Exhibit 99.1

Arco Platform Limited

Unaudited interim condensed

consolidated financial statements

March 31, 2023

Arco Platform Limited

Interim condensed consolidated statements of financial position

As of March 31, 2023 and December 31, 2022

(In thousands of Brazilian reais, unless otherwise stated)

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

Arco Platform Limited

Interim condensed consolidated statements of income

For the three-month periods ended March 31, 2023 and 2022

(In thousands of Brazilian reais, except earnings per share)

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

Arco Platform Limited

Interim condensed consolidated statements of comprehensive income

For the three-month periods ended March 31, 2023 and 2022

(In thousands of Brazilian reais)

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

Arco Platform Limited

Interim condensed consolidated statements of changes in equity 

For the three-month periods ended March 31, 2023 and 2022 

(In thousands of Brazilian reais, unless otherwise stated)

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

Arco Platform Limited

Interim condensed consolidated statements of cash flows 

For the three-month periods ended March 31, 2023 and 2022 

(In thousands of Brazilian reais)

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

Notes to the unaudited interim condensed consolidated financial statements 

For the three-month period ended March 31, 2023 

Expressed in thousands of Brazilian reais, unless otherwise stated

Arco Platform Limited (“Arco” or “Company”) is a holding Company incorporated under the laws of the Cayman Islands on April 12, 2018, whose shares are publicly traded on the National Association of Securities Dealers Automated Quotations Payments exchange (NASDAQ) under the ticker symbol “ARCE”. Arco and its subsidiaries are collectively referred to as the Company. Arco became the Parent Company of Arco Educação S.A. ("Arco Brazil") through the completion of the corporate reorganization and initial public offering of the Company in 2018. In 2023 Arco also became the Parent Company of INCO Limited and its subsidiaries (“Isaac”), after acquisition of control as disclosed in Note 3. Arco Brazil is the holding Company of the operating subsidiaries, including Companhia Brasileira de Educação e Sistemas de Ensino S.A. (“CBE”), which provides educational content from basic to secondary education (“K-12 curriculum”). The Company’s principal administrative office is located at 2840 Rua Augusta, 9th Floor, Consolação, São Paulo, Brazil. OSC Investments Limited is the ultimate parent Company of Arco.

On November 30, 2022, the Company’s board of directors received a preliminary non-binding proposal (the “Proposal”) from General Atlantic L.P. (“GA”) and Dragoneer Investment Group, LLC (“Dragoneer”) to acquire all of the outstanding Class A common shares of the Company (the “Proposed Transaction”) that are not held by GA, Dragoneer, Oto Brasil de Sá Cavalcante (“Oto”) or Ari de Sá Cavalcante Neto (“Ari” and together with Oto, the “Founders”), or their respective affiliates. See Note 1.2 in the consolidated financial statements for the year ended December 31, 2022.

On January 26, 2023, the Company announced the formation of a special committee of the board of directors (the “Special Committee”) composed of four independent and disinterested directors to evaluate and consider the Proposal.

On May 1, 2023, the Special Committee received a revised non-binding proposal in the amount of US$13.00 per share in cash. The board of directors cautions the Company’s shareholders and other potential investors considering investing or trading in the Company’s securities that the Proposal is under evaluation by the special committee and that the Company is committed to further negotiate definitive agreements. However, at this time, significant terms are still being discussed and the outcome is uncertain.

Isaac acquisition

On January 3, 2023, the Company communicated the completion of the previously announced acquisition of INCO Limited (“Isaac”). Under the terms of the Equity Purchase Agreement, Arco Platform Limited acquired control of Isaac through the acquisition of 75.1% of its issued and outstanding capital shares in exchange of Arco shares. Isaac’s shareholders received 10,436,202 Arco Class A common shares of Arco, of which 1,047,142 shares were Arco treasury shares, and 9,389,060 shares were newly issued Arco shares. Prior to the transaction, Arco held 24.9% of the share capital of Isaac. See Note 3 for further information.

