll and Semple agreed to (i) vote all shares of Arrowroot Common Stock held by such person 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 such person, to have Arrowroot discharge any Excess Transaction Expenses by payment in cash against a corresponding cancellation of shares of Arrowroot Common Stock held by such person (or any combination thereof), (iii) loan all amounts contemplated by the proxy statement filed by Arrowroot on or about February 13, 2023, pursuant to which the Arrowroot stockholders approved the extension of the deadline by which Arrowroot 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 Arrowroot or any other anti-dilution or similar protection with respect to the Class B Common Stock of Arrowroot, 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 Arrowroot’s by-laws, in each case, on the terms and subject to the conditions set forth therein.

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Convertible Note Purchase Agreements

Also on April 27, 2023, iLearningEngines entered into a convertible note purchase agreement, with the Convertible Note Investors, pursuant to which, among other things, iLearningEngines may issue and sell to the Convertible Note Investors convertible notes due in October 2025 with aggregate principal amount of up to $50,000,000, of which iLearningEngines has issued and sold Convertible Notes with aggregate principal amount of $17,400,000. Each Convertible Note accrues 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 Convertible Note will automatically convert into the Convertible Note Shares. Affiliates of our Sponsor have purchased $9,900,000 of Convertible Notes, convertible into an estimated 2,810,846 shares of New iLearningEngines Common Stock. The Convertible Note Purchase Agreement is attached to this proxy statement/prospectus as Annex H and the form of convertible note issued or to be issued pursuant to the Convertible Note Purchase Agreement is attached to this proxy statement/prospectus as Annex I. The Convertible Note Purchase Agreement contains customary representations and warranties of iLearningEngines, on the one hand, and each Convertible Note Investor, on the other hand.

The initial closing of the sale of Convertible Notes pursuant to the Convertible Note Purchase Agreement occurred concurrently with the execution of the Convertible Note Purchase Agreement. To date, iLearningEngines has issued and sold Convertible Notes in the aggregate principal amount of $17,400,000 and is able to sell and issue, from time to time, additional Convertible Notes in the aggregate principal amount of up to $32,600,000. The purpose of the Convertible Note Investment is to raise additional capital for use by iLearningEngines prior to the consummation of the Business combination.

To the extent iLearningEngines elects to sell additional Convertible Notes, the Sponsor will have a 5-day right of first offer. The Convertible Notes are subject to “most favored nations” provision in favor of the Convertible Note Investors, such that the Convertible Note Investors are entitled to elect to amend and restate the Convertible Notes held by them to be identical to the economic terms of any other subsequent convertible promissory note issued by iLearningEngines.

iLearningEngines has agreed to provide each Convertible Note Investor with a reciprocal waiver, amendment or repeal in the same proportion as any release by New iLearningEngines from any lock-up or market standoff provision applicable to any director, officer or holder of more than one percent (1%) of the outstanding capital stock of New iLearningEngines, provided that such release shall not be applied in the event of (i) permission granted to any stockholder of New iLearningEngines to sell or otherwise transfer or dispose of New iLearningEngines Common Stock with aggregate value less than or equal to $250,000, or (ii) any underwritten public offering, subject to any contractual registration rights the Convertible Note Investor may have.

Amended and Restated Registration Rights Agreement

The Merger Agreement contemplates that, at the Closing, New iLearningEngines, the Sponsor, the independent directors of Arrowroot, certain significant securityholders of iLearningEngines and certain of their respective affiliates will enter into an Amended and Restated Registration Rights Agreement pursuant to which New iLearningEngines will agree to register for resale, pursuant to Rule 415 under the Securities Act, certain shares of New iLearningEngines Common Stock and other equity securities of New iLearningEngines that are held by the parties thereto from time to time. Additionally, the Registration Rights Agreement will contain certain restrictions on transfer with respect to the securities of New iLearningEngines held by the Sponsor or the former iLearningEngines securityholders immediately following Closing. Such restrictions will begin at the Closing and terminate on the one (1) year anniversary of the Closing (subject to early termination (a) if the closing price of the New iLearningEngines 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 a 30 trading-day period commencing at least 150 days after the Closing or (b) upon the consummation of a change of control).