2.1 Basis for preparation of the consolidated financial statements

These unaudited interim condensed consolidated financial statements have been prepared in accordance with IAS 34 Interim Financial Reporting ("IAS 34") as issued by the International Accounting Standards Board (“IASB”). Accordingly, certain disclosures included in the Company’s annual consolidated financial statements prepared in accordance with International Financial Reporting Standards (“IFRSs”) as issued by the IASB have been condensed or omitted. These unaudited interim condensed consolidated financial statements should be read in conjunction with the Company’s annual consolidated financial statements for the year ended December 31, 2022, which include information necessary or useful to understanding the Company’s business and financial statement presentation. In particular, the Company’s material accounting policies were presented in Note 2 to the consolidated financial statements for the year ended December 31, 2022.

Basis for preparation

The accounting policies applied in the preparation of these unaudited interim condensed consolidated financial statements are consistent with those applied and disclosed in the Company’s consolidated financial statements for the year ended December 31, 2022.

In preparing these unaudited interim condensed consolidated financial statements, management has made judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, revenue, and expenses. Actual results may differ from these estimates. The critical judgements made by management in applying the Company’s accounting policies and the key sources of estimation uncertainty were the same as those applied and disclosed in Note 3 Significant accounting judgments, estimates and assumptions to the Company’s consolidated financial statements for the year ended December 31, 2022.

The unaudited interim condensed consolidated financial statements have been prepared based on a historical cost basis, except for the derivative financial instruments, accounts payable to selling shareholders and share-based compensation plan, which are measured at fair value.

The unaudited interim condensed consolidated financial statements are presented in Brazilian reais (“BRL” or “R$”), which is the Company’s functional and presentation currency. All amounts are rounded to the nearest thousands, except when otherwise indicated.

Management has assessed the capacity of the Company and its subsidiaries to continue as a going concern and is convinced that they hold sufficient funds to remain as operating in the future. Furthermore, the Management is not aware of any material uncertainty that could raise significant concerns about its ability to continue as a going concern. Thus, the financial statements of the Company were prepared based on a going concern basis.

These unaudited interim condensed consolidated financial statements as of March 31, 2023, and for the three-month period ended March 31, 2023 were authorized for issuance by the Board of Directors on May 25, 2023.

2.2 Basis of consolidation and investments in associates

The unaudited interim condensed consolidated financial statements comprise the financial statements of the Company, its subsidiaries and investments in associates as of March 31, 2023 and December 31, 2022 and for the three-month periods ended March 31, 2023 and 2022.

The table below is a list of the Company’s subsidiaries and investments:

Except for the amendments of IAS 12, which is discussed below, the other amendments or new standards that apply from January 1, 2023 are primarily clarifications and none required a change in the Company’s accounting policies.

New and amended standards and interpretations

Several new or amended standards became applicable for the current reporting period. The Company did not have to change its accounting policies or make retrospective adjustments as a result of adopting these new or amended standards. 

Standards issued but not yet effective

The new and amended standards and interpretations that are issued, but not yet effective, up to the date of issuance of the Company’s financial statements are disclosed below. The Company intends to adopt these new and amended standards and interpretations, if applicable, when they become effective. The Company is assessing the impact that changes in the standards will have in current practice, but does not expect a significant or any impact to occur on the Company's financial statements:

The Company has not early adopted any standard, interpretation or amendment that has been issued but is not yet effective.

On January 25, 2021, the Company acquired 8,571,427 series B ordinary shares of Isaac, a Company that provides financial and administrative services to private schools, equivalent to 30.0% of the total capital stock for R$ 25,000.

On April 27, 2021, the Company invested R$ 33,195 in the entity and acquired an additional 3.653.788 shares, resulting in a 27.1% interest due to the dilution of the interest. On September 27, 2021, the Company acquired an additional 2,935,010 shares, representing 0.4% interest in the share capital of Isaac, through a capital increase of R$ 52,035 million resulting in a 27.5% interest. As of December 31, 2022, the Company held 24.9% interest due to dilution due to contribution from other investors in new rounds of investments.

On January 3, 2023, the Company concluded the acquisition of Isaac and its controlled companies, INCO LLC, OISA Tecnologia e Serviços Ltda., Isaac Fundo de Investimento em Direitos Creditórios, Activeprint Processamento de Dados Ltda., Techschool Inteligencia Educacional Ltda., Activesoft Tecnologia e Serviços Ltda., AIX Sistemas Ltda., Softwares de Gestão Ltda., Classapp Sistemas Ltda. and Escolas Exponenciais Ltda. In consideration for the acquisition of the outstanding shares, Isaac shareholders will receive 10,436,201 shares of the Company's stock, equivalent to approximately 15.8% of the issued shares and outstanding equity interest, immediately following the closing of the transaction.

Of the total aggregate stock consideration, 10,018,754 shares have already been delivered to Isaac's shareholders, of which 1,047,142 were from the Company's treasury shares, 8,971,612 were newly issued shares and the remaining shares in the total of 417,448 have been retained for a period of 18 months (“holdback period”) for future claims. The transaction resulted in a dilution of approximately 14.2% for Arco's Class A shareholders.

As part of the acquisition, the Company granted to Isaac's employees new share-based awards to replace Isaac’s share-based compensation awards. The replacement awards were divided between stock options plan – SOP, called Arco Share Option Plan and restricted shares units – RSU, under Arco Regular Plan terms as mentioned in Note 13.

The Company accounted for the replacement awards as modification of the original granted instruments.

The acquisition of Isaac significantly expands Arco’s footprint in Brazil’s education ecosystem by increasing the scope of its portfolio of products, making Arco a true one-stop-shop for its partner schools, while establishing closer relationships with families.

The founding shareholders of Isaac are subject to a lock-up period of 3 years from the closing date with respect to their Arco shares, with 1/3 of their shares being released each year.

At the date of acquisition, the carrying amount of the Company’s previously held interest was R$ 87,695 and its fair value was R$ 244,109, resulting in a gain of R$ 156,414, recognized as other income in the statement of income.

The Company has not recognized any deferred taxes related to the business combination because the tax basis and the accounting basis, including fair value adjustments, were the same at the date of the business combination.

Goodwill

The goodwill recognized on the acquisition was R$ 555,040 and it is not expected to be deductible for tax purposes after the Company merges the acquiree. For the purposes of impairment testing, the goodwill has been allocated to the Financial and Management Solutions operating segment.

The goodwill recognized is primarily attributable to the expected synergies and other benefits from combining the assets and activities of Isaac with those of the Company. The goodwill is based on the Business Plan prepared for purposes of the acquisition, and the principal business assumptions used were considered by management as appropriate.

Transaction costs

Transaction costs of R$ 13,420 were expensed and were included in general and administrative expenses, in the amount of R$ 13,159 in 2022 and R$ 261 in 2023.

The fair value of the identifiable assets and liabilities as of the date of the acquisition was:

At the acquisition date, the fair value of the trade receivables was R$ 102,020, composed by R$ 216,168 of outstanding securities and R$ 114,148 of expected credit loss.

The Company measured the acquired lease liabilities using the present value of the remaining lease payments at the acquisition date. The right-of-use assets were measured at an amount equal to the lease liabilities.

The valuation techniques used for measuring the fair value of separate identified intangible assets acquired were as follows:

The revenue and net loss included in the consolidated statements of income and comprehensive income from the acquisition date through the period end are presented below:

From the date of acquisition, January 3, 2023, Isaac has contributed R$ 58,670 of revenue and R$ 35,996 of loss to the Company net profit from the continuing operations of Arco. Since the acquisition took place at the beginning of the year, revenue and profit from continuing operations would have been the same as presented in the statement of income.