Forward Purchase Agreement

On April 26, 2023, Arrowroot and Polar entered into an agreement (“Forward Purchase Agreement”), pursuant to which, among other things, Arrowroot agreed to purchase up to 2,500,000 shares of Arrowroot Class A Common Stock from Polar at the price equal to the redemption price of the Public Shares at the Closing, plus $0.60 (the “FPA Redemption Price”). In exchange for Arrowroot’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 Closing,

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Arrowroot will pre-pay to Polar for the forward purchase an amount equal to the Prepayment Amount (as defined in the Forward Purchase Agreement). 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 Arrowroot. If Polar terminates the Forward Purchase Agreement with respect to some or all of the shares prior to the Maturity Date, Polar will return to Arrowroot the terminated shares and Arrowroot will make a payment equal to the number of such terminated shares multiplied by the FPA Redemption Price. Arrowroot can terminate the Forward Purchase Agreement prior to the redemption deadline if Arrowroot pays Polar a $300,000 break-up fee. On the Maturity Date, if Polar has not terminated the Forward Purchase Agreement in full, then Arrowroot may be required to make a cash payment to Polar equal to the number of shares (less any shares terminated prior to the Maturity Date) multiplied by $0.60, minus the Prepayment Amount.

Board of New iLearningEngines following the Business Combination

Upon the Closing, we anticipate that the New iLearningEngines Board will consist of five members, reclassified into three separate classes, with each class serving a three-year term; except with respect to the election of directors at the special meeting pursuant to Proposal No. 4 — The Election of Directors Proposal, the Class I directors will be elected to an initial one-year term (and three-year terms subsequently), the Class II directors will be elected to an initial two-year term (and three-year terms subsequently) and the Class III directors will be elected to an initial three-year term (and three-year terms subsequently). All of our existing directors of Arrowroot, except for Tom Olivier, have informed us that they will resign from our board of directors upon Closing.

Our board of directors has nominated the following individuals for election at our special meeting:

        Class I Directors:    Harish Chidambaran and Balakrishnan Arackal;

        Class II Directors:    Matthew Barger and Thomas Olivier; and

        Class III Directors:    Bruce Mehlman.

For additional details, see the sections of this proxy statement/prospectus entitled “Proposal No. 4 — The Election of Directors Proposal” and “Directors and Executive Officers After the Business Combination.

Accounting Treatment of the Business Combination

The Business Combination will be accounted for as a reverse recapitalization in accordance with GAAP. Under this method of accounting, Arrowroot will be treated as the acquired company and iLearningEngines will be treated as the accounting acquirer for financial statement reporting purposes.

For more information, see the section entitled “The Business Combination — Accounting Treatment of the Business Combination.”

Appraisal or Dissenter’s Rights

No appraisal or dissenter’s rights are available to holders of shares of Arrowroot Common Stock or Arrowroot Warrants in connection with the Business Combination.

Arrowroot Proposals for Stockholder Approval

At the special meeting, Arrowroot’s stockholders will be asked to separately approve the following proposals:

        The Business Combination Proposal — a proposal to approve the adoption of the Merger Agreement and the Business Combination.

        The Organizational Documents Proposal — a proposal to approve the Proposed Charter and the Proposed Bylaws.

        The Advisory Organizational Documents Proposals — four proposals to amend Arrowroot’s Existing Charter.

        The Election of Directors Proposal — a proposal to elect the directors comprising the board of directors of New iLearningEngines.

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        The Equity Incentive Plan Proposal — a proposal to approve and adopt the incentive equity plan established to be effective after the Closing.

        The Employee Stock Purchase Plan Proposal — a proposal to approve and adopt the employee stock purchase plan established to be effective after the Closing of the Business Combination.

        The Nasdaq Proposal — a proposal to approve, for purposes of complying with the applicable listing rules of The Nasdaq Stock Market LLC, the issuance of shares of Arrowroot Class A Common Stock to the iLearningEngines stockholders in the Merger pursuant to the Merger Agreement and to the Convertible Note Investors in the Convertible Note Investment in connection with the Business Combination.