Cash and cash equivalents are held for the purpose of meeting short-term cash needs and include cash on hand, deposits with banks and other short-term highly liquid investments with original maturities of three-month or less and with immaterial risk of change in value.

As of March 31, 2023, and December 31, 2022, the aging of trade receivables was as follows:

The movement in the provision for expected credit losses for the three-month periods ended March 31, 2023 and 2022, was as follows:

Allowance for expected credit losses

In 2022, the provision reversal was caused by a return of default levels of delinquencies and a migration of customers from B2B to B2C, which customers do not have an expected credit loss. The provision in the first quarter of 2023 is mainly related to Isaac, in the amount of R$ 24,559. In addition, a migration from B2C to B2B occurred in the first three months of 2023, which resulted in an additional provision for the period.

Advances from customers

The Company receives advances from customers mainly at the beginning of the year when purchases of educational content for the current school year occur. The educational content is delivered in up to four stages, and as the material is delivered, revenue is recognized.

As of March 31, 2023, the Company has R$ 223,299 (R$ 16,079 in December 2022) of advances from customers recorded in current liabilities, representing deferred revenues.

Educational content is presented net of inventory reserve. The movement in the inventory reserve for the three-month periods ended March 31, 2023 and 2022 was as follows:

The table below summarizes the balances and transactions with related parties:

Key management personnel compensation

Key management personnel compensation comprised the following:

Compensation of the Company’s key management includes short-term employee benefits comprised by salaries, bonuses, labor and social charges, and other ordinary short-term employee benefits.

Certain executive officers also participate in the Company’s share-based compensation plan (Note 12).

During the three-month period ended March 31, 2023 the Company had R$ 35,396 of additions, mainly due to the development of educational content for the 2023 collection year (R$ 17,627), development of technology platforms for the supply of digital content, as well as licenses and software development for new projects (R$ 15,683), and copyrights (R$ 1,758).

During the three-month period ended March 31, 2023, the total amortization recorded as expense to the statement of income and appropriated in the intangible assets was      R$ 66,401 (March 31, 2022: R$ 57,979).

Also, as a result of the business combination disclosed in Note 3, there was an increase of R$ 115,369, mainly from software development, carried over from the acquiree’s balance sheet, R$ 555,040 related to goodwill and R$ 28,523 of identifiable assets arising from the purchase price allocation, composed of non-compete agreement (R$ 3,425), trademarks (R$ 23,486) and software (R$ 1,612).

The change in the current balance is mainly related to: (i) payment of interest R$ 93,909, (ii) accrued interest of R$ 46,780, and (iii) amortization of R$ 783 related to transaction costs.

The debenture agreement includes financial covenants, such as, net debt/adjusted EBITDA (excluding the balance in the statements of financial position and any effects in the statements of income from the convertible notes) ratio of less than 4x as of December 31, 2022; default on the financial obligations of the contract, bankruptcy or liquidation of the Company, limitation to carry out operations of acquisition, merger, sale or disposal of its assets, disclosure of financial statements.

As of March 31, 2023, the Company met all contractual commitments of its loans and financing operations.

The breakdown of financial derivatives is as follows:

The breakdown of the liabilities regarding balances of accounts payable from business combinations and investments in associates is as follows:

During the three-month period ended March 31, 2023, the Company recognized R$ 8,173 of interest expenses in finance expenses in the statement of income.

The Company recorded bonuses related to variable remuneration of employees and management in cost of sales, selling and administrative expenses in the amount of R$ 12,988 during the three-month period ended March 31, 2023 (March 31, 2022: R$ 13,238).

Arco Share Option Plan

Stock options plan

On January 2, 2023, and in connection with the Isaac acquisition, our board of directors approved the Arco Share Option Plan.