        The Adjournment Proposal — a proposal to adjourn the special meeting to a later date or dates, if necessary, to permit further solicitation and vote of proxies if, based upon the tabulated vote at the time of the special meeting, there are not sufficient votes to approve one or more proposals presented to stockholders for vote.

For more information about these proposals, see the sections of this proxy statement/prospectus entitled “Proposal No. 1 — The Business Combination Proposal,” “Proposal No. 2 — The Organizational Documents Proposal,” “Proposals No. 3 — The Advisory Organizational Documents Proposals,” “Proposal No. 4 — The Election of Directors Proposal,” “Proposal No. 5 — The Equity Incentive Plan Proposal,” “Proposal No. 6 — The Employee Stock Purchase Plan Proposal,” “Proposal No. 7 — The Nasdaq Proposal,” and “Proposal No. 8 — The Adjournment Proposal.

Date, Time and Place of Special Meeting

The special meeting will be held on February 12, 2024, at 9:00 a.m., Eastern time, conducted via live webcast at the following address: https://www.virtualshareholdermeeting.com/ARRW2024SM. You will need the 16-digit meeting control number that is printed on your proxy card to enter the special meeting. Arrowroot recommends that you log in at least 15 minutes before the special meeting to ensure you are logged in when the special meeting starts. Please note that you will not be able to attend the special meeting in person.

Record Date and Voting

Arrowroot’s stockholders will be entitled to vote or direct votes to be cast at the special meeting if they owned shares of Arrowroot Class A Common Stock or Arrowroot Class B Common Stock at the close of business on January 18, 2024, which is the Record Date for the special meeting. Arrowroot’s stockholders are entitled to one vote for each share of Arrowroot Class A Common Stock or Arrowroot Class B Common Stock that they owned as of the close of business on the Record Date. If Arrowroot’s stockholders’ shares are held in “street name” or are in a margin or similar account, such stockholder should contact their broker, bank or other nominee to ensure that votes related to the shares beneficially own by such stockholder are properly counted. On the Record Date, there were 4,445,813 shares of Arrowroot Class A Common Stock outstanding and 7,187,500 shares of Arrowroot Class B Common Stock outstanding. Our Sponsor holds 7,067,500 shares of Arrowroot Class B Common Stock, and two of our directors, Messrs. Doll and Semple, currently hold 80,000 shares of Arrowroot Class B Common Stock in the aggregate. One of Arrowroot’s former directors, Guarav Dhillon, currently holds 40,000 shares of Arrowroot Class B Common Stock.

Our Sponsor and our officers and directors have agreed to vote all of their shares of Arrowroot Class B Common Stock and any Public Shares acquired by them in favor of the Business Combination Proposal. Arrowroot’s issued and outstanding Arrowroot Warrants do not have voting rights at the special meeting.

Quorum and Vote Required for the Arrowroot Proposals

For all the proposals other than the Organizational Documents Proposal, a quorum will be present at the special meeting if a majority of the Arrowroot Common Stock outstanding and entitled to vote at the special meeting is represented in person or by proxy.

For the Organizational Documents Proposal, a quorum will be present at the special meeting if a majority of the Arrowroot Class A Common Stock outstanding and entitled to vote at the special meeting, a majority of the Arrowroot Class B Common Stock outstanding and entitled to vote at the special meeting, and a majority of the Arrowroot Common Stock outstanding and entitled to vote at the special meeting are represented in person online or by proxy. Based on the number of shares outstanding and entitled to vote as of the Record Date, 5,816,657 shares of Arrowroot Common Stock, 2,222,907 shares of Arrowroot Class A Common Stock and 3,593,751 shares of Arrowroot Class B Common Stock will be required to be present at the special meeting to achieve a quorum.

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The approval of the Organizational Documents Proposal requires the affirmative vote (in person or by proxy) of the majority of the issued and outstanding shares of each of the Arrowroot Class A Common Stock and Arrowroot Class B Common Stock, voting separately, as well as the vote of a majority of the issued and outstanding shares of Arrowroot Class A Common Stock and Arrowroot Class B Common Stock, voting together as a single class.

The approval of the Business Combination Proposal, the Advisory Organizational Documents Proposals, Equity Incentive Plan Proposal, Employee Stock Purchase Plan Proposal, Nasdaq Proposal and Adjournment Proposal require the affirmative vote (in person or by proxy) of the holders of a majority of the shares of Arrowroot Common Stock, voting together as a single class, that are cast thereon at the special meeting.

The approval of the election of each director nominee pursuant to the Election of Directors Proposal requires the affirmative vote of the holders of a plurality of the outstanding shares of Arrowroot Common Stock, voting together as a single class, that are cast thereon at the special meeting.

Pursuant to the Merger Agreement, the Business Combination is conditioned upon the approval of holders of at least sixty-five percent (65%) of the outstanding shares of Arrowroot Common Stock entitled to vote, who attend and vote thereupon at the special meeting.

As of the Record Date, our Sponsor, and current and former officers and directors collectively owned approximately 61.78% of our issued and outstanding shares of Arrowroot Class A Common Stock and Arrowroot Class B Common Stock, including all of the shares of Arrowroot Class B Common Stock. The Sponsor, officers and directors have agreed to vote any shares of Arrowroot Class A Common Stock and Arrowroot Class B Common Stock owned by them in favor of the Business Combination pursuant to the Letter Agreement and the Sponsor Support Agreement. Accordingly, assuming all of the outstanding shares of Arrowroot Common Stock vote “FOR” each proposal, each of the Advisory Organizational Documents Proposals, Business Combination Proposal, Equity Incentive Plan Proposal, Employee Stock Purchase Plan Proposal, Nasdaq Proposal and Adjournment Proposal will be approved even if none of the outstanding Arrowroot Class A Common Stock vote in favor of such proposals and the Organizational Documents Proposal will require the affirmative vote of a majority of the Arrowroot Class A Common Stock (in person or by proxy) in order to be approved. Directors are elected by a plurality of the votes cast, in person online or by proxy at the special meeting. This means that the five nominees will be elected if they receive more affirmative votes than any other nominee for the same position.

For more information about these proposals, see the section entitled “Quorum and Vote Required for the Arrowroot Proposals.”

Recommendation to Arrowroot Stockholders

Our board of directors believes that each of the Arrowroot Proposals is in the best interests of Arrowroot and our stockholders and unanimously recommends that its stockholders vote “FOR” each of the Arrowroot Proposals, including “FOR” each of the director nominees.

Arrowroot Board’s Reasons for the Approval of the Business Combination

After careful consideration, the Arrowroot Board recommends that its stockholders vote “FOR” the approval of the Business Combination Proposal. For a description of the Arrowroot Board’s reasons for the approval of the Business Combination, see the section entitled “The Business Combination — Arrowroot Board’s Reasons for the Approval of the Business Combination.”

Interests of Arrowroot Directors and Officers in the Business Combination

When considering the Arrowroot Board’s recommendation that Arrowroot’s stockholders vote in favor of the approval of the Business Combination Proposal and the other proposals presented for stockholder approval in this proxy statement/prospectus, Arrowroot’s stockholders should be aware that certain of Arrowroot’s Sponsor, executive officers and directors have interests in the Business Combination that may be different from or in addition to (or which may conflict with) the interests of Arrowroot’s other stockholders.

These interests may influence Arrowroot’s directors in making their recommendation that you vote in favor of the Business Combination Proposal and the transactions contemplated thereby. These interests were considered by the Arrowroot Board when it approved the Business Combination. For further information, please see the section entitled “The Business Combination — Interests of Arrowroot Directors and Officers in the Business Combination.”

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Redemption Rights

Pursuant to our Existing Charter, holders of Public Shares may elect to have their Public Shares redeemed for cash at the applicable redemption price per share calculated in accordance with our Existing Charter. For illustrative purposes, based on funds in the Trust Account of approximately $46.1 million on September 30, 2023, the estimated per share redemption price would have been approximately $10.36. If a Public Stockholder exercises its redemption rights, then such Public Stockholder will be exchanging its shares of our Arrowroot Class A Common Stock for cash and will no longer own shares of Arrowroot. Such a holder will be entitled to receive cash for its Public Shares only if it properly demands redemption and delivers its shares (either physically or electronically) to our transfer agent in accordance with the procedures described herein. Each redemption of Public Shares by our Public Stockholders will decrease the amount in our Trust Account, which held approximately $46.1 million on September 30, 2023. See the section entitled “Special Meeting of Arrowroot Stockholders — Redemption Rights” for the procedures to be followed if you wish to redeem your shares for cash.

U.S. Federal Income Tax Considerations for Holders of Arrowroot Class A Common Stock Exercising Redemption Rights

As described more fully herein, a holder of our Arrowroot Class A Common Stock that exercises its redemption rights to receive cash in exchange for such shares may be treated as selling its Arrowroot Class A Common Stock in a taxable sale or exchange resulting in the recognition of gain or loss. There may be certain circumstances in which the redemption may be treated as a distribution as an amount equal to the redemption proceeds, for U.S. federal income tax purposes, depending on the amount of our stock that a holder owns or is deemed to own by attribution (including through the ownership of warrants).

Please see the section entitled “Material U.S. Federal Income Tax Considerations Of The Redemption And The Business Combination — U.S. Federal Income Tax Considerations for Holders of Arrowroot Class A Common Stock Exercising Redemption Rights” for additional information. You are urged to consult your tax advisors regarding the tax consequences of exercising your redemption rights.

Emerging Growth Company

Arrowroot is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by 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 auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in Arrowroot’s 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. Arrowroot 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, Arrowroot, 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 Arrowroot’s financial statements with certain other public companies difficult or impossible because of the potential differences in accounting standards used.

Arrowroot will remain an emerging growth company until the earlier of: (1) the last day of the fiscal year (a) following the fifth anniversary of the closing of Arrowroot’s initial public offering (i.e., December 31, 2026), (b) in which it has total annual gross revenue of at least $1.235 billion or (c) in which Arrowroot is deemed to be a “large accelerated filer” under the rules of the SEC, which means the market value of Arrowroot’s common equity that is held by non-affiliates exceeds $700 million as of the end of the prior fiscal year’s second fiscal quarter; and (2) the date on which Arrowroot will have issued more than $1.0 billion in non-convertible debt securities during the prior three-year period.

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Summary of Risk Factors

In evaluating the Business Combination and the proposals to be considered and voted on at the special meeting of Arrowroot stockholders, you should carefully read this proxy statement/prospectus, including the annexes, and especially review and consider the factors discussed in the section entitled “Risk Factors.” Some of the risks related to iLearningEngines’ business and industry, Arrowroot, and the Business Combination are summarized below.

Risks Related to iLearningEngines’ Business

        iLearningEngines has a history of net losses and could continue to incur substantial net losses in the future.

        iLearningEngines’ recent rapid growth may not be indicative of iLearningEngines’ future growth. iLearningEngines’ rapid growth also makes it difficult to evaluate iLearningEngines’ future prospects and may increase the risk that iLearningEngines will not be successful.

        iLearningEngines may not be able to successfully manage its growth and, if iLearningEngines is not able to grow efficiently, iLearningEngines may not be able to reach or maintain profitability, and its business, financial condition, and results of operations could be harmed.

        Because iLearningEngines derives substantially all of its revenue from its learning automation and information intelligence offerings, failure of this platform to satisfy customer demands could adversely affect iLearningEngines’ business, results of operations, financial condition, and growth prospects.

        If iLearningEngines is unable to attract new customers, its business, financial condition, and results of operations will be adversely affected.

        A limited number of contracted customers represent a substantial portion of iLearningEngines’ revenue and ARR. If iLearningEngines fails to retain these contracted customers, its revenue and ARR could decline significantly.

        iLearningEngines relies on a channel partner for key business development, administrative, operational and other functions that are important to its business. The loss of this service provider could materially and adversely affect iLearningEngines’ business, results of operations and financial condition.

        The markets in which iLearningEngines participates are competitive and, if iLearningEngines does not compete effectively, its business, financial condition, and results of operations could be harmed.

        The success of iLearningEngines’ platform relies on the ability of iLearningEngines’ AI-enabled ecosystem to create broad solutions across corporate functions, and a failure to do so would adversely affect iLearningEngines’ business, financial condition, and results of operations.

        If iLearningEngines fails to retain and motivate members of iLearningEngines’ management team or other key employees or to integrate new team members, fail to execute management transitions, or fails to attract additional qualified personnel to support iLearningEngines’ operations, iLearningEngines’ business and future growth prospects could be harmed.

        Market adoption of automated learning solutions is relatively new and may not grow as iLearningEngines expects, which may harm iLearningEngines’ business and results of operations.

        iLearningEngines relies on iLearningEngines’ channel partners to generate a substantial amount of iLearningEngines’ revenue, and if we fail to expand and manage our distribution channels, our revenue could decline and our growth prospects could suffer.

        If iLearningEngines is not able to introduce new features or services successfully and to make enhancements to iLearningEngines’ platform or products, iLearningEngines’ business and results of operations could be adversely affected.

        iLearningEngines targets enterprise customers, and sales to these customers involve risks that may not be present or that are present to a lesser extent with sales to smaller entities.

        Real or perceived errors, failures, or bugs in iLearningEngines’ platform and products could adversely affect iLearningEngines’ business, results of operations, financial condition, and growth prospects.

        Incorrect or improper implementation or use of iLearningEngines’ platform and products could result in customer dissatisfaction and harm iLearningEngines’ business, results of operations, financial condition, and growth prospects.

        If iLearningEngines is unable to ensure that its platform integrates with a variety of software applications that are developed by others, including its integration partners, iLearningEngines may become less competitive and its results of operations may be harmed.

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        iLearningEngines’ outstanding indebtedness could adversely affect iLearningEngines’ financial condition and iLearningEngines’ ability to operate iLearningEngines’ business and pursue iLearningEngines’ business strategies and iLearningEngines’ may not be able to generate sufficient cash flows to meet iLearningEngines’ debt service obligations.

        iLearningEngines relies on data sets from its customers. If iLearningEngines is not able to acquire or utilize such data sets, or regulations limit it from doing so, iLearningEngines’ business, financial condition, and results of operations could be adversely affected.

•iLearningEngines is subject to stringent and changing obligations related to data privacy and security. iLearningEngines actual or perceived failure to comply with such obligations could lead to regulatory investigations or actions; litigation; fines and penalties; disruptions of our business operations; reputational harm; loss of revenue or profits; loss of customers or sales; and other adverse business consequences.

        Any failure to obtain, maintain, protect, or enforce iLearningEngines’ intellectual property and proprietary rights could impair iLearningEngines’ ability to protect iLearningEngines’ proprietary technology and iLearningEngines’ brand.

•iLearningEngines’ management has identified material weaknesses in iLearningEngines’ internal control over financial reporting and they may identify additional material weaknesses in the future. If iLearningEngines fails to remediate the material weaknesses or if it otherwise fails to establish and maintain effective control over financial reporting, it may adversely affect iLearningEngines’ ability to accurately and timely report its financial results, and may adversely affect investor confidence and business operations.

Risks Related to the Business Combination and New iLearningEngines

        If the perceived benefits of the Business Combination do not meet the expectations of investors or securities analysts, the market price of Arrowroot’s common stock may decline before the Closing, or the market price of New iLearningEngines’ securities may decline after the Closing.

        Fluctuations in operating results, quarter to quarter earnings and other factors, including incidents involving customers and negative media coverage, may result in significant decreases in the price of New iLearningEngines’ securities

        An active market for New iLearningEngines’ securities may not develop, which would adversely affect the liquidity and price of New iLearningEngines’ securities.

•iLearningEngines does not have experience operating as a United States public company and may not be able to adequately develop and implement the governance, compliance, risk management and control infrastructure and culture required for a public company, including compliance with the Sarbanes Oxley Act.

Risks Related to Arrowroot’s Business and the Business Combination

        The Business Combination and New iLearningEngines becoming a publicly listed company as a result of the Merger differs significantly from an underwritten initial public offering.

        The unaudited pro forma financial information and other projections included herein may not be indicative of what New iLearningEngines’ actual financial position or results of operations would have been.

        Arrowroot’s Sponsor, officers and directors have potential conflicts of interest in recommending that stockholders vote in favor of approval of the Business Combination Proposal and approval of the other proposals described in this proxy statement/prospectus.

        Arrowroot has identified a material weakness in its internal control over financial reporting as of March 31, 2023. This material weakness could continue to adversely affect its ability to report its results of operations and financial condition accurately and in a timely manner.

Risks Related to Redemptions

        If a stockholder fails to receive notice of Arrowroot’s offer to redeem the Public Shares in connection with the Business Combination, or fails to comply with the procedures for tendering its shares, such shares may not be redeemed.

        If we are unable to consummate our initial business combination, Public Stockholders may be forced to wait until after the Extension Deadline before redemption from the Trust Account.

     There is no guarantee that a stockholder’s decision whether to redeem their shares of Arrowroot Class A Common Stock for a pro rata portion of the Trust Account will put the stockholder in a better future economic position.

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SELECTED HISTORICAL CONSOLIDATED FINANCIAL INFORMATION OF ILEARNINGENGINES

The following table shows summary historical financial information of iLearningEngines for the periods and as of the dates indicated.

The selected historical consolidated financial information of iLearningEngines as of September 30, 2023 and for the nine months ended September 30, 2023 and 2022, was derived from the unaudited condensed consolidated historical financial statements of iLearningEngines included elsewhere in this proxy statement/prospectus. The selected historical consolidated financial information of iLearningEngines as of and for the years ended December 31, 2022, 2021, and 2020 was derived from the audited consolidated historical financial statements of iLearningEngines included elsewhere in this proxy statement/prospectus.

The following selected historical consolidated financial information should be read together with the financial statements and accompanying notes and “iLearningEngines’ Management’s Discussion and Analysis of Financial Condition and Results of Operations” appearing elsewhere in this proxy statement/prospectus. The summary historical financial information in this section is not intended to replace iLearningEngines financial statements and the related notes. iLearningEngines historical results are not necessarily indicative of iLearningEngines future results.

As explained elsewhere in this proxy statement/prospectus, the financial information contained in this section relates to iLearningEngines, prior to and without giving pro forma effect to the impact of the business combination and, as a result, the results reflected in this section may not be indicative of the results of the combined company going forward.

Statement of Operations Data

 

For the Nine Months Ended
September 30,

 

For the Year Ended
December 31,

(In thousands, except shares and per share data)

 

2023

 

2022

 

2022

 

2021

 

2020

Revenue

 

$

304,917

 

 

$

225,727

 

 

$

309,170

 

 

$

217,867

 

 

$

141,753

 

Total costs and expenses

 

 

295,006

 

 

 

216,390

 

 

 

297,292

 

 

 

210,181

 

 

 

133,814

 

Income from operations

 

 

9,911

 

 

 

9,337

 

 

 

11,878

 

 

 

7,686

 

 

 

7,939

 

Other (expense) income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

(4,603

)

 

 

(5,231

)

 

 

(6,614

)

 

 

(5,047

)

 

 

(1,082

)

Change in fair value of warrant liability

 

 

(681

)

 

 

240

 

 

 

248

 

 

 

(83

)

 

 

 

Change in fair value of convertible notes

 

 

(4,425

)

 

 

 

 

 

 

 

 

 

 

 

 

Other (expense) income

 

 

(44

)

 

 

32

 

 

 

(21

)

 

 

(3

)

 

 

 

Net (loss) income before income tax expense

 

 

158

 

 

 

4,378

 

 

 

5,491

 

 

 

2,553

 

 

 

6,857

 

Income tax (expense) benefit

 

 

(330

)

 

 

(675

)

 

 

5,975

 

 

 

(32

)

 

 

 

Net (loss) income

 

$

(172

)

 

$

3,703

 

 

$

11,466

 

 

$

2,521

 

 

$

6,857

 

Net (loss) income per share – basic

 

$

(0.00

)

 

$

0.03