The Arco Share Option Plan is administered by our board of directors and a designated committee, and eligible participants include Isaac employee. Pursuant to the Arco Share Option Plan, we have granted options to each participant at no cost to such participant, subject to the participant's continuance as an employee of any Company in Arco and its subsidiaries, including with respect to the dismissal of participants with or without cause or in the event of a change in our control, from the grant date until the end of the vesting period (“Vesting”). Participants in the Arco Share Option Plan are subject to a six-month lock up period from the date of acquisition of the shares.

There were no share options forfeited, exercised, and expired under the Arco Share Option Plan. The Company has accounted for the migration of the plan as all remaining unvested options due to the acquisition and, therefore, as of March 31, 2023, 782,471 options had been granted pursuant to the Arco Share Option Plan, 231,333 of which were vested and had not yet been exercised and 551,138 of which are unvested, due to its final vesting date, as presented in the following schedule table below.

The following table illustrates the number and movements of share options during the three-month period ended March 31, 2023:

The compensation expense recognized for the Arco Share Option Plan in the statement of income for the three-months period ended March 31, 2023 was R$ 4,123 of principal with no taxes and contributions, net of estimated forfeitures. These awards are classified as equity settled.

The following table lists the inputs to the model used for the Arco Share Option Plan:

The vesting period is according to the following schedule:

Restricted Shares Grant Plan – Regular Plan

Restricted stock units

The participant's right to effectively receive ownership of the restricted shares will be conditioned to the participant's continuance and performance as an employee, director or director of any Company in Arco and its subsidiaries from the grant date until the end of the vesting period (“Vesting”). If a participant leaves the group, or does not achieve the performance goal, the participant will be entitled to receive his or her vested shares and a pro rata amount of the granted and unvested shares, by reference to the vesting period in which the termination occurred and based on the number of days the participant was employed. The total amount will be calculated based on the performance goal multiplied by a rate between 80% and 120%. After the vesting period, the restricted shares have the same rights and privileges as any shareholder.

The vesting period is according to the following schedule:

The total compensation expense for the three-month period ended March 31, 2023, including taxes and social charges, was R$ 32,857 (R$ 16,701 of principal and R$ 16,156 of taxes and contributions) net of estimated forfeitures. These awards are classified as equity settled.

The fair value of these equity instruments was measured on the grant date as follows:

The following table reflects the movements of outstanding shares from the grant date until March 31, 2023 for Arco's share-based compensation plans:

Share capital

As of March 31, 2023, Arco’s share capital is represented by 66,213,337 common shares of par value of US$ 0,00005 each, comprised of 27,400,848 Class B common shares and 38,812,489 Class A common shares,

Capital reserve

Capital reserve includes additional paid in capital amounts related to the difference between the subscription price that shareholders paid for the common shares and their nominal value.

As of March 31, 2023, the Company recognized the amount of R$ 726,823 due to the issuance of new shares and transferred the amount of R$ 8,205 from treasury shares for the payment of the acquisition of Isaac, as described in Note 3.

Treasury shares

Repurchase program

The following table reflects the movements of treasury shares repurchased until March 31, 2023:

As of March 31, 2023, the Company has transferred the total 1,047,142 of treasury shares due to the acquisition of Isaac, as described in Note 3.

Basic earnings per share is calculated by dividing profit attributable to the equity holders of the parent by the weighted average number of Class A and Class B common shares outstanding during the period.

Diluted earnings per share reflects the potential dilution that could occur if securities or other contracts to issue shares were exercised into shares. In calculating diluted earnings per share, the numerator is adjusted for the effect of interest expense, exchange variation and changes in the fair value of the embedded conversion feature of the convertible notes disclosed in notes 10 and 11 (only if dilutive) and the denominator is increased to include the number of potentially dilutive Class A common shares assumed to be outstanding during the period.

In addition, the Company has share-based compensation plans (see Note 13) that are also considered in the calculation of diluted earnings per share if they have a dilutive effect.

The Company’s net revenue is as follows: