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As filed with the Securities and Exchange Commission on April 15, 2021.
Registration No. 333-​
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM F-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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Zenvia Inc.
(Exact Name of Registrant as Specified in its Charter)
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The Cayman Islands
(State or Other Jurisdiction of
Incorporation or Organization)
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7372
(Primary Standard Industrial
Classification Code Number)
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N/A
(I.R.S. Employer
Identification No.)
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Avenida Paulista, 2300, 18th Floor, Suites 182 and 184
São Paulo, São Paulo, 01310-300, Brazil
+55 (11) 4837-7440
(Address, including Zip Code, and Telephone Number, including Area Code, of Registrant’s Principal Executive Offices)
Cogency Global Inc.
122 East 42th Street, 18th Floor
New York, NY 10168
(212) 947-7200
(Name, Address, including Zip Code, and Telephone Number, including Area Code, of Agent for Service)
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Copies to:
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Grenfel S. Calheiros
S. Todd Crider
Simpson Thacher & Bartlett LLP
425 Lexington Avenue
New York, NY 10017
(212) 455-2000
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Manuel Garciadiaz
Davis Polk & Wardwell LLP
450 Lexington Avenue
New York, NY 10017
(212) 450-4000
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Approximate date of commencement of proposed sale to the public: As soon as practicable after the effective date of this registration statement.
If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box.   ☐
If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.   ☐
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.   ☐
If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.   ☐
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933.
Emerging growth company   ☒
If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards† provided pursuant to Section 7(a)(2)(B) of the Securities Act.   ☐
† The term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012.
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CALCULATION OF REGISTRATION FEE
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Title of Each Class of Securities to be Registered
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Proposed Maximum Aggregate
Offering Price(1)(2)(3)
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Amount of Registration Fee(3)
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Class A common shares, par value US$      per share
​ ​ ​ US$100,000,000 ​ ​ ​ US$10,910.00 ​
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(1)
Includes Class A common shares to be sold pursuant to the underwriters’ option to purchase additional Class A common shares from us. See “Underwriting.”
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(2)
Estimated solely for the purpose of determining the amount of registration fee pursuant to Rule 457(o) under the Securities Act of 1933, as amended.
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(3)
Includes Class A common shares to be sold by us.
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(4)
Calculated pursuant to Rule 457(o) based on an estimate of the proposed maximum aggregate offering price.
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The Registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until the registration statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.
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The information in this preliminary prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.
SUBJECT TO COMPLETION, DATED            , 2021
PRELIMINARY PROSPECTUS
Class A common shares
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Zenvia Inc.
(incorporated in the Cayman Islands)
This is an initial public offering of the Class A common shares, US$      par value per share, of Zenvia Inc., or Zenvia. We are offering           of the Class A common shares to be sold in this offering.
Prior to this offering, there has been no public market for our Class A common shares. The estimated initial public offering price for the Class A common shares in the offering is expected to be between US$      and US$      per Class A common share. We have applied to list our Class A common shares on the Nasdaq Capital Market, under the symbol “ZENV.”
Upon consummation of this offering, we will have two classes of common shares: our Class A common shares and our Class B common shares. The rights of the holders of Class A common shares and Class B common shares will be identical, except with respect to voting, conversion, pre-emptive rights and transfer restrictions applicable to the Class B common shares. Each Class A common share will be entitled to one (1) vote. Each Class B common share will be entitled to ten (10) votes and will be convertible into one Class A common share automatically upon transfer, subject to certain exceptions. Class B common shares shall not be listed on any stock exchange and will not be publicly traded. Holders of Class A common shares and Class B common shares will vote together as a single class on all matters unless otherwise required by law.
Following this offering, our issued and outstanding Class B common shares, which will be beneficially owned by some of our current shareholders, namely Cassio Bobsin, Oria Zenvia Co-investment Holdings, LP, Oria Zenvia Co-investment Holdings II, LP, Oria Tech Zenvia Co-investment — Fundo de Investimento em Participações Multiestratégia and Oria Tech I Inovação Fundo de Investimento em Participações Multiestratégia, will represent    % of the combined voting power of our outstanding common shares and    % of our total equity ownership, assuming no exercise of the underwriters’ option to purchase additional Class A common shares. For further information, see “Description of Share Capital.”
We are a “foreign private issuer” and an “emerging growth company” under the U.S. federal securities laws as that term is used in the Jumpstart Our Business Startups Act of 2012 and, as a result, have elected to comply with certain reduced public company disclosure and reporting requirements. In addition, for as long as we remain an emerging growth company, we will qualify for certain limited exceptions from the Sarbanes-Oxley Act of 2002. Additionally, following the offering, we will be a “controlled company” within the meaning of the corporate governance standards and as such plan to rely on available exemptions from certain corporate governance requirements. See “Risk Factors — Certain Risks Relating to this Offering and Our Class A Common shares — Our status as a controlled company and a foreign private issuer exempts us from certain of the corporate governance standards of the Nasdaq, limiting the protections afforded to investors” and “Risk Factors — Certain Risks Relating to this Offering and Our Class A Common shares — As a foreign private issuer and an “emerging growth company” ​(as defined in the JOBS Act), we will have different disclosure and other requirements from U.S. domestic registrants and non-emerging growth companies. We may take advantage of exemptions from certain corporate governance regulations of the Nasdaq, and this may result in less protection for the holders of our Class A common shares.”
Investing in our Class A common shares involves a high degree of risk. See “Risk Factors” beginning on page 25 of this prospectus.
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Per Class A Common Share
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Total
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Initial public offering price(1)
​ ​ ​ US$                 ​ ​ ​ ​ US$                 ​ ​
Underwriting discount and commissions(1)(2)
​ ​ ​ US$ ​ ​ ​ ​ US$ ​ ​
Proceeds to us (before expenses)(1)(3)
​ ​ ​ US$ ​ ​ ​ ​ US$ ​ ​ ​
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(1)
Assumes no exercise of the underwriters’ option to purchase additional Class A common shares.
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(2)
See “Underwriting” for a description of all compensation payable to the underwriters.
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(3)
See “Expenses of the Offering” for a description of all expenses (other than total underwriting discounts and commissions) payable in connection to this offering.
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We have granted the underwriters the right to purchase up to           additional Class A common shares from us within 30 days from the date of this prospectus, at the initial public offering price, less underwriting discounts and commissions.
Neither the U.S. Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.
The underwriters expect to deliver the Class A common shares to purchasers against payment on or about           , 2021, through the book-entry facilities of The Depository Trust Company.
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Global Coordinators
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Goldman Sachs & Co. LLC
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Morgan Stanley
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Itau BBA
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Joint Bookrunners
​ UBS Investment Bank ​ ​
Bradesco BBI
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XP Investimentos
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The date of this prospectus is                 , 2021.
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Unless the context otherwise requires, references in this prospectus to “Zenvia,” “Company,” “we,” “our,” “ours,” “us” or similar terms refer to Zenvia Inc., together with its consolidated subsidiaries; references to “Zenvia Brazil” refers to Zenvia Mobile Serviços Digitais S.A.; references to the “Issuer” refer to Zenvia Inc., the company whose Class A common shares are being offered by this prospectus.
We own or have rights to trademarks, service marks and trade names that we use in connection with the operation of our business, including our corporate name, logos and website names. Other trademarks, service marks and trade names appearing in this prospectus are the property of their respective owners. Solely for convenience, some of the trademarks, service marks and trade names referred to in this prospectus are listed without the ® and ™ symbols, but we will assert, to the fullest extent under applicable law, our rights to our trademarks, service marks and trade names.
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Neither we, the underwriters, nor any of our or their respective agents have authorized anyone to give any information or make any representation about the offering that is different from, or in addition to that contained in the prospectus, the related registration statement, any free writing prospectus prepared by or on
 
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behalf of us or we may refer to you or in any of the materials that we have incorporated by reference into this prospectus. Therefore, if anyone does give you information of this type, you should not rely on it as having been authorized by us, the underwriters or any of our or their respective agents. Neither we, the underwriters, nor any of our or their respective agents will have or take responsibility therefor, and can provide no assurance as to the reliability of, any other information that others may give you.
This prospectus is being used in connection with the offering of the Class A common shares in the United States and, to the extent described below, elsewhere. This offering is being made in the United States and elsewhere solely based on the information contained in this prospectus. You should assume that the information appearing in this prospectus is accurate only as of the date on the front cover of this prospectus, regardless of the time of delivery of this prospectus or any sale of the Class A common shares. Our business, financial condition, results of operations and prospects may have changed since the date on the front cover of this prospectus.
Neither we, the underwriters, nor any of our or their respective agents are offering or seeking offers to purchase the Class A common shares in any jurisdiction where such offers or sales are not permitted. We have not undertaken any efforts to qualify this offering for offers and sales to the public in any jurisdiction outside the United States, and we do not expect to make offers and sales to the public in jurisdictions located outside the United States (including Brazil). However, we may make offers and sales outside the United States in circumstances that do not constitute a public offer or distribution under applicable laws and regulations.
Notice to Investors Outside the United States. Neither we, the underwriters, nor any of our or their respective agents have done anything that would permit this offering or possession or distribution of this prospectus or any free writing prospectus in connection with this offering in any jurisdiction, other than the United States, where action for that purpose is required. Persons outside the United States who come into possession of this prospectus or any such free writing prospectus must inform themselves about, and observe any restrictions relating to, the offering of our Class A common shares and the distribution of this prospectus and any such free writing prospectus outside the United States.
Notice to EEA Investors. In any European Economic Area, or EEA, Member State that has implemented the Prospectus Regulation, this communication is only addressed to and is only directed at qualified investors in that Member State within the meaning of the Prospectus Regulation.
This prospectus has been prepared on the basis that any offer of our Class A common shares in any Member State of the EEA (each, a “Relevant Member State”), will be made pursuant to an exemption under the Prospectus Regulation from the requirement to publish a prospectus for offers of shares. Accordingly any person making or intending to make any offer within the EEA of our Class A common shares which are the subject of this offering may only do so in circumstances in which no obligation arises for us or any of the underwriters to publish a prospectus pursuant to Article 3 of the Prospectus Regulation in relation to such offer. Neither we, nor the underwriters have authorized, nor do they authorize, the making of any offer of our Class A common shares in circumstances in which an obligation arises for us or the underwriters to publish a prospectus for such offer.
For the purposes of this provision, the expression “Prospectus Regulation” means Regulation (EU) 2017/1129, and includes any relevant implementing measure in each Relevant Member State.
Notice to UK Investors. In the United Kingdom, this prospectus is only addressed to and directed at qualified investors who are (1) investment professionals falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the “Order”); or (2) high net worth entities and other persons to whom it may lawfully be communicated, falling within Article 49(2)(a) to (d) of the Order (all such persons together being referred to as “relevant persons”). Any investment or investment activity to which this prospectus relates is available only to relevant persons and will only be engaged with relevant persons. Any person who is not a relevant person should not act or rely on this prospectus or any of its contents.
 
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PRESENTATION OF FINANCIAL AND OTHER INFORMATION
Certain Definitions
The term “Brazil” refers to the Federative Republic of Brazil and the phrase “Brazilian government” refers to the federal government of Brazil. All references to “real,” “reais,” or “R$” are to the Brazilian real, the official currency of Brazil. All references to “U.S. dollar,” “U.S. dollars” or “US$” are to U.S. dollars, the official currency of the United States of America. All references to “IFRS” are to International Financial Reporting Standards, as issued by the International Accounting Standards Board, or the IASB.
Financial Statements
Zenvia Inc., the company whose Class A common shares are being offered in this prospectus, was incorporated on November 3, 2020, as a Cayman Islands exempted company with limited liability duly registered with the Cayman Islands Registrar of Companies. Until the contribution of Zenvia Brazil shares to Zenvia Inc. prior to the consummation of its initial public offering, Zenvia Inc. had not commenced operations and had only nominal assets and liabilities and no material contingent liabilities or commitments.
Zenvia Brazil maintains its books and records in Brazilian reais, the functional currency of its operations in Brazil and the presentation currency for its financial statements. Zenvia Brazil’s annual consolidated financial statements have been prepared in accordance with IFRS as issued by the IASB. Unless otherwise noted, the financial information presented herein has been derived from Zenvia Brazil’s audited consolidated financial statements as of and for the years ended December 31, 2020, 2019 and 2018, together with the accompanying notes thereto, or our audited consolidated financial statements.
Following our initial public offering, Zenvia Inc. will begin reporting our consolidated financial information to shareholders, maintaining its consolidated books and records also in Brazilian reais, and Zenvia Brazil will no longer present consolidated financial statements. Unless otherwise indicated, our historical financial information included elsewhere in this prospectus does not give effect to the contribution of Zenvia Brazil shares to Zenvia Inc. See “— Our Corporate Reorganization.”
All references to “2020” are to the year ended December 31, 2020, “2019” are to the year ended December 31, 2019 and “2018” are to the year ended December 31, 2018. Our fiscal year ends on December 31 of each year, so all references to a particular fiscal year are to the applicable year ended December 31. Following the completion of this offering, we will be required to file annual reports on Form 20-F with the Securities and Exchange Commission, or the SEC, under U.S. Securities Exchange Act of 1934, as amended, or the Exchange Act, and although not required under the Exchange Act, we expect to publish unaudited interim consolidated financial statements on a quarterly basis.
D1 Acquisition, Sirena Acquisition and Related Financial Statements
Pending D1 Acquisition
In March 2021, Zenvia Brazil entered into certain purchase agreements for the direct and indirect acquisition of 100% of the share capital of One To One Engine Desenvolvimento e Licenciamento de Sistemas de Informática S.A. — Direct One, or D1. D1 is a platform that connects different data sources to enable a single customer view layer, allowing the creation of multichannel communications, generation of variable documents, authenticated message delivery and contextualized conversational experiences. While its consummation is subject to certain closing conditions, including the consummation of this initial public offering, the transaction is expected to be consummated in the second quarter of 2021. Under the terms of these purchase agreements and as part of the consideration, on the closing date, (1) Zenvia Brazil will contribute R$40 million in cash into D1; (2) Zenvia Brazil will pay to D1 shareholders an amount which we currently estimate to be R$250 million, which will be based on a valuation of 13 (thirteen) times D1’s gross profit for the last twelve months (LTM) ending on March 31, 2021 minus D1 net debt as of the same date and adjusted by working capital; and (3) we will deliver a certain number of our Class A common shares to certain D1 shareholders, equivalent to an amount which we currently estimate to correspond to R$83 million, that will be calculated based on the valuation of 13 (thirteen) times D1’s gross profit for the last twelve months (LTM) ending on March 31, 2021 minus D1 net debt as of the same date and adjusted by
 
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working capital, divided by 13 (thirteen) times Zenvia Brazil’s consolidated gross profit for the last twelve months (LTM) (after giving effect to the D1 Acquisition and the Sirena Acquisition (each term as defined below) ending on March 31, 2021 minus Zenvia Brazil’s consolidated net debt (after giving effect to the D1 Acquisition and the Sirena Acquisition) as of the same date. We expect to deliver approximately        Class A common shares to these D1 shareholders in connection with the above.
Additionally, as further consideration for the D1 Acquisition, we have also agreed to pay amounts to certain D1 shareholders which we currently estimate to be (i) R$45 million in the first quarter of 2022; and (ii) R$174 million in the first quarter of 2023, based on a certain multiple times D1’s gross profit for the last twelve months (LTM) ending on March 31, 2022 and March 31, 2023, respectively, such multiple to be calculated on the achievement of certain gross profit milestones for the relevant periods. An English translation of the purchase agreements governing the D1 Acquisition are filed as exhibits 10.09 and 10.10 of the registration statement of which this prospectus forms a part.
While the payment estimates above have been prepared in good faith and based on information currently available, the actual consideration to be paid may change including as a result of D1’s and Zenvia Brazil’s results of operations and conclusion of the review of LTM ending March 31, 2021. The estimates presented above are preliminary and subject to that transaction progressing to a sufficiently advanced stage where there is sufficient information for a definitive measurement of final consideration amounts. See “Unaudited Pro Forma Condensed Financial Information.”
Upon consummation of the D1 Acquisition, we will also become indirect holders of 100% of the share capital of Smarkio Tecnologia Ltda., or Smarkio, a wholly -owned subsidiary of D1 and a cloud-based company that combines an automated marketing platform through chatbots with a platform for creating, integrating and processing conversational interfaces that can be used by developers and business users. Smarkio was acquired by D1 in December 2020 and D1 started consolidating Smarkio in its financial statements as of December 1, 2020. Zenvia Brazil’s probable acquisition of D1 and D1’s acquisition of Smarkio are hereinafter collectively referred to as the “D1 Acquisition.”
The D1 Acquisition is subject to the satisfaction or waiver of certain closing conditions set forth in the definitive agreements governing this transaction, including the consummation of this offering. To the extent these conditions are not satisfied or waived or to the extent we do not consummate this offering, we may not complete the D1 Acquisition. See “Risk Factors — Certain Risks Relating to Our Business and Industry — We may pursue strategic acquisitions or investments which may divert our management’s attention and result in reduced cash levels, increased indebtedness or dilution to our shareholders. The failure of an acquisition or investment to produce the anticipated results, the failure to consummate a pending acquisition (including the D1 Acquisition), or the inability to integrate an acquired company fully, could adversely affect our business.”
We plan to use US$      million (equivalent to R$       million using the Central Bank selling exchange rate of per U.S. dollar published on       , 2021) from the proceeds of this offering to pay the consideration payable in cash to acquire D1. See “Use of Proceeds.”
Sirena Acquisition
On July 24, 2020, Zenvia Brazil entered into a certain share purchase and sale agreement to purchase 100% of the shares of Rodati Motors Corporation, or Sirena, a startup founded in 2014 that offers communication solutions for sales teams via WhatsApp, or the Sirena Acquisition. As consideration for the Sirena Acquisition, Zenvia Brazil (i) made an upfront cash payment of US$10,923 thousand (amounting to R$56,961 thousand using the Central Bank selling exchange rate published on July 24, 2020) on closing date, and US$392 thousand (R$2,045 thousand using the Central Bank selling exchange rate published on January 24, 2021) which was paid on January 24, 2021 to Sirena shareholders; and (ii) assuming the consummation of this offering, we will deliver a certain number of our Class A common shares to Sirena shareholders, corresponding to an equity interest calculated based on a percentage of the upfront payment made by Zenvia Brazil divided by an established valuation of Zenvia Brazil set forth in the acquisition agreement governing the Sirena Acquisition. Zenvia Brazil’s valuation for this purpose will be based on Zenvia Brazil’s gross margin and EBITDA minus Zenvia’s net debt as of December 31, 2020. We expect to deliver approximately       Class A common shares to these Sirena shareholders in connection with the above.
 
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Moreover, Sirena’s former shareholders are entitled to an additional payment in the aggregate amount estimated at US$13,584 thousand (equivalent to R$70,835 thousand using the Central Bank selling exchange rate published on December 31, 2020) payable in three installments (6, 12 and 24 months following the closing date of the Sirena Acquisition). In addition, former Sirena shareholders that remained working with us are eligible to receive additional earn-out compensation (provided that they remain working with us until the end of the above referred payment period), in an amount up to US$5,514 thousand (equivalent to R$28,752 thousand using the Central Bank selling exchange rate published on the closing date) and payable in two installments (12 and 24 months following the closing date of the Sirena Acquisition), which may vary based on the achievement of certain financial milestones, as defined in the purchase and sale agreement governing the Sirena Acquisition, which are mainly based in the valuation of Sirena calculated considering Sirena’s gross margins. As of December 31, 2020, a provision was recorded in the amount of R$8,833 thousand in connection with such obligations. This acquisition is in line with our strategy to expand into other Latin American regions. The transaction was consummated on July 24, 2020, and Zenvia Brazil began to consolidate Sirena’s results of operations as of that date. A copy of the agreement governing the Sirena Acquisition is filed as exhibit 10.08 of the registration statement of which this prospectus forms a part.
This prospectus also includes (1) Sirena’s historical audited consolidated financial statements as of July 23, 2020 and December 31, 2019, and for the period from January 1, 2020 to July 23, 2020 and for the year ended December 31, 2019, together with the accompanying notes thereto, or Sirena’s audited consolidated financial statements, (2) D1’s historical audited consolidated financial statements as of December 31, 2020 and 2019 and for each of the two years in the period ended December 31, 2020, or D1’s audited consolidated financial statements, and (3) Smarkio’s historical audited financial statements as of November 30, 2020 and December 31, 2019 and for the period of eleven months ended November 30, 2020 and for the year ended December 31, 2019, or Smarkio’s audited financial statements.
We have also included elsewhere in this prospectus (1) our unaudited pro forma condensed statements of profit or loss for the year ended December 31, 2020 and (2) our unaudited pro forma condensed statement of financial position as of December 31, 2020. The unaudited pro forma condensed statements of profit or loss gives effect to Sirena Acquisition and the D1 Acquisition as if they had been consummated on January 1, 2020. The unaudited pro forma condensed statement of financial position gives effect to the D1 Acquisition as if it had been consummated on December 31, 2020. For a discussion about our unaudited pro forma condensed financial information and related notes, see “Unaudited Pro Forma Condensed Financial Information.”
Our Corporate Reorganization
Prior to the consummation of this offering, our current shareholders, Bobsin LLC, Oria Zenvia Co-investment Holdings, LP, Oria Zenvia Co-investment Holdings II, LP, Oria Tech Zenvia Co-investment — Fundo de Investimento em Participações Multiestratégia, Oria Tech I Inovação Fundo de Investimento em Participações Multiestratégia, Spectra I Fundo de Investimento em Participações Multiestratégia Investimento No Exterior and Spectra II Fundo de Investimento em Participações Multiestratégia Investimento No Exterior, will contribute all of their shares in Zenvia Brazil to us. In return for this contribution, we will issue in aggregate           new Class B common shares to Bobsin LLC, Oria Zenvia Co-investment Holdings, LP, Oria Zenvia Co-investment Holdings II, LP, Oria Tech Zenvia Co-investment — Fundo de Investimento em Participações Multiestratégia and Oria Tech I Inovação Fundo de Investimento em Participações Multiestratégia and in aggregate         new Class A common shares to Spectra I Fundo de Investimento em Participações Multiestratégia Investimento No Exterior and Spectra II Fundo de Investimento em Participações Multiestratégia Investimento No Exterior, in each case, at a ratio of           to one. Such corporate reorganization is hereinafter referred to as the “Corporate Reorganization.”
Until the contribution of Zenvia Brazil shares to us, we will not have commenced operations and will have only nominal assets and liabilities and no material contingent liabilities or commitments.
After giving effect to the issuance of Class A common shares to be sold by us in this offering, we will have a total of       common shares issued and outstanding,                 of which will be Class B common shares beneficially owned by Bobsin LLC, Oria Zenvia Co-investment Holdings, LP, Oria Zenvia Co-investment Holdings II, LP, Oria Tech Zenvia Co-investment — Fundo de Investimento em Participações
 
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Multiestratégia and Oria Tech I Inovação Fundo de Investimento em Participações Multiestratégia, will be Class A common shares benefically owned by Spectra I Fundo de Investimento em Participações Multiestratégia Investimento No Exterior and Spectra II Fundo de Investimento em Participações Multiestratégia Investimento No Exterior and                  will be Class A common shares beneficially owned by investors purchasing in this offering. In addition, after the consummation of this offering, it is expected that we will issue in aggregate            Class A common shares as consideration to certain parties in connection with the acquisition of Sirena and D1 by Zenvia Brazil. See “Presentation of Financial and Other Information — D1 Acquisition, Sirena Acquisition and Related Financial Statements.”
Special Note Regarding the Adoption of IFRS 16
As of January 1, 2019, we adopted IFRS 16 — Leases, or IFRS 16, which changed the recognition, measurement, presentation and disclosure of leases. With the exception of certain short-term leases or leases of low value, IFRS 16 requires lessees to record all leases on the balance sheet as a right-of-use asset and a corresponding lease liability at the date at which the leased asset is available for use. Lease liabilities are recorded in the statement of financial position over the term of the lease, which results in a constant periodic rate of interest on the remaining balance of the lease liability for each applicable accounting period. We amortize, on a straight-line basis, the right-of-use asset over the shorter of the asset’s useful life and the lease term.
We adopted IFRS 16 using the simplified retrospective approach, which does not require the restatement of the corresponding figures. Therefore, comparative information as of and for the years ended December 31, 2018 has not been restated, and is not comparable with the information as of and for the years ended December 31, 2020 and 2019, which reflects the effects of the adoption of this standard.
For additional information, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Application of New Accounting Standards and Recent Accounting Pronouncements.”
Special Note Regarding Non-GAAP Financial Measures
For the convenience of investors, this prospectus presents certain non-GAAP financial measures, which are not recognized under IFRS, specifically Non-GAAP Gross Profit, Non-GAAP Operating Profit, EBITDA and Adjusted EBITDA. A non-GAAP financial measure is generally defined as one that purports to measure financial performance but excludes or includes amounts that would not be so adjusted in the most comparable GAAP measure. Non-GAAP financial measures do not have standardized meanings and may not be directly comparable to similarly-titled measures adopted by other companies. These non-GAAP financial measures are used by our management for decision-making purposes and to assess our financial and operating performance, generate future operating plans and make strategic decisions regarding the allocation of capital. We also believe that the disclosure of our Non-GAAP Gross Profit, Non-GAAP Operating Profit, EBITDA and Adjusted EBITDA provides useful supplemental information to investors and financial analysts and other interested parties in their review of our operating performance. Potential investors should not rely on information not recognized under IFRS as a substitute for the IFRS measures of earnings, cash flows or profit (loss) in making an investment decision.
We use Non-GAAP Gross Profit, Non-GAAP Operating Profit, EBITDA and Adjusted EBITDA, collectively, to evaluate our ongoing operations and for internal financial planning and forecasting purposes. We believe that non-GAAP financial information, when taken collectively, may be helpful to investors because it provides consistency and comparability with past financial performance and facilitates period-to-period comparisons of results of operations.
Non-GAAP Gross Profit and Non-GAAP Operating Profit are measures that exclude amortization of intangible assets acquired from business combinations. Our acquisition activities have resulted in the recognition of intangible assets, which consist primarily of client portfolio and digital platform. Finite-lived intangible assets are amortized over their estimated useful lives and are tested for impairment when events indicate that the carrying value may not be recoverable. The amortization of intangible assets acquired from business combinations is reflected in our consolidated statements of profit or loss. Although intangible assets contribute to our revenue generation, the amortization of intangible assets does not directly relate to
 
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the services we perform to our clients. Additionally, intangible asset amortization expense typically fluctuates based on the size and timing of our acquisition activity. Accordingly, we believe excluding the amortization of intangible assets acquired from business combinations enhances our and our investors’ ability to compare our past financial performance with its current performance and to analyze underlying business performance and trends. Amortization of intangible assets acquired from business combinations excluded from Non-GAAP Gross Profit and Non-GAAP Operating Profit represents the entire amount recorded within our consolidated financial statements, and the revenue generated by the associated intangible assets has not been excluded from such non-GAAP financial measures.
Non-GAAP Gross Profit and Non-GAAP Operating Profit
We calculate Non-GAAP Gross Profit as gross profit plus amortization of intangible assets acquired from business combinations.
We calculate Non-GAAP Operating Profit as profit adjusted by income tax and social contribution (current and deferred) and net finance costs plus amortization of intangible assets acquired from business combinations and expenses related to branch closing.
EBITDA and Adjusted EBITDA
We calculate EBITDA as profit adjusted by income tax and social contribution (current and deferred), net finance costs and depreciation and amortization.
We calculate Adjusted EBITDA as EBITDA plus expenses related to branch closing and gain on bargain purchase. In particular, the exclusions in calculating Adjusted EBITDA facilitates operating performance comparisons on a period-to-period basis and such exclusions remove items that we do not consider to be indicative of our core operating performance.
Special Note Regarding Non-GAAP Pro Forma Financial Measures
This prospectus presents Non-GAAP Pro Forma Gross Profit, Non-GAAP Pro Forma Operating Profit, Pro Forma EBITDA and Pro Forma Adjusted EBITDA information for the convenience of investors. These measures are key performance indicators used by us to measure financial operating performance. These measures were prepared for information purposes only and give effect to the Sirena Acquisition and the D1 Acquisition by us as if they occurred as of January 1, 2020. These pro forma non-GAAP financial measures are used by our management for decision-making purposes and to assess our financial and operating performance, generate future operating plans and make strategic decisions regarding the allocation of capital. Our management also believes that these pro forma non-GAAP financial measures provide useful information to investors and shareholders.
Non-GAAP Pro Forma Gross Profit and Non-GAAP Pro Forma Operating Profit are measures that exclude amortization of intangible assets acquired from business combinations. Our acquisition activities have resulted in the recognition of intangible assets, which consist primarily of client portfolio and digital platform. Finite-lived intangible assets are amortized over their estimated useful lives and are tested for impairment when events indicate that the carrying value may not be recoverable. The amortization of intangible assets acquired from business combinations is reflected in our consolidated statements of profit or loss. Although intangible assets contribute to our revenue generation, the amortization of intangible assets does not directly relate to the services we perform to our clients. Additionally, intangible asset amortization expense typically fluctuates based on the size and timing of our acquisition activity. Accordingly, we believe excluding the amortization of intangible assets acquired from business combinations enhances our and our investors’ ability to compare our past financial performance with its current performance and to analyze underlying business performance and trends. Amortization of intangible assets acquired from business combinations excluded from Non-GAAP Pro Forma Gross Profit and Non-GAAP Pro Forma Operating Profit represents the entire amount recorded within our consolidated financial statements, and the revenue generated by the associated intangible assets has not been excluded from such non-GAAP financial measures.
We calculate Non-GAAP Pro Forma Gross Profit as pro forma gross profit plus pro forma amortization of intangible assets acquired from business combinations.
 
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We calculate Non-GAAP Pro Forma Operating Profit as pro forma profit adjusted by pro forma income tax and social contribution (current and deferred) and pro forma net finance costs plus, pro forma amortization of intangible assets acquired from business combinations and pro forma expenses related to branch closing.
We calculate Pro Forma EBITDA as pro forma profit adjusted by pro forma income tax and social contribution (current and deferred), pro forma net finance costs and pro forma depreciation and amortization.
We calculate Pro Forma Adjusted EBITDA as pro forma EBITDA plus pro forma expenses related to branch closing.
We understand that, although Non-GAAP Pro Forma Gross Profit, Non-GAAP Pro Forma Operating Profit, Pro Forma EBITDA and Pro Forma Adjusted EBITDA are used by investors and securities analysts in their evaluation of companies, these measures have limitations as analytical tools, and you should not consider them in isolation or as substitutes for analysis of our results of operations as reported under IFRS. Additionally, our calculations of Non-GAAP Pro Forma Gross Profit, Non-GAAP Pro Forma Operating Profit, Pro Forma EBITDA and Pro Forma Adjusted EBITDA may be different from the calculation used by other companies, including our competitors, and therefore, our measures may not be comparable to those of other companies.
For a reconciliation of our pro forma non-GAAP financial measures to their closest GAAP financial measures, see “Unaudited Pro Forma Condensed Financial Information — Reconciliation of Non-GAAP Pro Forma Financial Measures.”
Convenience Translation
As the reporting currency for our financial statements and our unaudited pro forma condensed financial information is the Brazilian real, solely for the convenience of the reader, we have provided convenience translations of some of the real amounts included in this prospectus into U.S. dollars using selling exchange rates published by the Brazilian Central Bank (Banco Central do Brasil), or Central Bank, on its website. Unless otherwise indicated, convenience translations from reais into U.S. dollars in this prospectus use the Central Bank selling exchange rate published on December 31, 2020, which was R$5.1967 per US$1.00. No representation is made that the reais amounts referred to could have been, or could be, converted into U.S. dollars at any particular rate. See “Exchange Rates” for information regarding historical exchange rates of reais to U.S. dollars.
Market Information
This prospectus contains data related to economic conditions in the market in which we operate. The information contained in this prospectus concerning economic conditions is based on publicly available information from third-party sources that we believe to be reliable. Market data and certain industry forecast data used in this prospectus were derived from our management’s knowledge and our experience in the industry, internal reports and studies, where appropriate, as well as estimates, market research, publicly available information and industry publications. We obtained the information included in this prospectus relating to the Brazilian payment solutions markets, and more broadly, the industry in which we operate, as well as the estimates concerning market shares, through internal research, public information and publications on the industry prepared by official public sources, such as the Central Bank, Fundação Getúlio Vargas, or FGV, Brazilian Institute for Geography and Statistics (Instituto Brasileiro de Geografia e Estatística), or IBGE, Gartner, Inc., or Gartner, (“Market Guide for Communications Platform as a Service,” Daniel O'Connell, Lisa Unden-Farboud, 14 October 2020)*, Juniper Research, World Bank and
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*
Gartner does not endorse any vendor, product or service depicted in its research publications, and does not advise technology users to select only those vendors with the highest ratings or other designation. Gartner research publications consist of the opinions of Gartner’s research organization and should not be construed as statements of fact. Gartner disclaims all warranties, expressed or implied, with respect to this research, including any warranties of merchantability or fitness for a particular purpose. The Gartner content described herein, or the Gartner Content, represents research opinion or
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International Data Corporation, or IDC, Brazilian Association of Software Companies (Associação Brasileira das Empresas de Software), or ABES, amongst others.
Industry publications, governmental publications and other market sources, including those referred to above, generally state that the information they include has been obtained from sources believed to be reliable, but that the accuracy and completeness of such information is not guaranteed. We have no reason to believe any of this information or these reports are inaccurate in any material respect and believe and act as if they are reliable. Neither we, the underwriters, nor their respective agents have independently verified it and they are subject to change based on various factors, including those discussed in the section entitled “Risk Factors.” Governmental publications and other market sources, including those referred to above, generally state that their information was obtained from recognized and reliable sources, but the accuracy and completeness of that information is not guaranteed. Estimates of market and industry data are based on statistical models, key assumptions and limited data sampling, and actual market and industry data may differ significantly from estimated industry data. In addition, the data that we compile internally and our estimates have not been verified by an independent source. Information derived from management’s knowledge and our experience is presented on a reasonable, good faith basis. Except as disclosed in this prospectus, none of the publications, reports or other published industry sources referred to in this prospectus were commissioned by us or prepared at our request. Except as disclosed in this prospectus, we have not sought or obtained the consent of any of these sources to include such market data in this prospectus.
Rounding
We have made rounding adjustments to some of the figures included in this prospectus for ease of presentation. Accordingly, certain of the numerical figures shown as totals in the tables may not be the exact sum total of the figures that precede them.
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viewpoints published, as part of a syndicated subscription service, by Gartner, and are not representations of fact. Gartner Content speaks as of its original publication date (and not as of the date of this registration statement), and the opinions expressed in the Gartner Content are subject to change without notice.
 
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PROSPECTUS SUMMARY
This summary highlights selected information contained elsewhere in this prospectus. This summary may not contain all of the information that may be important or relevant to you in making your investment decision. Before you decide to invest in our Class A common shares, we urge you to read this entire prospectus carefully, including our audited consolidated financial statements, our unaudited pro forma condensed financial information and the historical audited financial statements of Sirena, D1, Smarkio and their respective notes thereto included elsewhere in this prospectus and the information set forth under the sections “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”
Our Pledge
We are driven by the purpose of empowering companies to create unique experiences for customer communications through our unified end-to-end platform.
Overview
We empower companies to transform their existing customer communications from non-scalable, physical and impersonal interactions into highly scalable, digital first and hyper contextualized customer journey experiences.
Our customer experience, or CX, communications platform enables companies to create unique journeys for their end-customers across a variety of channels. Our unified end-to-end CX communications platform provides a combination of (i) solutions focused on campaigns, sales teams, customer service and engagement, (ii) tools, such as software application programming interfaces, or APIs, chatbots, single customer view, journey designer, documents composer and authentication and (iii) channels, such as SMS, Voice, WhatsApp and Webchat. Our comprehensive platform assists our customers in several use cases, including marketing campaigns, customer acquisition, customer information nutrition, customer onboarding actions, warnings, customer services with or without automation, fraud control, cross-selling and customer retention, among others.
We were founded in Brazil 17 years ago as a bootstrapped startup in a garage serving businesses with complex networking infrastructures through our platform of APIs for SMS messaging connectivity. As we continued to grow, we scaled our business by adding new CX communication solutions, tools and channels to our platform, making it more flexible, versatile and comprehensive in order to capitalize on the opportunity to serve customers along their journey. Currently, we are locally present in Brazil, Mexico and Argentina and our technology allows our customers to use our platform based on their individual use case. The adoption of these technologies by our customers, and the willingness of their end-consumers to use these technologies, allows our customers to streamline their decision-making process and day-to-day business operations.
Our software platform facilitated the flow of communication with end-consumers for more than 7,700 customers of all sizes as of December 31, 2019, which increased to more than 9,400 customers as of December 31, 2020, all across a broad range of industries throughout Latin America. Our usage-based recurring revenue model allows us to grow with our customers and increase our revenue base as our clients increase their use of our solutions and communication channels.
Communication is an essential activity for businesses serving their end-consumers. Businesses all over the world are shaping new customer experiences with the power of digital communications. However, businesses seeking to implement multi-channel communication experiences for their end-consumers are frequently faced with multiple challenges given the complexities of implementing and integrating such processes and level of investments that they require. We provide businesses with a solution to this problem by offering a unified, end-to-end communications platform at affordable prices.
The CX communication solutions we offer our customers allow any person within any business, from business analysts to tech professionals, to enhance the end-consumer journey for campaigns, sales teams, customer service and engagement purposes. Collectively, these solutions allow us to capture a range of use cases across all economic sectors. We initially adopt a “land and expand” strategy, pursuant to which we introduce our platform to our customers based on one simple use case, and then develop the customer relationship over time, upselling and cross-selling our suite of solutions to them as they grow and improve
 
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their customer journey. This strategy has allowed us to achieve a standalone net revenue expansion rate of 112.8% and 117.1% as of December 31, 2020 and 2019, respectively. For more information about our net revenue expansion rate, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Principal Factors Affecting Our Results of Operations — Net Revenue Expansion Rate.”
Businesses use our platform to frequently and more seamlessly connect with their end-consumers while also offering new mobile application experiences. From small family-owned businesses to large corporations, our customers use our platform to attract, convert, serve and nurture their end-consumers. For instance, one of the largest Brazilian banks adopted our platform for several use cases such as multichannel marketing campaigns with SMS and automated telemarketing, SMS transactional authorizations and chatbot invoice collection. In addition, one of the largest electronic retailers in Brazil adopted our platform for order tracking with WhatsApp notifications, retail sales with our WhatsApp sales solution and promotional coupons on rich communication services, or RCS, a communication protocol between mobile telephone carriers and mobile devices aimed at replacing SMS messages with a more sophisticated multimedia enabled text-messaging system. An international education group in Brazil also adopted our platform for communications related to entrance exam information, their student recruitment enrollment process and existing and prospective student communication solutions through chatbot on their website and through WhatsApp, customer service and sales chat services, SMS operational alerts and marketing campaigns.
We serve many other large corporations including:
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6 out of the top 10 Brazilian retail companies in terms of net revenue;
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6 out of the top 10 Brazilian health care companies in terms of net revenue;
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5 out of the top 10 Brazilian banks in terms of net revenue;
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5 out of the top 10 Brazilian education companies in terms of net revenue;
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5 out of the top 10 Brazilian service provider companies in terms of net revenue;
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5 out of the top 10 Brazilian insurance companies in terms of net revenue; and
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4 out of the top 5 Brazilian telecommunication companies in Brazil in terms of net revenue.
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Small businesses also use our platform for a variety of use cases. For example, a technology company that monitors temperature sensors for medical-grade cold storage uses our Voice solution to monitor, detect and alert its end-consumers of any out-of-range temperature incidents for specific medical supply storage chambers, mitigating the risk of improper medicine storage.
Our platform flexibility allows us to serve many important sectors including:
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Financial institutions use our platform for SMS transaction confirmation alerts, security tokens and marketing campaigns;
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Service providers use our platform to manage outbound voice calls integrated with their customer relationship management platforms, or CRMs;
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Universities use our platform to support students on multiple communication channels such as WhatsApp and Website;
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Medical and dental clinics and hospitals use our SMS platform to confirm and reschedule appointments as well as send appointment reminders to patients; and
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Retailers use our WhatsApp solution to support their sales teams to manage sales and our SMS platform to inform customers about new products and promotions and to track the status of deliveries.
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Although we have a diversified client base, our revenues are currently concentrated in a small number of large clients. Our 10 largest clients represented 33.1%, 34.2% and 37.0% of our revenue in the years ended December 31, 2020, 2019 and 2018, respectively. Giving effect to the consummation of the D1 Acquisition, our 10 largest clients would have represented 35% of our revenue in the year ended December 31, 2020. We are working to decrease this concentration by investing in marketing initiatives to attract new small and medium business, or SMBs, customers to our platform and providing additional offerings to our existing customer base. See “Risk Factors — Certain Risks Relating to Our Business and Industry — A significant
 
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portion of our revenue is currently concentrated on our outlier customers and an economic slowdown affecting these customers could lead to decreased demand for our products and services, which could adversely affect us.”
We have been a cash flow positive company since 2015. For the year ended December 31, 2020, cash generated from our operating activities amounted to R$53.1 million, compared to R$33.8 million and R$46.6 million for the years ended December 31, 2019 and 2018, respectively. Our revenue totaled R$429.7 million, R$354.0 million and R$276.4 million in the years ended December 31, 2020, 2019 and 2018, respectively, representing a growth rate of 21.4% between the years ended December 31, 2020 and 2019 and 28.1% between the years ended December 31, 2019 and 2018. Our loss for the year ended December 31, 2020 amounted to R$21.4 million, compared to profit amounting to R$13.8 million and R$19.9 million for the years ended December 31, 2019 and 2018, respectively. Our Adjusted EBITDA for the year ended December 31, 2020 amounted to R$8.0 million, compared to R$36.1 million and R$44.8 million for the years ended December 31, 2019 and 2018, respectively, as we continue to invest in our platform and growth initiatives.
Our Industry Background
Communication is critical for the operation and innovation of businesses of all sizes
With unprecedented customer dependence on smartphones and the proliferation of mobile applications, communications have become a major focus for businesses of all sizes. As a result, businesses are integrating mission-critical communications functions in their products and services in order to provide real-time value to their end-consumers across a myriad of devices, businesses are seeking and effectively operate and innovate to create a “connected” experience.
Ability of businesses to differentiate themselves has driven competition
The ability for businesses to differentiate themselves from competitors has been driving growth across different economic sectors. In order for businesses to continue to be competitive, they need to continue to develop their software development capabilities to allow them to build applications that address their end-consumers’ needs.
We differentiate ourselves through our capability to deliver more than just all the main communication channels. Our platform offers complete communication solutions focusing on our customers’ specific needs, developing each solution to improve the interaction between our customers and their end-consumers through marketing campaigns, customer support/service and sales teams, as well as providing developers with the tools they need to build communication solutions themselves.
Going forward, we expect to further explore the ecosystem of developers and software companies, as well as to further develop our ability to improve the solutions we offer our customers, opening a marketplace of apps and add-ons to meet the needs of our customers’ end-consumers and help our customers achieve high levels of end-consumer satisfaction.
Communication is transforming interactions between businesses and their end-consumers
Mobile channels connections between businesses and their end-consumers has been at the forefront of change in the way businesses communicate with their end-consumers and there is a need for a more comprehensive platform to manage such communications.
In addition, the ongoing transformation of the communications industry is demonstrated by the expected change in the mix of services provided by communications platform-as-a-service, or CPaaS, companies, which is one of our target markets. According to Juniper Research’s “2020 CPAAS Future Market Outlook — Emerging Opportunities — 2020-2025 — Deep dive Data & Forecasting” study, the CPaaS global market landscape is expected to change over the next five years as a result of the diversification of services offered. Although SMS revenue from CPaaS platforms is expected to grow 21.8% on average annually, it is expected to account only for approximately 70.5% of total CPaaS revenue by 2025, compared to 95.9% of total CPaaS revenue in 2020.
 
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Our Market Opportunity
We continue to expand in Latin America and this market represents an important area of growth and TAM going forward
Our CX communication platform addresses multiple markets. One of our target markets is CPaaS. We are the only representative vendor in the 2020 Gartner Market Guide for Communications Platform as a Service headquartered in Latin America.* For Gartner disclaimer, see “Presentation of Financial and Other Information — Market Information.” We have a large CPaaS total addressable market, or TAM, in Latin America, amounting to US$659.6 million in 2020, and our industry is expected to experience average annual growth in TAM of 34.6% a year as from 2020 and reach US$2.16 billion by 2024, according to IDC’s estimates. Our experience with customers of various sizes and segments also points to great demand for marketing campaign tools that can leverage SMS, RCS, e-mail and other digital channels, so we believe in the potential of multichannel Marketing Campaign Management (MCM) market also as a target market for our solutions. According to IDC estimates, the MCM TAM, in Latin America, amounted to US$1.54 billion in 2020, and this industry is expected to experience average annual growth in TAM of 4.1% a year from 2020 and reach US$1.80 billion by 2024. Our roots in Latin America allow us to understand its complexities and opportunities, to identify the right combination of technologies, sales channel efficiency and go-to-market strategy and to lead the customer experience transformation in the region. On July 24, 2020, in line with our strategy to expand our platform in Latin America, we acquired Sirena, a startup founded in 2014 that offers communication solutions for sales teams via WhatsApp in countries such as Argentina and Mexico. Also, upon consummation of the D1 Acquisition, we expect to expand our Latin America addressable market by adding a multichannel engagement solution and multiple tools to our CX communication platform such as single customer view, journey builder, documents (e.g., invoices, utilities bills, insurance policies) composition and delivery of transaction documents through multiple channels, which are considered part of the Customer Communications Management, or CCM, market. According to IDC estimates, the CCM TAM in Latin America amounted to US$115.6 million in 2020, and this industry is expected to experience average annual growth in TAM of 5.6% a year from 2020 and reach US$143.9 million by 2024. For further information about the Sirena Acquisition and the D1 Acquisition, see “Presentation of Financial and Other Information — D1 Acquisition, Sirena Acquisition and Related Financial Statements” and “Risk Factors — Certain Risks Relating to Our Business and Industry — We may pursue strategic acquisitions or investments which may divert our management’s attention and result in reduced cash levels, increased indebtedness or dilution to our shareholders. The failure of an acquisition or investment to produce the anticipated results, the failure to consummate a pending acquisition (including the D1 Acquisition) or the inability to integrate an acquired company fully, could adversely affect our business.” The following chart represents the total addressable market in Latin America for CPaaS, MCM and CCM for the periods indicated below:
[MISSING IMAGE: TM2039074D7-BC_LATINAME4C.JPG]
We believe the Latin American market has significant growth potential as it is in the early stage of digital transformation and the adoption of technology. For example, current business spending on
 
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information technology in Latin America remains relatively low compared to spending in developed markets (1.9% in Latin America, compared to 4.1% in the United States in terms of percentage of GDP as of 2019, according to data from the Brazilian Association of Software Companies (Associação Brasileira das Empresas de Software), or ABES, and the World Bank). Additionally, the ongoing COVID-19 pandemic has highlighted the need for businesses to transform their end-consumer journey by implementing digital platforms and solutions to mitigate disruptions and maintain direct relationships with end-consumers. Accordingly, we believe that the expected recovery of the Latin American economy, coupled with the expectation of pro-business reforms in certain countries of the region, will create opportunities for strategic investments in the private sector, generating an increase in demand for digital solutions, and we believe we are well-positioned to be at the forefront of meeting this increase in demand.
Our Technology
Our technology is based on a multi-layered communications platform, focused on providing the building blocks to compose communications solutions for businesses and APIs that may be integrated into business applications through the following layers:
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Solutions layer:   a full suite of communications solutions, such as customer service, engagement, marketing and sales teams communications, that leverage our tools and communication channels to provide end-to-end use cases. These solutions provide business users the ability to fully manage communications throughout the end-consumer journey.
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CX Insights layer:   provides recommendations for customer journey improvements based on data and use cases, enabling businesses to enhance their end-consumer experiences.
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Single Customer View layer:   maps and correlates end-consumer data, providing an individual historical view of the customer journey that enables the ability to trigger and contextualize communications.
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Tools layer:   allows implementation of business rules, communication flows, document management and integration connections across multiple channels. This layer acts as a set of building blocks that can be combined to build a variety of use cases.
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Channels layer:   manages a complex third-party network of connections and agreements with providers, such as carriers, messaging apps and social networks that allows communications to reach an end-consumer device. This layer includes the monitoring of provider performance for quality, service and features. We also seek to ensure that our platform is as resilient as possible to network service provider outages or service disruptions.
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Our Business Model and Our Communications Platform
The following chart summarizes our business model, communications platform (including channels and tools), use cases and business relationships with sales channel partners.
[MISSING IMAGE: TM2039074D7-ORG_COMP4CLR.JPG]
Our communications platform empowers businesses of all sizes to create, scale and improve communications through a variety of communication channels. The solutions we offer range from basic APIs to full communication solutions, focused on providing an ideal fit for business requirements based on each use case and industry.
Businesses use our platform to interact with their end-consumers on communication channels such as SMS, voice and IP-based messaging service products (such as WhatsApp) and use our tools to automate, integrate and manage communications for multiple use cases across these channels. For example, some businesses use our visual builder — a tool that enables businesses to draw conversational flows or automation flow through a visual “non-code” interface — to design communication flows, such as chatbots or automated campaigns, without any need for coding skills. Other businesses adopt our communication solutions to manage marketing, customer services or sales teams’ communications.
Our platform, combined with our business model, empowers innovators within every business, by encouraging them to be autonomous and improve to evolve their end-consumer journey without upfront payments and complex systems implementation and integration. We may give businesses free access to our platform for a trial period to allow them test their use cases prior to entering into a contract with us. We continue to improve our average sales cycle (which consists on the period of time starting from our first active interaction with a prospective client until such client enters into a contract with us) and expedite the adoption of our solutions by customers. Our average overall sales cycle was 19 days in 2020, compared to 37 days in 2019. For small- and medium-sized companies, our average sales cycle was 11 days and 14 days in 2020, compared to 15 days and 33 days in 2019. For large companies, we also experienced considerable improvement in terms of average sales cycle from 63 days in 2019 to 30 days in 2020. We believe our frictionless sales process strategy for smaller businesses increases our conversion rate when compared to our competitors as most of them need a salesperson available for every customer contact and we do not. We believe we are well-positioned to continue our accelerated growth while maintaining a low cost of acquisition, based on our “self-service” platform, i.e., customers can directly acquire and use our services without interaction with our sales or support team, which allows sales channel partners to integrate some of our platform capabilities in their software to improve the offering of their products together with our cross-selling opportunities.
 
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Our business model is based primarily on interactions volume, which means our revenues scale as our customers increase their usage of our platform, while just a small share of our revenues are derived from subscriptions and project implementation services. As businesses increasingly adopt our platform with new use cases or for other aspects of their business, we have increased revenues and customer retention levels, resulting in a standalone net revenue expansion rate of 112.8% year-over-year as of December 31, 2020 (or 119.7% giving pro forma effect to the Sirena Acquisition and the D1 Acquisition), compared to a net revenue expansion rate of 117.1% and 116.8% year-over-year as of December 31, 2019 and 2018, respectively.
For a detailed description of the products we offer our customers, see “Business and Industry — Our Products.”
Our Competitive Advantages
We believe we have achieved our leadership position in Latin America as a result of the following core competitive advantages:
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Composable Communications Platform:   We are a communications enabler company focused on providing the building blocks to compose communications solutions for businesses and APIs that may be integrated into business applications. We believe that our developers are able to build a very wide range of use cases.
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Comprehensive Platform with Highly Efficient Sales Channels:   We offer a breadth of functionality, including voice and messaging communication that may be used across a range of devices. While businesses can rely on one of our sales channel partners to assist them with their implementation, SMBs can start using them within days of their implementation using our “self-service” platform. We classify our customers by segment according to their potential interaction volumes, employing an efficient sales channel strategy for each customer size.
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Easy Adoption:   Our platform may be adopted one use case at a time, which reduces the sales and adoption cycle. We may give businesses a trial period to allow them to build trust with us and adopt our platform. This approach eliminates upfront costs for our customers and minimizes technical implementation and integration complexities that typically hinder innovation.
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Easy to Scale:   With easy to use products with a high velocity to scale, our platform allows our customers to scale up or down without interruptions and delays caused by required applications redesign or communications infrastructure restructurings. Our platform is user friendly and we have been experiencing a continuous increase in its adoption by customers. The share of our customer base using more than one product increased from 1.8% in December 2019 to 6.8% (excluding Sirena) and 17.5% (including Sirena) in December 2020.
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Reliability and Solid Reputation:   Our platform consists of fault-tolerant systems that have enabled our customers to avoid any significant failures or downtime, making it reliable and robust.
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Long Tail Go-to-Market:   Our low entry price and “self-service” platform allow small businesses to acquire and use our solutions with or without onboarding team support. Our market has high margins and a large addressable market and small businesses can increasingly acquire our products through our “self-service” platform. In recent years, we have successfully automated SMS messaging at a rate of up to 5,350 messages per customer. We plan to continue evolving the process to improve our monthly automated SMS messages and include other products such as Voice, WhatsApp, customer service using chat, amongst others, and plan to simplify onboarding and automation in the future.
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Our Growth Strategy
Our growth strategy is based on:
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Deepening Our Technology Leadership:   We plan to significantly invest in our technology platform by adding new software capabilities, including new solutions (e.g., commerce), tools (e.g., payments) and communication channels (e.g., new messaging apps). The combination of these solutions, tools and channels will enable us to provide new use cases to our customers and reinforce our one-stop shop market position in digital communications.
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Increasing Spend within Our Customer Base:   We plan to invest in initiatives to improve our customers’ spending on our products and services, including new offers and incentives for upselling and cross-selling and better customer education, and invest in improved processes to increase usage of our platform, offers related to customer needs, and also improve our ability to integrate external systems in order to make it easy for our customers to connect their internal systems with our platform. We believe that each communication channel that we enable on our platform results in an upsell and cross-sell opportunity with a self-service acquisition journey and as our platform allows us to develop new products quickly and integrates the user journey by a same interface, we can use our software as a products showcase to incentivize users to adopt our offerings.
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Accelerating Our Customer Acquisition Strategy:   Based on a pay-as-you-go model, we plan to accelerate our customer acquisition strategy to increase new customers in the markets in which we operate.
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Pursuing Targeted Acquisitions of Products and Technologies:   We have a track record of successfully acquiring and integrating businesses and technologies that have provided us with new product offerings and capabilities and helped us to penetrate new markets. We may increase our geographic footprint by expanding our addressable market and pursuing acquisitions or strategic investments in businesses to strengthen our presence in the region. On July 24, 2020, we completed the acquisition of Sirena, a startup that offers communication solutions for sales teams via WhatsApp. We intend to continue to explore potential acquisitions and make targeted acquisitions that complement and strengthen our product portfolio and capabilities or provide us with access to new markets.
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Increasing and Deepening Our Pan-Latin American Presence:   We believe a substantial market opportunity exists for us to increase our international footprint across all of our product lines. We plan to invest in our regional expansion in Latin America so we can benefit from our strong brand recognition and scale the benefits of that market.
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Scaling Our Go-to-Market Strategy:   We plan to scale our go-to-market strategy by enhancing our indirect sales channel, which includes digital agencies, system integrators and software sales channel companies. It leverages our platform with additional services, know-how and offerings to educate the market about improving customer experiences with multi-channel communications and makes our products and processes more attractive for a larger target market. See “Business and Industry — Sales and Marketing.”
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Our Corporate Structure
The following chart presents our corporate structure, including controlling shareholders and subsidiaries immediately after the completion of this offering (and also gives effect to the consummation of the D1 Acquisition).
[MISSING IMAGE: TM2039074D7-FC_CORP4C.JPG]
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(1)
Certain parties are expected to receive Class A common shares as consideration in connection with the acquisition of Sirena and D1 by Zenvia Brazil. For further information about the Sirena Acquisition and the D1 Acquisition, see “Presentation of Financial and Other Information — D1 Acquisition, Sirena Acquisition and Related Financial Statements.”
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(2)
The D1 Acquisition is subject to the satisfaction or waiver of certain closing conditions set forth in the definitive agreements governing this transaction, including the consummation of this offering. To the extent these conditions are not satisfied or waived or to the extent we do not consummate this offering, we may not complete the D1 Acquisition. See “Risk Factors — Certain Risks Relating to Our Business and Industry — We may pursue strategic acquisitions or investments which may divert our management’s attention and result in reduced cash levels, increased indebtedness or dilution to our shareholders. The failure of an acquisition or investment to produce the anticipated results, the failure to consummate a pending acquisition (including the D1 Acquisition), or the inability to integrate an acquired company fully, could adversely affect our business.”
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Corporate Information
Our principal executive office is located at Avenida Paulista, 2300, 18th Floor, Suites 182 and 184, São Paulo, São Paulo, CEP 01310-300, Brazil. Our registered office is located at Maples Corporate Services Limited, P.O. Box 309, Ugland House, Grand Cayman KYI-1104, Cayman Islands. The telephone number of our investor relations department is +55 (11) 4837-7440. Our investor relations website is https://investors.zenvia.com. Information contained on our website, any other website referred to in this prospectus or accessible through our website or any other website referred to in this prospectus is not incorporated by reference into, and does not form part of, this prospectus, and you should not consider such information to be part of this prospectus or in deciding whether to invest in our Class A common shares.
Recent Developments
Pending D1 Acquisition
In March 2021, Zenvia Brazil entered into certain purchase agreements for the direct and indirect acquisition of 100% of the share capital of D1. D1 is a platform that connects different data sources to enable a single customer view layer, allowing the creation of multichannel communications, generation of variable documents, authenticated message delivery and contextualized conversational experiences.
Upon consummation of the D1 Acquisition, we will also become indirect holders of 100% of the share capital of Smarkio, a wholly -owned subsidiary of D1 and a cloud-based company that combines an automated marketing platform through chatbots with a platform for creating, integrating and processing conversational interfaces that can be used by developers and business users.
The D1 Acquisition is subject to the satisfaction or waiver of certain closing conditions set forth in the definitive agreements governing this transaction, including the consummation of this offering. To the extent these conditions are not satisfied or waived or to the extent we do not consummate this offering, we may not complete the D1 Acquisition. See “Risk Factors — Certain Risks Relating to Our Business and Industry — We may pursue strategic acquisitions or investments which may divert our management’s attention and result in reduced cash levels, increased indebtedness or dilution to our shareholders. The failure of an acquisition or investment to produce the anticipated results, the failure to consummate a pending acquisition (including the D1 Acquisition), or the inability to integrate an acquired company fully, could adversely affect our business.” For further information regarding the D1 Acquisition, see “Presentation of Financial and Other Information — D1 Acquisition, Sirena Acquisition and Related Financial Statements.”
We plan to use US$     million (equivalent to R$     million using the Central Bank selling exchange rate of      per U.S. dollar published on            , 2021) from the proceeds of this offering to pay the consideration payable in cash to acquire D1. See “Use of Proceeds.”
COVID-19
As a result of the global outbreak of a novel strain of coronavirus, or COVID-19, unprecedented economic uncertainties have arisen that continue to have an adverse impact on global economic and market conditions, including in Brazil. In March 2020, the World Health Organization declared the COVID-19 outbreak a pandemic, and the Brazilian federal government declared a national emergency with respect to COVID-19. In addition, state and municipal authorities in Brazil suspended a variety of economic activities as part of measures to mitigate the spread of the virus.
The global impact of the COVID-19 outbreak has rapidly evolved and it presents material uncertainty and risk with respect to our future performance and financial results. In response to the COVID-19 outbreak,
 
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we have implemented several measures aimed at safeguarding the health of our employees and the stability of our operations, including: (1) the implementation of remote work arrangements; (2) restrictions on all business travel and the postponement or cancellation of other planned events or their shift to virtual-only experiences, (3) the development of wellbeing and work life balance initiatives; (4) the provision of a utilities stipend to assist our employees with increased cost of electricity, internet and other expenses resulting from remote work arrangements, and (5) increased communication with our employees, keeping them informed of the impacts of COVID-19 on their health. In addition, we have retained all of our employees during the COVID-19 pandemic and continued to hire personnel.
In the context of the COVID-19 pandemic, in order to help small and medium entrepreneurs who needed to adapt quickly to this new reality, we made available our multichannel service tool free of monthly fees from April through July 2020, which gave them access to Zenvia Chat, our customer service software, and serve their clients through several communication channels, such as e-mail, Facebook Messenger, Mercado Livre, Telegram and website, among others. In partnership with Neoway, and in light of the risk of a systemic crises resulting from the high demand of health care systems resulting from the COVID-19 pandemic, we developed a screening chatbot where each individual can answer questions on their own cell phone / computer. According to the symptoms presented by the user, our chatbot provides a recommendation, following the protocol developed by the Telemedicine University of Rio Grande do Sul. If the recommendation is to go to the hospital, the chatbot locates the nearest health posts and hospitals, using a geolocation system. This technology is available completely free of charge to any public agency that wants to use it.
The COVID-19 pandemic is also having an impact on our customers (and prospective customers) behavior as it is accelerating their digitalization plans, which creates opportunities for us, particularly for our IP-based messaging service products offerings (such as WhatsApp). Nonetheless, in the six months ended June 30, 2020, we suffered an impact as we believe that our sales would have been higher in the absence of COVID-19 pandemic, and such impact may continue for the duration of the COVID-19 pandemic. For example, certain of our customers reduced the usage of our SMS text messaging services in April as a cost-saving initiative designed to mitigate the impacts of COVID-19 pandemic on their businesses. We continue to monitor the impact of the COVID-19 pandemic on our business and the well-being of our employees.
For further information, please see “Risk Factors — Certain Risks Relating to Our Business and Industry — The outbreak of highly communicable diseases worldwide, such as the global coronavirus (COVID-19) pandemic, may lead to greater volatility in the global financial and capital markets resulting in an economic slowdown that may adversely affect our business, results of operations, financial performance and the trading price of our Class A common shares.”
Zenvia Anywhere
In October 2020, we announced our plan to implement Zenvia Anywhere, a permanent remote work arrangement for our employees for an indefinite period of time. The concept of a remote work arrangement for our employees started as a safety measure resulting from the COVID-19 pandemic; however, based on positive employee feedback and our initiatives to attract talent no matter an individual’s physical location and to build a global team mentality, we decided to fully transition our employees to remote work with Zenvia Anywhere. As part of the Zenvia Anywhere program, we provide employees with financial assistance to assist them with the increased cost of electricity, internet and other expenses resulting from a compulsory remote work arrangement. We will also provide employees with financial assistance for the setup of their home office. We expect to use any net cost-savings as a result of Zenvia Anywhere for teambuilding activities, employee and leadership training, the modernization of our São Paulo headquarters and the possibility of coworking remotely around the world.
Our Preliminary Results for the First Quarter of 2021
Our financial results for the three months ended March 31, 2021 are not yet finalized. The following information reflects our preliminary results for this period:
Our revenue for the three months ended March 31, 2021 is expected to be between R$     thousand and R$     thousand, an increase of approximately     % to     % as compared to the three months ended March 31, 2020, primarily due to            
 
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Our cost of services for the three months ended March 31, 2021 is expected to be between R$     thousand and R$     thousand, an increase of approximately     % to     % as compared to the three months ended March 31, 2020, primarily due to            
As a result of the above, our gross profit for the three months ended March 31, 2021 is expected to be between R$     thousand and R$     thousand, an increase of approximately     % to     % as compared to the three months ended March 31, 2020.
Our net revenue expansion rate for the three months ended March 31, 2021 is expected to be between     % and     %, an increase of approximately     % to     % as compared to the three months ended March 31, 2020.
Our active customers for the three months ended March 31, 2021 is expected to be     , an increase of approximately     % as compared to the three months ended March 31, 2020.
D1 Preliminary Results for the First Quarter of 2021
D1 financial results for the three months ended March 31, 2021 are not yet finalized. The following information reflects its preliminary results for this period:
D1 revenue for the three months ended March 31, 2021 is expected to be between R$     thousand and R$     thousand, an increase of approximately     % to     % as compared to the three months ended March 31, 2020, primarily due to            
D1 cost of services for the three months ended March 31, 2021 is expected to be between R$     thousand and R$     thousand, an increase of approximately     % to     % as compared to the three months ended March 31, 2020, primarily due to            
As a result of the above, D1 gross profit for the three months ended March 31, 2021 is expected to be between R$     thousand and R$     thousand, an increase of approximately     % to     % as compared to the three months ended March 31, 2020.
Cautionary Statement Regarding Preliminary Results
While the preliminary results have been prepared in good faith and based on information available at the time of preparation, no assurance can be made that actual results will not change as a result of our (and D1’s) management’s review of results and other factors. The preliminary results presented above are subject to finalization and closing of our and D1’s accounting books and records (which have yet to be performed) and should not be viewed as a substitute for full quarterly financial statements prepared in accordance with IFRS. The preliminary results depend on several factors, including weaknesses in our internal controls and financial reporting process (as described under “Risk Factors”). In addition, the estimates and assumptions underlying the preliminary results include, among other things, economic, competitive, regulatory and financial market conditions and business decisions that may not be accurately reflected and that are inherently subject to significant uncertainties and contingencies, including, among others, risks and uncertainties described in the section entitled “Risk Factors” and “Cautionary Statement Regarding Forward-Looking Statements,” all of which are difficult to predict and many of which are beyond our control. There can be no assurance that the underlying assumptions or estimates will be realized; in particular, while we do not expect that our and D1’s estimated preliminary results will differ materially from our actual results for the three months ended March 31, 2021, we cannot assure you that our estimated preliminary results for the three months ended March 31, 2021 will be indicative of our financial results for future interim periods or for the full year ending December 31, 2021. As a result, the preliminary results cannot necessarily be considered predictive of actual operating results for the periods described above, and this information should not be relied on as such. You should read this information together with the sections of this prospectus entitled “Selected Financial and Other Information” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and our audited consolidated financial statements, our unaudited pro forma condensed financial information and the historical audited financial statements of Sirena, D1, Smarkio and their respective notes thereto included elsewhere in this prospectus.
 
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The preliminary results presented above were prepared by and are the responsibility of our and D1 management. No independent registered public accounting firm or independent accountant has examined, compiled or otherwise performed any procedures with respect to the financial information contained in these preliminary results. Accordingly, no independent registered public accounting firm or independent accountant has expressed any opinion or given any other form of assurance with respect thereto and no independent registered public accounting firm or independent accountant assumes any responsibility for the preliminary results. The reports of the independent registered public accounting firms and independent accountants included elsewhere in this prospectus relate to the historical financial information of Zenvia Brazil, Sirena, D1 and Smarkio. Such reports do not extend to the preliminary results and should not be read to do so.
By including in this prospectus a summary of certain preliminary results regarding our financial and operating results, neither we nor any of our respective advisors or other representatives has made or makes any representation to any person regarding our and D1’s ultimate performance compared to the information contained in the preliminary results and actual results may materially differ from those described above and we do not undertake any obligation unless required by applicable law to update or otherwise revise the preliminary results set forth herein to reflect circumstances existing since their preparation or to reflect the occurrence of unanticipated events or to reflect changes in general economic or industry conditions, even in the event that any or all of the underlying assumptions are shown to be in error.
Summary of Risk Factors
An investment in our Class A common shares is subject to a number of risks, including risks relating to our business and industry, risks related to Brazil and risks related to the offering and our Class A common shares. The following list summarizes some, but not all, of these risks. Please read the information in the section entitled “Risk Factors” for a more thorough description of these and other risks.
Risks relating to our business and industry
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The market for our products and platform is relatively new and unproven, may decline or experience limited growth and is dependent on businesses continuing to adopt our platform and use our products. If our market does not experience significant growth or demand for our products decreases, our business, results of operations and financial condition could be materially adversely affected.
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A substantial percentage of our revenue is generated from our SMS text messaging service and a reduction in our revenue from this service could materially adversely affect our operation results, cash flows and liquidity. As a result, a reduction in revenue from this source of income, whether due to increased competition, cost increase from network service providers, adverse market conditions or a general reduction in demand for SMS text messaging services or other factors (including our inability to generate revenue from the other products we offer to our customers), could materially adversely affect our operational results, cash flows and liquidity.
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A significant portion of our revenue is currently concentrated on our outlier customers and an economic slowdown affecting these customers could lead to decreased demand for our products and services, which could adversely affect us. Therefore, a slowdown in the industries in which such customers are concentrated due to market forces, macroeconomic conditions or regulatory changes could result in decreased demand for our products and services.
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The outbreak of highly communicable diseases worldwide, such as the global coronavirus (COVID-19) pandemic, may lead to greater volatility in the global financial and capital markets resulting in an economic slowdown that may adversely affect our business, results of operations, financial performance and the trading price of our Class A common shares. Although the duration and severity of the COVID-19 outbreak and the degree of its impact on our business is uncertain and difficult to predict, compliance with social distancing and shelter-in-place measures have already impacted our day-to-day operations.
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Failure to set optimal prices for our products could adversely impact our business, results of operations and financial condition. This can result in us incurring increased costs that we may be unable or unwilling
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to pass through to our customers, which could adversely impact our business, results of operations and financial condition.
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If we cannot keep pace with rapid developments and changes in our industry and fail to continue to acquire new customers, the use of our products and services could cease to grow or decline and, thereby, adversely affect our revenues, business and prospects. Although we believe there is still a growing market for SMS text messaging services, there has been an increase in alternative messaging channels that use data connections.
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We may face challenges in the expansion of our operations and our offerings into new market segments and/or new geographic regions within and outside of Brazil. As we expand into new market segments or geographies, we will face challenges associated with entering markets in which we have limited or no experience and in which we may not be well-known. Offering our services in new industries or new geographic regions may require substantial expenditures and takes considerable time, and we may not recover our investments in new markets in a timely manner or at all.
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We may pursue strategic acquisitions or investments which may divert our management’s attention and result in reduced cash levels, increased indebtedness or dilution to our shareholders. The failure of an acquisition or investment to produce the anticipated results, the failure to consummate a pending acquisition (including the D1 Acquisition) or the inability to integrate an acquired company fully, could adversely affect our business.
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Risks relating to Brazil
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The Brazilian federal government has exercised, and continues to exercise, significant influence over the Brazilian economy. This involvement as well as Brazil’s political, regulatory, legal and economic conditions could harm us and the price of our Class A common shares. We and the market price of our securities may be harmed by changes in Brazilian government policies, as well as general economic factors.
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The ongoing economic uncertainty and political instability in Brazil, including as a result of ongoing investigations, may harm us and the price of our Class A common shares. Brazil’s political environment has historically influenced, and continues to influence, the performance of the country’s economy. Political crises have affected and continue to affect the confidence of investors and the general public, which have historically resulted in economic deceleration and heightened volatility in the securities offered by companies with significant operations in Brazil.
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Inflation and certain measures by the Brazilian government to curb inflation have historically harmed the Brazilian economy and Brazilian capital markets, and high levels of inflation in the future would harm our business and the price of our Class A common shares. Inflation, policies adopted to curb inflationary pressures and uncertainties regarding possible future governmental intervention have contributed to economic uncertainty and heightened volatility in the Brazilian capital markets.
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Exchange rate instability may have adverse effects on the Brazilian economy, us and the price of our Class A common shares. Depending on the circumstances, either devaluation or appreciation of the real relative to the U.S. dollar and other foreign currencies could restrict the growth of the Brazilian economy, as well as affecting our business, results of operations and profitability.
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Infrastructure and workforce deficiency in Brazil may impact economic growth and have a material adverse effect on us. Our performance depends on the overall health and growth of the Brazilian economy.
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Risks relating to this offering and our Class A common shares
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There is no existing market for our common shares, and we do not know whether one will develop to provide you with adequate liquidity. If our share price fluctuates after this offering, you could lose a significant part of your investment. Prior to this offering, there has not been a public market for our Class A common shares. If an active trading market does not develop, investors may have difficulty selling any of our Class A common shares that they buy.
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The market price of our shares may be volatile or may decline sharply or suddenly, regardless of our operating performance, and we may not be able to meet investors’ or analysts’ expectations. You may not be able to resell your shares for the initial offer price or above it and you may lose all or part of your investment. We cannot guarantee that the market price after this offering will be equal to or higher than prices in private traded transactions of our common shares that occurred from time to time prior to the offering.
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Our controlling shareholders will, in the aggregate, own 100% of our outstanding Class B common shares, which represent approximately    % of the voting power of our issued capital and    % of our total equity ownership following the offering, and will control all matters requiring shareholder approval. Our controlling shareholders also have the right to nominate the totality of our board of directors and consent rights over certain corporate transactions. This concentration of ownership limits your ability to influence corporate matters.
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The disparity in voting rights among classes of our shares may have a potential adverse effect on the price of our Class A common shares, and may limit or preclude your ability to influence corporate matters. Given the ten-to-one voting ratio between our Class B ordinary and Class A common shares, the holders of our Class B common shares collectively will continue to control a majority of the combined voting power of our shares and therefore be able to control all matters submitted to our shareholders so long as the Class B common shares represent at least     % of all outstanding shares of our Class A ordinary and Class B common shares in addition to certain other rights to which our controlling shareholders are entitled (see risk factor immediately above and “Description of Share Capital”).
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Our status as a controlled company and a foreign private issuer exempts us from certain of the corporate governance standards of the Nasdaq, limiting the protections afforded to investors. Accordingly, you will not have the same protections provided to shareholders of companies that are subject to all Nasdaq corporate governance requirements.
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Emerging Growth Company Status
We are an “emerging growth company,” as defined in Section 2(a) of the Securities Act of 1933, as amended, or the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012, or the JOBS Act. We 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 completion of this offering, (b) in which we have total annual revenues of at least US$1.07 billion, or (c) in which we are deemed to be a large accelerated filer, which means the market value of our shares that is held by non-affiliates exceeds US$700.0 million as of the prior June 30, and (2) the date on which we have issued more than US$1.07 billion in non-convertible debt during the prior three-year period. As an emerging growth company, we are eligible to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies in the United States that are not emerging growth companies including, but not limited to, exemptions from the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, or the Sarbanes-Oxley Act, and any Public Company Accounting Oversight Board, or PCAOB, rules, including any future audit rule promulgated by the PCAOB (unless the SEC determines otherwise). Accordingly, the information about us available to you will not be the same as, and may be more limited than, the information available to shareholders of a non-emerging growth company. In addition, under the JOBS Act, emerging growth companies can delay adopting new or revised U.S. GAAP accounting standards until such time as those standards apply to private companies. Given that we currently report and expect to continue to report under IFRS as issued by the IASB, we will not be able to avail ourselves of this extended transition period and, as a result, we will adopt new or revised accounting standards on the relevant dates on which adoption of such standards is required by the IASB.
Conventions Used in this Prospectus
Except as otherwise indicated or the context requires, all information in this prospectus assumes:
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the           for one share split of our common shares to occur immediately prior to the completion of this offering, or the share split;
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the further amendment and restatement of our Articles of Association, each of which will occur immediately prior to the completion of this offering;
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an initial public offering price of US$      per Class A common share, the midpoint of the estimated offering price range per Class A common share set forth on the cover page of this prospectus; and
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no exercise by the underwriters of their option to purchase up to                 additional Class A common shares from us, in connection with the offering.
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The Offering
This summary highlights information presented in greater detail elsewhere in this prospectus. This summary is not complete and does not contain all the information you should consider before investing in our Class A common shares. You should carefully read this entire prospectus before investing in our Class A common shares including “Risk Factors” and our audited consolidated financial statements, our unaudited pro forma condensed financial information and the historical audited financial statements of Sirena, D1, Smarkio and their respective notes thereto included elsewhere in this prospectus.
Issuer
Zenvia Inc.
Class A common shares offered by us
Class A common shares (or          Class A common shares if the underwriters exercise in full their option to purchase additional Class A common shares from us).
Offering price range
Between US$             and US$          per Class A common share.
Voting rights
The Class A common shares will be entitled to one vote per share, whereas the Class B common shares (which are not being sold in this offering) will be entitled to 10 votes per share.
Each Class B common share may be converted into one Class A common share at the option of the holder.
If, at any time, the total number of the issued and outstanding Class B common shares is less than 10% of the total number of shares outstanding, then each Class B common share will convert automatically into one Class A common share.
In addition, each Class B common share will convert automatically into one Class A common share upon any transfer, except for certain transfers to other holders of Class B common shares or their affiliates or to certain unrelated third parties as described under “Description of Share Capital — Conversion.”
Holders of Class A common shares and Class B common shares will vote together as a single class on all matters unless otherwise required by law and subject to certain exceptions set forth in our Articles of Association as described under “Description of Share Capital — Voting Rights.”
Upon consummation of this offering, assuming no exercise of the underwriters’ option to purchase additional shares, (1) holders of Class A common shares will hold approximately    % of the combined voting power of our outstanding common shares and approximately    % of our total equity ownership and (2) holders of Class B common shares will hold approximately    % of the combined voting power of our outstanding common shares and approximately     % of our total equity ownership.
If the underwriters exercise their option to purchase additional shares in full, (1) holders of Class A common shares will hold approximately    % of the combined voting power of our outstanding common shares and approximately    % of our total equity ownership and (2) holders of Class B common shares will hold approximately    % of the combined voting power of our outstanding common shares and approximately    % of our total equity ownership.
 
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The rights of the holders of Class A common shares and Class B common shares are identical, except with respect to voting, conversion, pre-emptive rights and transfer restrictions applicable to the Class B common shares, and holders of Class B common shares are entitled to preemptive rights to purchase additional Class B common shares in the event that additional Class A common shares are issued, upon the same economic terms and at the same price, in order to maintain such holder’s proportional ownership interest in us. See “Description of Share Capital” for a description of the material terms of our common shares and the difference between Class A and Class B common shares.
Option to purchase additional Class A common shares
We have granted the underwriters the right to purchase up to an additional          Class A common shares from us within 30 days of the date of this prospectus, at the public offering price, less underwriting discounts and commissions, on the same terms as set forth in this prospectus.
Listing
We have applied to list our Class A common shares on the Nasdaq, under the symbol “ZENV.”
Use of proceeds
We estimate that the net proceeds to us from the offering will be approximately US$      million (or US$      million if the underwriters exercise in full their option to purchase additional shares), assuming an initial public offering price of US$      per Class A common share, which is the midpoint of the price range set forth on the cover page of this prospectus, and after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us. We intend to use the net proceeds from this offering to pay the consideration payable in cash to acquire D1 (we plan to allocate US$    million (equivalent to R$     million using the Central Bank selling exchange rate of      per U.S. dollar published on            , 2021) from the proceeds for such purposes), and for any remaining net proceeds, general corporate purposes, which may include investments for the development of software, products or technologies, investments in the international expansion of our operations, funding opportunistic mergers, acquisitions or investments in complementary businesses, and maintaining liquidity. We will have broad discretion in allocating a portion of the net proceeds from this offering. See “Use of Proceeds.”
Share capital before and after offering
As of the date of this prospectus, our authorized share capital is          consisting of          shares of par value          each. Of those authorized shares, (1)          are designated as Class A common shares, (2)          are designated as Class B common shares, and (3)          are as yet undesignated and may be issued as common shares or shares with preferred rights.
Immediately after the offering, we will have          Class A common shares outstanding and               Class B common shares outstanding, assuming no exercise of the underwriters’ option to purchase additional class A common shares.
Dividend policy
The amount of any distributions will depend on many factors, such as our results of operations, financial condition, cash requirements,
 
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prospects and other factors deemed relevant by our board of directors and shareholders. We currently intend to retain all available funds and future earnings, if any, to fund the development and expansion of our business and we do not anticipate paying any cash dividends in the foreseeable future. See “Dividends and Dividend Policy.”
Lock-up agreements
We, all of our directors, officers and substantially all of our shareholders have agreed with the underwriters, subject to certain exceptions, not to offer, sell, or dispose of any shares of our share capital or securities convertible into or exchangeable or exercisable for any shares of our share capital during the 180-day period following the date of this prospectus. Members of our board of directors and our executive officers have agreed to substantially similar lock-up provisions, subject to certain exceptions. See “Underwriting.”
Risk factors
See “Risk Factors” and the other information included in this prospectus for a discussion of factors you should consider before deciding to invest in our Class A common shares.
Cayman Islands exempted company with limited liability
We are a Cayman Islands exempted company with limited liability. The rights of shareholders and the responsibilities of members of our board of directors may be different from the rights of shareholders and responsibilities of directors in companies governed by the laws of U.S. jurisdictions. In particular, as a matter of Cayman Islands law, directors of a Cayman Islands company owe fiduciary duties to the company and separately a duty of care, diligence and skill to the company. Under Cayman Islands law, directors and officers owe the following fiduciary duties: (1) duty to act in good faith in what the director or officer believes to be in the best interests of the company as a whole; (2) duty to exercise powers for the purposes for which those powers were conferred and not for a collateral purpose; (3) directors should not properly fetter the exercise of future discretion; (4) duty to exercise powers fairly as between different sections of shareholders; (5) duty to exercise independent judgment; and (6) duty not to put themselves in a position in which there is a conflict between their duty to the company and their personal interests. Our Articles of Association have varied this last obligation by providing that a director must disclose the nature and extent of his or her interest in any contract or arrangement, and following such disclosure and subject to any separate requirement under applicable law or the listing rules of the Nasdaq, and unless disqualified by the chairman of the relevant meeting, such director may vote in respect of any transaction or arrangement in which he or she is interested and may be counted in the quorum at the meeting. In comparison, under the Delaware General Corporation Law, a director of a Delaware corporation owes fiduciary duties to the corporation and its stockholders comprised of the duty of care and the duty of loyalty. Such duties prohibit self-dealing by a director and mandate that the best interest of the corporation and its shareholders take precedence over any interest possessed by a director, officer or controlling shareholder and not shared by the shareholders generally. See “Description of Share Capital — Principal Differences between Cayman Islands and U.S. Corporate Law.”
 
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Unless otherwise indicated, all information contained in this prospectus assumes no exercise of the option granted to the underwriters to purchase up to additional           Class A common shares in connection with the offering.
 
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Summary Financial and Other Information
The following tables set forth summary consolidated historical financial data for Zenvia Brazil as of and for the years ended December 31, 2020, 2019 and 2018 and summary unaudited pro forma financial data for the year ended December 31, 2020. Summary consolidated historical financial data has been derived from our audited consolidated financial statements, included elsewhere in this prospectus. The financial results of Sirena are consolidated in our historical results since July 24, 2020. See “Presentation of Financial and Other Information.”
Summary unaudited pro forma financial data included below has been derived from the unaudited pro forma condensed financial information included elsewhere in this prospectus. The unaudited pro forma condensed financial information for the year ended December 31, 2020 included below gives effect to the Sirena Acquisition and the D1 Acquisition by us as if they had occurred as of January 1, 2020. See Unaudited Pro Forma Condensed Financial Information.” The unaudited pro forma condensed financial information does not purport to represent what our actual consolidated results of operations would have been had these acquisitions actually occurred on the date indicated, nor are they indicative of future consolidated results of operations or financial condition. The summary audited consolidated historical financial data and the summary unaudited pro forma condensed financial data should be read in conjunction with “Presentation of Financial and Other Information,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” “Unaudited Pro Forma Condensed Financial Information” our audited consolidated financial statements and the historical audited financial statements of Sirena, D1 and Smarkio, including the notes thereto, included elsewhere in this prospectus.
Consolidated and Pro Forma Condensed Statements of Profit or Loss for the Years Ended December 31, 2020, 2019 and 2018
​ ​ ​
Historical Zenvia Brazil
​ ​
Total Zenvia Brazil
Pro Forma(1)
​
​ ​ ​
Year ended December 31,
​ ​
Year ended December 31,
​
​ ​ ​
2020(2)
​ ​
2020(2)
​ ​
2019
​ ​
2018
​ ​
2020
​ ​
2020
​
​ ​ ​
(in US$)(3)
​ ​
(in R$)
​ ​
(in R$)
​ ​
(in R$)
​ ​
(in US$)(3)
​ ​
(in R$)
​
​ ​ ​
(in thousands)
​
Revenue
​ ​ ​ ​ 82,687 ​ ​ ​ ​ ​ 429,701 ​ ​ ​ ​ ​ 354,035 ​ ​ ​ ​ ​ 276,380 ​ ​ ​ ​ ​ 94,766 ​ ​ ​ ​ ​ 492,470 ​ ​
Cost of services(4)
​ ​ ​ ​ (62,707) ​ ​ ​ ​ ​ (325,870) ​ ​ ​ ​ ​ (260,786) ​ ​ ​ ​ ​ (186,084) ​ ​ ​ ​ ​ (71,640) ​ ​ ​ ​ ​ (372,292) ​ ​
Gross profit
​ ​ ​ ​ 19,980 ​ ​ ​ ​ ​ 103,831 ​ ​ ​ ​ ​ 93,249 ​ ​ ​ ​ ​ 90,296 ​ ​ ​ ​ ​ 23,126 ​ ​ ​ ​ ​ 120,178 ​ ​
Selling and marketing expenses(5)
​ ​ ​ ​ (6,464) ​ ​ ​ ​ ​ (33,589) ​ ​ ​ ​ ​ (26,018) ​ ​ ​ ​ ​ (18,241) ​ ​ ​ ​ ​ (10,931) ​ ​ ​ ​ ​ (56,806) ​ ​
Administrative expenses(4)(5)
​ ​ ​ ​ (13,791) ​ ​ ​ ​ ​ (71,667) ​ ​ ​ ​ ​ (40,868) ​ ​ ​ ​ ​ (35,683) ​ ​ ​ ​ ​ (24,007) ​ ​ ​ ​ ​ (124,758) ​ ​
Research and development expenses(5)
​ ​ ​ ​ (3,009) ​ ​ ​ ​ ​ (15,637) ​ ​ ​ ​ ​ (9,832) ​ ​ ​ ​ ​ (3,931) ​ ​ ​ ​ ​ (3,009) ​ ​ ​ ​ ​ (15,637) ​ ​
Gain on bargain purchase
​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 2,479 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​
Allowance for credit losses
​ ​ ​ ​ (809) ​ ​ ​ ​ ​ (4,205) ​ ​ ​ ​ ​ (3,733) ​ ​ ​ ​ ​ (2,287) ​ ​ ​ ​ ​ (879) ​ ​ ​ ​ ​ (4,568) ​ ​
Other income and expenses, net
​ ​ ​ ​ (162) ​ ​ ​ ​ ​ (840) ​ ​ ​ ​ ​ 4,473 ​ ​ ​ ​ ​ 96 ​ ​ ​ ​ ​ (698) ​ ​ ​ ​ ​ (3,629) ​ ​
Operating profit
​ ​ ​ ​ (4,255) ​ ​ ​ ​ ​ (22,107) ​ ​ ​ ​ ​ 19,750 ​ ​ ​ ​ ​ 30,250 ​ ​ ​ ​ ​ (16,398) ​ ​ ​ ​ ​ (85,220) ​ ​
Finance costs
​ ​ ​ ​ (5,115) ​ ​ ​ ​ ​ (26,580) ​ ​ ​ ​ ​ (6,811) ​ ​ ​ ​ ​ (7,352) ​ ​ ​ ​ ​ (5,913) ​ ​ ​ ​ ​ (30,727) ​ ​
Finance income
​ ​ ​ ​ 3,698 ​ ​ ​ ​ ​ 19,217 ​ ​ ​ ​ ​ 4,239 ​ ​ ​ ​ ​ 3,446 ​ ​ ​ ​ ​ 3,781 ​ ​ ​ ​ ​ 19,647 ​ ​
Net finance costs
​ ​ ​ ​ (1,417) ​ ​ ​ ​ ​ (7,363) ​ ​ ​ ​ ​ (2,572) ​ ​ ​ ​ ​ (3,906) ​ ​ ​ ​ ​ (2,132) ​ ​ ​ ​ ​ (11,080) ​ ​
Profit (loss) before income tax and social contribution
​ ​ ​ ​ (5,672) ​ ​ ​ ​ ​ (29,470) ​ ​ ​ ​ ​ 17,178 ​ ​ ​ ​ ​ 26,344 ​ ​ ​ ​ ​ (18,530) ​ ​ ​ ​ ​ (96,300) ​ ​
Deferred income tax and social contribution
​ ​ ​ ​ 1,632 ​ ​ ​ ​ ​ 8,480 ​ ​ ​ ​ ​ (3,186) ​ ​ ​ ​ ​ (3,457) ​ ​ ​ ​ ​ (776) ​ ​ ​ ​ ​ (4,031) ​ ​
Current income tax and social contribution
​ ​ ​ ​ (85) ​ ​ ​ ​ ​ (441) ​ ​ ​ ​ ​ (148) ​ ​ ​ ​ ​ (3,022) ​ ​ ​ ​ ​ 5,537 ​ ​ ​ ​ ​ 28,771 ​ ​
Profit (loss) for the year
​ ​ ​ ​ (4,125) ​ ​ ​ ​ ​ (21,431) ​ ​ ​ ​ ​ 13,844 ​ ​ ​ ​ ​ 19,865 ​ ​ ​ ​ ​ (13,769) ​ ​ ​ ​ ​ (71,560) ​ ​
 
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​
(1)
For a discussion on the Sirena Acquisition, the D1 Acquisition and our unaudited pro forma condensed statements of profit or loss and related notes, see “Unaudited Pro Forma Condensed Financial Information.”
​
(2)
We started to consolidate Sirena’s results of operations as of July 24, 2020 upon consummation of its acquisition by us. Since the D1 Acquisition has not been consummated, its results have not been consolidated into our results of operations to date.
​
(3)
Solely for the convenience of the reader, certain Brazilian real amounts have been translated into U.S. dollars at the selling rate of R$5.1967 to US$1.00, as reported by the Central Bank as of December 31, 2020. The U.S. dollar equivalent information presented in this prospectus should not be construed as implying that the amounts in reais represent, or could have been or could be converted into, U.S. dollars at this rate or any other rate. See “Exchange Rates” for further information about exchange rate fluctuations.
​
(4)
Includes amortization of intangible assets acquired from business combinations allocated as follows:
​
​ ​ ​
Historical Zenvia Brazil
​
​ ​ ​
Year ended December 31,
​
​ ​ ​
2020(*)
​ ​
2020(*)
​ ​
2019
​ ​
2018
​
​ ​ ​
(in US$)(**)
​ ​
(in R$)
​ ​
(in R$)
​ ​
(in R$)
​
​ ​ ​
(in thousands)
​
Cost of services
​ ​ ​ ​ (1,355) ​ ​ ​ ​ ​ (7,042) ​ ​ ​ ​ ​ (653) ​ ​ ​ ​ ​ — ​ ​
Administrative expenses
​ ​ ​ ​ (1,630) ​ ​ ​ ​ ​ (8,468) ​ ​ ​ ​ ​ (11,087) ​ ​ ​ ​ ​ (11,044) ​ ​
Total ​ ​ ​ ​ (2,985) ​ ​ ​ ​ ​ (15,510) ​ ​ ​ ​ ​ (11,740) ​ ​ ​ ​ ​ (11,044) ​ ​
​
*
We started to consolidate Sirena’s results of operations as of July 24, 2020 upon consummation of its acquisition by us.
​
**
Solely for the convenience of the reader, certain Brazilian real amounts have been translated into U.S. dollars at the selling rate of R$5.1967 to US$1.00, as reported by the Central Bank as of December 31, 2020. The U.S. dollar equivalent information presented in this prospectus should not be construed as implying that the amounts in reais represent, or could have been or could be converted into, U.S. dollars at this rate or any other rate. See “Exchange Rates” for further information about exchange rate fluctuations.
​
(5)
Includes compensation expenses negotiated in connection with business combination transactions allocated as follows:
​
​ ​ ​
Historical Zenvia Brazil
​
​ ​ ​
Year ended December 31,
​
​ ​ ​
2020(*)
​ ​
2020(*)
​ ​
2019
​ ​
2018
​
​ ​ ​
(in US$)(**)
​ ​
(in R$)
​ ​
(in R$)
​ ​
(in R$)
​
​ ​ ​
(in thousands)
​
Selling and marketing expenses
​ ​ ​ ​ (758) ​ ​ ​ ​ ​ (3,941) ​ ​ ​ ​ ​ (2,615) ​ ​ ​ ​ ​ — ​ ​
Research and development expenses
​ ​ ​ ​ (758) ​ ​ ​ ​ ​ (3,941) ​ ​ ​ ​ ​ (2,615) ​ ​ ​ ​ ​ — ​ ​
Administrative expenses
​ ​ ​ ​ (1,700) ​ ​ ​ ​ ​ (8,833) ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​
Total
​ ​ ​
​
(3,216)
​ ​ ​ ​
​
(16,715)
​ ​ ​ ​
​
(5,230)
​ ​ ​ ​ ​ — ​ ​
​
*
We started to consolidate Sirena’s results of operations as of July 24, 2020 upon consummation of its acquisition by us.
​
**
Solely for the convenience of the reader, certain Brazilian real amounts have been translated into U.S. dollars at the selling rate of R$5.1967 to US$1.00, as reported by the Central Bank as of December 31, 2020. The U.S. dollar equivalent information presented in this prospectus should not be construed as implying that the amounts in reais represent, or could have been or
​
​
 
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could be converted into, U.S. dollars at this rate or any other rate. See “Exchange Rates” for further information about exchange rate fluctuations.
Note:
The Total Voice acquisition purchase agreement provided for a cash upfront payment of R$2,015 thousand on closing date. Following the acquisition, Total Voice former shareholders that remained working with us are eligible to receive additional compensation of up to R$23,327 thousand to be paid in 2021, calculated based on the contribution margins generated by our voice solutions for the period of time set forth under the share purchase agreement and based on certain conditions, including their continued employment with us. For the year ended December 31, 2020, a provision was recorded in the amount of R$7,882 thousand related to the estimated compensation payable to these individuals. Also, the Sirena acquisition purchase agreement provided for a cash upfront payment of US$10,923 thousand made on closing date (which amounted to R$56,961 thousand on such date) and US$392 thousand (R$2,045 thousand using the Central Bank selling exchange rate published on January 24, 2021) which was paid on January 24, 2021 to Sirena shareholders. Following such acquisition, former Sirena shareholders are eligible to additional payments of up to US$13,584 thousand (R$70,835 thousand) payable in three installments (6, 12 and 24 months following the closing date of the Sirena Acquisition). In addition, former Sirena shareholders that remained working with us are eligible to receive additional compensation of up to US$5,514 thousand (R$28,752 thousand using the Central Bank selling exchange rate published on December 31, 2020) to be paid in two installments (12 and 24 months following the closing date of the Sirena Acquisition), calculated based on the gross margin generated by Sirena’s solutions for the period of time set forth under the share purchase agreement and based on certain conditions, including their continued employment with us. As of December 31, 2020, a provision was recorded in the amount of R$8,833 thousand in connection with such obligations. See “Business and Industry — Recent Acquisitions.”
​
Selected Items from Consolidated Statement of Financial Position
​ ​ ​
Historical Zenvia Brazil
​ ​
Total Zenvia Brazil
Pro Forma(1)
​
​ ​ ​
As of December 31,
​ ​
As of December 31,
​
​ ​ ​
2020(2)
​ ​
2020(2)
​ ​
2019
​ ​
2018
​ ​
2020
​ ​
2020
​
​ ​ ​
(in US$)(3)
​ ​
(in R$)
​ ​
(in R$)
​ ​
(in R$)
​ ​
(in US$)(3)
​ ​
(in R$)
​
​ ​ ​
(in thousands)
​ ​
(in thousands)
​
Cash and cash equivalents
​ ​ ​ ​ 11,542 ​ ​ ​ ​ ​ 59,979 ​ ​ ​ ​ ​ 12,342 ​ ​ ​ ​ ​ 50,676 ​ ​ ​ ​ ​ ​ ​ ​
Total current assets(4)
​ ​ ​ ​ 29,766 ​ ​ ​ ​ ​ 154,686 ​ ​ ​ ​ ​ 79,089 ​ ​ ​ ​ ​ 104,281 ​ ​ ​ ​ ​ ​ ​ ​
Total non-current assets
​ ​ ​ ​ 57,375 ​ ​ ​ ​ ​ 298,168 ​ ​ ​ ​ ​ 169,894 ​ ​ ​ ​ ​ 168,083 ​ ​ ​ ​ ​ ​ ​ ​
Total assets
​ ​ ​ ​ 87,141 ​ ​ ​ ​ ​ 452,854 ​ ​ ​ ​ ​ 248,983 ​ ​ ​ ​ ​ 272,364 ​ ​ ​ ​ ​ ​ ​ ​
Total current liabilities
​ ​ ​ ​ 43,573 ​ ​ ​ ​ ​ 226,438 ​ ​ ​ ​ ​ 74,777 ​ ​ ​ ​ ​ 73,717 ​ ​ ​ ​ ​ ​ ​ ​
Total non-current liabilities
​ ​ ​ ​ 21,372 ​ ​ ​ ​ ​ 111,068 ​ ​ ​ ​ ​ 74,869 ​ ​ ​ ​ ​ 50,153 ​ ​ ​ ​ ​ ​ ​ ​
Total liabilities
​ ​ ​ ​ 64,945 ​ ​ ​ ​ ​ 337,506 ​ ​ ​ ​ ​ 149,646 ​ ​ ​ ​ ​ 123,870 ​ ​ ​ ​ ​ ​ ​ ​
Total equity
​ ​ ​ ​ 22,196 ​ ​ ​ ​ ​ 115,348 ​ ​ ​ ​ ​ 99,337 ​ ​ ​ ​ ​ 148,494 ​ ​ ​ ​ ​ ​ ​ ​
Total liabilities and equity
​ ​ ​ ​ 87,141 ​ ​ ​ ​ ​ 452,854 ​ ​ ​ ​ ​ 248,983 ​ ​ ​ ​ ​ 272,364 ​ ​ ​ ​ ​ ​ ​ ​
​
(1)
For a discussion on the D1 Acquisition and our unaudited pro forma condensed statement of financial position and related notes, see “Unaudited Pro Forma Condensed Financial Information.”
​
(2)
We started to consolidate Sirena’s results of operations as of July 24, 2020 upon consummation of its acquisition by us.
​
(3)
Solely for the convenience of the reader, certain Brazilian real amounts have been translated into U.S. dollars at the selling rate of R$5.1967 to US$1.00, as reported by the Central Bank as of December 31, 2020. The U.S. dollar equivalent information presented in this prospectus should not be construed as
​
​
 
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implying that the amounts in reais represent, or could have been or could be converted into, U.S. dollars at this rate or any other rate. See “Exchange Rates” for further information about exchange rate fluctuations.
(4)
Includes cash and cash equivalents.
​
Non-GAAP Financial Measures
​ ​ ​
Year ended December 31,
​
​ ​ ​
Historical Zenvia Brazil
​ ​
Total Zenvia Brazil
Pro Forma(1)
​
​ ​ ​
2020(2)
​ ​
2020(2)
​ ​
2019
​ ​
2018
​ ​
2020
​ ​
2020
​
​ ​ ​
(in US$)(3)
​ ​
(in R$)
​ ​
(in R$)
​ ​
(in R$)
​ ​
(in US$)(3)
​ ​
(in R$)
​
​ ​ ​
(in thousands)
​ ​
(in thousands)
​
Non-GAAP Gross Profit(4)
​ ​ ​ ​ 21,335 ​ ​ ​ ​ ​ 110,873 ​ ​ ​ ​ ​ 93,902 ​ ​ ​ ​ ​ 90,296 ​ ​ ​ ​ ​ 29,530(8) ​ ​ ​ ​ ​ 153,456(8) ​ ​
Non-GAAP Operating Profit(5)
​ ​ ​ ​ (720) ​ ​ ​ ​ ​ (3,739) ​ ​ ​ ​ ​ 29,011 ​ ​ ​ ​ ​ 41,294 ​ ​ ​ ​ ​ (2,147)(9) ​ ​ ​ ​ ​ (11,169)(9) ​ ​
EBITDA(6) ​ ​ ​ ​ 996 ​ ​ ​ ​ ​ 5,180 ​ ​ ​ ​ ​ 38,546 ​ ​ ​ ​ ​ 44,763 ​ ​ ​ ​ ​ (5,658)(10) ​ ​ ​ ​ ​ (29,403)(10) ​ ​
Adjusted EBITDA(7)
​ ​ ​ ​ 1,546 ​ ​ ​ ​ ​ 8,038 ​ ​ ​ ​ ​ 36,067 ​ ​ ​ ​ ​ 44,763 ​ ​ ​ ​ ​ 506(11) ​ ​ ​ ​ ​ 2,632(11) ​ ​
​
(1)
For a discussion on the Sirena Acquisition, the D1 Acquisition and our unaudited pro forma condensed statements of profit or loss and related notes, see “Presentation of Financial and Other Information” and “Unaudited Pro Forma Condensed Financial Information.”
​
(2)
We started to consolidate Sirena’s results of operations as of July 24, 2020 upon consummation of its acquisition by us. See “Unaudited Pro Forma Condensed Financial Information,” for the unaudited pro forma condensed financial information for the year ended December 31, 2020, which gives effect to the Sirena Acquisition as if it occurred as of January 1, 2020. Since the D1 Acquisition has not been consummated, its results have not been consolidated into our results of operations to date.
​
(3)
Solely for the convenience of the reader, certain Brazilian real amounts have been translated into U.S. dollars at the selling rate of R$5.1967 to US$1.00, as reported by the Central Bank as of December 31, 2020. The U.S. dollar equivalent information presented in this prospectus should not be construed as implying that the amounts in reais represent, or could have been or could be converted into, U.S. dollars at this rate or any other rate. See “Exchange Rates” for further information about exchange rate fluctuations.
​
(4)
We calculate Non-GAAP Gross Profit as gross profit plus amortization of intangible assets acquired from business combinations. For a reconciliation of Non-GAAP Gross Profit to gross profit, see “Selected Financial and Other Information — Reconciliation of Non-GAAP Financial Measures — Reconciliation of Non-GAAP Gross Profit.”
​
(5)
We calculate Non-GAAP Operating Profit as profit adjusted by income tax and social contribution (current and deferred) and net finance costs plus, amortization of intangible assets acquired from business combinations and expenses related to branch closing. For a reconciliation of Non-GAAP Operating Profit to profit, see “Selected Financial and Other Information — Reconciliation of Non-GAAP Financial Measures — Reconciliation of Non-GAAP Operating Profit.”
​
(6)
We calculate EBITDA as profit adjusted by income tax and social contribution (current and deferred), net finance costs and depreciation and amortization. For a reconciliation of EBITDA to profit, see “Selected Financial and Other Information — Reconciliation of Non-GAAP Financial Measures — Reconciliation of EBITDA and Adjusted EBITDA.”
​
(7)
We calculate Adjusted EBITDA as EBITDA plus expenses related to branch closing and gain on bargain purchase. For a reconciliation of Adjusted EBITDA to profit, see “Selected Financial and Other Information — Reconciliation of Non-GAAP Financial Measures — Reconciliation of EBITDA and Adjusted EBITDA.”
​
(8)
We calculate Non-GAAP Pro Forma Gross Profit as pro forma gross profit plus pro forma amortization of intangible assets acquired from business combinations. For a reconciliation of Non-GAAP Pro Forma Gross Profit to gross profit, see “Unaudited Pro Forma Condensed Financial
​
​
 
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Information — Reconciliation of Non-GAAP Pro Forma Financial Measures — Reconciliation of Non-GAAP Pro Forma Gross Profit.”
(9)
We calculate Non-GAAP Pro Forma Operating Profit as pro forma profit adjusted by pro forma income tax and social contribution (current and deferred) and pro forma net finance costs plus pro forma amortization of intangible assets acquired from business combinations and pro forma expenses related to branch closing. For a reconciliation of Non-GAAP Pro Forma Operating Profit to profit, see “Unaudited Pro Forma Condensed Financial Information — Reconciliation of Non-GAAP Pro Forma Financial Measures — Reconciliation of Non-GAAP Pro Forma Operating Profit.”
​
(10)
We calculate Pro Forma EBITDA as pro forma profit adjusted by pro forma income tax and social contribution (current and deferred), pro forma net finance costs and pro forma depreciation and amortization. For a reconciliation of Pro Forma EBITDA to profit, see “Unaudited Pro Forma Condensed Financial Information — Reconciliation of Non-GAAP Pro Forma Financial Measures — Reconciliation of Pro Forma EBITDA and Pro Forma Adjusted EBITDA.”
​
(11)
We calculate Pro Forma Adjusted EBITDA as pro forma EBITDA plus pro forma expenses related to branch closing. For a reconciliation of Pro Forma Adjusted EBITDA to profit, see “Unaudited Pro Forma Condensed Financial Information — Reconciliation of Non-GAAP Pro Forma Financial Measures — Reconciliation of Pro Forma EBITDA and Pro Forma Adjusted EBITDA.”
​
Selected Operating Data
The following table sets forth summary information regarding certain of our key performance metrics as of the periods indicated:
​ ​ ​
As of December 31,
​
​ ​ ​
2020
​ ​
2019
​ ​
2018
​
Active customers(1) (#)
​ ​ ​ ​ 9,442 ​ ​ ​ ​ ​ 7,751 ​ ​ ​ ​ ​ 5,871 ​ ​
Revenue growth rate(2)
​ ​ ​ ​ 21.4% ​ ​ ​ ​ ​ 28.1% ​ ​ ​ ​ ​ — ​ ​
Net revenue expansion rate(2)
​ ​ ​ ​ 112.8% ​ ​ ​ ​ ​ 117.1% ​ ​ ​ ​ ​ 116.8% ​ ​
​
(1)
We believe that the number of our active customers is an important indicator of the growth of our business, the market acceptance of our platform and future revenue trends. We define an active customer as an account (based on an individual taxpayer registration number) at the end of any period that was the source of any amount of revenue for us in the preceding three months. We classify a customer from which we generated no revenue in the preceding three months as an inactive customer.
​
(2)
We believe that net revenue expansion rate is one of the most reliable indicators of our future revenue trends. Our ability to drive growth and generate incremental revenue depends, in part, on our ability to maintain and grow our relationships with customers to increase their use of our platform. An important way in which we track our performance in this regard is by measuring the net revenue expansion rate for our customer. Our net revenue expansion rate increases, for instance, when (a) customers increase use of a product for the same application, (b) customers increase the use of the same product to new applications, (c) customers adopt new products offered by us; (d) we raise our prices on offered products without change in usage volumes or (e) given that our the net revenue expansion rate is calculated in reais, there is a depreciation of the real vis-à-vis the currency of the countries in which we operate. Our net revenue expansion rate decreases, for instance, when (a) customers cease or reduce usage of a product, (b) we lower our prices on offered products or (c) given that our the net revenue expansion rate is calculated in reais, there is an appreciation of the real vis-à-vis the currency of the countries in which we operate. We believe measuring our net revenue expansion rate on revenue generated from our customer provides a more meaningful indication of the performance of our efforts to increase revenue from existing customers. In order to calculate net revenue expansion, we first select the cohort of customers on a prior trailing twelve months period, sum up the total revenue of these customers for the applicable twelve month period and divide this sum by the sum of the total revenue of these same customers on the prior trailing twelve month period.
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RISK FACTORS
An investment in our Class A common shares involves significant risks. Before you decide to invest in our Class A common shares, you should carefully consider all of the information set forth in this prospectus, including the risks described below. Note that an investment in the securities of issuers whose operations are located in emerging market countries such as Brazil involves a higher degree of risk than an investment in the securities of issuers whose operations are located in the United States or other more developed countries. In the event that any of these risks occurs, our business, financial condition, results of operations, cash flows and prospects may be materially adversely affected and, as a result, the value of our Class A common shares may decline and you may lose all or part of your investment. We currently believe that the risks described below are those that may adversely affect us. Additional risks and uncertainties not currently known to us, or that we currently believe to be immaterial, may have a material adverse effect on us in the future.
When determining whether to invest, you should also refer to the other information contained in this prospectus, including our audited consolidated financial statements and the related notes thereto. You should also carefully review the cautionary statements referred to under “Forward-looking statements.” Our actual results could differ materially and adversely from those anticipated in this prospectus.
For the purposes of this section, the indication that a risk, uncertainty or problem may or will have an “adverse effect on us” or will “adversely affect us” means that the risk, uncertainty or problem could have a material adverse effect on our business, financial condition, results of operations, cash flows, prospects and/or the liquidity or trading price of our Class A common shares, except as otherwise indicated or as the context may otherwise require. You should view similar expressions in this section as having a similar meaning.
Certain Risks Relating to Our Business and Industry
The market for our products and platform is relatively new and unproven, may decline or experience limited growth and is dependent on businesses continuing to adopt our platform and use our products.
We develop and provide a cloud-based communications platform that enables businesses to integrate several communication capabilities (including short message service, or SMS, WhatsApp, Voice, WebChat and Facebook Messenger) into their software applications, empowering them to simplify communications along their end-consumers journey. This market is relatively new, unproven and subject to a number of risks and uncertainties, including changes to end-consumer behavior, technologies, products and industry standards. The utilization of tools such as APIs and Bots by businesses to build, foster and simplify communications with their end-consumer is still relatively new, and businesses may not recognize the need for, or benefits of, our products and platform. Moreover, if they do not recognize the need for and benefits of our products and platform, they may decide to adopt alternative products and services to satisfy some portion of their business needs. In order to grow our business and extend our market position, we intend to focus on educating current and potential customers about the benefits of our products and platform, expanding the functionality of our products and bringing new technologies to market to increase market acceptance and use of our platform. Our ability to expand the market that our products and platform address depends upon a number of factors, including the cost, performance and perceived value associated with such products and platform. The market for our products and platform could fail to grow significantly or there could be a reduction in demand for our products as a result of a lack of acceptance by businesses, technological challenges, competing products and services, decreases in spending by current and prospective customers, and weakening macroeconomic conditions, among other causes. If our market does not experience significant growth or demand for our products decreases, our business, results of operations and financial condition could be materially adversely affected.
A substantial percentage of our revenue is generated from our SMS text messaging service and a reduction in our revenue from this service could materially adversely affect our operation results, cash flows and liquidity.
A substantial portion of our revenue is currently dependent on our SMS text messaging service. As a result, a reduction in revenue from this source of income, whether due to increased competition, cost increase from network service providers, adverse market conditions or a general reduction in demand for SMS text messaging services or other factors (including our inability to generate revenue from the other products we offer to our customers), could materially adversely affect our operational results, cash flows and liquidity.
 
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See also “— If we cannot keep pace with rapid developments and changes in our industry and fail to continue to acquire new customers, the use of our products and services could cease to grow or decline and, thereby, adversely affect our revenues, business and prospects.”
A significant portion of our revenue is currently concentrated on our outlier customers and an economic slowdown affecting these customers could lead to decreased demand for our products and services, which could adversely affect us.
A significant portion of our revenue is currently concentrated in our outlier customers, which are our top 10 largest customers in terms of revenue. For the years ended December 31, 2020, 2019 and 2018, 33.1%, 34.2% and 37.0%, respectively, of our revenue was derived from such customers. Therefore, a slowdown in the industries in which such customers are concentrated due to market forces, macroeconomic conditions or regulatory changes could result in decreased demand for our products and services. In particular, such customers are particularly vulnerable to the effects of adverse macroeconomic conditions due to the corresponding impacts that macroeconomic factors typically have on end-consumer spending. Such effects may affect our revenue volumes, results of operations and profit margins. For example, certain of our outlier customers reduced the usage of our SMS text messaging services in April as a cost-saving initiative designed to mitigate the impacts of COVID-19 pandemic on their businesses. In addition, any adverse market forces affecting the industry in which our customers are currently concentrated also increases our counterparty risk as it may heightens their risk of default.
The outbreak of highly communicable diseases worldwide, such as the global coronavirus (COVID-19) pandemic, may lead to greater volatility in the global financial and capital markets resulting in an economic slowdown that may adversely affect our business, results of operations, financial performance and the trading price of our Class A common shares.
Outbreaks or potential disease outbreaks may adversely affect the global capital market (including the capital market where our Class A common shares are traded), the global economy (including the Latin America economy) and the trading price of our Class A common shares. Historically, some epidemics and regional or global outbreaks, such as the zika virus, ebola, H5N5 virus (popularly known as avian influenza), foot-and-mouth disease, H1N1 virus (influenza A, popularly known as swine flu), middle east respiratory syndrome (MERS) and severe acute respiratory syndrome (SARS) have affected certain sectors of the economy in the countries where these diseases have spread.
The COVID-19 pandemic and measures adopted to contain its spread have significantly restricted the movement of people, goods and services worldwide, including in all of the regions in which we operate, adversely affected the global financial and capital markets and led to an economic crises in many countries, including Brazil. Although the duration and severity of the COVID-19 outbreak and the degree of its impact on our business is uncertain and difficult to predict, compliance with social distancing and shelter-in-place measures have already impacted our day-to-day operations. Like many other companies, including our customers and prospective customers, on March 16, 2020, our management decided to close our offices and we started to gradually reopen them as from August 31, 2020, to the extent allowed by municipal local rules. We cannot guarantee that we will not close our office again due to the outbreak of COVID-19 or that we will not need to take additional measures due to the COVID-19 pandemic. We have transitioned our employees to a remote work arrangement (see “Summary — Recent Developments — Zenvia Anywhere), restricted all business travel and postponed or cancelled other planned events and shifted interactions with our customers and business development activities through virtual-only meetings and we may deem it advisable to similarly alter, postpone or cancel entirely additional customer, employee or industry events in the future.
The continued spread of COVID-19 could have a far-reaching and a material adverse impact on the financial capacity of our customers, suppliers and third-party business partners and potentially lead to an ongoing global economic downturn, which could result in constrained supply or reduced customer demand and willingness to enter into or renew contracts with us, any of which could have a material adverse effect on us. Customers are charged based on the usage of our platform, and most of our customers do not have long-term contractual arrangements with us and, therefore, most of them may reduce or cease their use of our platform at any time without penalty or termination charges. If our customers are unable to pay us or
 
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reduce or discontinue their contract with us, we may be adversely affected by the inability to collect payment amounts or a reduction in revenue. We also may experience impact from delayed sales cycles, including due to delays with signing or renewals of contracts on the part of existing and prospective customers, or reducing budgets or the commitment term related to our product and service offerings. In the six months ended June 30, 2020, we suffered an impact as we believe that our sales would have been higher in the absence of COVID-19 pandemic, and such impact may continue for the duration of the COVID-19 pandemic. For instance, a few of our customers are implementing cost-saving measures to manage the COVID-19 pandemic, which includes setting caps to their IT and marketing budgets, which may adversely impact the usage levels of our products by them.
On the other hand, as modern-day society has become increasingly dependent on usage of voice and messaging services for communication needs, even more so in light of the restriction on movement of people and transition to a remote workforce due to the COVID-19 pandemic, we believe there will be increased strain on and demand for the telecommunications infrastructure, including our voice and messaging products, which will require us to make additional investments to increase network capacity, the availability of which may be limited. For example, if the data centers on which we rely for our cloud infrastructure and the network service providers with which we interconnect are unable to keep up with capacity needs or if relevant governmental or regulatory authorities limit our bandwidth, our customers may experience service delays, interruptions or outages. From time to time, including due to the COVID-19 pandemic, our data center suppliers and our network service providers have had outages which resulted in disruptions in service for our customers. In certain jurisdictions in which we operate or plan to operate, governmental and regulatory authorities had announced that, due to the COVID-19 pandemic, the implementation of traffic management measures on telecommunications operators may be justified to avoid network congestion. Such traffic management measures could result in customers experiencing service delays, interruptions or outages. Any of these events could harm our reputation, impact our customer relationships, cause customers to reconsider or terminate the use of our products, impair our ability to increase revenue from existing customers and grow our customer base, subject us to financial penalties and liabilities under our service level agreements and otherwise adversely affect our business, results of operations and financial condition.
Changes to consumer behavior due to the COVID outbreak may also affect our customers, and as a consequence the use in their business of our platform for confirmations, notifications and related use cases.
In addition, a global recession and/or economic slowdown, notably in Brazil, including rising unemployment, which may result in less commercial activity, both during the COVID-19 pandemic and after the outbreak has subsided, has the potential to decrease the demand for our products. The COVID-19 pandemic has adversely affected global economic and market conditions, which are likely to continue for an extended period and could result in decreased business spending by our customers and prospective customers, reduced demand for our solutions, longer sales cycles and lower renewal rates by our customers, all of which could have a material adverse impact on our business operations and financial condition. We also believe that the extent of the pandemic impacts will depend on future developments, which are highly uncertain and unpredictable, including, among others, the duration and geographical distribution of the outbreak, its severity, actions to contain the virus or treat its impact and how quickly and to what extent the usual economic and operational conditions may be resumed. After the COVID-19 outbreak, we may continue to have materially adverse impacts on our business as a result of the national and global economic impact, including any recession, economic slowdown or increase in unemployment levels in Brazil that occurred or may occur. While we have developed and continue to develop plans to help mitigate the potential negative impact of the outbreak on our business, these efforts may not be effective and a protracted economic downturn may limit the effectiveness of our mitigation efforts.
Failure to set optimal prices for our products could adversely impact our business, results of operations and financial condition.
We charge our customers based on the use of our products. One of our pricing challenges is that the SMS fees paid by us to the network service providers, and on whose networks we transmit such SMS communications, can vary given certain elements that may be difficult for us to predict such as: pricing increases upon renewal of our agreements with such providers and/or annual monetary adjustments on SMS fees based on index or time period of index that we cannot replicate in our customer contracts and/or
 
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certain minimum take or pay SMS volume purchase obligations imposed by network services providers on us and the volume of which we cannot guarantee will be contracted by our customers or new customers. Additionally, such fees paid by us to network service providers can be also affected by the enactment of new rules and regulations (including an increased amount of applicable taxes or governmental fees). This can result in us incurring increased costs that we may be unable or unwilling to pass through to our customers, which could adversely impact our business, results of operations and financial condition. For more information about our relationship with network service providers, see “Management’s Discussion and Analysis of Financial Condition and Results of Operation — Material Contracts.”
Further, as competitors introduce new products or services at prices that are more competitive than ours for similar products and services, we may be unable to attract new customers or retain existing customers based on our historical pricing. As we expand internationally, we also must determine the appropriate price to enable us to compete effectively internationally. In addition, if the mix of products sold changes, including the ongoing shift to IP-based products (such as WhatsApp and Facebook Messenger), then we may need to, or choose to, revise our pricing to remain competitive. As a result, in the future we may be required or choose to reduce our prices or change our pricing model, which could adversely affect our business, results of operations and financial condition.
If we cannot keep pace with rapid developments and changes in our industry and fail to continue to acquire new customers, the use of our products and services could cease to grow or decline and, thereby, adversely affect our revenues, business and prospects.
The customer experience communications market in which we compete is subject to rapid and significant technological changes, new product and service roll outs, evolving industry standards and changing customer needs. Our platform is currently substantially dependent on our SMS text messaging services. Although we believe there is still a growing market for SMS text messaging services, there has been an increase in alternative messaging channels that use data connections such as internet protocol based, or IP-based, messaging services, e.g., WhatsApp, Facebook Messenger, WeChat, Telegram and Line.
In order to remain competitive and continue to acquire new customers, we are continually involved in a number of projects to develop new products and services. These projects carry risks, such as cost overruns, delays in delivery, performance problems and lack of client adoption. Any delay in the delivery of new services or the failure to differentiate our services or to accurately predict and address market demand could render our services less desirable, or even obsolete, to our customers. Furthermore, despite the evolving market for customer experience communications, the market may not continue to develop rapidly enough for us to recover the costs we incur in developing new services targeted at this market.
In addition, we deliver services designed to simplify the way that businesses connect with their end-consumers. Any failure to deliver an effective and secure service or any performance issue that arises with a new service could result in significant processing or reporting errors or other losses. As a result of these factors, our development efforts could result in increased costs and we could also experience a loss in business that could reduce our earnings or could cause a loss of revenue if scheduled new services are not delivered to our customers on a timely basis or do not perform as anticipated. We also, and may in the future, rely in part on third parties, including some of our existing and potential competitors, for the development of, and access to, new technologies. Our future success will depend in part on our ability to develop or adapt to technological changes and evolving industry standards. We cannot predict the effects of technological changes on our business. If we are unable to develop, adapt or access technological changes or evolving industry standards necessary to meet our customers’ needs on a timely and cost-effective basis, our business, financial condition and results of operations could be materially adversely affected.
Furthermore, our competitors may have the ability to devote more financial and operational resources than us to the development of new technologies, products and services. If successful, their development efforts could render our services less desirable to clients, resulting in the loss of clients or a reduction in the fees we could generate from our offerings.
Given the relevance of WhatsApp as a channel of communication in Brazil (and in other countries of Latin America), we expect to devote more of our resources to the integration of WhatsApp into our platform and deploying additional IP-based communication products going forward (such as products to be
 
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integrated with Facebook Messenger). Although there can be no assurance that we will be able to successfully deploy and expand our WhatsApp-integrated products, if we are successful in deploying and escalating such products, we expect to be increasingly dependent on this product over time since WhatsApp has become a preferred channel of communication in Brazil and elsewhere in Latin America. Since WhatsApp is notably strict about the manner in which companies are allowed to interact with WhatsApp users, changes in the policies or in the terms and conditions of use of this communication channel might also adversely affect market potential and attractiveness for WhatsApp based solutions in the event such changes result in a decrease of possible use cases or result in increases on message content restrictions.
If we fail to anticipate and adequately respond to rapidly changing technology, evolving industry standards, changing regulations, and changing consumer trends, requirements or preferences, our products may become less competitive, which may adversely affect our sales.
We need to understand our consumers’ behavior and needs in order to prepare for the next shift in the relationship between businesses and their end-consumers so that we are well positioned to propose and develop new products to support this change in consumer trends and behavior. Additionally, we need to understand the communication channel of choice between businesses and their end-consumers throughout all phases of a customer journey so that we are in a position to quickly develop and deploy the communication channel that businesses need to most effectively communicate with their end-consumers.
We cannot guarantee that we will always be able to offer the products and services sought by our customers. We are subject to potential changes to consumer habits as well as to demand for products and services by our customers (and the end-consumers of our customers). This requires us to adapt to their preferences on an ongoing basis. Accordingly, we may not be able to anticipate or respond adequately to changes in the habits of our consumers (and the habits of the end-consumers of our customers), which may adversely affect our sales. In addition, we cannot guarantee that the habits of our customers (and the habits of the end-consumers of our customers) will not change due to factors such as limitations or restrictions on the movement of people, including due to the impacts of the COVID-19 pandemic. In addition, if there are changes in customer habits, we cannot guarantee that we will be efficient and effective in adapting to meet those habits.
The market for communications in general, and cloud communications in particular, is subject to rapid technological change, evolving industry standards, changing regulations, as well as changing customer needs, requirements and preferences. We may not be able to adapt quickly enough to meet our customers’ requirements, preferences and industry standards. We may face obstacles in our search for a digital transformation related to corporate culture, business complexity and the lack of processes that make employee collaboration and integration feasible. These challenges may limit the growth of our platform and adversely affect our business and results of operations. The success of our business will depend, in part, on our ability to adapt and respond effectively to these changes on a timely basis. If we are unable to develop new products that satisfy our customers and provide enhancements and new features for our existing products that keep pace with rapid technological and industry change and applicable industry standards, our business, results of operations and financial condition could be adversely affected. If new technologies emerge that are able to deliver competitive products and services at lower prices than ours and more efficiently, more conveniently or more securely, such technologies could adversely impact our ability to compete effectively. If we do not respond to the urgency in meeting new standards and practices, our platform and our own technology may become obsolete and materially adversely affect our results.
Degradation of the quality of the products and services we offer could diminish demand for our products and services, adversely affecting our ability to attract and retain customers, harming our business and results of operations and subjecting us to liability.
Our customers expect a consistent level of quality in the provision of our products and services. Our customers use our products for important aspects of their businesses, and any errors, defects or disruptions to our products and any other performance problems with our products could damage our customers’ businesses and, in turn, harm our brand and reputation and erode customer trust. Although we regularly update our products, they may contain undetected errors, failures, vulnerabilities and bugs when first introduced or released. Real or perceived errors, failures or bugs in our products could result in negative
 
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publicity, loss of, or delay in, market acceptance of our platform, loss of competitive position, lower customer retention or claims by customers for losses sustained by them. In such events, we may be required, or may choose, for customer relations or other reasons, to expend additional resources in order to help correct the problem, which may result in increased costs to us. Any failure to maintain the high quality of our products and services, or a market perception that we do not maintain a high quality service, could erode customer trust and adversely affect our reputation, business, results of operations and financial condition.
If we are not able to maintain and enhance our brand and increase market awareness of our company and products, our business, results of operations and financial condition may be adversely affected.
We believe that maintaining and enhancing the “Zenvia” brand identity and increasing market awareness of our company and products, is critical to achieving widespread acceptance of our platform, to strengthen our relationships with our existing customers and to our ability to attract new customers. The successful promotion of our brand will depend largely on our continued marketing efforts, our ability to continue to offer high quality products, and our ability to successfully differentiate our products and platform from competing products and services. Our brand promotion activities may not be successful or yield increased revenue.
Negative publicity about us, our products or our platform could materially and adversely impact our ability to attract and retain customers, our business, results of operations and financial condition.
The promotion of our brand also requires us to make substantial expenditures, and we anticipate that these expenditures will increase as our market becomes more competitive and as we expand into new markets. To the extent that these activities increase revenue, this revenue may not be enough to offset the increased expenses we incurred. We have typically relied on marketing and promotional events and in-person meetings to facilitate customer sign-ups and generate leads for potential customers and we cannot predict whether virtual marketing events and phone or virtual sales interactions will be as successful as in-person events and meetings or, for how long, or the extent to which the COVID-19 pandemic may continue to constrain our marketing, promotional and sales activities. If we do not successfully maintain and enhance our brand, our business may not grow, our pricing power may be reduced relative to our competitors and we may lose customers, all of which would adversely affect our business, results of operations and financial condition.
Our business depends on customers increasing their use of our products, and any loss of customers or decline in their use of our products could materially and adversely affect our business, results of operations and financial condition. In addition, our customers generally do not have long-term contractual arrangements with us and may cease to use our products at any time without penalties or termination charges.
Our ability to grow and generate incremental revenue depends, in part, on our ability to maintain and grow our relationships with existing customers (including any customers acquired through our acquisitions) and to have them increase their usage of our platform. Customers are charged based on the actual usage volume of our products, and if they do not increase their use of our products, our revenue may decline and our results of operations may be adversely affected. For more information as to our product offerings, see “Business and Industry — Our Customers.”
Most of our customers do not have long-term contractual arrangements with us and may reduce or cease their use of our products at any time without penalty or termination charges provided they give us thirty days’ prior written notice. Customers may terminate or reduce their use of our products for a number of reasons, including if they are not satisfied with our products, the value proposition of our products or our ability to meet their needs and expectations. We cannot accurately predict customers’ usage levels and the loss of customers or reductions in their usage levels of our products may each have a negative impact on our business, results of operations and financial condition. If a significant number of customers cease using, or reduce their usage of our products, we may be required to spend significantly more on sales and marketing initiatives than we currently plan to spend in order to maintain or increase revenue from customers. Such additional sales and marketing expenditures could adversely affect our business, results of operations and financial condition. See “— A significant portion of our revenue is currently concentrated on our outlier customers and an economic slowdown affecting these customers could lead to decreased demand for our products and services, which could adversely affect us.”
 
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If we are unable to increase adoption of our products by customers and attract new customers, our business, results of operations and financial condition may be adversely affected.
Historically, we have relied on the adoption of our products by large and mid-sized businesses, and we currently generate only a small portion of our revenue (2.3% and 1.9% of our revenue for the years ended December 31, 2020 and 2019, respectively) from our “self-service” model directed to small businesses or indirect sales channel (i.e., partners that integrate some of our platform capabilities in their software to improve the quality of their products). Our ability to increase our customer base and achieve broader market acceptance of our products will depend, in part, on our ability to effectively organize, focus and train our sales and marketing personnel. We have limited experience selling through a “self-service” model or through indirect channels, as we have only recently deployed these channels.
The decision by our customers to adopt our products may require the approval of multiple technical and business decision makers, including legal, security, compliance, procurement, operations and IT. In addition, sales cycles for businesses (particularly for large businesses) are inherently more complex and these complex and resource intensive sales efforts could place additional strain on our product and engineering resources. Furthermore, businesses, including some of our current customers, may choose to develop their own solutions that do not include our products. They may also demand price reductions as their usage of our products increases, which could have an adverse impact on our gross margin.
In addition, in order to grow our business, we must continue to attract new customers in a cost-effective manner. We use a variety of marketing channels to promote our products and platform, such as events and webinars, as well as search engine marketing and optimization initiatives. We periodically adjust the mix of our other marketing programs such as regional customer events, email campaigns and public relations initiatives. If the costs of the marketing channels we use increase significantly, we may choose to use alternative and less expensive channels, which may not be as effective as the channels we currently use. As we add to or change the mix of our marketing strategies, we may need to expand into more expensive channels than those we are currently in, which could adversely affect our business, results of operations and financial condition. We will incur marketing expenses before we are able to recognize any revenue that the marketing initiatives may generate, and these expenses may not result in increased revenue or brand awareness. If we are unable to attract new customers in a cost-effective manner, our business, results of operations and financial condition would be adversely affected.
Potential customers may be reluctant to switch to a new vendor, which may adversely affect our growth.
As we expand our offerings into new products (such as IP-based products), our potential customers may be concerned about disadvantages associated with switching platform providers, such as a loss of accustomed functionality, increased costs and business disruption. For prospective customers, switching from one vendor of products similar to those provided by us (or from an internally developed system) to a new vendor may be a significant undertaking. As a result, certain potential customers may resist changing vendors. We are aiming to address these concerns by making investments to improve the functionality of our solutions vis-à-vis the products and solutions offered by our competitors. However, there can be no assurance that our investments to overcome potential customers’ reluctance to change vendors will be successful, which may adversely affect our growth.
If we do not develop enhancements to our products and introduce new products that achieve market acceptance, our business, results of operations and financial condition could be adversely affected.
Our ability to attract new customers and increase revenue from existing customers depends in part on our ability to enhance and improve our existing products, increase adoption and usage of our products and introduce new products. The success of any product enhancements or new products depends on several factors, including timely completion, adequacy to customer needs, adequate quality testing, actual performance quality, market-accepted pricing levels and overall market acceptance. We cannot guarantee that product enhancements and new products will perform as well as or better than our existing offerings. Product enhancements and new products that we develop may not be introduced in a timely or cost-effective manner, may contain errors or defects, may have interoperability difficulties with our platform or other products or may not achieve the broad market acceptance necessary to generate significant revenue. We also have invested, and may continue to invest, in the acquisition of complementary businesses, technologies,
 
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services, products and other assets that expand the products that we can offer our customers. We may make these investments without being certain that they will result in products or enhancements that will be accepted by existing or prospective customers. Our ability to generate additional usage of products by our customers may also require increasingly sophisticated and more costly sales efforts and result in a longer sales cycle. If we are unable to successfully enhance our existing products to meet evolving customer requirements, increase adoption and usage of our products, develop new products, or if our efforts to increase the usage of our products are more expensive than we expect, our business, results of operations and financial condition would be adversely affected.
The market in which we participate is intensely competitive, and if we do not compete effectively, our business, results of operations and financial condition could be adversely affected.
The market for cloud communications is rapidly evolving, significantly fragmented and highly competitive, with relatively low barriers to entry in some segments. The principal competitive factors in our market includes our ability to offer solutions embedded in the main channels of communications, the ease of integration and programmability of our solutions, product features, cost-benefit, platform scalability, reliability, deliverability, security and performance, brand awareness, reputation, the strength of sales and marketing efforts, customer support and customer service experience, as well as the cost of deploying and using our products. Our competitors fall into four primary categories:
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communication channels providers such as Infobip, Sinch and Twilio;
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regional network service providers that offer limited customer functionality together with their own physical infrastructure;
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smaller software companies that compete with certain of our products; and
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software-as-a-service, or SaaS, companies and cloud platform vendors that offer applications and platforms, mainly offerings of integrated communication channels.
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Some of our competitors and potential competitors are larger than us and have greater name recognition, longer operating histories, more established customer relationships, larger budgets and significantly greater resources than we do. In addition, they have the operating flexibility to bundle competing products and services at little or no perceived incremental cost, including offering them at a lower price as part of a larger sales transaction. As a result, our competitors may be able to respond more quickly and effectively than we can to new or changing opportunities, technologies, standards or customer requirements. In addition, some competitors may offer products or services that address one or a limited number of functions at lower prices, with greater depth than our products or in different geographies. Our current and potential competitors may develop and market new products and services with comparable functionality to our products, and this could lead to us having to decrease prices in order to remain competitive. Customers utilize our products in many ways and use varying levels of functionality that our products offer or are capable of supporting or enabling within their applications. Customers that use many of the features of our products or use our products to support or enable core functionality for their applications may have difficulty or find it impractical to replace our products with a competitor’s products or services, while customers that use only limited functionality may be able to more easily replace our products with competitive offerings. Our current or prospective customers (as well as some of our sales channel partners) may also choose to replicate some of the functionality our products provide, which may limit or eliminate their demand for our products.
With the introduction of new products and services and new market entrants, we expect competition to intensify in the future. In addition, some of our customers may choose to use our products and our competitors’ products simultaneously. Furthermore, our customers and their end-consumers may choose to adopt other forms of electronic communications or alternative communication platforms, which could harm our business, results of operations and financial condition.
Moreover, as we expand the scope of our products, we may face additional competition. If one or more of our competitors were to merge or partner with other competitors, the change in the competitive landscape could also adversely affect our ability to compete effectively. In addition, some of our competitors have lower listed prices than us, which may be attractive to certain customers even if those products have different or lesser functionality. If we are unable to maintain our current pricing due to competitive pressures, our
 
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margins will be reduced and our business, results of operations and financial condition would be adversely affected. In addition, pricing pressures and increased competition generally could result in reduced revenue, reduced margins, increased losses or the failure of our products to achieve or maintain widespread market acceptance, any of which could harm our business, results of operations and financial condition.
We have experienced rapid growth and expect our growth to continue, and if we fail to effectively manage our growth, our business, results of operations and financial condition could be adversely affected.
We have experienced substantial growth in our business. For example, our headcount has grown from 226 employees as of January 30, 2020 to 470 employees (and 672 employees after giving effect to the expected consummation of the D1 Acquisition) as of December 31, 2020, approximately 207% during the period (297%, giving effect to the expected consummation of the D1 Acquisition). In addition, we are rapidly expanding our operations outside of Brazil, and have offices in Argentina, the United States and Mexico and are in the process of reaching/acquiring customers in Chile, Peru, Ecuador, Uruguay, Guatemala and fifteen other countries. Our international headcount increased from zero employees as of January 1, 2020 to 83 employees as of December 31, 2020. We expect to continue to expand our international operations in the future, in particular in other Latin American countries. We have also experienced significant growth in the number of customers, usage and amount of data that our platform and associated infrastructure support. For example, our WhatsApp message volume has grown from approximately 1.4 million in December 2019 to more than 67 million in December 2020. This growth has placed and may continue to place significant demands on our corporate culture, operational infrastructure and management.
We believe that our corporate culture has been a critical component of our success. We have invested substantial time and resources in building our team and nurturing our culture. As we expand our business outside Brazil, namely Argentina, Mexico and other Latin American countries, and mature as a public company, we may find it difficult to maintain our corporate culture while managing this growth. Any failure to manage our anticipated growth and organizational changes in a manner that preserves the key aspects of our culture could harm our future prospects, including our ability to recruit and retain personnel, and effectively focus on and pursue our corporate objectives. This, in turn, could adversely affect our business, results of operations and financial condition.
In addition, as we have rapidly grown, our organizational structure has become more complex. In order to manage these increasing complexities, we will need to continue to expand and adapt our operational, financial and management controls, as well as our reporting systems and procedures. The expansion of our systems and infrastructure will require us to commit substantial financial, operational and management resources before our revenue increases and we cannot assure that our revenue will increase.
Furthermore, if we continue to grow, our ability to maintain reliable service levels for our customers could be affected. If we fail to achieve the necessary level of efficiency as we grow, our business, results of operations and financial condition could be adversely affected.
Finally, as we continue to grow, we expect to continue to spend substantial financial and other resources on, among other things:
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investments in our engineering team, improvements in security and data protection, the development of new products, features and functionality and enhancements to our platform;
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sales and marketing, including the continued expansion of our direct sales and marketing programs, especially for businesses outside of Brazil;
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expansion of our operations and infrastructure, both domestically and internationally; and
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general administration, including legal, accounting and other expenses related to being a public company.
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These investments may not result in increased revenue or the growth of our business. Accordingly, we may not be able to generate sufficient revenue to offset our expected cost increases and achieve and sustain profitability. If we fail to achieve and sustain profitability, our business, results of operations and financial condition would be adversely affected.
 
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Our quarterly results may fluctuate, and if we fail to meet securities analysts’ and investors’ expectations, then the trading price of our Class A common shares and the value of your investment could decline substantially.
Our results of operations, including the levels of our revenue, cost of services, gross profit and other operating (expenses) income may vary significantly in the future. These fluctuations may result from a variety of factors, many of which are outside of our control, including general market volatility caused by the COVID-19 pandemic, and may be difficult to predict and may or may not fully reflect the underlying performance of our business. If our quarterly results of operations or forward-looking quarterly and annual financial guidance fall below the expectations of investors or securities analysts, then the trading price of our Class A common shares could decline substantially. Some of the important factors that may cause our results of operations to fluctuate from quarter to quarter include:
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our ability to retain and increase revenue from existing customers and attract new customers;
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fluctuations in the amount of revenue from our customers;
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our ability to attract and retain businesses as customers;
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our ability to introduce new products and enhance existing products;
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competition and the actions of our competitors, including pricing changes and the introduction of new products, services and geographies;
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changes in laws, industry standards, regulations or regulatory enforcement, in Brazil or internationally, including Signature-based Handling of Asserted Information Using toKENs/Secure Telephone Identity Revisited (SHAKEN/STIR), a technology framework intended to combat unwanted robocalls and fraudulent caller ID spoofing, and other robocalling prevention and anti-spam standards as well as enhanced Know-Your-Client processes that impact our ability to market, sell or deliver our products;
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the number of new employees;
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changes in network service provider fees that we pay in connection with the delivery of communications on our platform;
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changes in cloud infrastructure fees that we pay in connection with the operation of our platform;
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changes in our pricing as a result of our optimization efforts or otherwise;
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reductions in pricing as a result of negotiations with our larger customers;
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the rate of expansion and productivity of our sales force;
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changes in the size and complexity of our customer relationships;
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the length and complexity of the sales cycle for our services, especially for sales to larger businesses, as well as government and regulated businesses;
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change in the mix of products that our customers use;
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change in the revenue mix of Brazil and international products;
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the amount and timing of operating costs and capital expenditures related to the operations and expansion of our business, including investments in our international expansion, additional systems and processes and research and development of new products and services;
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significant security breaches of, technical difficulties with, or interruptions to, the delivery and use of our products on our platform;
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the timing of customer payments and any difficulty in collecting accounts receivable from customers;
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general economic conditions that may adversely affect a prospective customer’s ability or willingness to adopt our products, delay a prospective customer’s adoption decision, reduce the revenue that we generate from the use of our products or affect customer retention;
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changes in foreign currency exchange rates and our ability to effectively hedge our foreign currency exposure;
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sales tax and other tax determinations by authorities in the jurisdictions in which we conduct business;
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the impact of new accounting pronouncements; and
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expenses in connection with mergers, acquisitions or other strategic transactions and the follow-on costs of integration.
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The occurrence of one or more of the foregoing and other factors may cause our results of operations to vary significantly. As such, we believe that quarter-to-quarter comparisons of our results of operations may not be meaningful and should not be relied upon as an indication of future performance. In addition, a significant percentage of our operating expenses is fixed in nature and is based on forecasted revenue trends. Accordingly, in the event of a revenue shortfall, we may not be able to mitigate the negative impact on our income (loss) and margins in the short term. If we fail to meet or exceed the expectations of investors or securities analysts, then the trading price of our Class A common shares could fall substantially, and we could face costly lawsuits, including securities class action suits.
Additionally, global pandemics such as COVID-19 as well as certain large scale events, such as major elections and sporting events, can significantly impact usage levels on our platform, which could cause fluctuations in our results of operations. We expect that significantly increased usage of all communications platforms, including ours, during certain seasonal and one-time events could impact delivery and quality of our products during those events. Such annual and one-time events may cause fluctuations in our results of operations and may impact both our revenue and operating expenses.
If we are unable to develop and maintain successful relationships with sales channel partners, our business, results of operations and financial condition could be adversely affected.
We believe that continued growth of our business depends in part upon identifying, developing and maintaining strategic relationships with sales channel partners that will apply service layers over our products (including consultancy, implementation, integration development, flows development, solutions developed using our platform, among others). Sales channel partners embed our software products in their solutions, such as software applications for contact centers and sales force and marketing automation, and then sell such solutions to other businesses. When potential customers do not have the resources to develop their own applications, we refer them to our partners, who embed our products in the solutions that they sell to other businesses. As part of our growth strategy, we intend to further develop business relationships and specific solutions with sales channel partners. If we fail to establish these relationships in a timely and cost-effective manner, or at all, our business, results of operations and financial condition could be adversely affected. Additionally, even if we are successful at developing these relationships but there are integration problems or issues or businesses are not willing to purchase our products through sales channel partners, our reputation and ability to grow our business may be adversely affected.
We rely upon cloud infrastructure and physical data center providers to operate our platform, and any disruption of or interference with our use of these cloud infrastructure or physical data center providers could adversely affect our business, results of operations and financial condition.
We outsource our cloud infrastructure to various cloud infrastructure providers, which host our products and platform. We also rely on certain third-party providers to provide us with physical data centers to host certain of our products. Our customers need to be able to access our platform and products at any time, without interruption or degradation of performance. These service providers operate the platforms that we access and we are therefore vulnerable to service interruptions in those platforms. We have experienced, and expect that in the future we may experience interruptions, delays and outages in service and availability due to a variety of factors, including infrastructure changes, networking issues due to internet backbone provider outage, human or software errors, website hosting disruptions and capacity constraints. Capacity constraints could be due to a number of potential causes, including technical failures, natural disasters, pandemics such as COVID-19, fraud or security attacks. In addition, if our security, or that of such services providers, is compromised, or our products or platform are unavailable or our users are unable to use our products within a reasonable amount of time or at all, our business, results of operations and financial condition could be adversely affected. In some instances, we may not be able to identify the cause or causes
 
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of these performance problems within a period of time acceptable to our customers. It may also become increasingly difficult to maintain and improve our platform performance, especially during peak usage times, as our products become more complex and the usage of our products increases. To the extent that we do not effectively address capacity constraints, our business, results of operations and financial condition may be adversely affected. In addition, we access the platform of our cloud infrastructure providers through standard IP connectivity. Any problem with this access can prevent us from responding in a timely manner to any issues with the availability of our products. More generally, any changes in service levels from the cloud infrastructure providers may adversely affect our ability to meet our customers’ requirements.
Any of the above circumstances or events may harm our reputation, erode customer trust, cause customers to stop using our products, impair our ability to increase revenue from existing customers, impair our ability to grow our customer base, subject us to financial penalties and liabilities under our service level agreements and otherwise harm our business, results of operations and financial condition.
To deliver our products, we rely on network service providers and internet service providers for our network service and connectivity and disruption or deterioration in the quality of these services could adversely affect our business, results of operations and financial condition. Also, our platform must integrate with network technologies and we expect to continue to have to integrate our platform with other software platforms and technologies. In addition. if our products and platform are unable to interconnect with any of our network service providers, software platforms and technologies, our business may be materially and adversely affected.
We currently interconnect with network service providers to enable the use by our customers of our products over their networks. Furthermore, many of these network service providers do not have long-term commitments with us and either they or we may interrupt services or terminate the agreement, without cause upon 30 days’ prior written notice. If a significant portion of our network service providers stop providing us with access to their infrastructure, fail to provide these services to us on a cost-effective basis, cease operations, or otherwise terminate these services, the delay caused by qualifying and switching to other network service providers could be time consuming and costly and could adversely affect our business, results of operations and financial condition. Further, if problems occur with our network service providers, it may cause errors or poor quality communications with our products, and we could encounter difficulty identifying the source of the problem. The occurrence of errors or poor quality communications in connection with our products, whether caused by our platform or a network service provider, may result in the loss of our existing customers or the delay of adoption of our products by potential customers and may adversely affect our business, results of operations and financial condition.
Also, our platform must integrated with network technologies and we expect to continue to have to integrate our platform with other existing software platforms and technologies (such as Facebook Messenger, WhatsApp, other Apple and Google systems, among others) and others to be developed in the future, and we need to continuously modify and enhance our products and platform to adapt to changes and innovation in technologies. For example, our network service providers may adopt new filtering technologies in an effort to combat spam, filter spam and unwanted phone calls, messages or robocalling. Such technologies may inadvertently filter desired messages or calls to or from our customers. If network service providers and/or other software platforms that we integrate (or expect to integrate) with our platform, our customers or their end users adopt new software platforms or infrastructure, we may be required to develop new versions of our products to work with those new platforms or infrastructure. This development effort may require significant resources, which would adversely affect our business, results of operations and financial condition. Also, there can be no assurance that any such platforms and technologies (such as Facebook Messenger and WhatsApp) will continue to provide us with access to their infrastructure. Any failure of our products and platform to operate effectively with evolving or new platforms and technologies could reduce the demand for our products. If we are unable to respond to these changes in a cost-effective manner, our products may become less marketable and less competitive or obsolete, and our business, results of operations and financial condition could be adversely affected.
If we cannot pass fee increases from network service providers or developers of IP-based messaging services to our customers, our operating margins may decline.
Network service providers have in the past, and may in the future, unilaterally charge additional fees or change prices due to commercial, regulatory, competitive or other industry related changes that increase our
 
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network costs. While we have historically responded to these types of fee increases through a combination of further negotiating efforts with our network service providers, absorbing the increased costs or changing our prices to customers, there is no guarantee that we will continue to be able to do so in the future without a material negative impact to our business. For instance, one of our network service providers with a significant market share in SMS messages volume recently notified us of an approximately 28% increase in their 2021 fees as a result of the significant increase in the IGP inflation indexes for 2021. As of the date of this prospectus, we are challenging before the Brazilian National Telecommunication Agency (Agência Nacional de Telecomunicações), or ANATEL, the adequacy of the use of inflation indexes in agreements with network service providers that are not telecommunication sector indexes but ANATEL may reject our challenge. Also, the developers of IP-based messaging services that we use in our platform (such as WhatsApp) may in the future unilaterally charge additional fees or change their prices due to commercial, regulatory, competitive or other industry related changes that may adversely affect our costs. See also “— Failure to set optimal prices for our products could adversely impact our business, results of operations and financial condition.”
Under our existing contracts with customers, we are generally permitted to pass these fee increases to our customers through corresponding increases in our fees. However, if we are unable to pass on these and other fees in the future due to contractual or regulatory restrictions, competitive pressures or other considerations, our business, financial condition and results of operations could be materially adversely affected. Additionally, our ability to respond to any new fees may be constrained if all network service providers in a particular market impose equivalent fee structures, if the magnitude of the fees is disproportionately large when compared to the underlying prices paid by our customers, or if the market conditions limit our ability to increase the price we charge our customers. In addition, since we do not have long term contractual arrangements with our customers and they may terminate their agreements with us provided they give us thirty days’ prior written notice, any increase of our fees (disproportionate or not) may lead them to terminate their contractual arrangements with us.
For more information regarding our commercial relationship with network service providers, see “Management’s Discussion and Analysis of Financial Condition and Results of Operation — Material Contracts.”
Our reliance on SaaS technologies from third parties may adversely affect our business, results of operations and financial condition.
We rely on hosted SaaS technologies from third parties in order to operate critical internal functions of our business, including enterprise resource planning, customer support and customer relations management services. If these services become unavailable due to extended outages or interruptions, or because they are no longer available on commercially reasonable terms or prices, our expenses could increase. As a result, our ability to manage our operations could be interrupted and our processes for managing our sales process and supporting our customers could be impaired until equivalent services, if available, are identified, obtained and implemented, all of which could adversely affect our business, results of operations and financial condition.
Our use of open source software could negatively affect our ability to sell our products and subject us to possible litigation.
Our products and platform incorporate open source software, and we expect to continue to incorporate open source software in our products and platform in the future. Few of the licenses applicable to open source software have been interpreted by courts, and there is a risk that these licenses could be construed in a manner that could impose unanticipated conditions or restrictions on our ability to commercialize our products and platform. Moreover, although we have implemented policies to regulate the use and incorporation of open source software into our products and platform, we cannot be certain that we have not incorporated open source software in our products or platform in a manner that is inconsistent with such policies. If we fail to comply with open source licenses, we may be subject to certain requirements, including requirements that we offer our products that incorporate the open source software for no cost, that we discontinue our products that incorporate the open source software, that we make available source code for modifications or derivative works we create based upon, incorporating or using the open source software and
 
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that we license such modifications or derivative works under the terms of applicable open source licenses. If an author or other third party that distributes such open source software were to allege that we had not complied with the conditions of one or more of these licenses, we could be required to incur significant legal expenses defending against such allegations and could be subject to significant damages, enjoined from generating revenue from customers using products that contained the open source software and required to comply with onerous conditions or restrictions on these products. In any of these events, we and our customers could be required to seek licenses from third parties in order to continue offering our products and platform and to re-engineer our products or platform or discontinue offering our products to customers in the event we cannot re-engineer them on a timely basis. Any of the foregoing could require us to devote additional research and development resources to re-engineer our products or platform, could result in customer dissatisfaction and may adversely affect our business, results of operations and financial condition.
We may face challenges in the expansion of our operations and our offerings into new market segments and/or new geographic regions within and outside of Brazil.
In July, 2020, we concluded the acquisition of Sirena, a company that develops solutions that enable corporations to manage sale processes through WhatsApp accounts. Sirena currently operates outside of Brazil, and has offices in Argentina, the United States and Mexico and is in the process of reaching/​acquiring customers in Chile, Peru, Ecuador, Uruguay, Guatemala and fifteen other countries. Our acquisition of Sirena represents the first step in our strategy to expand our business outside of Brazil. We expect to continue to expand our international operations and to increase our revenue from customers inside and outside of Brazil as part of our growth strategy. For instance, in March 2021, we entered into agreements for the acquisition of D1, which we expect to be consummated after the completion of this offering. See “—We may pursue strategic acquisitions or investments which may divert our management’s attention and result in reduced cash levels, increased indebtedness or dilution to our shareholders. The failure of an acquisition or investment to produce the anticipated results, the failure to consummate a pending acquisition (including the D1 Acquisition), or the inability to integrate an acquired company fully, could adversely affect our business.”
We may face challenges in connection with the expansion of our operations and our product and service offerings into new market segments, and/or new geographic regions within or outside of Brazil.
As we expand into new market segments or geographies, we will face challenges associated with entering markets in which we have limited or no experience and in which we may not be well-known. Offering our services in new industries or new geographic regions may require substantial expenditures and takes considerable time, and we may not recover our investments in new markets in a timely manner or at all. For example, we may be unable to attract a sufficient number of customers, fail to anticipate competitive conditions or fail to adapt and tailor our services to different markets. In addition, although the industries into which we are considering expanding our offerings are subject to risks similar to those of our current business, profitability, if any, in our newer activities may be lower than in our more mature segments, and we may not be successful enough to recover our investments in them.
Expansion and development of business in new geographic regions within Brazil and in other jurisdictions may expose us to risks relating to staffing and managing cross border operations, lack of acceptance of our products and services, and particularly with respect to our operations outside of Brazil, increased costs and difficulty protecting intellectual property and sensitive data, tariffs and other trade barriers, differing and potentially adverse tax consequences, increased and conflicting regulatory compliance requirements, including with respect to privacy and security, lack of acceptance of our products and services, challenges caused by distance, language, and cultural differences, exchange rate risk and political instability. Accordingly, our efforts to develop and expand the geographic footprint of our operations may not be successful, which could limit our ability to grow our business.
From January 1, 2020 to December 31, 2020, our international headcount increased from zero employees to 83 employees. We expect to hire additional employees to work in our international operations in order to reach new customers and gain access to additional technical talent. Operating in international markets requires significant resources and management attention and will subject us to regulatory, economic and political risks in addition to those we already face in Brazil. Because of our limited experience with
 
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international operations or with developing and managing sales in international markets, our international expansion efforts may not be successful.
In addition, we will face risks in doing business internationally that could adversely affect our business, including:
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exposure to political developments in Brazil, Argentina, Mexico and other Latin American countries into which we plan to expand that may create an uncertain political and economic environment and instability for businesses, which could disrupt the sale of our services and the mobility of our employees and contractors between and within these jurisdictions.
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the difficulty of managing and staffing international operations and the increased operations, travel, infrastructure and legal compliance costs associated with servicing international customers and operating numerous international locations;
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our ability to effectively price our products in competitive international markets;
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new and different sources of competition or other changes to our current competitive landscape;
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understanding and reconciling different technical standards, data privacy and telecommunications regulations, registration and certification requirements outside of Brazil, which could prevent customers from deploying our products or limit their usage;
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our ability to comply with regulations and industry standards relating to data privacy and security enacted in countries and other regions in which we operate or do business;
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potentially greater difficulty collecting accounts receivable and longer payment cycles;
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higher or more variable network service provider fees outside of Brazil;
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the need to adapt and localize our products for specific countries;
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the need to offer customer support in various languages;
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difficulties in understanding and complying with local laws, regulations and customs in non-Brazilian jurisdictions;
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compliance with various anti-bribery and anti-corruption laws such as the U.S. Foreign Corrupt Practices Act;
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changes in international trade policies, tariffs and other non-tariff barriers, such as quotas and local content rules;
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more limited protection for intellectual property rights in some countries;
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adverse tax consequences;
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fluctuations in currency exchange rates, which could increase the price of our products outside of Brazil, increase the expenses of our international operations and expose us to foreign currency exchange rate risk;
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currency control regulations, which might restrict or prohibit our conversion of other currencies into Brazilian reais;
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restrictions on the transfer of funds;
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deterioration of political relations between Brazil and other countries;
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the impact of natural disasters and public health epidemics such as COVID-19 on employees, contingent workers, sales channel partners, travel and the global economy and the ability to operate freely and effectively in a region that may be fully or partially on lockdown; and
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political or social unrest or economic instability in a specific country or region in which we operate, which could have an adverse impact on our operations in that location.
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Our failure to manage any of these risks successfully could harm our international operations, and adversely affect our business, results of operations and financial condition.
 
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We may pursue strategic acquisitions or investments which may divert our management’s attention and result in reduced cash levels, increased indebtedness or dilution to our shareholders. The failure of an acquisition or investment to produce the anticipated results, the failure to consummate a pending acquisition (including the D1 Acquisition), or the inability to integrate an acquired company fully, could adversely affect our business.
We may from time to time acquire or invest in complementary companies, businesses, technologies, services, products and other assets in the future. For instance, in July 2020 we completed the acquisition of Sirena and in March 2021, we entered into agreements for the acquisition of D1, which we expect to be consummated after the completion of this offering. We also may from time to time enter into relationships with other businesses to expand our products and platform, which could involve preferred or exclusive licenses, additional channels of distribution, discount pricing or investments in other companies.
The success of an acquisition or investment will depend on our ability to make accurate assumptions regarding the valuation, operations, growth potential, integration and other factors related to that business. We cannot assure you that the acquisitions we recently consummated or that are currently pending (such as the D1 Acquisition) or our prospective acquisitions or investments will produce the results that we expect at the time we enter into or complete a given transaction. Furthermore, acquisitions may result in difficulties integrating the acquired companies, and may result in the diversion of our capital and our management’s attention from other business issues and opportunities. We may not be able to integrate successfully the operations of the acquired companies, including their technologies, products personnel, financial systems, distribution or operating procedures, particularly if the key personnel of the acquired company choose not to work for us, their products or services are not easily adapted to work with our platform, or we have difficulty retaining the customers of any acquired business due to changes in ownership, management or otherwise. If we fail to integrate acquisitions successfully, our business could suffer. In addition, the expense of integrating any acquired business and their results of operations may adversely affect our operating results. Further, there can be no assurance that we had or will have full access to all necessary information to assess any assets acquired or will acquire and identify and mitigate the risks, liabilities and contingencies in connection with the due diligence performed. We may discover liabilities or deficiencies associated with the assets or companies we acquire or ineffective or inadequate controls, procedures or policies at an acquired business that were not identified in advance, any of which could result in significant unanticipated costs and adversely impact our business. Also, in the context of our acquisitions, we may face contingent liabilities in connection with, among others things, (i) judicial and/or administrative proceedings of the business we acquire, including civil, regulatory, tax, labor, social security, environmental and intellectual property proceedings, and (ii) financial, reputational and technical issues, including with respect to accounting practices, financial statement disclosures and internal controls, as well as other regulatory matters, all of which may not be sufficiently indemnifiable under the relevant acquisition agreement and may impact our financial reporting obligations and the preparation of our consolidated financial statements, resulting in delays to such preparation.
The D1 Acquisition is subject to the satisfaction or waiver of certain closing conditions set forth in the definitive agreements governing this transaction, which includes the consummation of this offering. There can be no assurance that all conditions precedent for the consummation of the D1 Acquisition will be met or waived, in which case, our prospects may be adversely affected. For instance, D1 is required pursuant to certain financing agreements entered into by it (which principal amounted to US$4.0 million (R$20.7 million) as of December 31, 2020), to obtain waivers in the event of its change of control (which will occur upon consummation of the D1 Acquisition) or to prepay any financing where a waiver is not obtained. In the event any such waiver is not obtained or D1 does not properly prepay the correspondent financing agreement, we can withdraw from the D1 Acquisition. Additionally, prior to the consummation of the D1 Acquisition, D1 is required as a condition precedent to pay to Smarkio’s shareholders the total consideration not paid to date in connection with Smarkio’s acquisition. In the event any such payment is not made, we can withdraw from the D1 Acquisition.
Certain acquisitions, partnerships and joint ventures we may enter into in the future may prevent us from competing for certain clients or in certain lines of business, and may lead to a loss of clients. We may spend time and money on projects that do not increase our revenue. To the extent we pay the consideration of any acquisition in cash, it would reduce our cash reserves, and to the extent the consideration is paid with any of our shares, it could be dilutive to our shareholders. To the extent we pay the consideration with
 
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proceeds from the incurrence of debt, it would increase our level of indebtedness and could negatively affect our liquidity and restrict our operations. Our competitors may be willing or able to pay more than us for acquisitions, which may cause us to lose certain acquisitions that we would otherwise desire to complete. We cannot ensure that any acquisition, partnership or joint venture we make will not have a material adverse effect on our business, financial condition and results of operations.
For further information about our recent acquisitions, see “Business and Industry — Recent Acquisitions.”
Future legislative, regulatory or judicial actions impacting our CX communications platform could also increase the cost and complexity of compliance and expose us to liability.
In the countries where we operate there is currently no specific regulation for CX communications platform companies like us. However, although we understand that existing regulations do not fully contemplate the CX communications platform business model and our business do not fit into the current communications regulatory framework of the countries in which we operate, this matter is continuing to evolve internationally. As a result, interpretation and enforcement of regulations often involve significant uncertainties and sudden changes. Regulators could claim in the future that our products or services are subject to licensing and communications regulatory requirements and as a result, regulatory scrutiny and enforcement may apply to our business. Future legislative, regulatory or judicial actions impacting CX communications platform services could also increase the cost and complexity of compliance and expose us to liability. There can be no assurance that legislation or regulation will not be enacted for purposes of regulating CX communications platform businesses and that any such legislation or regulation will not adversely impact our business. In addition, as we expand our business into our other jurisdictions or as we expand our portfolio of product offerings to our customers, we may become subject to regulatory oversight. Our products and platform and our business are subject to privacy, data protection and information security, and our customers may be subject to regulations related to the handling and transfer of certain types of sensitive and confidential information. Any failure of our products to comply with or enable our customers to comply with applicable laws and regulations would harm our business, results of operations and financial condition.
We and our customers that use our products may be subject to privacy and data protection-related laws and regulations that impose obligations in connection with the collection, processing and use of personal data, financial data, health or other similar data.
The nature of our business exposes us to risks related to possible shortcomings in data protection. Any perceived or actual unauthorized disclosure of personally identifiable information, whether through breach of our network by an unauthorized party, employee theft, misuse or error or otherwise, including the data protection of our customers, the end-consumers of our customers and employees or third parties, could harm our reputation, impair our ability to attract and retain our customers, or subject us to claims or litigation arising from damages suffered by individuals.
Law No. 13,709/2018 (Lei Geral de Proteção de Dados Pessoais), or LGPD, was enacted on September 18, 2020 to regulate the processing of personal data in Brazil. Further, Law No. 14,010/2020 was approved in the context of the COVID-19 pandemic, and among other measures postponed the application of the administrative sanctions set out in the LGPD to August 1, 2021.
The LGPD establishes a new legislation to be observed by individuals or public or private companies in operations involving processing of personal data in Brazil and provides for, among others, the rights of holders of personal data, the legal bases applicable to the processing of personal data, the requisites to obtain consent, the obligations and requisites related to security incidents and breaches and transfers of data, either Brazilian or international, as well as the creation of the National Authority for Data Protection, or ANPD, responsible for the inspection, promotion, disclosure, regulation, establishment of guidelines and application of the law. In case of noncompliance with the LGDP, we can be subject to administrative sanctions applicable, on isolated or cumulative basis, of warning, obligation to disclose incidents; temporary blocking and/or elimination of personal data related to the infraction; simple fine of up to 2% of our revenue, or revenue of the group or conglomerate in Brazil for the last fiscal year, excluding taxes, up to the global amount of R$50 million per infraction; daily fine, up to the aforesaid global limit; suspension of the operation of
 
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the database related to the infraction for the maximum period of six months, which can be extended for an equal period, up to the regularization of the processing by the controlling shareholder; suspension of activities related to processing of personal data related to the infraction for a period of six months, which can be extended for an equal period; and partial or total prohibition to exercise activities related to data processing.
In addition to the administrative sanctions, due to the noncompliance with the obligations established by the LGPD, we can be held liable for individual or collective material damages, and non-material damages caused to holders of personal data, including when caused by third parties that serve as operators of personal data on our behalf.
In addition to the civil liability, the fact that the administrative sanctions of the LGPD will be applicable by the ANPD only in August 2021 does not prevent the imposition of administrative sanctions set forth by other laws that address issues related to data privacy and protection, such as Law No. 8,078/1990, or the Brazilian Code of Consumer Defense, and Law No. 12,965/2014, or the Brazilian Civil Rights Framework for the Internet. These administrative sanctions can be applied by other public authorities, such as the Attorney General’s Office and consumer protection agencies. We can also be held liable civilly for violation of these laws.
Similarly, many foreign countries and governmental bodies, including in the countries in which we currently operate, have laws and regulations concerning the collection and use of personal data obtained from individuals located in their jurisdiction or by businesses operating within their jurisdiction. Laws and regulations in these jurisdictions apply broadly to the collection, use, storage, disclosure and security of personal data that identifies or may be used to identify an individual, such as names, telephone numbers, email addresses and, in some jurisdictions, IP addresses and other online identifiers.
In addition, we continue to see jurisdictions imposing data localization laws, which require personal information, or certain subcategories of personal information to be stored in the jurisdiction of origin. These regulations may inhibit our ability to expand into those markets or prohibit us from continuing to offer services in those markets without significant additional costs.
As we expand into new industries and regions, we will likely need to comply with new requirements to compete effectively. The uncertainty and changes in the requirements of multiple jurisdictions may increase the cost of compliance, delay or reduce demand for our services, restrict our ability to offer services in certain locations, impact our customers’ ability to deploy our solutions in certain jurisdictions, or subject us to sanctions, by national data protection regulators, all of which could harm our business, financial condition and results of operations. Additionally, although we endeavor to have our products and platform comply with applicable laws and regulations, these and other obligations may be modified, they may be interpreted and applied in an inconsistent manner from one jurisdiction to another, and they may conflict with one another, other regulatory requirements, contractual commitments or our internal practices.
We also may be bound by contractual obligations relating to our collection, use and disclosure of personal, financial and other data or may find it necessary or desirable to join industry or other self-regulatory bodies or other privacy or data protection-related businesses that require compliance with their rules pertaining to privacy and data protection.
We expect that there will continue to be new proposed laws, rules of self-regulatory bodies, regulations and industry standards concerning privacy, data protection and information security in Brazil and other jurisdictions, and we cannot yet determine the impact such future laws, rules, regulations and standards may have on our business. For instance, the State of São Paulo recently enacted a law determining that a consumer may restrict the receipt of telemarketing, SMS or Whatsapp messages in their mobiles by registering their phone numbers in a specific registry. There can be no assurance that the public in general will not adopt this tool to restrict the receipt of unsolicited telemarketing, SMSs and WhatsApp messages. A broad use of this tool by the public (particularly if its adoption is extended to other Brazilian states or foreign jurisdictions where we operate) may materially adversely affect our business as it may prevent our customers to effectively use our platform to promote their businesses. Moreover, existing Brazilian and foreign privacy and data protection-related laws and regulations are evolving and subject to potentially differing interpretations, and various legislative and regulatory bodies may expand current or enact new laws and regulations regarding privacy and data protection-related matters. Because global laws, regulations and
 
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industry standards concerning privacy and data security have continued to develop and evolve rapidly, it is possible that we or our products or platform may not be, or may not have been, compliant with each such applicable law, regulation and industry standard and compliance with such new laws or to changes to existing laws may impact our business and practices, require us to expend significant resources to adapt to these changes, or to stop offering our products in certain countries. These developments could adversely affect our business, results of operations and financial condition.
Any failure or perceived failure by us, our products or our platform to comply with new or existing Brazilian or other foreign privacy or data security laws, regulations, policies, industry standards or legal obligations, or any security incident that results in the unauthorized access to, or acquisition, release or transfer of, personal data or other customer data may result in governmental investigations, inquiries, enforcement actions and prosecutions, private litigation, fines and penalties, adverse publicity or potential loss of business.
We may be materially adversely affected in the event that we are in violation of anti-corruption and anti-bribery laws and regulations in the jurisdiction in which we operate.
We operate in a jurisdiction that has a high risk of corruption and we are subject to anti-corruption and anti-bribery laws and regulations, including Brazilian Federal Law No. 12,846/2013, or the Brazilian Anticorruption Law, the U.S. Foreign Corrupt Practices Act of 1977, as amended, or the FCPA, and the U.K. Bribery Act of 2010, or the Bribery Act, as well as other similar anti-bribery and anti-kickback laws and regulations in the jurisdictions where we operate. Brazilian Anticorruption Law, the FCPA and the Bribery Act generally prohibit companies and their employees and intermediaries from authorizing, offering or providing improper payments and benefits to government officials and other persons for improper purposes. We are in the process of implementing an anti-corruption compliance program that is designed to manage the risks of doing business in light of these new and existing legal and regulatory requirements. Violations of the anti-corruption and anti-bribery laws and regulations could result in criminal liability, administrative and civil proceedings, significant fines and penalties, forfeiture of significant assets, as well as reputational harm.
Regulators may increase and/or initiate enforcement of these obligations, which may require us to make adjustments to our anti-corruption compliance program, including the procedures we use to verify the identity of cardholders and to monitor our transactions. Regulators may also reexamine the transaction volume thresholds at which we must obtain and keep applicable records or verify identities of cardholders and any change in such thresholds could result in greater costs for compliance. Costs associated with fines or enforcement actions, changes in compliance requirements, or limitations on our ability to grow could adversely affect our business, and any new requirements or changes to existing requirements could impose significant costs, result in delays to planned product improvements, make it more difficult for new merchants to join our network and reduce the attractiveness of our products and services.
Changes in laws and regulations related to the Internet or changes in the Internet infrastructure itself may diminish the demand for our products, and could adversely affect our business, results of operations and financial condition.
The future success of our business depends (particularly for IP-based messaging services) upon the continued use of the Internet as a primary medium for commerce, communications and business applications. Federal, state or foreign government bodies or agencies have in the past adopted, and may in the future adopt, laws or regulations affecting the use of the Internet as a commercial medium. Changes in these laws or regulations could require us to modify our products and platform in order to comply with these changes. In addition, government agencies or private businesses have imposed and may impose additional taxes, fees or other charges for accessing the Internet or commerce conducted via the Internet. These laws or charges could limit the growth of Internet-related commerce or communications generally or result in reductions in the demand for Internet-based products and services such as our products and platform. In addition, the use of the Internet as a business tool could be adversely affected due to delays in the development or adoption of new standards and protocols to handle increased demands of Internet activity, security, reliability, cost, ease-of-use, accessibility and quality of service. The performance of the Internet and its acceptance as a business tool has been adversely affected by “viruses,” “worms,” and similar malicious programs. If the
 
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use of the Internet is reduced as a result of these or other issues, then demand for our products could decline, which could adversely affect our business, results of operations and financial condition.
Changes in tax laws, tax incentives, benefits or differing interpretations of tax laws may adversely affect our results of operations.
Changes in tax laws, regulations, related interpretations and tax accounting standards in Brazil may result in a higher tax rate on our earnings, which may significantly reduce our profits and cash flows from operations. In case of an increase in taxes applicable to our business and we cannot alter our cost structure to pass our tax increases on to customers, our financial condition, results of operations and cash flows could be materially adversely affected. Our activities are also subject to a municipal tax on services (Imposto Sobre Serviços), or ISS. Any increases in ISS rates would also adversely affect our profitability.
In addition, Brazilian government authorities at the federal, state and local levels are considering changes in tax laws in order to cover budgetary shortfalls resulting from the recent economic downturn in Brazil. If these proposals are enacted they may adversely affect our profitability by increasing our tax burden, increasing our tax compliance costs, or otherwise affecting our financial condition, results of operations and cash flows. Tax rules in Brazil, particularly at the local level, may change without notice (although certain principles contained in the Brazilian federal constitution and certain procedures contained in applicable law must be observed). We may not always be aware of all such changes that affect our business and we may therefore fail to pay the applicable taxes or otherwise comply with tax regulations, which may result in additional tax assessments and penalties for our company.
Furthermore, we are subject to tax laws and regulations that may be interpreted differently by tax authorities than by us, for a variety of reasons. The application of direct (such as income tax and social contribution) and indirect taxes, such as sales and use tax, value-added tax, or VAT, provincial taxes, goods and services tax, business tax and gross receipt tax, to businesses like ours is a complex and evolving issue. Significant judgment is required to evaluate applicable tax obligations. In many cases, the ultimate tax determination is uncertain because it is not clear how existing statutes apply to our business. One or more states, or municipalities, the federal government or other countries may seek to challenge the taxation or procedures applied to our transactions imposing the charge of taxes or additional reporting, record-keeping or indirect tax collection obligations on businesses like ours. New taxes could also require us to incur substantial costs to capture data and collect and remit taxes. If such obligations were imposed, the additional costs associated with tax collection, remittance and audit requirements could have a material adverse effect on our business and financial results.
In addition, we benefit from certain tax incentives related to research and development and technological innovation, established by Law No. 11,196, dated November 21, 2005, as amended, or Lei do Bem, and regulated by Decree No. 5,798, dated June 7, 2006. Our ability to benefit from these incentives depends on our compliance with certain obligations. Failure on our part to comply with certain obligations in accordance with the applicable rules or to provide the documentation required to substantiate such tax credits could result in the loss of such incentives that have not yet been used and claims by the Brazilian tax authorities of the amount corresponding to taxes not paid as a result of the incentives already used, in addition to penalties and interest under Brazilian tax laws. If any of our tax benefits expires, terminates or is cancelled, we may not be successful in obtaining new tax benefits that are equally favorable, which may materially adversely affect us. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Critical Accounting Policies and Estimates — Income tax and social contribution.”
Furthermore, as we expand our business into new jurisdictions, there can be no assurance that any such jurisdiction will have tax treaties with the other countries where we operate and that we will not be subject to “double taxation” issues or other tax-related concerns.
If we are unable to obtain or retain geographical, regional, local or toll-free numbers, or to effectively process requests, such numbers in a timely manner due to industry regulations, our business and results of operations may be adversely affected.
Our future success depends in part on our ability to obtain allocations of geographical, regional, local and toll-free direct inward dialing numbers, or DIDs, at a reasonable cost and without overly burdensome
 
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restrictions because DIDs are necessary to access the public telecommunications network (even through VoIP technology) and the business model developed by us and our subsidiary, Total Voice Comunicações S.A., or Total Voice, requires the management of DIDs on behalf of our clients in order to timely and effectively complete and receive calls at reasonable costs. Our ability to obtain allocations of, assign and retain DIDs depends on factors outside of our control, such as applicable regulations, the practices of authorities that administer national numbering plans or of network service providers from whom we can provision DIDs, such as offering DIDs with conditional minimum volume call level requirements, the cost of these DIDs and the level of overall competitive demand for new DIDs.
In addition, in order to obtain allocations of, assign and retain telephone numbers in other regions, we may be required to be licensed by local telecommunications regulatory authorities, some of which have been increasingly monitoring and regulating the categories of phone numbers that are eligible for provisioning to our customers. We have obtained licenses, and are in the process of obtaining licenses in various countries in which we do business, but in some countries, the regulatory regime around the allocation of phone numbers is unclear, subject to change over time, and sometimes may conflict from jurisdiction to jurisdiction. Furthermore, these regulations and governments’ approach to their enforcement, as well as our products and services, are still evolving and we may be unable to maintain compliance with applicable regulations, or enforce compliance by our customers, on a timely basis or without significant cost. Also, compliance with these types of regulation may require changes in products or business practices that result in reduced revenue. Due to our or our customers’ assignment and/or use of phone numbers in certain countries in a manner that violates applicable rules and regulations, we have been subjected to government inquiries and audits, and may in the future be subject to significant penalties or further governmental action, and in extreme cases, may be precluded from doing business in that particular country. We have also been forced to reclaim phone numbers from our customers as a result of certain non-compliance events. These reclamations result in loss of customers, loss of revenue, reputational harm, erosion of customer trust, and may also result in breach of contract claims, all of which could have a material adverse effect on our business, results of operations and financial condition.
Due to their limited availability, there are certain popular area code prefixes that we generally cannot obtain. Our inability to acquire or retain DIDs for our operations would make our voice and messaging products less attractive to potential customers in the affected local geographic areas. In addition, future growth in our customer base, together with growth in the customer bases of other providers of cloud communications, has increased, which increases our dependence on needing sufficiently large quantities of DIDs. It may become increasingly difficult to source larger quantities of DIDs as we scale and we may need to pay higher costs for DIDs, and DIDs may become subject to more stringent regulation or conditions of usage such as the registration and on-going compliance requirements discussed above.
Additionally, in some geographies, we support number portability, which allows our customers to transfer their existing phone numbers to us and thereby retain their existing phone numbers when subscribing to our voice and messaging products. Transferring existing numbers is a manual process that can take up to 15 business days or longer to complete. Any delay that we experience in transferring these numbers typically results from the fact that we depend on network service providers to transfer these numbers, a process that we do not control, and these network service providers may refuse or substantially delay the transfer of these numbers to us. Number portability is considered an important feature by many potential customers, and if we fail to reduce any related delays, then we may experience increased difficulty in acquiring new customers.
Any of the foregoing factors could adversely affect our business, results of operations and financial condition.
Our credit facility arrangements contain restrictive and financial covenants that may limit our operating flexibility.
Our credit facility agreements contain certain restrictive covenants that either limit our ability to, or require a mandatory prepayment in the event we, incur additional indebtedness and liens, merge with other companies or consummate certain changes of control, acquire other companies, engage in new lines of business, change business locations, make certain investments, pay dividends, make any payments on any subordinated debt, transfer or dispose of assets, amend certain material agreements, and enter into various specified transactions. We, therefore, may not be able to engage in any of the foregoing transactions unless we
 
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obtain the consent of our lenders or prepay the outstanding amount under these credit facility agreements. These agreements also contain certain financial covenants and financial reporting requirements. We may not be able to generate sufficient cash flow or sales to meet the financial covenants or pay the principal and interest under these credit facility arrangements. Furthermore, our future working capital, borrowings, or equity financing could be unavailable to repay or refinance the amounts outstanding under the credit facility. In the event of liquidation, our lenders would be repaid all outstanding principal and interest prior to distribution of assets to unsecured creditors, and the holders of our Class A and Class B common shares would receive a portion of any liquidation proceeds only if all of our creditors, including our lenders, were first repaid in full.
Our holding company structure makes us dependent on the operations of our subsidiaries.
We are a company incorporated under the laws of the Cayman Islands with limited liability. Our material assets are our direct and indirect equity interests in our subsidiaries. We are, therefore, dependent upon payments, dividends and distributions from our subsidiaries for funds to pay our holding company’s operating and other expenses and to pay future cash dividends or distributions, if any, to holders of our Class A common shares. The amount of any dividends or distributions which may be paid to us from time to time will depend on many factors including, for example, such subsidiaries results of operations and financial condition; limits on dividends under applicable law; its constitutional documents; documents governing any indebtedness; applicability of tax treaties; and other factors which may be outside our control. Furthermore, exchange rate fluctuation will affect the U.S. dollar value of any distributions our subsidiaries (which are currently mostly located in Brazil) make with respect to our equity interests in those subsidiaries. See “— Certain Risks Relating to Brazil — Exchange rate instability may have adverse effects on the Brazilian economy, us and the price of our Class A common shares,” “The ongoing economic uncertainty and political instability in Brazil, including as a result of ongoing investigations, may harm us and the price of our Class A common shares” and “Dividends and Dividend Policy.”
Breaches of our networks or systems, or those of our cloud infrastructure providers or our service providers, could degrade our ability to conduct our business, compromise the integrity of our products, platform and data, result in significant data losses and the theft of our intellectual property, damage our reputation, expose us to liability to third parties and require us to incur significant additional costs to maintain the security of our networks and data.
We depend upon our IT systems to conduct virtually all of our business operations, ranging from our internal operations and research and development activities to our marketing and sales efforts and communications with our customers and sales channel partners. Individuals or entities may attempt to penetrate our network security, or that of our platform, and to cause harm to our business operations, including by misappropriating our proprietary information or that of our customers, employees and sales channel partners or to cause interruptions of our products and platform. In particular, cyberattacks and other malicious internet-based activity continue to increase in frequency and in magnitude generally, and cloud-based companies have been targeted in the past. In addition to threats from traditional computer hackers, malicious code (such as malware, viruses, worms, and ransomware), employee theft or misuse, password spraying, phishing, credential stuffing, and denial-of-service attacks, we can also face threats from sophisticated organized crime, nation-state, and nation-state supported actors who engage in attacks (including advanced persistent threat intrusions) that add to the risk to our systems (including those hosted on cloud infrastructure providers, internal networks, our customers’ systems and the information that they store and process. While we devote significant financial and personnel resources to implement and maintain security measures, because the techniques used by such individuals or entities to access, disrupt or sabotage devices, systems and networks change frequently and may not be recognized until launched against a target, we may be required to make further investments over time to protect data and infrastructure as cybersecurity threats develop, evolve and grow more complex over time. We may also be unable to anticipate these techniques, and we may not become aware in a timely manner of such a security breach, which could exacerbate any damage we experience.
Additionally, we depend upon our employees and contractors to appropriately handle confidential and sensitive data, including customer data, and to deploy our IT resources in a safe and secure manner that does not expose our network systems to security breaches or the loss of data. We have been and expect to
 
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be subject to cybersecurity threats and incidents, including employee errors or individual attempts to gain unauthorized access to information systems. Any data security incidents, including internal malfeasance or inadvertent disclosures by our employees or a third party’s fraudulent inducement of our employees to disclose information, unauthorized access or usage, virus or similar breach or disruption of us or our service providers, could result in loss of confidential information, damage to our reputation, erosion of customer trust, loss of customers, litigation, regulatory investigations, fines, penalties and other liabilities. Such liabilities are also related to the penalties, lawsuits and other regulatory scrutiny arising from the LGPD and the Brazilian Code of Consumer Defense. According to the Brazilian Code of Consumer Defense, consumers may file complaints with consumer protection agencies, comprising the Federal Consumer Agency (Departamento de Proteção e Defesa do Consumidor), and the local consumer protection agencies, or PROCONs. In case consumer protection agencies identify a violation of the Brazilian Code of Consumer Defense, such agencies may impose the penalties set forth in section 56 of the Brazilian Code of Consumer Defense (commonly a fine that varies from R$800 (eight hundred reais) up to R$9.5 million, depending on the size of the company, the advantage obtained as result of the practice and the seriousness of the case). Consumers may also file civil lawsuits seeking compensation for damages. In addition, the Public Prosecutor’s Office may initiate a proceeding which consists of civil inquiries or investigations arising from consumer complaints in order to verify the company’s compliance with consumer law. If the inquiries or investigations conclude that there was no infraction to the law, administrative proceedings filed by the Public Prosecutor Office may be postponed or closed. However, administrative proceedings may also lead to Terms of Conduct Adjustment, or TACs, entered into between us and the relevant authorities, which are intended to adjust our conduct to certain requirements and legal standards, or lead to a public civil action (ação civil pública) against us. Accordingly, if our cybersecurity measures or those of our service providers, fail to protect against unauthorized access, attacks (which may include sophisticated cyberattacks), compromise or the mishandling of data by our employees and contractors, our reputation, customer trust, business, results of operations and financial condition could be adversely affected. Vulnerability to cyberattacks may increase in light of our adoption of a permanent remote work policy (Zenvia Anywhere), a measure that we implemented as a result of the COVID-19 pandemic. While we maintain errors, omissions, and cyber liability insurance policies covering certain security and privacy damages, we cannot be certain that our existing insurance coverage will continue to be available on acceptable terms or will be available, and in sufficient amounts, to cover the potentially significant losses that may result from a security incident or breach or that the insurer will not deny coverage as to any future claim.
For further information regarding sanctions, see “Business and Industry — Regulatory Matters — Impacts of the enforcement of Law No. 13,709/2018 (Lei Geral de Proteção de Dados Pessoais), or LGPD, to our products and platform and our business model.”
Unfavorable conditions in our industry or the global economy or reductions in spending on information technology and communications could adversely affect our business, results of operations and financial condition.
Our results of operations may vary based on the impact of changes in our industry or the global economy on our customers. Our results of operations depend in part on demand for information technology and cloud communications. In addition, our revenue is dependent on the usage of our products, which in turn is influenced by the scale of business that our customers are conducting. To the extent that weak economic conditions, geopolitical developments, such as existing and potential trade wars, and other events outside of our control such as the COVID-19 pandemic, result in a reduced volume of business for, and communications by, our customers and prospective customers, demand for, and use of, our products may decline. Furthermore, weak economic conditions may make it more difficult to collect on outstanding accounts receivable. If our customers reduce their use of our products, or prospective customers delay adoption or elect not to adopt our products, as a result of a weak economy, this could adversely affect our business, results of operations and financial condition.
Material weaknesses in our internal control over financial reporting have been identified. If we are unable to remedy such material weaknesses or fail to establish and maintain a proper and effective system of disclosure controls and internal control over financial reporting, our ability to produce timely and accurate financial statements, our results of operations and our ability to operate our business or comply with applicable regulations may be adversely affected.
Prior to this offering, we have been a private company with limited accounting personnel and other resources to address our internal control over financial reporting. In connection with the audit of our
 
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financial statements, we and our independent registered public accounting firm identified certain material weaknesses in our internal controls. A material weakness is a deficiency, or combination of control deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis. The material weaknesses identified relate to the (1) ineffective design, implementation and operation of controls, including the lack of training and experience of the finance team, within the financial reporting process relating to preparation and review of the financial statements, including the technical application of IFRS and applicability of required disclosures; (2) ineffective design, implementation and operation of controls within the financial process covering the maintenance of proper accounting records and the preparation and review of financial statements, including required disclosures for subsidiaries acquired in business combinations; and (3) ineffective design, implementation and operation of general information technology controls, or GITCs, in the areas of user access and program change-management over information technology systems that support the financial reporting processes, which resulted in business process controls that are dependent on the affected GITCs. We plan to adopt measures that will improve our internal control over financial reporting, including increasing the depth and experience within our accounting and finance team and designing and implementing improved processes and internal controls. As of the date of this prospectus, we are in the process of considering and implementing remedial measures. For instance, we have planned an assessment of our internal control gaps by specialized consultants, as well as the adoption of processes and corrections of controls arising from this evaluation. This assessment will start in the second quarter of 2021, and we expect to have it completed before the end of the third quarter of 2021. Improvements in our internal control environment will start as soon as we complete this assessment. Additionally, we expect to implement improvements to the softwares used to control information (ERP, billing system, planning system, among others) during 2021 and 2022, as well as to obtain ISO27001 certification. We currently expect to spend approximately R$5,000 thousand on these improvements. However, we cannot assure you that our efforts will be effective or prevent any future material weakness or significant deficiency in our internal control over financial reporting. Morever, while we currently do not expect that the costs we will have to incur to remediate these material weaknesses will adversely affect our business, we may incur in unforessen expenses.
As a public company, we will be subject to the Sarbanes-Oxley Act of 2002, or the Sarbanes-Oxley Act, which requires, among other things, that we establish and maintain effective internal control over financial reporting and disclosure controls and procedures. Under the SEC’s current rules, beginning with the year ending             2022, we are required to perform system and process evaluation and testing of our internal control over financial reporting to allow management to assess the effectiveness of our internal control over financial reporting. Our testing may reveal additional deficiencies in our internal control over financial reporting that are deemed to be material weaknesses or significant deficiencies and render our internal control over financial reporting ineffective. We may also identify deficiencies in our disclosure controls and procedures. We expect to incur substantial accounting and auditing expenses and to expend significant management time in complying with these requirements. If we are not able to comply with these requirements in a timely manner, or if we identify additional material weaknesses or significant deficiencies in our internal control over financial reporting that are deemed to be material weaknesses, the market price of our Class A common shares may decline and we may be subject to investigations or sanctions by the SEC, the Financial Industry Regulatory Authority, Inc., or FINRA, or other regulatory authorities. In addition, we may be required to expend significant management time and financial resources to correct any material weaknesses that may be identified or to respond to any regulatory investigations or proceedings.
The unaudited pro forma condensed financial information included in this prospectus may not be indicative of our consolidated financial condition or results of operations after giving effect to the Sirena Acquisition and the D1 Acquisition.
The unaudited pro forma condensed financial information contained in this prospectus has been presented for informational purposes and is not necessarily indicative of the financial position or results of operations that actually would have occurred had the acquisition of Sirena and D1 by us (as well as the acquisition of Smarkio by D1) been consummated as of January 1, 2020, nor is it indicative of our future operating results or financial positions after the assumed consummation of the D1 Acquisition. The unaudited pro forma condensed financial information reflects various adjustments, assumptions and estimates, and may not be indicative of our consolidated financial condition or results of operations after giving effect to
 
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the Sirena Acquisition and the D1 Acquisition by us. For instance, the estimates of final consideration amounts for the D1 Acquisition presented in the “Unaudited Pro Forma Condensed Financial Information” are preliminary and subject to the transactions described therein progressing to a sufficiently advanced stage where there is sufficient information for a definitive measurement of final consideration amounts. See “Unaudited Pro Forma Condensed Financial Information.”
The unaudited pro forma condensed financial information does not reflect future events that may occur, including the costs related to a potential integration and any future nonrecurring charges resulting from the acquisition of Sirena and D1 by us (as well as the acquisition of Smarkio by D1), and does not consider potential impacts of current market conditions on revenues or expenses efficiencies. The unaudited pro forma condensed financial information is based in part on certain assumptions that we believe are reasonable under the circumstances. Our assumptions may not prove to be accurate over time.
We may not be able to successfully manage our intellectual property and may be subject to infringement claims.
We rely on a network of contractual rights, trademarks, patents and trade secrets to establish and protect our proprietary rights, including our technology. For further information regarding our intellectual property, see “Business and Industry — Intellectual Property.” Third parties may challenge, invalidate, circumvent, infringe or misappropriate our intellectual property, or such intellectual property may not be sufficient to permit us to take advantage of current market trends or otherwise to provide competitive advantages, which could result in costly redesign efforts, discontinuance of certain service offerings or other competitive harm. Others, including our competitors, may independently develop similar technology, duplicate our services or design around our intellectual property, and in such cases, we could not assert our intellectual property rights against such parties. Further, our contractual arrangements may not effectively prevent disclosure of our confidential information or provide an adequate remedy in the event of unauthorized disclosure of our confidential information. We may have to litigate to enforce or determine the scope and enforceability of our intellectual property rights, trade secrets and know-how, which is expensive, could cause a diversion of resources and may not prove successful. Also, because of the rapid pace of technological change in our industry, aspects of our business and our services rely on technologies developed or licensed by third parties, and we may not be able to obtain or continue to obtain licenses and technologies from these third parties on reasonable terms or at all. The loss of intellectual property protection, the inability to obtain third-party intellectual property or delay or refusal by relevant regulatory authorities to approve pending intellectual property registration applications could adversely affect our business and ability to compete.
We may also be subject to costly litigation in the event our services and technology infringe upon or otherwise violate a third party’s proprietary rights. Third parties may have, or may eventually be issued, patents that could be infringed by our proprietary rights. Any of these third parties could make a claim of infringement against us with respect to our proprietary rights. We may also be subject to claims by third parties for breach of copyright, trademark, license usage or other intellectual property rights. Any claim from third parties may result in a limitation on our ability to use the intellectual property subject to these claims or could prevent us from registering our brands as trademarks. Even if we believe that intellectual property related claims are without merit, defending against such claims is time-consuming and expensive and could result in the diversion of the time and attention of our management and employees. Claims of intellectual property infringement also might require us to redesign affected services, enter into costly settlement or license agreements, pay costly damage awards, change our brands, or face a temporary or permanent injunction prohibiting us from marketing or selling certain of our services or using certain of our brands. Even if we have an agreement for indemnification against such costs, the indemnifying party, if any in such circumstances, may be unable to uphold its contractual obligations. If we cannot or do not license the infringed technology on reasonable terms or substitute similar technology from another source, our revenue and earnings could be adversely impacted.
In the future, we may also introduce or acquire new products, technologies or businesses, including in areas where we historically have not participated in, which could increase our exposure to intellectual property claims. Any claims or litigation could cause us to incur significant expenses and, if successfully asserted against us, could require that we pay substantial damages or ongoing royalty payments, prevent us from offering our products, or require that we comply with other unfavorable terms. We may also be obligated to
 
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indemnify our customers or sales channel partners in connection with any such litigation and to obtain licenses or modify our products or platform, which could further exhaust our resources. Litigation is inherently uncertain and even if we were to prevail in the event of claims or litigation against us, any claim or litigation regarding intellectual property could be costly and time-consuming and divert the attention of our management and other employees from our business. Patent infringement, trademark infringement, trade secret misappropriation and other intellectual property claims and proceedings brought against us, whether successful or not, could harm our brand, business, results of operations and financial condition.
In addition, laws of the countries where we operate do not protect intellectual property and other proprietary rights to the same extent as the laws of the United States. To the extent we expand our international activities, our exposure to unauthorized copying, transfer and use of our proprietary technology or information may increase.
We cannot be certain that our means of protecting our intellectual property and proprietary rights will be adequate or that our competitors will not independently develop similar technology. If we fail to meaningfully protect our intellectual property and proprietary rights, our business, results of operations and financial condition could be adversely affected.
Our customers’ and other users’ violation of our policies or other misuse of our platform to transmit unauthorized, offensive or illegal messages, spam, phishing scams, and website links to harmful applications or for other fraudulent or illegal activity could damage our reputation, and we may face a risk of litigation and liability for illegal activities on our platform and unauthorized, inaccurate, or fraudulent information distributed via our platform.
The actual or perceived improper sending of text messages, Facebook messages, WhatsApp messages or voice calls may subject us to potential risks, including liabilities or claims relating to the LGPD and other consumer protection laws and regulatory enforcement, including fines. The scope and interpretation of the laws that are or may be applicable to the delivery of text messages are continuously evolving and developing. If we do not comply with these laws or regulations or if we become liable under these laws or regulations due to the failure of our customers to comply with these laws by obtaining proper consent, we could face direct liability.
Moreover, despite our efforts to limit any such use, there is a chance that certain of our customers may use our platform to transmit unauthorized, offensive or illegal messages, calls, spam, phishing scams, and website links to harmful applications, reproduce and distribute copyrighted material or the trademarks of others without permission, and report inaccurate or fraudulent data or information. These actions are in violation of our policies made available to them. However, our efforts to defeat spamming attacks, illegal robocalls and other fraudulent activity will not prevent all such attacks and activity. Such use of our platform could damage our reputation and we could face claims for damages, copyright or trademark infringement, defamation, negligence, or fraud and be subject to fines imposed by our network service providers. Moreover, our customers’ and other users’ promotion of their products and services through our platform might not comply with federal, state, and foreign laws. We rely on contractual representations made to us by our customers that their use of our platform will comply with our policies and applicable law, including, without limitation, our messaging policies. Although we retain the right to verify that customers and other users are abiding by certain contractual terms, our customers and other users are ultimately responsible for compliance with our policies, and we do not systematically audit our customers or other users to confirm compliance with our policies. We cannot predict whether our role in facilitating our customers’ or other users’ activities would expose us to liability under applicable law. Even if claims asserted against us do not result in liability, we may incur substantial costs in investigating and defending such claims. If we are found liable for our customers’ or other users’ activities, we could be required to pay fines or penalties, redesign business methods or otherwise expend resources to remedy any damages caused by such actions and to avoid future liability.
We depend largely on our senior management, other key employees and qualified personnel, the loss of any of whom and our inability to continue to attract other qualified personnel could adversely affect our business, results of operations and financial condition.
Our future performance depends on the continued services and contributions of our senior management, other key employees and qualified personnel to execute on our business plan, to develop our products and
 
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platform, to deliver our products to customers, to attract and retain customers and to identify and pursue opportunities. The loss of members of our senior management, other key employees and qualified personnel could disrupt our operations and significantly delay or prevent the achievement of our development and strategic objectives. In particular, we depend to a considerable degree on the vision, skills, experience and effort of our founder and chief executive officer, Cassio Bobsin.
None of our executive officers or other senior management personnel is bound by a written employment agreement and any of them may terminate employment with us at any time with no advance notice. If members of our senior management team resign, we may not be able to sustain our existing culture or replace them with individuals of the same experience and qualification. The replacement of any of our senior management personnel would likely involve significant time and costs, and such loss could significantly delay or prevent the achievement of our business objectives. The loss of the services of any of our senior management or other key employees for any reason could adversely affect our business, results of operations and financial condition.
Our future success also depends on our ability to identify, attract, hire, train, retain, motivate and manage other highly skilled technical, managerial, information technology (particularly developers) and marketing, product, sales and customer service personnel. Competition for such personnel is intense, and we may not be able to successfully attract, hire, train, retain, motivate and manage sufficiently qualified personnel. If we are unable to retain and motivate our existing employees and attract qualified personnel to fill key positions, we may be unable to manage our business effectively, including the development, marketing and sale of our products, which could adversely affect our business, results of operations and financial condition. To the extent we hire personnel from competitors, we also may be subject to allegations that they have been improperly solicited or disclosed proprietary or other confidential information.
In addition, even if we are successful in hiring qualified sales personnel, newly hired personnel require significant training and experience before they achieve full productivity, particularly for sales efforts targeted at businesses and new regions (including outside of Brazil). Our recent hires and planned hires may not become as productive as quickly as we expect, and we may be unable to hire or retain sufficient numbers of qualified individuals in the future in the markets where we do business.
Volatility in, or lack of performance of, our Class A common share price may also affect our ability to attract and retain key personnel. Many of our key personnel are, or will soon be, vested in a substantial number of stock options to purchase our Class A common shares. Employees may be more likely to terminate their employment with us if the shares underlying their vested options have significantly appreciated in value relative to the original exercise prices of the options, or, conversely, if the exercise prices of the options that they hold are significantly above the trading price of our Class A common shares. If we are unable to retain our employees, our business, results of operations and financial condition could be adversely affected. For further information regarding our long-term compensation incentive plans, see “Management — Post-IPO Equity Incentive Plan.”
We may require additional financing to support our future capital requirements and we may not be able to secure such financing on favorable terms or at all.
We intend to continue to make investments to support our business and may require additional funds. In particular, we may seek additional funds to develop new products and enhance our platform and existing products, expand our operations, including our sales and marketing departments and our presence outside of Brazil, improve our infrastructure or acquire complementary businesses, technologies, services, products and other assets. Accordingly, we may need to engage in equity or debt financings to secure additional funds. If we raise additional funds through future issuances of equity or convertible debt securities, our shareholders could suffer significant dilution, and any new equity securities we issue could have rights, preferences and privileges superior to those of holders of our Class A common shares. Any debt financing that we may secure in the future could involve restrictive covenants relating to our capital raising activities and other financial and operational matters, which may make it more difficult for us to obtain additional capital and to pursue business opportunities. We may not be able to obtain additional financing on terms favorable to us, if at all. If we are unable to obtain adequate financing or financing on terms satisfactory to us when we require it, our ability to continue to support our business growth, scale our infrastructure,
 
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develop product enhancements and to respond to business challenges could be significantly impaired, and our business, results of operations and financial condition may be adversely affected.
We face exposure to foreign currency exchange rate fluctuations, and such fluctuations could adversely affect our business, results of operations and financial condition.
As our international operations expand, our exposure to the effects of fluctuations in currency exchange rates will grow. For example, global political events, including the United Kingdom’s exit from the European Union, trade tariff developments and other geopolitical events have caused global economic uncertainty and variability in foreign currency exchange rates. While we have primarily transacted with customers in Brazilian reais, in light of our international expansion we expect to transact with customers in Mexican pesos, Argentine pesos, Colombian pesos and U.S. dollars, among others. We expect to significantly expand the number of transactions with customers that are denominated in foreign currencies in the future as we continue to expand our business internationally. We also incur expenses for some of our network service provider costs outside of Brazil in local currencies and for employee compensation and other operating expenses at our non-Brazil locations in the local currency for such locations. Fluctuations in the exchange rates between the Brazilian real and other currencies could result in an increase to the Brazilian equivalent of such expenses.
As we continue to expand our international operations, we become more exposed to the effects of fluctuations in currency exchange rates. Accordingly, changes in the value of foreign currencies relative to the U.S. dollar can affect our results of operations due to transactional and translational remeasurements. As a result of such foreign currency exchange rate fluctuations, it could be more difficult to detect underlying trends in our business and results of operations. In addition, to the extent that fluctuations in currency exchange rates cause our results of operations to differ from our expectations or the expectations of our investors and securities analysts who follow our stock, the trading price of our Class A common shares could be adversely affected.
We do not currently maintain a program to hedge transactional exposures in foreign currencies. However, in the future, we may use derivative instruments, such as foreign currency forward and option contracts, to hedge certain exposures to fluctuations in foreign currency exchange rates. The use of such hedging activities may not offset any or more than a portion of the adverse financial effects of unfavorable movements in foreign exchange rates over the limited time the hedges are in place. Moreover, the use of hedging instruments may introduce additional risks if we are unable to structure effective hedges with such instruments.
The costs and effects of pending and future litigation, investigations or similar matters, or adverse facts and developments related thereto, could materially affect our business, financial position and results of operations.
In the ordinary course of business, we and our subsidiaries are and may continue to be in the future parties to tax, civil, labor and consumer protection proceedings, as well as arbitration and administrative investigations, inspections and proceedings whose outcomes may be unfavorable to us. As of December 31, 2020, we have established an amount of R$31,780 thousand in provisions for disputes that represent a probable loss for us and our subsidiaries. Also, we are not required to record provisions for proceedings in which our management judges the risk of loss to be possible or remote. However, the amounts involved in some of these proceedings may be substantial, and eventual losses on them could be significantly high. Even for the amounts recorded as provisions for probable losses, a judgment against us would have an impact on our cash flow if we were required to pay those amounts and the eventual losses could be higher than the provisions we have recorded. Unfavorable decisions in our legal proceedings (including court decisions unfavorable to us in amounts above those provisioned for or that prevent us from carrying out our projects, as initially planned) may, therefore, reduce our liquidity and have a material adverse impact on our business, results of operations, financial condition and prospects. For more information on material legal proceedings, see “Business and Industry — Legal and Administrative Proceedings.”
There are risks for which our insurance policies may not adequately cover or for which we have no insurance coverage. Insufficient insurance coverage or the materialization of such uninsured risks could adversely affect us.
Our insurance policies may not adequately cover all risks to which we are exposed. In addition, we may not carry insurance sufficient to compensate us for any losses that may result from claims arising from defects
 
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or disruptions in our products. We cannot assure you that we will be able to maintain our insurance policies in the future or that we will be able to renew them at reasonable prices or on acceptable terms, which may adversely affect our business and the trading price of our Class A common shares. Moreover, we are subject to risks for which we are uninsured, such as war, acts of God, including hurricanes, other force majeure events and breaches of the security of our systems by hackers. The occurrence of a significant loss that is not insured or compensable, or that is only partially insured or compensable, may require us to commit significant cash resources to cover such losses, which may adversely affect us.
Certain Risks Relating to Brazil
The Brazilian federal government has exercised, and continues to exercise, significant influence over the Brazilian economy. This involvement as well as Brazil’s political, regulatory, legal and economic conditions could harm us and the price of our Class A common shares.
The Brazilian federal government frequently exercises significant influence over the Brazilian economy and occasionally makes significant changes in policy and regulations. The Brazilian government’s actions to control inflation and other policies and regulations have often involved, among other measures, increases or decreases in interest rates, changes in fiscal policies, wage and price controls, foreign exchange rate controls, blocking access to bank accounts, currency devaluations, capital controls and import and export restrictions. We have no control over and cannot predict what measures or policies the Brazilian government may take in the future, and how these can impact us and our business. We and the market price of our securities may be harmed by changes in Brazilian government policies, as well as general economic factors, including, without limitation:
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growth or downturn of the Brazilian economy;
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interest rates and monetary policies;
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exchange rates and currency fluctuations;
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inflation;
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liquidity of the domestic capital and lending markets;
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import and export controls;
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exchange controls and restrictions on remittances abroad and payments of dividends;
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modifications to laws and regulations according to political, social and economic interests;
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fiscal policy and changes in tax laws;
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economic, political and social instability, including general strikes and mass demonstrations;
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the regulatory framework governing our industry;
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labor and social security regulations;
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public health crises, such as the ongoing COVID-19 pandemic; and
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other political, diplomatic, social and economic developments in or affecting Brazil.
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Uncertainty over whether the Brazilian federal government will implement reforms or changes in policy or regulation affecting these or other factors in the future may affect economic performance and contribute to economic uncertainty in Brazil, which may have an adverse effect on our activities and consequently our operating results and may also adversely affect the trading price of our Class A common shares. Recent economic and political instability has led to a negative perception of the Brazilian economy and higher volatility in the Brazilian securities markets, which also may adversely affect us and our Class A common shares. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Macroeconomic Environment.”
The ongoing economic uncertainty and political instability in Brazil, including as a result of ongoing investigations, may harm us and the price of our Class A common shares.
Brazil’s political environment has historically influenced, and continues to influence, the performance of the country’s economy. Political crises have affected and continue to affect the confidence of investors
 
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and the general public, which have historically resulted in economic deceleration and heightened volatility in the securities offered by companies with significant operations in Brazil.
The recent economic instability in Brazil has contributed to a decline in market confidence in the Brazilian economy. Various ongoing investigations into allegations of money laundering and corruption being conducted by the Office of the Brazilian Federal Prosecutor, including the largest of such investigations, known as “Operação Lava Jato,” have negatively impacted the Brazilian economy and political environment. The potential outcome of these investigations is uncertain, but they have already had an adverse impact on the image and reputation of the implicated companies, and on the general market perception of the Brazilian economy. We cannot predict whether the ongoing investigations will result in further political and economic instability, or if new allegations against government officials and/or executives of private companies will arise in the future. A number of senior politicians, including current and former members of Congress and the Executive Branch, and high-ranking executive officers of major corporations and state-owned companies in Brazil were arrested, convicted of various charges relating to corruption, entered into plea agreements with federal prosecutors and/or have resigned or been removed from their positions as a result of these Lava Jato investigations. These individuals are alleged to have accepted bribes by means of kickbacks on contracts granted by the government to several infrastructure, oil and gas and construction companies. The profits of these kickbacks allegedly financed the political campaigns of political parties, for which funds were unaccounted or not publicly disclosed. These funds were also allegedly directed toward the personal enrichment of certain individuals. The effects of Lava Jato as well as other ongoing corruption-related investigations resulted in an adverse impact on the image and reputation of the companies that have been implicated as well as on the general market perception of the Brazilian economy, political environment and capital markets. We have no control over, and cannot predict, whether such investigations or allegations will lead to further political and economic instability or whether new allegations against government officials will arise in the future.
On October 28, 2018, Jair Bolsonaro, a former member of the military and three-decade congressman, was elected the president of Brazil and took office on January 1, 2019. During his presidential campaign, President Bolsonaro was reported to favor the privatization of state-owned companies, economic liberalization, and social security and tax reforms. However, there is no guarantee that President Bolsonaro will be successful in executing his campaign promises or passing certain reforms fully or at all, particularly when confronting a divided Congress. In addition, his current minister of the economy, Paulo Guedes, proposed during the presidential campaign the revocation of the income tax exemption on the payment of dividends, which, if enacted, would increase the tax expenses associated with any dividend or distribution by Brazilian companies, which could impact our capacity to receive future cash dividends or distributions net of taxes from our subsidiaries. Moreover, President Bolsonaro was generally a polarizing figure during his campaign for the presidency, particularly in relation to certain of his behavioral views, and we cannot predict the ways in which a divided electorate may continue to impact his presidency and ability to implement policies and reforms, as well as external perception regarding the Brazilian economy and political environment, all of which could have a negative impact on our business and the price of our securities.
Furthermore, during April 2020, President Bolsonaro became involved in a political dispute that culminated in the resignation of both the then Minister of Health, Luiz Henrique Mandetta, and Minister of Justice, Sergio Moro. These former ministers were considered key names in the current administration, and the ministerial changes triggered further instability in the Brazilian economy and capital markets. As of the date of this prospectus, President Bolsonaro is under investigation by the Federal Supreme Court (Supremo Tribunal Federal) for misconduct alleged by former Minister of Justice Mr. Sergio Moro. According to the former minister, the President exerted undue political pressure to appoint certain members of the Brazilian federal police for potential personal benefit and for the benefit of his family. If the President did in fact infringe the law, any resulting consequences, including potential impeachment, could have material adverse effects on the political and economic scenario in Brazil, and on businesses operating here, including our business. Also, President Jair Bolsonaro has been criticized in Brazil and internationally as a result of his actions to combat the COVID-19 pandemic in Brazil, increasing the political uncertainty and the instability in Brazil. Since the beginning of the COVID-19 pandemic in Brazil, three individuals already took office as Minister of Health.
It is expected that the current Brazilian federal government may propose the general terms of fiscal reform to stimulate the economy and reduce the forecasted budget deficit for 2020 and following years, but
 
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it is uncertain whether the Brazilian government will be able to gather the required support in the Brazilian Congress to pass additional specific reforms. We cannot predict which policies the Brazilian federal government may adopt or change or the effect that any such policies might have on our business and on the Brazilian economy. In addition, the Brazilian government is incurring significant levels of debt to finance measures to combat the COVID-19 pandemic which is expected to increase the Brazilian budget deficit. Any such new policies or changes to current policies, including measures to combat the COVID-19 pandemic, may have a material adverse impact on our business, results of operations, financial condition and prospects.
Any of the above factors may create additional political uncertainty, which could harm the Brazilian economy and, consequently, our business and the price of our Class A common shares.
Inflation and certain measures by the Brazilian government to curb inflation have historically harmed the Brazilian economy and Brazilian capital markets, and high levels of inflation in the future would harm our business and the price of our Class A common shares.
In the past, Brazil has experienced extremely high rates of inflation. Inflation and some of the measures taken by the Brazilian government in an attempt to curb inflation have had significant negative effects on the Brazilian economy generally. Inflation, policies adopted to curb inflationary pressures and uncertainties regarding possible future governmental intervention have contributed to economic uncertainty and heightened volatility in the Brazilian capital markets.
According to the National Consumer Price Index (Índice Nacional de Preços ao Consumidor Amplo), or IPCA, which is published by the Brazilian Institute for Geography and Statistics (Instituto Brasileiro de Geografia e Estatística), or IBGE, Brazilian inflation rates were 4.5%, 4.3% and 3.8% for the years ended December 31, 2020, 2019 and 2018, respectively. Brazil may experience high levels of inflation in the future and inflationary pressures may lead to the Brazilian government’s intervening in the economy and introducing policies that could harm our business and the price of our Class A common shares. One of the tools used by the Brazilian government to control inflation levels is its monetary policy, specifically in regard to the official Brazilian interest rate. An increase in the interest rate restricts the availability of credit and reduces economic growth, and vice versa. During recent years there has been significant volatility in the official Brazilian interest rate, which ranged from 14.25%, on December 31, 2015, to 4.50% on December 31, 2019 and 2.00% as of December 31, 2020. As of the date hereof, the official Brazilian interest rate is 2.75%. This rate is set by the Monetary Policy Committee of the Central Bank of Brazil (Comitê de Política Monetária), or COPOM. Any change in interest rate, in particular any volatile swings, can adversely affect our growth, indebtedness and financial condition.
Exchange rate instability may have adverse effects on the Brazilian economy, us and the price of our Class A common shares.
The Brazilian currency has been historically volatile and has been devalued frequently over the past three decades. Throughout this period, the Brazilian government has implemented various economic plans and used various exchange rate policies, including sudden devaluations, periodic mini-devaluations (during which the frequency of adjustments has ranged from daily to monthly), exchange controls, dual exchange rate markets and a floating exchange rate system. Although long-term depreciation of the real is generally linked to the rate of inflation in Brazil, depreciation of the real occurring over shorter periods of time has resulted in significant variations in the exchange rate between the real, the U.S. dollar and other currencies. In 2014, the real depreciated by 11.8% against the U.S. dollar, while in 2015 it further depreciated by 32%. The real/U.S. dollar exchange rate reported by the Central Bank was R$3.259 per U.S.$1.00 on December 31, 2016, an appreciation of 16.5% against the rate of R$3.905 per U.S.$1.00 reported on December 31, 2015. In 2017, the real depreciated by 1.5%, with the exchange rate reaching R$3.308 per U.S.$1.00 on December 31, 2017. In 2018, the real depreciated an additional 17.1%, to R$3.875 per U.S.$1.00 on December 31, 2018. The real/U.S. dollar exchange rate reported by the Central Bank was R$4.031 per U.S.$1.00 on December 31, 2019, which reflected a 4.0% depreciation of the real against the U.S. dollar for the year. Recently, due to the COVID-19 and the economic and political instability, the real depreciated 47.2% against the U.S. dollar since December 31, 2019, and reached R$5.937 per U.S.$1.00 as of May 14, 2020, its lowest level since the introduction of the currency in 1994. The exchange rate reported by the Central Bank was R$5.1967 per U.S.$1.00 on December 31, 2020 and R$5.6936 per U.S.$1.00 on April 14, 2021. There can be no assurance that the real will not again depreciate against the U.S. dollar or other currencies in the future.
 
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A devaluation of the real relative to the U.S. dollar could create inflationary pressures in Brazil and cause the Brazilian government to, among other measures, increase interest rates. Any depreciation of the real may generally restrict access to the international capital markets. It would also reduce the U.S. dollar value of our results of operations. Restrictive macroeconomic policies could reduce the stability of the Brazilian economy and harm our results of operations and profitability. In addition, domestic and international reactions to restrictive economic policies could have a negative impact on the Brazilian economy. These policies and any reactions to them may harm us by curtailing access to foreign financial markets and prompting further government intervention. A devaluation of the real relative to the U.S. dollar may also, as in the context of the current economic slowdown, decrease consumer spending, increase deflationary pressures and reduce economic growth.
On the other hand, an appreciation of the real relative to the U.S. dollar and other foreign currencies may deteriorate the Brazilian foreign exchange current accounts. Depending on the circumstances, either devaluation or appreciation of the real relative to the U.S. dollar and other foreign currencies could restrict the growth of the Brazilian economy, as well as affecting our business, results of operations and profitability.
Infrastructure and workforce deficiency in Brazil may impact economic growth and have a material adverse effect on us.
Our performance depends on the overall health and growth of the Brazilian economy. Brazilian GDP growth has fluctuated over the past few years, with contractions of 3.5% and 3.3% in 2015 and 2016, respectively, followed by growth of 1.3% in both 2017 and 2018, 1.1% for the year ended December 31, 2019 and a contraction of 4.1% for the year ended December 31, 2020. Growth is limited by inadequate infrastructure, including potential energy shortages and deficient transportation, logistics and telecommunication sectors, general strikes, the lack of a qualified labor force (particularly developers), and the lack of private and public investments in these areas, which limit productivity and efficiency. Any of these factors could lead to labor market volatility and generally impact income, purchasing power and consumption levels, which could limit growth and ultimately have a material adverse effect on us.
Developments and the perceptions of risks in other countries, including other emerging markets, the United States and Europe, may harm the Brazilian economy and the price of our Class A common shares.
The market for securities offered by companies with significant operations in Brazil is influenced by political, economic and market conditions in Brazil and, to varying degrees, market conditions in other Latin American and emerging markets, as well as the United States, Europe and other countries. To the extent the conditions of the global markets or economy deteriorate, the business of companies with significant operations in Brazil may be harmed. The weakness in the global economy has been marked by, among other adverse factors, lower levels of consumer and corporate confidence, decreased business investment and consumer spending, increased unemployment, reduced income and asset values in many areas, reduction of China’s growth rate, currency volatility and limited availability of credit and access to capital, in addition to significant uncertainty results from the current COVID-19 pandemic. Developments or economic conditions in other countries may significantly affect the availability of credit to companies with significant operations in Brazil and result in considerable outflows of funds from Brazil, decreasing the amount of foreign investments in Brazil.
Crises and political instability in other emerging market countries, the United States, Europe or other countries could decrease investor demand for securities offered by companies with significant operations in Brazil, such as our Class A common shares. Investor sentiment in one country may cause capital markets in other countries to fluctuate, affecting the value of our Class A common shares, even if indirectly. The economic, political and social instability in the United States, the trade war between the United States and China, crises in Europe and other countries and global tensions, as well as economic or political crises and social unrest in Latin America or other emerging markets, including as a result of the COVID-19 pandemic, can significantly affect the perception of the risks inherent in investment in Brazil.
On November 7, 2020, Joseph Biden won the presidential election in the United States and assumed office as the 46th President of the United States on January 20, 2021. The U.S. president has considerable influence, which may materially and adversely global economy and political stability. We cannot ensure that the Biden administration will adopt policies designed to promote macroeconomic stability, fiscal discipline,
 
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as well as domestic and foreign investment, which may materially and adversely impact the trading price of securities of Brazilian issuers, including our common shares. Growing economic uncertainty and news of a potentially recessive economy in the United States may also create uncertainty in the Brazilian economy.In addition, on June 2016, the United Kingdom held a referendum in which the majority voted for the United Kingdom to leave the European Union (so called “Brexit”), and the British government will continue to negotiate the terms of its withdrawal. Brexit officially occurred on January 31, 2020 and has created significant economic uncertainty in the United Kingdom and in Europe, the Middle East, and Asia. The terms of Brexit, once negotiated, could potentially disrupt the markets we serve and the tax jurisdictions in which we operate and adversely change tax benefits or liabilities in these or other jurisdictions, and may cause us to lose investors, investment opportunities and employees. In addition, Brexit could lead to legal uncertainty and potentially divergent national laws and regulations as the United Kingdom determines which EU laws to replace or replicate. These developments, as well as potential crises and other forms of political instability or any other as of yet unforeseen development, may harm our business and the price of our Class A common shares.
Any further downgrading of Brazil’s credit rating could reduce the trading price of our Class A common shares.
We may be harmed by investors’ perceptions of risks related to Brazil’s sovereign debt credit rating. Rating agencies regularly evaluate Brazil and its sovereign ratings, which are based on a number of factors including macroeconomic trends, fiscal and budgetary conditions, indebtedness metrics and the perspective of changes in any of these factors.
The rating agencies began to review Brazil’s sovereign credit rating in September 2015. Subsequently, the three major rating agencies downgraded Brazil’s investment-grade status:
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In 2015, Standard & Poor’s initially downgraded Brazil’s credit rating from BBB-negative to BB-positive and subsequently downgraded it again from BB-positive to BB, maintaining its negative outlook, citing a worse credit situation since the first downgrade. On January 11, 2018, Standard & Poor’s further downgraded Brazil’s credit rating from BB to BB-negative. The BB-negative rating was affirmed on February 7, 2019 with a stable outlook, which reflects the agency’s expectations that the Brazilian government will be able to implement policies to gradually improve the fiscal deficit, as well as a mild economic recovery, given improvements in consumer confidence. In April 2020, Standard & Poor’s revised the credit rating for Brazil to BB-negative with a stable outlook, which was affirmed in December 2020.
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In December 2015, Moody’s reviewed and downgraded Brazil’s issue and bond ratings from Baa3 to below investment grade, Ba2 with a negative outlook, citing the prospect of a further deterioration in Brazil’s debt indicators, considering the low growth environment and the challenging political scenario. In April 2018, Moody’s affirmed its Ba2 rating, but altered its outlook from “negative” to “stable,” also supported by the projection that the Brazilian government would approve fiscal reforms and that economic growth in Brazil would resume gradually. In May 2020, Moody’s maintained the Ba2 rating with a stable outlook.
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In 2016, Fitch downgraded Brazil’s sovereign credit rating to BB-positive with a negative outlook, citing the rapid expansion of the country’s budget deficit and the worse-than-expected recession. In February 2018, Fitch downgraded Brazil’s sovereign credit rating again to BB-negative, citing, among other reasons, fiscal deficits, the increasing burden of public debt and an inability to implement reforms that would structurally improve Brazil’s public finances. The BB-negative rating was affirmed in May 2019. In May 2020, Fitch affirmed Brazil’s long-term foreign currency issuer default rating at BB-negative and revised the rating outlook to negative, citing the deterioration of the Brazilian economic and fiscal scenarios and the worsening risks for both dimensions, given the renewed political uncertainty, in addition to the uncertainties about the duration and intensity of the COVID-19 pandemic. In November 2020, Fitch maintained the BB-negative rating with a negative outlook.
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Brazil’s sovereign credit rating is currently rated below investment grade by the three credit rating agencies. Consequently, the prices of securities offered by companies with significant operations in Brazil have been negatively affected. A prolongation or worsening of the current Brazilian recession and continued
 
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political uncertainty, among other factors, could lead to further ratings downgrades. Any further downgrade of Brazil’s sovereign credit ratings could heighten investors’ perception of risk and, as a result, cause the trading price of our Class A common shares to decline.
Certain Risks Relating to This Offering and Our Class A Common Shares
There is no existing market for our common shares, and we do not know whether one will develop to provide you with adequate liquidity. If our share price fluctuates after this offering, you could lose a significant part of your investment.
Prior to this offering, there has not been a public market for our Class A common shares. If an active trading market does not develop, investors may have difficulty selling any of our Class A common shares that they buy. We cannot predict the extent to which investor interest in our company will lead to the development of an active trading market on the Nasdaq, or otherwise or how liquid that market might become. The initial public offering price for the Class A common shares will be determined by negotiations between us and the underwriters and may not be indicative of prices that will prevail in the open market following this offering. Consequently, you may not be able to sell our Class A common shares at prices equal to or greater than the price paid by you in this offering. In addition to the risks described above, the market price of our Class A common shares may be influenced by many factors, some of which are beyond our control, including:
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technological innovations by us or competitors;
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the failure of financial analysts to cover our Class A common shares after this offering or changes in financial estimates by analysts;
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actual or anticipated variations in our operating results;
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changes in financial estimates by financial analysts, or any failure by us to meet or exceed any of these estimates, or changes in the recommendations of any financial analysts that elect to follow our Class A common shares or the shares of our competitors;
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announcements by us or our competitors of significant contracts or acquisitions;
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future sales of our shares;
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investor perceptions of us and the industries in which we operate; and
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difficulties experienced by our parent company and/or by any of our associate companies in Brazil, or direct or indirect subsidiaries of our parent company.
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In addition, the stock market in general has experienced substantial price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of particular companies affected. These broad market and industry factors may materially harm the market price of our Class A common shares, regardless of our operating performance. In the past, following periods of volatility in the market price of certain companies’ securities, securities class action litigation has been instituted against these companies. Any such litigation, if instituted against us, could adversely affect our financial condition or results of operations. If a market does not develop or is not maintained, the liquidity and price of our Class A common shares could be materially adversely affected.
The market price of our shares may be volatile or may decline sharply or suddenly, regardless of our operating performance, and we may not be able to meet investors’ or analysts’ expectations. You may not be able to resell your shares for the initial offer price or above it and you may lose all or part of your investment.
The initial price of the public offering for our Class A common shares will be determined by means of negotiations between the underwriters and ourselves and may vary in relation to the market price of our common shares following this offering. If you purchase our Class A common shares in this offering, you may not be able to resell them at the initial price or at a higher price than that of the public offering. We cannot guarantee that the market price after this offering will be equal to or higher than prices in private traded transactions of our common shares that occurred from time to time prior to the offering. The market
 
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price of our Class A common shares may fluctuate or decline significantly in response to a number of factors, many of which are beyond our control, including, but not limited to:
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actual or forecast fluctuations in revenue or in other operating and financial results;
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variations between our actual operating results and the expectations of securities analysts, investors and the financial community;
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action by securities analysts who begin or continue to cover us, changes in the financial estimates of any securities analysts who follow our company or our failure to meet these estimates or investors’ expectations;
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announcements by us or by our competitors of significant products or features, technical innovations, acquisitions, strategic partnerships, joint ventures or capital commitments;
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negative media coverage or publicity affecting us or our parent company, whether true or not;
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changes in the operating performance and stock market valuations of CX communications platform companies in general, including our competitors;
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fluctuations in the price and volume of the stock market in general, including as a result of trends in the economy as a whole;
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threats of proceedings and actions brought against us or decided against us;
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developments in the legislation or regulatory action, including interim or final decisions by judicial or regulatory bodies;
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changes in accounting standards, policies, guidelines, interpretations or principles;
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any significant changes to our board of directors or management;
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any security incidents or public reports of security incidents that occur in our platform or in our sector;
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statements, comments or opinions from public officials that our product offerings are or may be illegal, regardless of interim or final decisions of judicial or regulatory bodies; and
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other events or factors, including those resulting from war, terrorist incidents, natural disasters or responses to such events.
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In addition, price and volume fluctuations in the stock markets have affected and continue to affect the stock prices of many CX communications platform companies. Often, their stock prices fluctuate in ways that are unrelated or disproportionate to the operating performance of companies. In some instances, shareholders have filed a class action lawsuit after periods of market volatility. If we are involved in litigation regarding securities, this could subject us to substantial costs, divert resources and management attention from our business and seriously undermine our business. In addition, the occurrence of any of the factors listed above, along with others, may cause our share price to drop significantly and there is no guarantee that our share price will recover. As a result, you may not be able to sell your Class A common shares at or above the initial price of the public offering and you may lose some or all of your investment.
Our controlling shareholders will, in the aggregate, own 100% of our outstanding Class B common shares, which represent approximately     % of the voting power of our issued capital and     % of our total equity ownership following the offering, and will control all matters requiring shareholder approval. Our controlling shareholders also have the right to nominate the totality of our board of directors and consent rights over certain corporate transactions. This concentration of ownership limits your ability to influence corporate matters.
Immediately following this offering of Class A common shares, our controlling shareholders will own 100% of our Class B common shares, resulting in their ownership of     % of our outstanding shares, and, consequently,     % of the combined voting power of our Class A and Class B common shares. See “Principal Shareholders.” These entities will control a majority of our voting power and will have the ability to control matters affecting, or submitted to a vote of, our shareholders. As a result, these shareholders may be able to elect the members of our board of directors and set our management policies and exercise
 
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overall control over us. Our controlling shareholders will be able to appoint the totality of our board despite owning a non-proportionate number of shares and will be able to control any transaction involving a merger or change of control until they own less than     % (     percent) of our outstanding Class A and Class B common shares. In addition, our Articles of Association require the consent of our controlling shareholders before our shareholders are able to take certain actions, including to amend such document. For more information, see “Description of Share Capital.”
The interests of these shareholders may conflict with, or differ from, the interests of other shareholders. For example, our current controlling shareholders may cause us to make acquisitions that increase the amount of our indebtedness or outstanding shares, sell revenue-generating assets or inhibit change of control transactions that benefit other shareholders. Our controlling shareholders’ decisions on these matters may be contrary to your expectations or preferences, and they may take actions that could be contrary to your interests. Our controlling shareholder will be able to prevent any other shareholders, including you, from blocking these actions. For further information regarding shareholdings in our company, see “Principal Shareholders.” So long as these shareholders continue to own a substantial number of our shares, they will significantly influence all our corporate decisions and together with other shareholders, they may be able to effect or inhibit changes in the control of our company.
The disparity in voting rights among classes of our shares may have a potential adverse effect on the price of our Class A common shares, and may limit or preclude your ability to influence corporate matters.
Each Class A common share will entitle its holder to one vote per share on all matters submitted to a vote of our shareholders. Each holder of our Class B common shares will be entitled to ten (10) votes per Class B common share so long as the voting power of Class B common shares is at least     % (     percent) of the aggregate voting power of our outstanding shares on the record date for any general meeting of the shareholders. The difference in voting rights could adversely affect the value of our Class A common shares by, for example, delaying or deferring a change of control or, if investors view or any potential future purchaser of our company views, the superior voting rights of the Class B common shares have value. Given the ten-to-one voting ratio between our Class B ordinary and Class A common shares, the holders of our Class B common shares collectively will continue to control a majority of the combined voting power of our shares and therefore be able to control all matters submitted to our shareholders so long as the Class B common shares represent at least     % of all outstanding shares of our Class A ordinary and Class B common shares in addition to certain other rights to which our controlling shareholders are entitled (see risk factor immediately above and “Description of Share Capital”). This concentrated control will limit or preclude your ability to influence corporate matters for the foreseeable future.
Future transfers by holders of Class B common shares will generally result in those shares converting to Class A common shares, subject to limited exceptions, such as certain transfers effected to permitted transferees or for estate planning or charitable purposes as well as transfers between our controlling shareholders. The conversion of Class B common shares to Class A common shares will have the effect, over time, of increasing the relative voting power of those holders of Class B common shares who retain their shares in the long term. For a description of our dual class structure, see “Description of Share Capital and Constitutional Documents — Meetings of Shareholders — Voting Rights.”
Our status as a controlled company and a foreign private issuer exempts us from certain of the corporate governance standards of the Nasdaq, limiting the protections afforded to investors.
We are a “controlled company” and a “foreign private issuer” within the meaning of the Nasdaq corporate governance standards. Under the Nasdaq rules, a controlled company is exempt from certain Nasdaq corporate governance requirements. In addition, a foreign private issuer may elect to comply with the practice of its home country and not to comply with certain Nasdaq corporate governance requirements, including the requirements that (i) a majority of the board of directors consists of independent directors, (ii) a nominating and corporate governance committee be established that is composed entirely of independent directors and has a written charter addressing the committee’s purpose and responsibilities, (iii) a compensation committee be established that is composed entirely of independent directors and has a written charter addressing the committee’s purpose and responsibilities, and (iv) an annual performance evaluation of the nominating and corporate governance and compensation committees be undertaken.
 
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Although we have similar practices, they do not entirely conform to the Nasdaq requirements; therefore, we currently use these exemptions and intend to continue using them. Accordingly, you will not have the same protections provided to shareholders of companies that are subject to all Nasdaq corporate governance requirements.
Class A common shares eligible for future sale may cause the market price of our Class A common shares to drop significantly.
The market price of our Class A common shares may decline as a result of sales of a large number of our Class A common shares in the market after this offering (including Class A common shares issuable upon conversion of Class B common shares) or the perception that these sales may occur. These sales, or the possibility that these sales may occur, also might make it more difficult for us to sell equity securities in the future at a time and at a price that we deem appropriate.
Following the completion of this offering, we will have outstanding      Class A common shares and      Class B common shares (or      Class A common shares and      Class B common shares, if the underwriters exercise in full their option to purchase additional shares). Subject to the lock up agreements described below, the Class A common shares sold in this offering will be freely tradable without restriction or further registration under the U.S. Securities Act of 1933, as amended, or the Securities Act, by persons other than our affiliates within the meaning of Rule 144 of the Securities Act.
Our controlling shareholders or entities controlled by them or its permitted transferees will, subject to the lock up agreements described below, be able to sell their shares in the public market from time to time without registering them, subject to certain limitations on the timing, amount and method of those sales imposed by regulations promulgated by the SEC. If our controlling shareholders, the affiliated entities controlled by them or its permitted transferees were to sell a large number of Class A common shares, the market price of our Class A common shares may decline significantly. In addition, the perception in the public markets that sales by them might occur may also cause the trading price of our Class A common shares to decline.
We have agreed with the underwriters, subject to certain exceptions, not to offer, sell or dispose of any shares in our share capital or securities convertible into or exchangeable or exercisable for any shares in our share capital during the 180-day period following the date of this prospectus. Our directors, executive officers and substantially all of our shareholders have agreed to substantially similar lock up provisions. However, Goldman Sachs & Co. LLC and Morgan Stanley & Co. LLC may, in their sole discretion and without notice, release all or any portion of the shares from the restrictions in any of the lock up agreements described above. In addition, these lock up agreements are subject to the exceptions described in “Underwriting,” including the right for our company to issue new shares if we carry out an acquisition or enter into a merger, joint venture or strategic participation.
Sales of a substantial number of our Class A common shares upon expiration of the lock up agreements, the perception that such sales may occur, or early release of these lock up periods, could cause our market price to fall or make it more difficult for you to sell your Class A common shares at a time and price that you deem appropriate.
Our Articles of Association contain anti-takeover provisions that may discourage a third party from acquiring us and adversely affect the rights of holders of our Class A common shares.
Our Articles of Association contain certain provisions that could limit the ability of others to acquire our control, including a provision that grants authority to our board of directors to establish and issue from time to time one or more series of preferred shares without action by our shareholders and to determine, with respect to any series of preferred shares, the terms and rights of that series. These provisions could have the effect of depriving our shareholders of the opportunity to sell their shares at a premium over the prevailing market price by discouraging third parties from seeking to obtain our control in a tender offer or similar transactions.
If securities or industry analysts do not publish reports, or publish inaccurate or unfavorable reports about our business, the price of our Class A common shares and our trading volume could decline.
The trading market for our Class A common shares will depend in part on the research and reports that securities or industry analysts publish about us or our business. Securities and industry analysts currently
 
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cover our parent company, but they do not, and may never, publish research on our company. If no or too few securities or industry analysts commence coverage of our company, the trading price for our Class A common shares would likely be negatively affected. If one or more of the analysts who cover us downgrade their target price for our Class A common shares or publish inaccurate or unfavorable reports about our business, the price of our Class A common shares would likely decline. If one or more of these analysts cease coverage of our company or fail to publish reports on us regularly, demand for our Class A common shares could decrease, which might cause the price of our Class A common shares and trading volume to decline.
We have not adopted a dividend policy with respect to future dividends. If we do not declare any dividends in the future, you will have to rely on the price appreciation of our Class A common shares in order to achieve a return on your investment.
We have not adopted a dividend policy with respect to future dividends. The amount of any distributions will depend on many factors such as our results of operations, financial condition, cash requirements, prospects and other factors deemed relevant by our board of directors or, where applicable, our shareholders. We may retain our future earnings, if any, for the foreseeable future, to fund the operation of our business and future growth. In addition, our financing agreements may from time to time contain certain restrictions as to the distribution of dividends by us and/or our subsidiaries. For instance, under certain financial arrangements, Zenvia Brazil is currently limited from distributing dividends in excess of 25% of the profit of any given year. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources — Indebtedness.”
Accordingly, if we do not declare dividends in the future or there are any significant limitations on our ability to distribute dividends to our shareholders, investors will most likely have to rely on sales of their Class A common shares, which may increase or decrease in value, as the only way to realize cash from their investment. There is no guarantee that the price of our Class A common shares will ever exceed the price that you pay.
The requirements of being a public company in the United States may overstretch our resources, result in litigation and divert the attention of management from our business.
This offering will have a significant transformative effect on us. We expect to incur significant additional legal, accounting, reporting and other expenses as a result of having publicly traded Class A common shares. We will also incur costs, including, but not limited to, directors’ fees, increased directors’ and officers’ insurance, investor relations, and various other costs of a public company.
We also anticipate that we will incur costs associated with corporate governance requirements, including requirements under the Exchange Act, the Sarbanes-Oxley Act, the Dodd-Frank Wall Street Reform and the Consumer Protection Act, Nasdaq listing requirements and other rules and regulations applying to companies with publicly listed securities. We expect these rules and regulations to increase our legal and financial compliance costs and make some management and corporate governance activities more difficult, time consuming and costly, particularly after we are no longer an “emerging growth company,” increasing the demands on our systems and resources. Among other things, the applicable SEC rules require us to file annual and current reports with respect to our business and operating results.
These rules and regulations may make it more difficult and more expensive for us to obtain director and officer liability insurance, and we may be required to accept reduced policy limits and coverage or incur substantially higher costs to obtain the same or similar coverage. This could have an adverse impact on our ability to recruit and bring on a qualified independent board.
The additional demands associated with being a public company in the United States may disrupt regular operations of our business by diverting the attention of some of our senior management team away from revenue producing activities to management and administrative oversight, adversely affecting our ability to attract and complete business opportunities and increasing the difficulty in both retaining professionals and managing and growing our businesses.
In addition, the public reporting obligations associated with being a public company in the United States may subject us to litigation as a result of increased scrutiny of our financial reporting. If we are
 
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involved in litigation regarding our public reporting obligations, this could subject us to substantial costs, divert resources and management attention from our business and seriously undermine our business.
Our dual-class structure may result in a lower or more volatile market price of our Class A common shares. Our dual-class capital structure means our shares will not be included in certain stock indices. We cannot predict the impact this may have on our Class A common share price.
We cannot predict whether our dual class structure, combined with the concentrated control of our Company (see “Principal Shareholders”), will result in a lower or more volatile market price of our Class A common shares or in adverse publicity or other adverse consequences. FTSE Russell, S&P Dow Jones and MSCI announced changes to their eligibility criteria for the inclusion of shares of public companies on certain indices, namely, to exclude companies with multiple classes of common shares. FTSE Russell requires greater than five percent of the company’s voting rights (aggregated across all of its equity securities, including, where identifiable, those not listed or trading) in the hands of public shareholders whereas S&P Dow Jones announced that companies with multiple share class structures, such as ours, will not be eligible for inclusion in the S&P 500, S&P MidCap 400 and S&P SmallCap 600, which together comprise the S&P Composite 1500. MSCI also announced its review of no-vote and multi-class structures and temporarily barred new multi-class listings from its ACWI Investable Market Index and U.S. Investable Market 2500 Index. We cannot assure you that other stock indices will not take a similar approach to FTSE Russell, S&P Dow Jones and MSCI in the future. Pursuant to these policies, our dual class structure makes our Class A common shares ineligible for inclusion in such indices and mutual funds, exchange-traded funds and other investment vehicles that attempt to passively track these indices will not invest in our stock. Any such exclusion from indices could result in a less active trading market for our Class A common shares and depress the valuations of publicly traded companies excluded from the indices compared to those of similar companies that are included. In addition, several shareholder advisory firms have announced their opposition to the use of multiple share class structures. As a result, our dual class structure may cause shareholder advisory firms to publish negative commentary about our corporate governance practices or otherwise seek to cause us to change our capital structure. Any actions or publications by shareholder advisory firms critical of our corporate governance practices or capital structure could also adversely affect the value of our Class A common shares.
We are a Cayman Islands exempted company with limited liability. The rights of our shareholders, including with respect to fiduciary duties and corporate opportunities, may be different from the rights of shareholders governed by the laws of U.S. jurisdictions.
We are a Cayman Islands exempted company with limited liability. Our corporate affairs are governed by our Articles of Association, the Companies Act and by the laws of the Cayman Islands. The rights of shareholders and the responsibilities of members of our board of directors may be different from the rights of shareholders and responsibilities of directors in companies governed by the laws of U.S. jurisdictions. In particular, as a matter of Cayman Islands law, directors and officers owe the following fiduciary duties: (1) duty to act in good faith in what the director or officer believes to be in the best interests of the company as a whole; (2) duty to exercise powers for the purposes for which those powers were conferred and not for a collateral purpose; (3) directors should not properly fetter the exercise of future discretion; (4) duty to exercise powers fairly as between different sections of shareholders; (5) duty to exercise independent judgment; and (6) duty not to put themselves in a position in which there is a conflict between their duty to the company and their personal interests. With respect to the duty of directors to avoid conflicts of interest, our Articles of Association vary from the applicable provision of Cayman Islands law mentioned above by providing that a director must disclose the nature and extent of his or her interest in any contract or arrangement, and following such disclosure and subject to any separate requirement under applicable law or the listing rules of the Nasdaq, and unless disqualified by the chairman of the relevant meeting, such director may vote in respect of any transaction or arrangement in which he or she is interested and may be counted in the quorum at the meeting. In addition to the above, under Cayman Islands law, directors also owe a duty of care which is not fiduciary in nature. This duty has been defined as a requirement to act as a reasonably diligent person having both the general knowledge, skill and experience that may reasonably be expected of a person carrying out the same functions as are carried out by that director in relation to the company and the general knowledge skill and experience which that director has. As set out above, directors
 
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have a duty not to put themselves in a position of conflict and this includes a duty not to engage in self-dealing, or to otherwise benefit as a result of their position. However, in some instances what would otherwise be a breach of this duty can be forgiven and/or authorized in advance by the shareholders provided that there is full disclosure by the directors. This can be done by way of permission granted in the memorandum and articles of association or alternatively by shareholder approval at general meetings. Accordingly, as a result of multiple business affiliations, our officers and directors may have similar legal obligations relating to presenting business opportunities meeting the above-listed criteria to multiple entities. In addition, conflicts of interest may arise when our board evaluates a particular business opportunity with respect to the above-listed criteria. We cannot assure you that any of the above mentioned conflicts will be resolved in our favor. Furthermore, each of our officers and directors may have pre-existing fiduciary obligations to other businesses of which they are officers or directors. Conversely, under Delaware corporate law, a director has a fiduciary duty to the corporation and its stockholders (made up of two components) and the director’s duties prohibit self-dealing by a director and mandate that the best interest of the corporation and its shareholders take precedence over any interest possessed by a director, officer or controlling shareholder and not shared by the shareholders generally. For more information, see “Description of Share Capital — Principal Differences between Cayman Islands and U.S. Corporate Law.”
New investors in our Class A common shares will experience immediate and substantial book value dilution after this offering.
The initial public offering price of our Class A common shares will be substantially higher than the pro forma net tangible book value per Class A common share of the outstanding Class A common shares immediately after the offering. Based on an assumed initial public offering price of U.S.$      per class A common share (the midpoint of the price range set forth on the cover of this prospectus) and our net tangible book value as of           if you purchase our Class A common shares in this offering you will pay more for your shares than the amounts paid by our current shareholder for its shares and you will suffer immediate dilution of approximately U.S.$      per Class A common share in pro forma net tangible book value. As a result of this dilution, investors purchasing shares in this offering may receive significantly less than the full purchase price that they paid for the shares purchased in this offering in the event of a liquidation. For more information, see “Dilution.”
We may need to raise additional capital in the future by issuing securities, use our Class A common shares as acquisition consideration, or may enter into corporate transactions with an effect similar to a merger, which may dilute your interest in our share capital, change the nature of our business, and/or affect the trading price of our Class A common shares.
We may need to raise additional funds to grow our business, including through acquisitions, and implement our growth strategy going forward by engaging in public or private issuances of common shares or securities convertible into, or exchangeable for, our common shares, which may dilute your interest in our share capital or result in a decrease in the market price of our common shares. Any fundraising through the issuance of shares or securities convertible into or exchangeable for shares, the use of our Class A common shares as acquisition consideration, or the participation in corporate transactions with an effect similar to a merger, may dilute your interest in our capital stock, change the nature of our business from the business that you originally invested in (including as a result of merger or acquisition transactions), and/or result in a decrease in the market price of our Class A common shares.
We have broad discretion in the use of the portion of the net proceeds from this offering that will not be used in connection with the D1 Acquisition and may not use them effectively.
Our management will have broad discretion in the application of the portion of the net proceeds from this offering that will not be used in connection with the D1 Acquisition and could spend such proceeds in ways that do not improve our results of operations or enhance the value of our Class A common shares. The failure by our management to apply these funds effectively could result in financial losses that could have a material adverse effect on our business, results of operations and financial condition. Pending their use, we may invest the net proceeds from this offering in a manner that does not produce income or that loses value. For more information see the section “Use of Proceeds.”
 
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As a foreign private issuer and an “emerging growth company” ​(as defined in the JOBS Act), we will have different disclosure and other requirements from U.S. domestic registrants and non-emerging growth companies. We may take advantage of exemptions from certain corporate governance regulations of the Nasdaq, and this may result in less protection for the holders of our Class A common shares.
As a foreign private issuer and emerging growth company, we may be subject to different disclosure and other requirements than domestic U.S. registrants and non-emerging growth companies. For example, as a foreign private issuer, in the United States, we are not subject to the same disclosure requirements as a domestic U.S. registrant under the Exchange Act, including the requirements to prepare and issue quarterly reports on Form 10-Q or to file current reports on Form 8-K upon the occurrence of specified significant events, the proxy rules applicable to domestic U.S. registrants under Section 14 of the Exchange Act or the insider reporting and short swing profit rules applicable to domestic U.S. registrants under Section 16 of the Exchange Act. In addition, we intend to rely on exemptions from certain U.S. rules which will permit us to follow Cayman Islands legal requirements rather than certain of the requirements that are applicable to U.S. domestic registrants.
We will follow Cayman Islands laws and regulations that are applicable to Cayman Islands companies. However, Cayman Islands laws and regulations applicable to Cayman Islands companies do not contain any provisions comparable to the U.S. proxy rules, the U.S. rules relating to the filing of reports on Form 10-Q or 8-K or the U.S. rules relating to liability for insiders who profit from trades made in a short period of time, as referred to above.
Furthermore, foreign private issuers are required to file their annual report on Form 20-F within 120 days after the end of each fiscal year, while U.S. domestic issuers that are accelerated filers are required to file their annual report on Form 10-K within 75 days after the end of each fiscal year. Foreign private issuers are also exempt from Regulation Fair Disclosure, aimed at preventing issuers from making selective disclosures of material information, although we will be subject to Cayman Islands laws and regulations having substantially the same effect as Regulation Fair Disclosure. As a result of the above, even though we are required to file reports on Form 6-K disclosing the limited information which we have made or are required to make public pursuant to Cayman Islands law, or are required to distribute to shareholders generally, and that is material to us, you may not receive information of the same type or amount that is required to be disclosed to shareholders of a U.S. company.
In addition, according to Section 303A of the Section 5605 of the Nasdaq equity rules listed companies are required, among other things, to have a majority of independent board members, and to have independent director oversight of executive compensation, nomination of directors and corporate governance matters. As a foreign private issuer, however, we are permitted to, and we will, follow home country practice in lieu of the above requirements. For more information, see the section “Description of Share Capital — Principal Differences between Cayman Islands and U.S. Corporate Law.”
The JOBS Act contains provisions that, among other things, relax certain reporting requirements for emerging growth companies. Under this act, as an emerging growth company, we will not be subject to the same disclosure and financial reporting requirements as non-emerging growth companies. For example, as an emerging growth company we are permitted to, and intend to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies. Also, we will not have to comply with future audit rules promulgated by the U.S. Public Company Accounting Oversight Board, or PCAOB (unless the SEC determines otherwise), and our auditors will not need to attest to our internal controls under Section 404(b) of the Sarbanes Oxley Act. We may follow these reporting exemptions until we are no longer an emerging growth company. As a result, our shareholders may not have access to certain information that they deem important. We 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 completion of this offering, (b) in which we have total annual revenue of at least U.S.$1.07 billion, or (c) in which we are deemed to be a large accelerated filer, which means the market value of our Class A common shares that is held by non-affiliates exceeds U.S.$700.0 million as of the prior June 30, and (2) the date on which we have issued more than U.S.$1.07 billion in non-convertible debt during the prior three year period. Accordingly, the information about us available to you will not be the same as, and may be more limited than, the information available to shareholders of a non-emerging growth company. We could be an “emerging growth company” for up to five years, although circumstances could cause us to lose that
 
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status earlier, including if the market value of our Class A common shares held by non-affiliates exceeds U.S.$700 million as of any June 30 (the end of our second fiscal quarter) before that time, in which case we would no longer be an “emerging growth company” as of the following December 31 (our fiscal year end).
We cannot predict if investors will find our Class A common shares less attractive because we may rely on these exemptions. If some investors find our Class A common shares less attractive as a result, there may be a less active trading market for our Class A common shares and the price of our Class A common shares may be more volatile.
We may lose our foreign private issuer status which would then require us to comply with the Exchange Act’s domestic reporting regime and cause us to incur significant legal, accounting and other expenses.
In order to maintain our current status as a foreign private issuer, either (a) more than 50% of our Class A common shares must be either directly or indirectly owned of record by nonresidents of the United States or (b)(1) a majority of our executive officers or directors may not be U.S. citizens or residents, (2) more than 50% of our assets cannot be located in the United States and (3) our business must be administered principally outside the United States. If we lose this status, we would be required to comply with the Exchange Act reporting and other requirements applicable to U.S. domestic issuers, which are more detailed and extensive than the requirements for foreign private issuers. We may also be required to make changes in our corporate governance practices in accordance with various SEC and Nasdaq rules. The regulatory and compliance costs to us under U.S. securities laws if we are required to comply with the reporting requirements applicable to a U.S. domestic issuer may be significantly higher than the costs we will incur as a foreign private issuer.
Our shareholders may face difficulties in protecting their interests because we are a Cayman Islands exempted company.
Our corporate affairs will be governed by our amended and restated memorandum and articles of association, the Companies Act and the common law of the Cayman Islands. We will also be subject to the federal securities laws of the United States. The rights of shareholders to take action against the directors, actions by minority shareholders and the fiduciary responsibilities of our directors to us under Cayman Islands law are to a large extent governed by the common law of the Cayman Islands. The common law of the Cayman Islands is derived in part from comparatively limited judicial precedent in the Cayman Islands as well as from English common law, the decisions of whose courts are of persuasive authority, but are not binding on a court in the Cayman Islands. The rights of our shareholders and the fiduciary responsibilities of our directors under Cayman Islands law are different from what they would be under statutes or judicial precedent in some jurisdictions in the United States. In particular, the Cayman Islands has a different body of securities laws as compared to the United States, and certain states, such as Delaware, may have more fully developed and judicially interpreted bodies of corporate law.
While Cayman Islands law allows a dissenting shareholder to express the shareholder’s view that a court sanctioned reorganization of a Cayman Islands company would not provide fair value for the shareholder’s shares, Cayman Islands statutory law does not specifically provide for shareholder appraisal rights in connection with a merger or consolidation of a company that takes place by way of a scheme of arrangement. This may make it more difficult for you to assess the value of any consideration you may receive in a merger or consolidation that takes place by way of a court approved scheme of arrangement or to require that the acquirer gives you additional consideration if you believe the consideration offered is insufficient. However, Cayman Islands statutory law provides a mechanism for a dissenting shareholder in a merger or consolidation that does not take place by way of a scheme of arrangement to apply to the Grand Court for a determination of the fair value of the dissenter’s shares if it is not possible for the company and the dissenter to agree on a fair price within the time limits prescribed.
Shareholders of Cayman Islands exempted companies have no general rights under Cayman Islands law to inspect corporate records and accounts or to obtain copies of lists of shareholders. Our directors have discretion under our Articles of Association to determine whether or not, and under what conditions, our corporate records may be inspected by our shareholders, but are not obliged to make them available to our
 
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shareholders. This may make it more difficult for you to obtain information needed to establish any facts necessary for a shareholder motion or to solicit proxies from other shareholders in connection with a proxy contest.
Subject to limited exceptions, under Cayman Islands’ law, a minority shareholder may not bring a derivative action against the board of directors. Our Cayman Islands counsel is not aware of any reported class actions having been brought in a Cayman Islands court.
United States civil liabilities and certain judgments obtained against us by our shareholders may not be enforceable.
We are a Cayman Islands exempted company and substantially all of our assets are located outside of the United States. In addition, the majority of our directors and officers are nationals and residents of countries other than the United States. A substantial portion of the assets of these persons is located outside of the United States. As a result, it may be difficult to effect service of process within the United States upon these persons. It may also be difficult to enforce in U.S. courts judgments obtained in U.S. courts based on the civil liability provisions of the U.S. federal securities laws against us and our officers and directors who are not resident in the United States and the substantial majority of whose assets are located outside of the United States.
Further, we have been advised by our Cayman Islands legal counsel, Maples and Calder, that the courts of the Cayman Islands are unlikely (i) to recognize or enforce against us judgments of courts of the United States predicated upon the civil liability provisions of the securities laws of the United States or any State; and (ii) in original actions brought in the Cayman Islands, to impose liabilities against us predicated upon the civil liability provisions of the securities laws of the United States or any State, so far as the liabilities imposed by those provisions are penal in nature. In those circumstances, although there is no statutory enforcement in the Cayman Islands of judgments obtained in the United States, the courts of the Cayman Islands will recognize and enforce a foreign money judgment of a foreign court of competent jurisdiction without retrial on the merits based on the principle that a judgment of a competent foreign court imposes upon the judgment debtor an obligation to pay the sum for which judgment has been given provided certain conditions are met. For a foreign judgment to be enforced in the Cayman Islands, such judgment must be final and conclusive and for a liquidated sum, and must not be in respect of taxes or a fine or penalty, inconsistent with a Cayman Islands judgment in respect of the same matter, impeachable on the grounds of fraud or obtained in a manner, and or be of a kind the enforcement of which is, contrary to natural justice or the public policy of the Cayman Islands (awards of punitive or multiple damages may well be held to be contrary to public policy). A Cayman Islands Court may stay enforcement proceedings if concurrent proceedings are being brought elsewhere.
The Depository Trust Company, or DTC, may cease to act as depositary and transfer agent for our Class A common shares.
DTC will have the discretion to cease to act as depositary and clearing agent for our Class A common shares. If DTC determines at any time that our Class A common shares are not eligible for continued deposit and clearance within their facilities, then we believe the Class A common shares would not be eligible for continued listing on the Nasdaq and trading of our Class A common shares would be disrupted. While we would pursue alternative arrangements to maintain the listing and trading, any such disruption could result in a material adverse effect on the trading price of our Class A common shares.
Judgments of Brazilian courts to enforce our obligations with respect to our Class A common shares may be payable only in reais. The exchange rate in force at the time may not offer non-Brazilian investors full compensation for any claim arising from our obligations.
Most of our assets are currently located in Brazil. If proceedings are brought in the courts of Brazil seeking to enforce our obligations in respect of our Class A common shares, we may not be required to discharge our obligations in a currency other than the real. Under Brazilian exchange control laws, an obligation in Brazil to pay amounts denominated in a currency other than the real may only be satisfied in Brazilian currency at the exchange rate, as determined by the Central Bank, in effect on the date the judgment is obtained, and such amounts are then adjusted to reflect exchange rate variations through the effective
 
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payment date. The then prevailing exchange rate may not afford non-Brazilian investors with full compensation for any claim arising out of or related to our obligations under the Class A common shares.
Our Class A common shares may not be a suitable investment for all investors, as investment in our Class A common shares presents risks and the possibility of financial losses.
The investment in our Class A common shares is subject to risks. Investors who wish to invest in our Class A common shares are thus subject to asset losses, including loss of the entire value of their investment, as well as other risks, including those related to our Class A common shares, us, the sector in which we operate, our shareholder structure and the general macroeconomic environment in Brazil, among other risks.
Each potential investor in our Class A common shares must therefore determine the suitability of that investment in light of its own circumstances. In particular, each potential investor should:
•
have sufficient knowledge and experience to make a meaningful evaluation of our Class A common shares, the merits and risks of investing in our Class A common shares and the information contained in this prospectus;
​
•
have access to, and knowledge of, appropriate analytical tools to evaluate, in the context of its particular financial situation, an investment in our Class A common shares and the impact our Class A common shares will have on its overall investment portfolio;
​
•
have sufficient financial resources and liquidity to bear all of the risks of an investment in our Class A common shares;
​
•
understand thoroughly the terms of our Class A common shares and be familiar with the behavior of any relevant indices and financial markets; and
​
•
be able to evaluate (either alone or with the help of a financial adviser) possible scenarios for economic, interest rate and other factors that may affect its investment and its ability to bear the applicable risks.
​
The Cayman Islands Economic Substance Law may affect our operations.
The Cayman Islands has recently enacted the International Tax Co-operation (Economic Substance) Act (As Revised), or the Cayman Economic Substance Law. We are required to comply with the Cayman Economic Substance Law. As we are a Cayman Islands company, compliance obligations include filing annual notifications for us, which need to state whether we are carrying out any relevant activities and, if so, whether we have satisfied economic substance tests to the extent required under the Cayman Economic Substance Law. As it is a relatively new regime, it is anticipated that the Cayman Economic Substance Law will evolve and be subject to further clarification and amendments. We may need to allocate additional resources to keep updated with these developments, and may have to make changes to our operations in order to comply with all requirements under the Cayman Economic Substance Law. Failure to satisfy these requirements may subject us to penalties under the Cayman Economic Substance Law.
The Cayman Islands Tax Information Authority shall impose a penalty of CI$10,000 (or U.S.$12,500) on a relevant entity for failing to satisfy the economic substance test or CI$100,000 (or U.S.$125,000) if it is not satisfied in the subsequent financial year after the initial notice of failure. Following failure after two consecutive years the Grand Court of the Cayman Islands may make an order requiring the relevant entity to take specified action to satisfy the economic substance test or ordering it that it is defunct or be struck off.
 
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CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
This prospectus contains forward-looking statements subject to risks and uncertainties, generally set forth under the sections “Summary,” “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Business and Industry.” Many of the forward-looking statements in this prospectus can be identified based on forward-looking words such as “aim,” “anticipate,” “believe,” “can,” “continue,” “estimate,” “expect,” “intend,” “likely,” “may,” “might,” “plan,” “potential,” “project,” “seek,” “should,” “target,” “would,” or the opposite of these terms or other similar expressions.
Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date on which they are made. There is no assurance that the expected events, trends or results will actually occur and we and the underwriters undertake no obligation to update publicly or revise any forward-looking statements and estimates whether as a result of new information, future events or otherwise.
Forward-looking statements include, but are not limited to, statements regarding our current belief or expectations as of the date of this prospectus and estimates on future events and trends that affect or may affect our business, financial condition, results of operations, liquidity, prospects and the trading price of our Class A common shares. Although such forward-looking statements are based on assumptions and information currently available to us, which we believe to be reasonable, none of the forward-looking statements, whether expressed or implied, are indicative of or guarantee future results. Given such limitations, you should not make any investment decision on the basis of the forward-looking statements contained herein.
Our forward-looking statements may be affected by the following factors, among others:
•
the consummation of the D1 Acquisition;
​
•
our ability to innovate and respond to technological advances, changing market needs and customer demands, such as the use of and demand for SMS text message service and cloud-based platform communications;
​
•
our ability to successfully acquire new businesses as customers, acquire customers in new industry verticals and appropriately manage our international expansion;
​
•
our failure to enhance our brand recognition or maintain a positive public image;
​
•
the inherent risks related to the CPaaS market, such as the interruption, failure or breach of our computer or information technology systems, resulting in the degradation of the quality or a decline in the use of the products and services we offer;
​
•
general economic, political and business conditions in Brazil, including as a result of the impacts of the COVID-19 pandemic, and their impact on our business, notably with respect to inflation and interest rates and their impact on the discretionary spending of businesses;
​
•
our ability to face challenges in the expansion of our operations and our offerings into new market segments and/or new geographic regions within and outside of Brazil;
​
•
the impact of substantial and increasing competition in our market, innovation by our competitors, and our ability to compete effectively;
​
•
our compliance with applicable regulatory and legislative developments and regulations and legislation that currently apply or become applicable to our business as we continue to grow;
​
•
our ability to attract and retain qualified personnel while controlling our personnel related expenses;
​
•
the dependence of our business on our relationship with service providers as well with certain cloud infrastructure providers;
​
•
our ability to maintain, protect and enhance our brand and intellectual property;
​
•
our ability to maintain our classification as an emerging growth company under the JOBS Act;
​
•
health crises, including due to pandemics such as the COVID-19 pandemic and government measures taken in response thereto;
​
 
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•
other factors that may affect our financial condition, liquidity and results of operations; and
​
•
other risk factors discussed under “Risk Factors.”
​
We caution you that the foregoing list of significant factors may not contain all of the material factors that are important to you. In addition, in light of these risks and uncertainties, the matters referred to in the forward-looking statements contained in this prospectus may not in fact occur. Many of these risks are beyond our ability to control or predict. All forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the cautionary statements contained throughout this prospectus.
 
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USE OF PROCEEDS
We estimate that the net proceeds from our issuance and sale of           Class A common shares in this offering will be approximately US$       (or US$       million if the underwriters exercise in full their option to purchase additional Class A common shares), assuming an initial public offering price of US$       per Class A common share, which is the midpoint of the price range set forth on the cover page of this prospectus, and after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us.
Each US$1.00 increase (decrease) in the assumed initial public offering price of US$       per Class A common share would increase (decrease) the net proceeds to us from this offering by approximately US$      , assuming the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us. Each increase (decrease) of 1.0 million in the number of Class A common shares we are offering would increase (decrease) the net proceeds to us from this offering, after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us, by approximately US$      million, assuming the assumed initial public offering price stays the same.
We believe that the offering will provide additional capital to support the development and growth of our business. The principal purposes of this offering are to increase our capitalization, provide us with greater financial flexibility, create a public market for our Class A common shares and facilitate our future access to the capital markets. We intend to use the net proceeds from this offering in the following order of importance:
•
First: payment of the consideration payable in cash to acquire D1 (we plan to allocate US$       million (equivalent to R$      million using the Central Bank selling exchange rate of       per U.S.dollar published on            , 2021) from the proceeds for such purposes). For further information about the D1 acquisition, see “Presentation of Financial and Other Information — D1 Acquisition, Sirena Acquisition and Related Financial Statements.”
​
•
For any remaining net proceeds: general corporate purposes, which may include investments for the development of software, products or technologies, investments in the international expansion of our operations, funding other opportunistic mergers, acquisitions or investments in complementary businesses, and maintaining liquidity.
​
We will have broad discretion in allocating this portion of the net proceeds from this offering.
Although we currently anticipate that we will use the net proceeds from this offering as described above, there may be circumstances where a reallocation of funds is necessary. The amounts and timing of our actual expenditures will depend upon numerous factors, including the factors described under “Risk Factors” in this prospectus. Accordingly, our management will have flexibility in applying the net proceeds from this offering. An investor will not have the opportunity to evaluate the economic, financial or other information on which we base our decisions on how to use the net proceeds.
Pending the determination of the net proceeds from this offering, we intend to invest them in a variety of capital preservation investments, including short-term, interest-bearing instruments and government securities.
 
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DIVIDENDS AND DIVIDEND POLICY
The amount of any dividends will depend on many factors, such as our results of operations, financial condition, cash requirements, prospects and other factors deemed relevant by our board of directors. We currently intend to retain all available funds and future earnings, if any, to fund the development and expansion of our business and we do not anticipate paying any cash dividends in the foreseeable future. Any future determination to pay dividends will be made at the discretion of our board of directors and will depend on various factors, including applicable laws, our results of operations, financial condition, cash requirements, future prospects and any other factors deemed relevant by our board of directors.
As a holding company, our ability to pay dividends depends on our receipt of cash dividends from our operating subsidiaries, which may further restrict our ability to pay dividends as a result of their respective jurisdictions of incorporation (including imposing legal restrictions on dividend distribution by subsidiaries), agreements of our subsidiaries or covenants under future indebtedness that we or they may incur. Our ability to pay dividends is therefore directly related to positive and distributable net results from our subsidiaries. See “Risk Factors — Risks Relating to Our Business and Industry — Our holding company structure makes us dependent on the operations of our subsidiaries.”
Certain Cayman Islands Legal Requirements Related to Dividends
Under the Companies Act and our Articles of Association, a Cayman Islands company may pay a dividend out of either its profit or share premium account, but a dividend may not be paid if this would result in the company being unable to pay its debts as they fall due in the ordinary course of business. According to our Articles of Association, dividends can be declared and paid out of funds lawfully available to us, which include the share premium account. Dividends, if any, would be paid in proportion to the number of common shares a shareholder holds. For further information, see “Taxation — Cayman Islands Tax Considerations.”
 
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CAPITALIZATION
The table below sets forth our (i) current and non-current loans and borrowings, (ii) total equity and (iii) total capitalization (defined as the sum of current and non-current loans and borrowing plus total equity) as of December 31, 2020, derived from our consolidated financial statements as follows:
•
on an as historical reported basis;
​
•
as adjusted to give effect to the contribution of Zenvia Brazil to Zenvia Inc. by the shareholders of Zenvia Brazil (the contribution will be accounted for at historical book value, in return for new Class B common shares issued by Zenvia Inc. in a           exchange for the shares of Zenvia Brazil contributed to us) and (iii) the issuance and sale of                 Class A common shares by us in this offering at the initial public offering price of US$      per Class A common share (the midpoint of the estimated offering price per Class A common share set forth on the cover page of this prospectus translated into real using the selling exchange rate of R$      per US$1.00, as reported by the Central Bank as of           , 2021), assuming no exercise of the option by the underwriters to purchase additional Class A common shares, and after deducting underwriting discounts and commissions and estimated offering expenses payable by us. Our total capitalization may be different in the event that we do not allocate the net proceeds of this offering in accordance with the assumption set forth under “Use of Proceeds;” and
​
•
as further adjusted to give pro forma effect to the consummation of our acquisition of D1 as if it had occurred on December 31, 2020, including the issuance of class A common shares to certain D1 shareholders upon consummation of the D1 Acquisition. See “Unaudited Pro Forma Condensed Financial Information.” We expect that the consummation of the D1 Acquisition will impact our loans and borrowings, current by R$      , loans and borrowings, non-current by R$       and total equity by R$       .
​
The table below does not give effect to the de minimis share consideration still payable to Sirena shareholders. See “Presentation of Financial and Other Information — D1 Acquisition, Sirena Acquisition and Related Financial Statements.”
You should read this table in conjunction with “Use of Proceeds,” “Selected Financial and Other Information,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” our consolidated financial statements and our unaudited pro forma condensed financial information included elsewhere in this prospectus. Our capitalization following the closing of the offering will be adjusted based on the actual initial offering price and other terms of the offering determined at pricing.
​ ​ ​
As of December 31, 2020
​ ​ ​
​ ​ ​
Zenvia Brazil, as Reported
​ ​
As Adjusted
​ ​
As Further Adjusted
​
​ ​ ​
(in US$
thousands)(1)
​ ​
(in R$
thousands)
​ ​
(in US$
thousands)(1)
​ ​
(in R$
thousands)
​ ​
(in US$
thousands)(1)
​ ​
(in R$
thousands)
​
Loans and borrowings, current
​ ​ ​ ​ 10,814 ​ ​ ​ ​ ​ 56,197 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Loans and borrowings, non-current
​ ​ ​ ​ 8,232 ​ ​ ​ ​ ​ 42,778 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Equity ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
4,781,602 Zenvia Brazil common shares on an as reported basis
​ ​ ​ ​ 22,196 ​ ​ ​ ​ ​ 115,348 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​
 
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​ ​ ​
As of December 31, 2020
​ ​ ​
​ ​ ​
Zenvia Brazil, as Reported
​ ​
As Adjusted
​ ​
As Further Adjusted
​
​ ​ ​
(in US$
thousands)(1)
​ ​
(in R$
thousands)
​ ​
(in US$
thousands)(1)
​ ​
(in R$
thousands)
​ ​
(in US$
thousands)(1)
​ ​
(in R$
thousands)
​
Class A common shares,
par value US$     per
share,     shares
authorized,   shares
outstanding on an as
adjusted basis and
shares outstanding on
an as further adjusted
basis
​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Class B common shares,
par value US$     per
share,     shares
authorized,     shares
outstanding on an as
adjusted basis and
shares outstanding on
an as further adjusted
basis
​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Total equity
​ ​ ​ ​ 22,196 ​ ​ ​ ​ ​ 115,348 ​ ​ ​ ​ ​        ​ ​ ​ ​ ​        ​ ​ ​ ​ ​        ​ ​ ​ ​ ​        ​ ​
Total capitalization
​ ​ ​ ​ 41,242 ​ ​ ​ ​ ​ 214,323 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​
​
(1)
Solely for the convenience of the reader, certain Brazilian real amounts have been translated into U.S. dollars at the selling rate of R$5.1967 to US$1.00, as reported by the Central Bank as of December 31, 2020. The U.S. dollar equivalent information presented in this prospectus should not be construed as implying that the amounts in reais represent, or could have been or could be converted into, U.S. dollars at this rate or any other rate. See “Exchange Rates” for further information about exchange rate fluctuations.
​
An increase or reduction of US$1.00 in the assumed initial public offering price of US$      per Class A common shares, which is the midpoint of the price range indicated on the cover page of this prospectus, would, after the completion of this offering, increase (decrease) (1) the value of our total equity by US$      million, and (2) our total capitalization by US$      million, assuming that the number of Class A common shares offered herein, as set forth on the cover page of this prospectus, remains the same and assuming no exercise of the option to purchase additional Class A common shares, and after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us.
An increase (decrease) of 1.0 million shares in the number of Class A common shares sold in this offering by us would increase (decrease) (1) the value of our total equity by US$      million, and (2) our total capitalization by US$      million, assuming an initial public offering price of US$      per Class A common shares, the midpoint of the price range set forth on the cover page of this prospectus, and after deducting estimated underwriting discounts and commissions and the estimated offering expenses payable by us.
 
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DILUTION
Prior to the consummation of this offering, all of our shareholders will contribute all of their shares in Zenvia Brazil to us. In return for this contribution, we will issue in aggregate                  new Class B common shares to Bobsin LLC, Oria Zenvia Co-investment Holdings, LP, Oria Zenvia Co-investment Holdings II, LP, Oria Tech Zenvia Co-investment — Fundo de Investimento em Participações Multiestratégia and Oria Tech I Inovação Fundo de Investimento em Participações Multiestratégia and in aggregate          new Class A common shares to Spectra I Fundo de Investimento em Participações Multiestratégia Investimento No Exterior and Spectra II Fundo de Investimento em Participações Multiestratégia Investimento No Exterior, in each case in a one‑to-      exchange for the shares of Zenvia Brazil contributed to us. Immediately prior to this initial public offering and after the share exchange, Bobsin LLC, Oria Zenvia Co-investment Holdings, LP, Oria Zenvia Co-investment Holdings II, LP, Oria Tech Zenvia Co-investment — Fundo de Investimento em Participações Multiestratégia, Oria Tech I Inovação Fundo de Investimento em Participações Multiestratégia, Spectra I Fundo de Investimento em Participações Multiestratégia Investimento No Exterior and Spectra II Fundo de Investimento em Participações Multiestratégia Investimento No Exterior will hold all of our issued and outstanding shares, and we will hold all of the issued and outstanding shares in Zenvia Brazil.
We have presented the dilution calculation below on the basis of Zenvia Brazil’s net tangible book value as of December 31, 2020 (and giving pro forma effect to the consummation of the D1 Acquisition as if it had occurred on December 31, 2020, including the issuance of our class A common shares to certain D1 shareholders upon consummation of the D1 Acquisition) because until the one-to-      contribution of Zenvia Brazil shares to it, Zenvia Inc. will not have commenced operations and will have only nominal assets and liabilities and no material contingent liabilities or commitments.
As of December 31, 2020, Zenvia Brazil had a net tangible book value of R$      million, corresponding to a net tangible book value of R$      per Class A common share (after giving effect to the one-to-           contribution). Net tangible book value per common shares represents the amount of total assets (excluding goodwill and other intangible assets) less total liabilities, divided by      , the total number of Zenvia Brazil shares outstanding as of December 31, 2020 (after giving effect to the one-to-           contribution).
After giving effect to (1) the sale by us of the                 Class A common shares offered by us in the offering at an assumed offering price of US$      per Class A common share (the midpoint of the price range set forth on the cover of this prospectus), after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us and (2) the consummation of our acquisition of D1 as if it had occurred on December 31, 2020, including the issuance of our class A common shares to certain D1 shareholders upon consummation of the D1 Acquisition, and assuming no exercise of the underwriters’ option to purchase additional Class A common shares, our pro forma net tangible book value estimated at December 31, 2020 (based on the same exchange rate above) would have been US$      , representing US$      per common share, after giving effect to the share split. This represents an immediate increase in net tangible book value of US$      , or    % per common share to current shareholders and an immediate dilution in net tangible book value of US$      , or    % per common share to new investors purchasing Class A common shares in this offering. Dilution for this purpose represents the difference between the price per common shares paid by these investors and net tangible book value per common share immediately after the completion of the offering.
Assuming the underwriters’ option to purchase additional Class A common shares is exercised in full, our pro forma net tangible book value as of December 31, 2020 would have been US$      per common share, after giving effect to the share split. This represents an immediate increase in pro forma net tangible book value of US$      , or    % per common share to our current shareholders and an immediate dilution in the pro forma net tangible book value of US$      or    % per common share to new investors purchasing common shares in this offering.
If you invest in our Class A common shares, your interest will be diluted to the extent of the difference between the initial public offering price per Class A common share and the pro forma net tangible book value per Class A common share which accounts for the issuance and sale of new Class A common shares in this offering.
 
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Because our Class A common shares and Class B common shares have the same dividend and other rights, except for voting, conversion, pre-emptive rights and transfer restrictions, we have counted the Class A common shares and Class B common shares equally for purposes of the dilution calculations below.
The following table illustrates this dilution to new investors purchasing Class A common shares in the offering assuming either no exercise or full exercise by the underwriters of their option to purchase additional Class A common shares.
​ ​ ​
No Exercise
US$
​ ​
Full Exercise
US$
​
Assumed initial public offering price per Class A common shares(1)
​ ​ ​ ​ ​ ​ ​
Net tangible book value per common share at December 31, 2020 (without giving pro forma effect to the consummation of the D1 Acquisition as if it had occurred on December 31, 2020)(2)
​ ​ ​ ​ ​ ​ ​
Net tangible book value per common share at December 31, 2020 (giving pro forma effect to the consummation of the D1 Acquisition as if it had occurred on December 31, 2020)(2)
​ ​ ​
Pro forma net tangible book value per common share after completion of this offering(2)
​ ​ ​ ​ ​ ​ ​
Increase in pro forma net tangible book value per common share attributable to current shareholders(2)
​ ​ ​ ​ ​ ​ ​
Dilution in pro forma net tangible book value per common share attributable to new shareholders(2) (3)
​ ​ ​ ​ ​ ​ ​
​
(1)
Corresponds to the midpoint of the price range set forth on the cover page of this prospectus.
​
(2)
After giving effect to the share split.
​
(3)
Dilution represents the difference between the offering price per common share paid by new shareholders and the pro forma net tangible book value per common share immediately after giving effect to this offering.
​
The actual offering price per Class A common share is not based on the pro forma net tangible book value of our common shares, but will be established based through a book building process.
The dilution table above does not give effect to the de minimis share consideration still payable to Sirena shareholders. See “Presentation of Financial and Other Information — D1 Acquisition, Sirena Acquisition and Related Financial Statements.”
The following table summarizes, on the same pro forma basis at December 31, 2020, the number of common shares acquired from us, the total cash consideration paid and the average price per common share paid to us by our current shareholders and by new investors purchasing Class A common shares in this offering. As the table shows, new investors purchasing shares in this offering will pay an average price per common share substantially higher than our pre-IPO shareholders paid. This information is based on the assumed initial public offering price of US$      per Class A common share (which is the midpoint of the price range per common share set forth on the cover page of this prospectus), before deducting the underwriting discounts and commissions and estimated offering expenses payable by us in connection with this offering.
​ ​ ​
Common Shares Purchased
​ ​
Total Consideration
​ ​
Average Price
per
Common Share
(US$)
​
​ ​ ​
Amount
​ ​
Percentage of
Total Common
Shares (%)
​ ​
Amount
(US$ million)
​ ​
Percentage
(%)
​
Current shareholders
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
New investors
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Total
​ ​ ​ ​        ​ ​ ​ ​ ​        ​ ​ ​ ​ ​ 100 ​ ​ ​ ​ ​        ​ ​ ​ ​ ​ 100 ​ ​ ​ ​ ​        ​ ​
 
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If the underwriters were to fully exercise their option to purchase                 additional Class A common shares, the total consideration paid by new shareholders and the average price per common share paid by new shareholders would be US$      million and US$      per common share, respectively, and the percentage of common shares purchased by new shareholder would be    %.
An increase (decrease) of US$1.00 in the assumed initial public offering price of US$      per common share, which is the midpoint of the price range indicated on the cover page of this prospectus, would, after the conclusion of this offering, increase (decrease) (1) the value of our total shareholders’ equity by US$      million, and (2) the value of our pro forma net tangible book value per common share to new investors by US$      , assuming that the number of common shares offered herein, as set forth on the cover page of this prospectus, remains the same and assuming no exercise of the option to purchase additional Class A common shares, and after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us.
 
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EXCHANGE RATES
The Brazilian foreign exchange system allows the purchase and sale of foreign currency and the international transfer of reais by any person or legal entity, regardless of the amount, subject to certain regulatory procedures.
The real depreciated against the U.S. dollar from mid-2011 to early 2016. In particular, during 2015, due to the poor economic conditions in Brazil, including as a result of political instability, the real depreciated at a rate that was much higher than in previous years. Overall in 2015, the real depreciated 47.0%, reaching R$3.905 per US$1.00 on December 31, 2015. In 2016, the real recovered significantly, appreciating 16.5% to R$3.259 per US$1.00 on December 31, 2016. In 2017, the real depreciated 1.5% against the U.S. dollar, ending the year at an exchange rate of R$3.308 per US$1.00. In 2018, due to the inherent political instability of the election period, the real/U.S. dollar exchange rate reported by the Central Bank was R$3.875 per US$1.00, which reflected a 17.1% depreciation in the real against the U.S. dollar. As of December 31, 2019, the real/U.S. dollar exchange rate reported by the Central Bank was R$4.031 per US$1.00. Recently, due to the COVID-19 and the economic and political instability, the real depreciated 47.2% against the U.S. dollar since December 31, 2019, and reached R$5.937 per US$1.00 as of May 14, 2020, its lowest level since the introduction of the currency in 1994. The exchange rate reported by the Central Bank was R$5.1967 per US$1.00 on December 31, 2020. As of April 14, 2021, the exchange rate reported by the Central Bank was R$5.6936 per US$1.00. The Central Bank has intervened occasionally in the foreign exchange market to attempt to control instability in foreign exchange rates. We cannot predict whether the Central Bank or the Brazilian government will continue to allow the real to float freely or will intervene in the exchange rate market by re-implementing a currency band system or otherwise. The real may depreciate or appreciate substantially against the U.S. dollar in the future. Furthermore, Brazilian law provides that, whenever there is a serious imbalance in Brazil’s balance of payments or there are substantial reasons to foresee a significant imbalance, temporary restrictions may be imposed on remittances of foreign capital abroad. We cannot assure you that the Brazilian government will not place restrictions on remittances of foreign capital abroad in the future.
The following table sets forth, for the periods indicated, the high, low, average and period-end exchange rates for the purchase of U.S. dollars expressed in Brazilian reais per U.S. dollar. The average rate is calculated by using the average of reported exchange rates by the Central Bank on each day during a monthly or yearly period.
Year
​ ​
Period-end
​ ​
Average for
Period(1)
​ ​
Low
​ ​
High
​
​ ​ ​
(R$ per US$)
​
2016
​ ​ ​ ​ 3.259 ​ ​ ​ ​ ​ 3.483 ​ ​ ​ ​ ​ 3.119 ​ ​ ​ ​ ​ 4.156 ​ ​
2017
​ ​ ​ ​ 3.308 ​ ​ ​ ​ ​ 3.193 ​ ​ ​ ​ ​ 3.051 ​ ​ ​ ​ ​ 3.381 ​ ​
2018
​ ​ ​ ​ 3.875 ​ ​ ​ ​ ​ 3.656 ​ ​ ​ ​ ​ 3.139 ​ ​ ​ ​ ​ 4.188 ​ ​
2019
​ ​ ​ ​ 4.031 ​ ​ ​ ​ ​ 3.946 ​ ​ ​ ​ ​ 3.652 ​ ​ ​ ​ ​ 4.260 ​ ​
2020
​ ​ ​ ​ 5.197 ​ ​ ​ ​ ​ 5.158 ​ ​ ​ ​ ​ 4.021 ​ ​ ​ ​ ​ 5.937 ​ ​
2021 (through April 14, 2021)
​ ​ ​ ​ 5.694 ​ ​ ​ ​ ​ 5.505 ​ ​ ​ ​ ​ 5.163 ​ ​ ​ ​ ​ 5.840 ​ ​
​
Source: Central Bank
(1)
Represents the average of the exchange rates on the closing of each day during the relevant periods.
​
 
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Month
​ ​
Period-end
​ ​
Average for
Period(1)
​ ​
Low
​ ​
High
​
​ ​ ​
(R$ per US$)
​
November 2020
​ ​ ​ ​ 5.332 ​ ​ ​ ​ ​ 5.418 ​ ​ ​ ​ ​ 5.282 ​ ​ ​ ​ ​ 5.693 ​ ​
December 2020
​ ​ ​ ​ 5.197 ​ ​ ​ ​ ​ 5.146 ​ ​ ​ ​ ​ 5.058 ​ ​ ​ ​ ​ 5.279 ​ ​
January 2021
​ ​ ​ ​ 5.476 ​ ​ ​ ​ ​ 5.356 ​ ​ ​ ​ ​ 5.163 ​ ​ ​ ​ ​ 5.509 ​ ​
February 2021
​ ​ ​ ​ 5.530 ​ ​ ​ ​ ​ 5.416 ​ ​ ​ ​ ​ 5.342 ​ ​ ​ ​ ​ 5.530 ​ ​
March 2021
​ ​ ​ ​ 5.697 ​ ​ ​ ​ ​ 5.646 ​ ​ ​ ​ ​ 5.495 ​ ​ ​ ​ ​ 5.840 ​ ​
April 2021 (through April 14, 2021)
​ ​ ​ ​ 5.694 ​ ​ ​ ​ ​ 5.649 ​ ​ ​ ​ ​ 5.581 ​ ​ ​ ​ ​ 5.706 ​ ​
​
Source: Central Bank
(1)
Represents the average of the exchange rates on the closing of each day during the relevant periods.
​
 
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SELECTED FINANCIAL AND OTHER INFORMATION
The following tables set forth summary consolidated historical financial data for Zenvia Brazil as of and for the years ended December 31, 2020, 2019 and 2018 and summary unaudited pro forma financial data for the year ended December 31, 2020. Summary consolidated historical financial data has been derived from our audited consolidated financial statements, included elsewhere in this prospectus. The financial results of Sirena are consolidated in our historical results since July 24, 2020. See “Presentation of Financial and Other Information.”
Summary unaudited pro forma financial data has been derived from the unaudited pro forma condensed financial information included elsewhere in this prospectus. The unaudited pro forma financial information for the year ended December 31, 2020 gives effect to the Sirena Acquisition and the D1 Acquisition by us as if they occurred as of January 1, 2020. See “Unaudited Pro Forma Condensed Financial Information.” The unaudited pro forma condensed financial information does not purport to represent what our actual consolidated results of operations would have been had the acquisitions actually occurred on the date indicated, nor are they indicative of future consolidated results of operations or financial condition.
The summary audited consolidated historical financial data and the summary unaudited pro forma condensed financial data should be read in conjunction with “Presentation of Financial and Other Information,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” “Unaudited Pro Forma Condensed Financial Information,” our consolidated financial statements and the historical audited financial statements of Sirena, D1 and Smarkio, including the notes thereto, included elsewhere in this prospectus.
Consolidated and Pro Forma Condensed Statements of Profit or Loss for the Years Ended December 31, 2020, 2019 and 2018
​ ​ ​
Historical Zenvia Brazil
Year ended December 31,
​ ​
Total Zenvia Brazil
Pro Forma(1)
Year ended December 31,
​
​ ​ ​
2020(2)
​ ​
2020(2)
​ ​
2019
​ ​
2018
​ ​
2020
​ ​
2020
​
​ ​ ​
(in US$)(3)
​ ​
(in R$)
​ ​
(in R$)
​ ​
(in R$)
​ ​
(in US$)(3)
​ ​
(in R$)
​
​ ​ ​
(in thousands)
​
Revenue
​ ​ ​ ​ 82,687 ​ ​ ​ ​ ​ 429,701 ​ ​ ​ ​ ​ 354,035 ​ ​ ​ ​ ​ 276,380 ​ ​ ​ ​ ​ 94,766 ​ ​ ​ ​ ​ 492,470 ​ ​
Cost of services(4)
​ ​ ​ ​ (62,707) ​ ​ ​ ​ ​ (325,870) ​ ​ ​ ​ ​ (260,786) ​ ​ ​ ​ ​ (186,084) ​ ​ ​ ​ ​ (71,640) ​ ​ ​ ​ ​ (372,292) ​ ​
Gross profit
​ ​ ​ ​ 19,980 ​ ​ ​ ​ ​ 103,831 ​ ​ ​ ​ ​ 93,249 ​ ​ ​ ​ ​ 90,296 ​ ​ ​ ​ ​ 23,126 ​ ​ ​ ​ ​ 120,178 ​ ​
Selling and marketing expenses(5)
​ ​ ​ ​ (6,464) ​ ​ ​ ​ ​ (33,589) ​ ​ ​ ​ ​ (26,018) ​ ​ ​ ​ ​ (18,241) ​ ​ ​ ​ ​ (10,931) ​ ​ ​ ​ ​ (56,806) ​ ​
Administrative expenses(4)(5)
​ ​ ​ ​ (13,791) ​ ​ ​ ​ ​ (71,667) ​ ​ ​ ​ ​ (40,868) ​ ​ ​ ​ ​ (35,683) ​ ​ ​ ​ ​ (24,007) ​ ​ ​ ​ ​ (124,758) ​ ​
Research and development expenses(5)
​ ​ ​ ​ (3,009) ​ ​ ​ ​ ​ (15,637) ​ ​ ​ ​ ​ (9,832) ​ ​ ​ ​ ​ (3,931) ​ ​ ​ ​ ​ (3,009) ​ ​ ​ ​ ​ (15,637) ​ ​
Gain on bargain purchase
​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 2,479 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​
Allowance for credit losses
​ ​ ​ ​ (809) ​ ​ ​ ​ ​ (4,205) ​ ​ ​ ​ ​ (3,733) ​ ​ ​ ​ ​ (2,287) ​ ​ ​ ​ ​ (879) ​ ​ ​ ​ ​ (4,568) ​ ​
Other income and expenses, net
​ ​ ​ ​ (162) ​ ​ ​ ​ ​ (840) ​ ​ ​ ​ ​ 4,473 ​ ​ ​ ​ ​ 96 ​ ​ ​ ​ ​ (698) ​ ​ ​ ​ ​ (3,629) ​ ​
Operating profit
​ ​ ​ ​ (4,255) ​ ​ ​ ​ ​ (22,107) ​ ​ ​ ​ ​ 19,750 ​ ​ ​ ​ ​ 30,250 ​ ​ ​ ​ ​ (16,398) ​ ​ ​ ​ ​ (85,220) ​ ​
Finance costs
​ ​ ​ ​ (5,115) ​ ​ ​ ​ ​ (26,580) ​ ​ ​ ​ ​ (6,811) ​ ​ ​ ​ ​ (7,352) ​ ​ ​ ​ ​ (5,913) ​ ​ ​ ​ ​ (30,727) ​ ​
Finance income
​ ​ ​ ​ 3,698 ​ ​ ​ ​ ​ 19,217 ​ ​ ​ ​ ​ 4,239 ​ ​ ​ ​ ​ 3,446 ​ ​ ​ ​ ​ 3,781 ​ ​ ​ ​ ​ 19,647 ​ ​
Net finance costs
​ ​ ​ ​ (1,417) ​ ​ ​ ​ ​ (7,363) ​ ​ ​ ​ ​ (2,572) ​ ​ ​ ​ ​ (3,906) ​ ​ ​ ​ ​ (2,132) ​ ​ ​ ​ ​ (11,080) ​ ​
Profit (loss) before income tax and social contribution
​ ​ ​ ​ (5,672) ​ ​ ​ ​ ​ (29,470) ​ ​ ​ ​ ​ 17,178 ​ ​ ​ ​ ​ 26,344 ​ ​ ​ ​ ​ (18,530) ​ ​ ​ ​ ​ (96,300) ​ ​
Deferred income tax and social contribution
​ ​ ​ ​ 1,632 ​ ​ ​ ​ ​ 8,480 ​ ​ ​ ​ ​ (3,186) ​ ​ ​ ​ ​ (3,457) ​ ​ ​ ​ ​ (776) ​ ​ ​ ​ ​ (4,031) ​ ​
Current income tax and social contribution
​ ​ ​ ​ (85) ​ ​ ​ ​ ​ (441) ​ ​ ​ ​ ​ (148) ​ ​ ​ ​ ​ (3,022) ​ ​ ​ ​ ​ 5,537 ​ ​ ​ ​ ​ 28,771 ​ ​
Profit (loss) for the year
​ ​ ​ ​ (4,125) ​ ​ ​ ​ ​ (21,431) ​ ​ ​ ​ ​ 13,844 ​ ​ ​ ​ ​ 19,865 ​ ​ ​ ​ ​ (13,769) ​ ​ ​ ​ ​ (71,560) ​ ​
 
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​
(1)
For a discussion on the Sirena Acquisition, the D1 Acquisition and our unaudited pro forma condensed statements of profit or loss and related notes, see “Unaudited Pro Forma Condensed Financial Information.”
​
(2)
We started to consolidate Sirena’s results of operations as of July 24, 2020 upon consummation of its acquisition by us. Since the D1 Acquisition has not been consummated, its results have not been consolidated into our results of operations to date.
​
(3)
Solely for the convenience of the reader, certain Brazilian real amounts have been translated into U.S. dollars at the selling rate of R$5.1967 to US$1.00, as reported by the Central Bank as of December 31, 2020. The U.S. dollar equivalent information presented in this prospectus should not be construed as implying that the amounts in reais represent, or could have been or could be converted into, U.S. dollars at this rate or any other rate. See “Exchange Rates” for further information about exchange rate fluctuations.
​
(4)
Includes amortization of intangible assets acquired from business combinations allocated as follows:
​
​ ​ ​
Historical Zenvia Brazil
Year ended December 31,
​
​ ​ ​
2020(*)
​ ​
2020(*)
​ ​
2019
​ ​
2018
​
​ ​ ​
(in US$)(**)
​ ​
(in R$)
​ ​
(in R$)
​ ​
(in R$)
​
​ ​ ​
(in thousands)
​
Cost of services
​ ​ ​ ​ (1,355) ​ ​ ​ ​ ​ (7,042) ​ ​ ​ ​ ​ (653) ​ ​ ​ ​ ​ — ​ ​
Administrative expenses
​ ​ ​ ​ (1,630) ​ ​ ​ ​ ​ (8,468) ​ ​ ​ ​ ​ (11,087) ​ ​ ​ ​ ​ (11,044) ​ ​
Total ​ ​ ​ ​ (2,985) ​ ​ ​ ​ ​ (15,510) ​ ​ ​ ​ ​ (11,740) ​ ​ ​ ​ ​ (11,044) ​ ​
​
*
We started to consolidate Sirena’s results of operations as of July 24, 2020 upon consummation of its acquisition by us.
​
**
Solely for the convenience of the reader, certain Brazilian real amounts have been translated into U.S. dollars at the selling rate of R$5.1967 to US$1.00, as reported by the Central Bank as of December 31, 2020. The U.S. dollar equivalent information presented in this prospectus should not be construed as implying that the amounts in reais represent, or could have been or could be converted into, U.S. dollars at this rate or any other rate. See “Exchange Rates” for further information about exchange rate fluctuations.
​
(5)
Includes compensation expenses negotiated in connection with business combination transactions allocated as follows:
​
​ ​ ​
Historical Zenvia Brazil
Year ended December 31,
​
​ ​ ​
2020(*)
​ ​
2020(*)
​ ​
2019
​ ​
2018
​
​ ​ ​
(in US$)(**)
​ ​
(in R$)
​ ​
(in R$)
​ ​
(in R$)
​
​ ​ ​
(in thousands)
​
Selling and marketing expenses
​ ​ ​ ​ (758) ​ ​ ​ ​ ​ (3,941) ​ ​ ​ ​ ​ (2,615) ​ ​ ​ ​ ​ — ​ ​
Research and development expenses
​ ​ ​ ​ (758) ​ ​ ​ ​ ​ (3,941) ​ ​ ​ ​ ​ (2,615) ​ ​ ​ ​ ​ — ​ ​
Administrative expenses
​ ​ ​ ​ (1,700) ​ ​ ​ ​ ​ (8,833) ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​
Total ​ ​ ​ ​ (3,216) ​ ​ ​ ​ ​ (16,715) ​ ​ ​ ​ ​ (5,230) ​ ​ ​ ​
​
—
​ ​
​
*
We started to consolidate Sirena’s results of operations as of July 24, 2020 upon consummation of its acquisition by us.
​
**
Solely for the convenience of the reader, certain Brazilian real amounts have been translated into U.S. dollars at the selling rate of R$5.1967 to US$1.00, as reported by the
​
 
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Central Bank as of December 31, 2020. The U.S. dollar equivalent information presented in this prospectus should not be construed as implying that the amounts in reais represent, or could have been or could be converted into, U.S. dollars at this rate or any other rate. See “Exchange Rates” for further information about exchange rate fluctuations.
Note:
The Total Voice acquisition purchase agreement provided for a cash upfront payment of R$2,015 thousand on closing date. Following the acquisition, Total Voice former shareholders that remained working with us are eligible to receive additional compensation of up to R$23,327 thousand to be paid in 2021, calculated based on the contribution margins generated by our voice solutions for the period of time set forth under the share purchase agreement and based on certain conditions, including their continued employment with us. For the year ended December 31, 2020, a provision was recorded in the amount of R$7,882 thousand related to the estimated compensation payable to these individuals. Also, the Sirena acquisition purchase agreement provided for a cash upfront payment of US$10,923 thousand made on closing date (which amounted to R$56,961 thousand on such date) and US$392 thousand (R$2,045 thousand using the Central Bank selling exchange rate published on January 24, 2021) which was paid on January 24, 2021 to Sirena shareholders. Following such acquisition, former Sirena shareholders are eligible to additional payments of up to US$13,584 thousand (R$70,835 thousand) payable in three installments (6, 12 and 24 months following the closing date of the Sirena Acquisition). In addition, former Sirena shareholders that remained working with us are eligible to receive additional compensation of up to US$5,514 thousand (R$28,752 thousand using the Central Bank selling exchange rate published on December 31, 2020) to be paid in two installments (12 and 24 months following the closing date of the Sirena Acquisition), calculated based on the gross margin generated by Sirena’s solutions for the period of time set forth under the share purchase agreement and based on certain conditions, including their continued employment with us. As of December 31, 2020, a provision was recorded in the amount of R$8,833 thousand in connection with such obligations. See “Business and Industry — Recent Acquisitions.”
​
 
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Consolidated Statement of Financial Position
​ ​ ​
Historical Zenvia Brazil
As of December 31,
​ ​
Total Zenvia Brazil
Pro Forma(1)
As of December 31,
​
​ ​ ​
2020
​ ​
2020
​ ​
2019
​ ​
2018
​ ​
2020
​ ​
2020
​
​ ​ ​
(in US$)(2)
​ ​
(in R$)
​ ​
(in R$)
​ ​
(in R$)
​ ​
(in US$)(2)
​ ​
(in R$)
​
​ ​ ​
(in thousands)
​ ​
(in thousands)
​
Assets ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Current assets ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Cash and cash equivalents
​ ​ ​ ​ 11,542 ​ ​ ​ ​ ​ 59,979 ​ ​ ​ ​ ​ 12,342 ​ ​ ​ ​ ​ 50,676 ​ ​ ​ ​ ​ ​ ​ ​
Trade and other receivables
​ ​ ​ ​ 16,551 ​ ​ ​ ​ ​ 86,009 ​ ​ ​ ​ ​ 62,136 ​ ​ ​ ​ ​ 51,200 ​ ​ ​ ​ ​ ​ ​ ​
Current tax assets
​ ​ ​ ​ 942 ​ ​ ​ ​ ​ 4,897 ​ ​ ​ ​ ​ 2,703 ​ ​ ​ ​ ​ 2,068 ​ ​ ​ ​ ​ ​ ​ ​
Prepayments
​ ​ ​ ​ 484 ​ ​ ​ ​ ​ 2,516 ​ ​ ​ ​ ​ 1,158 ​ ​ ​ ​ ​ 71 ​ ​ ​ ​ ​ ​ ​ ​
Other assets
​ ​ ​ ​ 247 ​ ​ ​ ​ ​ 1,285 ​ ​ ​ ​ ​ 750 ​ ​ ​ ​ ​ 266 ​ ​ ​ ​ ​ ​ ​ ​
Total current assets
​ ​ ​
​
29,766
​ ​ ​ ​
​
154,686
​ ​ ​ ​
​
79,089
​ ​ ​ ​
​
104,281
​ ​ ​ ​ ​ ​ ​ ​
Non-current assets ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Interest earning bank deposits
​ ​ ​ ​ 429 ​ ​ ​ ​ ​ 2,227 ​ ​ ​ ​ ​ 3,292 ​ ​ ​ ​ ​ 4,714 ​ ​ ​ ​ ​ ​ ​ ​
Property, plant and equipment
​ ​ ​ ​ 2,404 ​ ​ ​ ​ ​ 12,495 ​ ​ ​ ​ ​ 17,496 ​ ​ ​ ​ ​ 9,198 ​ ​ ​ ​ ​ ​ ​ ​
Intangible assets and goodwill
​ ​ ​ ​ 54,164 ​ ​ ​ ​ ​ 281,475 ​ ​ ​ ​ ​ 149,106 ​ ​ ​ ​ ​ 154,171 ​ ​ ​ ​ ​ ​ ​ ​
Other non-current assets
​ ​ ​ ​ 378 ​ ​ ​ ​ ​ 1,971 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ ​ ​ ​
Total non-current assets
​ ​ ​
​
57,375
​ ​ ​ ​
​
298,168
​ ​ ​ ​
​
169,894
​ ​ ​ ​
​
168,083
​ ​ ​ ​ ​ ​ ​ ​
Total assets
​ ​ ​
​
87,141
​ ​ ​ ​
​
452,854
​ ​ ​ ​
​
248,983
​ ​ ​ ​
​
272,364
​ ​ ​ ​ ​ ​ ​ ​
Liabilities ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Current liabilities ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Loans and borrowings
​ ​ ​ ​ 10,814 ​ ​ ​ ​ ​ 56,197 ​ ​ ​ ​ ​ 17,696 ​ ​ ​ ​ ​ 12,852 ​ ​ ​ ​ ​ ​ ​ ​
Trade and other payables
​ ​ ​ ​ 19,250 ​ ​ ​ ​ ​ 100,036 ​ ​ ​ ​ ​ 42,454 ​ ​ ​ ​ ​ 44,322 ​ ​ ​ ​ ​ ​ ​ ​
Related parties
​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ ​ ​ ​
Liabilities from acquisitions
​ ​ ​ ​ 10,299 ​ ​ ​ ​ ​ 53,520 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ ​ ​ ​
Current tax liabilities
​ ​ ​ ​ 1,712 ​ ​ ​ ​ ​ 8,898 ​ ​ ​ ​ ​ 5,185 ​ ​ ​ ​ ​ 6,405 ​ ​ ​ ​ ​ ​ ​ ​
Employee benefits
​ ​ ​ ​ 1,285 ​ ​ ​ ​ ​ 6,678 ​ ​ ​ ​ ​ 6,755 ​ ​ ​ ​ ​ 5,235 ​ ​ ​ ​ ​ ​ ​ ​
Lease liabilities
​ ​ ​ ​ 213 ​ ​ ​ ​ ​ 1,109 ​ ​ ​ ​ ​ 2,687 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ ​ ​ ​
Dividends payable
​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 4,718 ​ ​ ​ ​ ​ ​ ​ ​
Other current liability
​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 185 ​ ​ ​ ​ ​ ​ ​ ​
Total current liabilities
​ ​ ​
​
43,573
​ ​ ​ ​
​
226,438
​ ​ ​ ​
​
74,777
​ ​ ​ ​
​
73,717
​ ​ ​ ​ ​ ​ ​ ​
Non-current liabilities ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Related parties
​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 5,230 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ ​ ​ ​
Liabilities from acquisitions
​ ​ ​ ​ 7,741 ​ ​ ​ ​ ​ 40,228 ​ ​ ​ ​ ​ 5,230 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ ​ ​ ​
Loans and borrowings
​ ​ ​ ​ 8,232 ​ ​ ​ ​ ​ 42,778 ​ ​ ​ ​ ​ 45,650 ​ ​ ​ ​ ​ 35,377 ​ ​ ​ ​ ​ ​ ​ ​
Employee benefits
​ ​ ​ ​ 221 ​ ​ ​ ​ ​ 1,151 ​ ​ ​ ​ ​ 1,127 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ ​ ​ ​
Lease liabilities
​ ​ ​ ​ 317 ​ ​ ​ ​ ​ 1,649 ​ ​ ​ ​ ​ 4,604 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ ​ ​ ​
Provisions
​ ​ ​ ​ 436 ​ ​ ​ ​ ​ 2,267 ​ ​ ​ ​ ​ 1,489 ​ ​ ​ ​ ​ 1,193 ​ ​ ​ ​ ​ ​ ​ ​
Deferred tax liabilities
​ ​ ​ ​ 4,386 ​ ​ ​ ​ ​ 22,794 ​ ​ ​ ​ ​ 16,769 ​ ​ ​ ​ ​ 13,583 ​ ​ ​ ​ ​ ​ ​ ​
Other non-current liabilities
​ ​ ​ ​ 39 ​ ​ ​ ​ ​ 201 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ ​ ​ ​
Total non-current liabilities
​ ​ ​
​
21,372
​ ​ ​ ​
​
111,068
​ ​ ​ ​
​
74,869
​ ​ ​ ​
​
50,153
​ ​ ​ ​ ​ ​ ​ ​
Total liabilities
​ ​ ​
​
64,945
​ ​ ​ ​
​
337,506
​ ​ ​ ​
​
149,646
​ ​ ​ ​
​
123,870
​ ​ ​ ​ ​ ​ ​ ​
Equity ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Capital
​ ​ ​ ​ 25,072 ​ ​ ​ ​ ​ 130,292 ​ ​ ​ ​ ​ 93,883 ​ ​ ​ ​ ​ 93,883 ​ ​ ​ ​ ​ ​ ​ ​
Reserves
​ ​ ​ ​ (2,876) ​ ​ ​ ​ ​ (14,944) ​ ​ ​ ​ ​ 5,454 ​ ​ ​ ​ ​ 54,611 ​ ​ ​ ​ ​ ​ ​ ​
Total equity
​ ​ ​
​
22,196
​ ​ ​ ​
​
115,348
​ ​ ​ ​
​
99,337
​ ​ ​ ​
​
148,494
​ ​ ​ ​ ​ ​ ​ ​
Total liabilities and equity
​ ​ ​
​
87,141
​ ​ ​ ​
​
452,854
​ ​ ​ ​
​
248,983
​ ​ ​ ​
​
272,364
​ ​ ​ ​ ​ ​ ​ ​
​
(1)
See “Unaudited Pro Forma Condensed Financial Information,” for the unaudited pro forma condensed financial information for the year ended December 31, 2020, which gives effect to the D1 Acquisition
​
 
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as if it occurred as of January 1, 2020. Since the D1 Acquisition has not been consummated, its results have not been consolidated into our results of operations to date.
(2)
Solely for the convenience of the reader, certain Brazilian real amounts have been translated into U.S. dollars at the selling rate of R$5.1967 to US$1.00, as reported by the Central Bank as of December 31, 2020. The U.S. dollar equivalent information presented in this prospectus should not be construed as implying that the amounts in reais represent, or could have been or could be converted into, U.S. dollars at this rate or any other rate. See “Exchange Rates” for further information about exchange rate fluctuations.
​
Non-GAAP Financial Measures
​ ​ ​
Year ended December 31,
​
​ ​ ​
Historical Zenvia Brazil
​ ​
Total Zenvia Brazil
Pro Forma(1)
​
​ ​ ​
2020(2)
​ ​
2020(2)
​ ​
2019
​ ​
2018
​ ​
2020
​ ​
2020
​
​ ​ ​
(in US$)(3)
​ ​
(in R$)
​ ​
(in R$)
​ ​
(in R$)
​ ​
(in US$)(3)
​ ​
(in R$)
​
​ ​ ​
(in thousands)
​ ​ ​ ​
Non-GAAP Gross Profit(4)
​ ​ ​ ​ 21,335 ​ ​ ​ ​ ​ 110,873 ​ ​ ​ ​ ​ 93,902 ​ ​ ​ ​ ​ 90,296 ​ ​ ​ ​ ​ 29,530(8) ​ ​ ​ ​ ​ 153,456(8) ​ ​
Non-GAAP Operating Profit(5)
​ ​ ​ ​ (720) ​ ​ ​ ​ ​ (3,739) ​ ​ ​ ​ ​ 29,011 ​ ​ ​ ​ ​ 41,294 ​ ​ ​ ​ ​ (2,147)(9) ​ ​ ​ ​ ​ (11,169)(9) ​ ​
EBITDA(6) ​ ​ ​ ​ 996 ​ ​ ​ ​ ​ 5,180 ​ ​ ​ ​ ​ 38,546 ​ ​ ​ ​ ​ 44,763 ​ ​ ​ ​ ​ (5,658)(10) ​ ​ ​ ​ ​ (29,403)(10) ​ ​
Adjusted EBITDA(7)
​ ​ ​ ​ 1,546 ​ ​ ​ ​ ​ 8,038 ​ ​ ​ ​ ​ 36,067 ​ ​ ​ ​ ​ 44,763 ​ ​ ​ ​ ​ 506(11) ​ ​ ​ ​ ​ 2,632(11) ​ ​
​
(1)
For a discussion on the Sirena Acquisition, the D1 Acquisition and our unaudited pro forma condensed statements of profit or loss and related notes, see “Presentation of Financial and Other Information” and “Unaudited Pro Forma Condensed Financial Information.”
​
(2)
We started to consolidate Sirena’s results of operations as of July 24, 2020 upon consummation of its acquisition by us. See “Unaudited Pro Forma Condensed Financial Information,” for the unaudited pro forma condensed financial information for the year ended December 31, 2020, which gives effect to the Sirena Acquisition as if it occurred as of January 1, 2020. Since the D1 Acquisition has not been consummated, its results have not been consolidated into our results of operations to date.
​
(3)
Solely for the convenience of the reader, certain Brazilian real amounts have been translated into U.S. dollars at the selling rate of R$5.1967 to US$1.00, as reported by the Central Bank as of December 31, 2020. The U.S. dollar equivalent information presented in this prospectus should not be construed as implying that the amounts in reais represent, or could have been or could be converted into, U.S. dollars at this rate or any other rate. See “Exchange Rates” for further information about exchange rate fluctuations.
​
(4)
We calculate Non-GAAP Gross Profit as gross profit plus amortization of intangible assets acquired from business combinations. For a reconciliation of Non-GAAP Gross Profit to gross profit, see “—​Reconciliation of Non-GAAP Financial Measures — Reconciliation of Non-GAAP Gross Profit.”
​
(5)
We calculate Non-GAAP Operating Profit as profit adjusted by income tax and social contribution (current and deferred) and net finance costs plus, amortization of intangible assets acquired from business combinations and expenses related to branch closing. For a reconciliation of Non-GAAP Operating Profit to profit, see “— Reconciliation of Non-GAAP Financial Measures — Reconciliation of Non-GAAP Operating Profit.”
​
(6)
We calculate EBITDA as profit adjusted by income tax and social contribution (current and deferred), net finance costs and depreciation and amortization. For a reconciliation of EBITDA to profit, see “— Reconciliation of Non-GAAP Financial Measures — Reconciliation of EBITDA and Adjusted EBITDA.”
​
(7)
We calculate Adjusted EBITDA as EBITDA plus expenses related to branch closing and gain on bargain purchase. For a reconciliation of Adjusted EBITDA to profit, see “— Reconciliation of Non-GAAP Financial Measures — Reconciliation of EBITDA and Adjusted EBITDA.”
​
 
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(8)
We calculate Non-GAAP Pro Forma Gross Profit as pro forma gross profit plus pro forma amortization of intangible assets acquired from business combinations. For a reconciliation of Non-GAAP Pro Forma Gross Profit to gross profit, see “Unaudited Pro Forma Condensed Financial Information — Reconciliation of Non-GAAP Pro Forma Financial Measures — Reconciliation of Non-GAAP Pro Forma Gross Profit.”
​
(9)
We calculate Non-GAAP Pro Forma Operating Profit as pro forma profit adjusted by pro forma income tax and social contribution (current and deferred) and pro forma net finance costs plus pro forma amortization of intangible assets acquired from business combinations and pro forma expenses related to branch closing. For a reconciliation of Non-GAAP Pro Forma Operating Profit to profit, see “Unaudited Pro Forma Condensed Financial Information — Reconciliation of Non-GAAP Pro Forma Financial Measures — Reconciliation of Non-GAAP Pro Forma Operating Profit.”
​
(10)
We calculate Pro Forma EBITDA as pro forma profit adjusted by pro forma income tax and social contribution (current and deferred), pro forma net finance costs and pro forma depreciation and amortization. For a reconciliation of Pro Forma EBITDA to profit, see “Unaudited Pro Forma Condensed Financial Information — Reconciliation of Non-GAAP Pro Forma Financial Measures — Reconciliation of Pro Forma EBITDA and Pro Forma Adjusted EBITDA.”
​
(11)
We calculate Pro Forma Adjusted EBITDA as pro forma EBITDA plus pro forma expenses related to branch closing. For a reconciliation of Pro Forma Adjusted EBITDA to profit, see “Unaudited Pro Forma Condensed Financial Information — Reconciliation of Non-GAAP Pro Forma Financial Measures — Reconciliation of Pro Forma EBITDA and Pro Forma Adjusted EBITDA.”
​
Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Gross Profit
​ ​ ​
Year ended December 31,
​
​ ​ ​
2020
​ ​
2020
​ ​
2019
​ ​
2018
​
​ ​ ​
(in US$)(1)
​ ​
(in R$)
​ ​
(in R$)
​ ​
(in R$)
​
​ ​ ​
(in thousands)
​
Gross profit
​ ​ ​ ​ 19,980 ​ ​ ​ ​ ​ 103,831 ​ ​ ​ ​ ​ 93,249 ​ ​ ​ ​ ​ 90,296 ​ ​
(+) Amortization of intangible assets acquired from business combinations
​ ​ ​ ​ 1,355 ​ ​ ​ ​ ​ 7,042 ​ ​ ​ ​ ​ 653 ​ ​ ​ ​ ​ — ​ ​
Non-GAAP Gross Profit(2)
​ ​ ​ ​ 21,335 ​ ​ ​ ​ ​ 110,873 ​ ​ ​ ​ ​ 93,902 ​ ​ ​ ​ ​ 90,296 ​ ​
Revenue
​ ​ ​ ​ 82,687 ​ ​ ​ ​ ​ 429,701 ​ ​ ​ ​ ​ 354,035 ​ ​ ​ ​ ​ 276,380 ​ ​
Gross margin(3)
​ ​ ​ ​ 24.2% ​ ​ ​ ​ ​ 24.2% ​ ​ ​ ​ ​ 26.3% ​ ​ ​ ​ ​ 32.7% ​ ​
Non-GAAP Gross Margin(4)
​ ​ ​ ​ 25.8% ​ ​ ​ ​ ​ 25.8% ​ ​ ​ ​ ​ 26.5% ​ ​ ​ ​ ​ 32.7% ​ ​
​
(1)
Solely for the convenience of the reader, certain Brazilian real amounts have been translated into U.S. dollars at the selling rate of R$5.1967 to US$1.00, as reported by the Central Bank as of December 31, 2020. The U.S. dollar equivalent information presented in this prospectus should not be construed as implying that the amounts in reais represent, or could have been or could be converted into, U.S. dollars at this rate or any other rate. See “Exchange Rates” for further information about exchange rate fluctuations.
​
(2)
We calculate Non-GAAP Gross Profit as gross profit plus amortization of intangible assets acquired from business combinations. For further information on Non-GAAP Gross Profit, see “Presentation of Financial and Other Information — Special Note Regarding Non-GAAP Financial Measures — Non-GAAP Gross Profit and Non-GAAP Operating Profit.”
​
(3)
We calculate gross margin as gross profit divided by revenue.
​
(4)
We calculate Non-GAAP Gross Margin as Non-GAAP Gross Profit divided by revenue.
​
 
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Reconciliation of Non-GAAP Operating Profit
​ ​ ​
Year ended December 31,
​
​ ​ ​
2020
​ ​
2020
​ ​
2019
​ ​
2018
​
​ ​ ​
(in US$)(1)
​ ​
(in R$)
​ ​
(in R$)
​ ​
(in R$)
​
​ ​ ​
(in thousands)
​
Profit ​ ​ ​ ​ (4,125) ​ ​ ​ ​ ​ (21,431) ​ ​ ​ ​ ​ 13,844 ​ ​ ​ ​ ​ 19,865 ​ ​
(+) Income tax and social contribution (current and deferred)
​ ​ ​ ​ (1,547) ​ ​ ​ ​ ​ (8,039) ​ ​ ​ ​ ​ 3,334 ​ ​ ​ ​ ​ 6,479 ​ ​
(+) Net finance costs
​ ​ ​ ​ 1,417 ​ ​ ​ ​ ​ 7,363 ​ ​ ​ ​ ​ 2,572 ​ ​ ​ ​ ​ 3,906 ​ ​
Operating profit
​ ​ ​ ​ (4,255) ​ ​ ​ ​ ​ (22,107) ​ ​ ​ ​ ​ 19,750 ​ ​ ​ ​ ​ 30,250 ​ ​
(+) Amortization of intangible assets acquired from business combinations
​ ​ ​ ​ 2,985 ​ ​ ​ ​ ​ 15,510 ​ ​ ​ ​ ​ 11,740 ​ ​ ​ ​ ​ 11,044 ​ ​
(–) Gain on bargain purchase
​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ (2,479) ​ ​ ​ ​ ​ — ​ ​
(+) Expenses related to branch closing(2)
​ ​ ​ ​ 550 ​ ​ ​ ​ ​ 2,858 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​
Non-GAAP Operating Profit(3)​
​ ​ ​ ​ (720) ​ ​ ​ ​ ​ (3,739) ​ ​ ​ ​ ​ 29,011 ​ ​ ​ ​ ​ 41,294 ​ ​
​
(1)
Solely for the convenience of the reader, certain Brazilian real amounts have been translated into U.S. dollars at the selling rate of R$5.1967 to US$1.00, as reported by the Central Bank as of December 31, 2020. The U.S. dollar equivalent information presented in this prospectus should not be construed as implying that the amounts in reais represent, or could have been or could be converted into, U.S. dollars at this rate or any other rate. See “Exchange Rates” for further information about exchange rate fluctuations.
​
(2)
Corresponds to the write-off of leasehold improvements in the amount of R$1,758 thousand and fines paid in connection with the return of property before expiration of contractual term in the amount of R$1,100 thousand.
​
(3)
We calculate Non-GAAP Operating Profit as profit adjusted by income tax and social contribution (current and deferred) and net finance costs plus amortization of intangible assets acquired from business combinations and expenses related to branch closing. For further information on Non-GAAP Operating Profit, see “Presentation of Financial and Other Information — Special Note Regarding Non-GAAP Financial Measures — Non-GAAP Gross Profit and Non-GAAP Operating Profit.”
​
Reconciliation of EBITDA and Adjusted EBITDA
​ ​ ​
Year ended December 31,
​
​ ​ ​
2020
​ ​
2020
​ ​
2019
​ ​
2018
​
​ ​ ​
(in US$)(1)
​ ​
(in R$)
​ ​
(in R$)
​ ​
(in R$)
​
​ ​ ​
(in thousands)
​
Profit ​ ​ ​ ​ (4,125) ​ ​ ​ ​ ​ (21,431) ​ ​ ​ ​ ​ 13,844 ​ ​ ​ ​ ​ 19,865 ​ ​
(+) Income tax and social contribution (current and deferred)
​ ​ ​ ​ (1,547) ​ ​ ​ ​ ​ (8,039) ​ ​ ​ ​ ​ 3,334 ​ ​ ​ ​ ​ 6,479 ​ ​
(+) Net finance costs
​ ​ ​ ​ 1,417 ​ ​ ​ ​ ​ 7,363 ​ ​ ​ ​ ​ 2,572 ​ ​ ​ ​ ​ 3,906 ​ ​
(+) Depreciation and amortization
​ ​ ​ ​ 5,251 ​ ​ ​ ​ ​ 27,287 ​ ​ ​ ​ ​ 18,796 ​ ​ ​ ​ ​ 14,513 ​ ​
EBITDA(2) ​ ​ ​ ​ 996 ​ ​ ​ ​ ​ 5,180 ​ ​ ​ ​ ​ 38,546 ​ ​ ​ ​ ​ 44,763 ​ ​
(+) Expenses related to branch closing(3)​
​ ​ ​ ​ 550 ​ ​ ​ ​ ​ 2,858 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​
(–) Gain on bargain purchase
​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ (2,479) ​ ​ ​ ​ ​ — ​ ​
Adjusted EBITDA(4)​
​ ​ ​
​
1,546
​ ​ ​ ​
​
8,038
​ ​ ​ ​
​
36,067
​ ​ ​ ​
​
44,763
​ ​
​
(1)
Solely for the convenience of the reader, certain Brazilian real amounts have been translated into U.S. dollars at the selling rate of R$5.1967 to US$1.00, as reported by the Central Bank as of December 31, 2020. The U.S. dollar equivalent information presented in this prospectus should not be construed as
​
 
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implying that the amounts in reais represent, or could have been or could be converted into, U.S. dollars at this rate or any other rate. See “Exchange Rates” for further information about exchange rate fluctuations.
(2)
We calculate EBITDA as profit adjusted by income tax and social contribution (current and deferred), net finance costs and depreciation and amortization. For further information on EBITDA, see “Presentation of Financial and Other Information — Special Note Regarding Non-GAAP Financial Measures — EBITDA and Adjusted EBITDA.”
​
(3)
Corresponds to the write-off of leasehold improvements in the amount of R$1,758 thousand and fines paid in connection with the return of property before expiration of contractual term in the amount of R$1,100 thousand.
​
(4)
We calculate Adjusted EBITDA as EBITDA plus expenses related to branch closing and gain on bargain purchase. For further information on Adjusted EBITDA, see “Presentation of Financial and Other Information — Special Note Regarding Non-GAAP Financial Measures — EBITDA and Adjusted EBITDA.”
​
Selected Operating Data
The following table sets forth summary information regarding certain of our key performance metrics as of the periods indicated:
​ ​ ​
As of December 31,
​
​ ​ ​
2020
​ ​
2019
​ ​
2018
​
Active customers(1) (#)
​ ​ ​ ​ 9,442 ​ ​ ​ ​ ​ 7,751 ​ ​ ​ ​ ​ 5,871 ​ ​
Revenue growth rate(2)
​ ​ ​ ​ 21.4% ​ ​ ​ ​ ​ 28.1% ​ ​ ​ ​ ​ — ​ ​
Net revenue expansion rate(2)
​ ​ ​ ​ 112.8% ​ ​ ​ ​ ​ 117.1% ​ ​ ​ ​ ​ 116.8% ​ ​
​
(1)
We believe that the number of our active customers is an important indicator of the growth of our business, the market acceptance of our platform and future revenue trends. We define an active customer as an account (based on an individual taxpayer registration number) at the end of any period that was the source of any amount of revenue for us in the preceding three months. We classify a customer from which we generated no revenue in the preceding three months as an inactive customer.
​
(2)
We believe that net revenue expansion rate is one of the most reliable indicators of our future revenue trends. Our ability to drive growth and generate incremental revenue depends, in part, on our ability to maintain and grow our relationships with customers to increase their use of our platform. An important way in which we track our performance in this regard is by measuring the net revenue expansion rate for our customer. Our net revenue expansion rate increases, for instance, when (a) customers increase use of a product for the same application, (b) customers increase the use of the same product to new applications, (c) customers adopt new products offered by us; (d) we raise our prices on offered products without change in usage volumes or (e) given that our the net revenue expansion rate is calculated in reais, there is a depreciation of the real vis-à-vis the currency of the countries in which we operate. Our net revenue expansion rate decreases, for instance, when (a) customers cease or reduce usage of a product, (b) we lower our prices on offered products or (c) given that our the net revenue expansion rate is calculated in reais, there is an appreciation of the real vis-à-vis the currency of the countries in which we operate. We believe measuring our net revenue expansion rate on revenue generated from our customer provides a more meaningful indication of the performance of our efforts to increase revenue from existing customers. In order to calculate net revenue expansion, we first select the cohort of customers on a prior trailing twelve months period, sum up the total revenue of these customers for the applicable twelve month period and divide this sum by the sum of the total revenue of these same customers on the prior trailing twelve month period.
​
 
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UNAUDITED PRO FORMA CONDENSED FINANCIAL INFORMATION
Set forth below are our (1) unaudited pro forma condensed statements of financial position as of December 31, 2020 and (2) our unaudited pro forma condensed statements of profit of loss for the year ended December 31, 2020 giving effect to the D1 Acquisition and the Sirena Acquisition. For further information, see below and “Presentation of Financial and Other Information — D1 Acquisition, Sirena Acquisition and Related Financial Statements.”
The unaudited pro forma condensed statement of financial position as of December 31, 2020 is based on (a) the historical audited consolidated statement of financial position of Zenvia Brazil which is included in this prospectus, and (b) the historical audited consolidated statement of financial position of D1, also included in this prospectus, and gives effect on a pro forma basis to the D1 Acquisition as if it had been consummated on December 31, 2020.
The unaudited pro forma condensed statement of profit or loss for the year December 31, 2020 is based on (a) the historical audited consolidated statement of profit or loss of Zenvia Brazil for the year ended December 31, 2020, which is included in this prospectus, (b) the historical audited statement of profit or loss of D1 for the year ended December 31, 2020, (c) the historical audited consolidated statement of profit or loss of Smarkio for the period of eleven months ended November 30, 2020 (which was acquired by D1), (d) the historical statement of profit or loss of Sirena, for the period from January 1 to July 23, 2020, and gives effect on a pro forma basis to the D1 Acquisition and the Sirena Acquisition as if it had been consummated on January 1, 2020.
The unaudited pro forma condensed financial information included herein was prepared in accordance with requirements of Article 11 of Regulation S-X, considering the amendment to improve the financial disclosures that are effective on January 1, 2021. The unaudited pro forma condensed financial information included herein are not necessarily indicative of what our combined financial position or statement of profit or loss, would have been if the D1 Acquisition and Sirena Acquisition had been completed as of the dates indicated, nor do they purport to project the future financial position or operating results of the combined company. The actual financial position and results of operations may differ significantly from the pro forma amounts reflected herein due to a variety of factors. The pro forma financial information is presented for illustrative purposes only and does not reflect the costs of any integration activities or cost savings or synergies that may be achieved as a result of the D1 Acquisition and the Sirena Acquisition.
The unaudited pro forma condensed financial information included herein should be read in conjunction with the following:
•
accompanying notes to the unaudited pro forma condensed financial information;
​
•
historical audited consolidated financial statements of Zenvia Brazil for the fiscal year ended December 31, 2020, included elsewhere in this prospectus;
​
•
historical audited financial statements of Sirena for the period from January 1 to July 23, 2020, included elsewhere in this prospectus;
​
•
historical audited consolidated financial statements of D1 for the fiscal year ended December 31, 2020, included elsewhere in this prospectus; and
​
•
historical audited financial statements of Smarkio for the period of eleven months ended November 30, 2020, included elsewhere in this prospectus;
​
The unaudited pro forma condensed financial information included herein has been prepared using the acquisition method of accounting under IFRS. The following unaudited pro forma condensed financial information gives effect to the D1 Acquisition and the Sirena Acquisition to be accounted for under the acquisition method of accounting in accordance with the IFRS 3, Business Combinations, or IFRS 3, in which Zenvia Brazil is treated as the acquirer for financial reporting purposes, and shall record assets acquired and liabilities assumed at their respective acquisition date at fair values. The excess of the total consideration transferred over the estimated fair values of the net assets acquired, if applicable, will be recorded as goodwill. The D1 acquisition accounting is dependent upon certain valuations and other studies that have yet to progress to a future stage where there is sufficient information for a definitive measurement. The actual
 
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results of these studies may depend in part on prevailing market information and conditions. Accordingly, the pro forma adjustments related to the D1 Acquisition are preliminary and have been made solely for the purpose of providing unaudited pro forma condensed financial information. Differences between these preliminary estimates and the final acquisition accounting may occur and these differences may have a material impact on the accompanying unaudited pro forma condensed financial information and our future results of operations and financial position. See “Risk Factors—Certain Risks Relating to Our Business and Industry—The unaudited pro forma condensed financial information included in this prospectus may not be indicative of our consolidated financial condition or results of operations after giving effect to the Sirena Acquisition and the D1 Acquisition.”
 
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UNAUDITED PRO FORMA CONDENSED STATEMENT OF FINANCIAL POSITION
AS OF DECEMBER 31, 2020
(in thousands)
​ ​ ​
Historical
Zenvia
Brazil (1)
​ ​
Historical
D1(2)
​ ​
Transaction
Accounting
Adjustments
​ ​
Note
​ ​
Other Transaction
Accounting
Adjustments(3)
​ ​
Total Zenvia Brazil
Pro Forma
​
​ ​ ​
(R$)
​ ​
(R$)
​ ​
(R$)
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
(R$)
​ ​
(US$)(4)​
​
Assets
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Current assets
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Cash and cash equivalents
​ ​ ​ ​ 59,979 ​ ​ ​ ​ ​ 22,952 ​ ​ ​ ​ ​ (351,812)(4) ​ ​ ​ ​ ​ 3.1 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Trade and other receivables
​ ​ ​ ​ 86,009 ​ ​ ​ ​ ​ 12,048 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Other assets
​ ​ ​ ​ 8,698 ​ ​ ​ ​ ​ 424 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Total current assets
​ ​ ​
​
154,686
​ ​ ​ ​
​
35,424
​ ​ ​ ​ ​ (351,812) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Non-current assets
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Property, plant and equipment
​ ​ ​ ​ 12,495 ​ ​ ​ ​ ​ 3,810 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Intangible assets and goodwill
​ ​ ​ ​ 281,475 ​ ​ ​ ​ ​ 58,964 ​ ​ ​ ​ ​ 626,391 ​ ​ ​ ​ ​ 3.1 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Other non-current assets
​ ​ ​ ​ 4,198 ​ ​ ​ ​ ​ 10 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Total non-current assets
​ ​ ​
​
298,168
​ ​ ​ ​
​
62,784
​ ​ ​ ​ ​ 626,391 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Total assets
​ ​ ​
​
452,854
​ ​ ​ ​
​
98,208
​ ​ ​ ​
​
274,579
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​
(1)
Represents the historical audited consolidated statement of financial position of Zenvia Mobile Serviços Digitais S.A. for the year ended December 31, 2020, which already reflects the acquisition of Sirena. In July 2020 the Sirena acquisition was consummated and Zenvia Brazil began to consolidate Sirena’s results of operations as of July 24, 2020.
​
(2)
Represents the historical audited consolidated statement of financial position of One To One Engine Desenvolvimento e Licenciamento de Sistemas de Informática S.A. — Direct One for year ended December 31, 2020, which already reflects the acquisition of Smarkio. In December 2020 D1 consummated the acquisition of Smarkio and began to consolidate Smarkio’s results of operations as of December 1, 2020.
​
(3)
Gives pro forma effect in our unaudited pro forma condensed statement of financial position to the use of US$    million (equivalent to R$    million using the Central Bank selling exchange rate of     per U.S. dollar published on            , 2021) from the net proceeds of this offering to pay the consideration payable in cash to consummate the D1 Acquisition (i.e., use of proceeds directly related to the D1 Acquisition).
​
(4)
Solely for the convenience of the reader, certain Brazilian real amounts have been translated into U.S. dollars at the selling rate of R$5.1967 to US$1.00, as reported by the Central Bank as of December 31, 2020. The U.S. dollar equivalent information presented in this prospectus should not be construed as implying that the amounts in reais represent, or could have been or could be converted into, U.S. dollars at this rate or any other rate.
​
The accompanying notes are an integral part of the unaudited pro forma condensed financial information.
 
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UNAUDITED PRO FORMA CONDENSED STATEMENT OF FINANCIAL POSITION
AS OF DECEMBER 31, 2020
(in thousands)
​ ​ ​
Historical
Zenvia
Brazil(1)
​ ​
Historical
D1(2)
​ ​
Transaction
Accounting
Adjustments
​ ​
Note
​ ​
Other Transaction
Accounting
Adjustments(3)
​ ​
Total Zenvia Brazil
Pro Forma
​
​ ​ ​
(R$)
​ ​
(R$)
​ ​
(R$)
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
(R$)
​ ​
(US$)(4)​
​
Liabilities
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Current liabilities
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Loans and borrowings
​ ​ ​ ​ 56,197 ​ ​ ​ ​ ​ 3,179 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Trade and other payables
​ ​ ​ ​ 100,036 ​ ​ ​ ​ ​ 3,311 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Related parties
​ ​ ​ ​ — ​ ​ ​ ​ ​ 2,442 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Liabilities from acquisitions
​ ​ ​ ​ 53,520(6) ​ ​ ​ ​ ​ 61,464 ​ ​ ​ ​ ​ (61,464)(5) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Other current liability
​ ​ ​ ​ 16,685 ​ ​ ​ ​ ​ 6,986 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Total Current
liabilities
​ ​ ​
​
226,438
​ ​ ​ ​
​
77,382
​ ​ ​ ​ ​ (61,464) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Non-current liabilities
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Related parties
​ ​ ​ ​ — ​ ​ ​ ​ ​ 7,386 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Liabilities from acquisitions
​ ​ ​ ​ 40,228 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 219,271 ​ ​ ​ ​ ​ 3.1 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Loans and borrowings
​ ​ ​ ​ 42,778 ​ ​ ​ ​ ​ 8,291 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Other payables
​ ​ ​ ​ 5,268 ​ ​ ​ ​ ​ 4,196 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Deferred tax liabilities
​ ​ ​ ​ 22,794 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 33,388 ​ ​ ​ ​ ​ 4(c) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Total non-current liabilities
​ ​ ​
​
111,068
​ ​ ​ ​
​
19,873
​ ​ ​ ​
​
252,659
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Total shareholder´s equity
​ ​ ​
​
115,348
​ ​ ​ ​
​
953
​ ​ ​ ​
​
83,384
​ ​ ​ ​ ​ 3.1 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Total shareholder´s equity and
liabilities
​ ​ ​ ​ 452,854 ​ ​ ​ ​ ​ 98,208 ​ ​ ​ ​ ​ 274,579 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​
(1)
Represents the historical consolidated statement of financial position of Zenvia Mobile Serviços Digitais S.A. for the year ended December 31, 2020, which already reflects the acquisition of Sirena. In July 2020, the Sirena acquisition was consummated and Zenvia Brazil began to consolidated Sirena’s results of operations as of July 24, 2020.
​
(2)
Represents the historical consolidated statement of financial position of One To One Engine Desenvolvimento e Licenciamento de Sistemas de Informática S.A. — Direct One for year ended December 31, 2020, which already reflects the acquisition of Smarkio. In December 2020 D1 consummated the acquisition of Smarkio and began to consolidate Smarkio’s results of operations as of December 1, 2020.
​
(3)
Gives pro forma effect in our unaudited pro forma condensed statement of financial position to the use of US$   million (equivalent to R$   million using the Central Bank selling exchange rate of     per U.S. dollar published on            , 2021) from the net proceeds of this offering to pay the consideration payable in cash to consummate the D1 Acquisition (i.e., use of proceeds directly related to the D1 Acquisition).
​
(4)
Solely for the convenience of the reader, certain Brazilian real amounts have been translated into U.S. dollars at the selling rate of R$5.1967 to US$1.00, as reported by the Central Bank as of December 31, 2020. The U.S. dollar equivalent information presented in this prospectus should not be construed as implying that the amounts in reais represent, or could have been or could be converted into, U.S. dollars at this rate or any other rate.
​
 
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(5)
Prior to the consummation of the D1 Acquisition, D1 is required as a precedent condition to pay to Smarkio’s shareholders the total outstanding consideration payable in connection with Smarkio’s acquisition, amounting R$61,464 thousand. Pro forma assumes that the acquisition event has already occurred and we reflected the estimated consideration paid in cash, as a reduction of cash and cash equivalents.
​
The accompanying notes are an integral part of the unaudited pro forma condensed financial information.
 
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UNAUDITED PRO FORMA CONDENSED STATEMENT OF PROFIT AND LOSS
FOR YEAR ENDED DECEMBER 31, 2020
(in thousands, except share and per share data)
​ ​ ​
Historical
Zenvia
Brazil(1)
​ ​
Historical
Sirena(2)
​ ​
Transaction
Accounting
Adjustments
​ ​
Note
to the
Pro Forma
Adjustments
​ ​
Subtotal
Zenvia
Brazil
Pro Forma /​
Sirena(3)
​ ​
Historical
D1(4)
​ ​
Historical
Smarkio (5)
​ ​
Transaction
Accounting
Adjustments
​ ​
Note
to the
Pro Forma
Adjustments
​ ​
Total Zenvia
Brazil
Pro Forma(6)
​
​ ​ ​
(R$)
​ ​
(R$)
​ ​ ​ ​ ​ ​ ​ ​
(R$)
​ ​
(R$)
​ ​
(R$)
​ ​
(R$)
​ ​
(R$)
​ ​ ​ ​ ​ ​ ​ ​
(R$)
​ ​
(US$)(7)​
​
Revenue
​ ​ ​ ​ 429,701 ​ ​ ​ ​ ​ 8,413 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 438,114 ​ ​ ​ ​ ​ 26,521 ​ ​ ​ ​ ​ 27,835 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 492,470 ​ ​ ​ ​ ​ 94,766 ​ ​
Cost of services
​ ​ ​ ​ (325,870) ​ ​ ​ ​ ​ (2,236) ​ ​ ​ ​ ​ (6,179) ​ ​ ​ ​ ​ ​4(a) ​ ​ ​ ​ ​ (334,285) ​ ​ ​ ​ ​ (13,603) ​ ​ ​ ​ ​ (5,079) ​ ​ ​ ​ ​ (19,325) ​ ​ ​ ​ ​ 4(a) ​ ​ ​ ​ ​ (372,292) ​ ​ ​ ​ ​ (71,640) ​ ​
Gross profit
​ ​ ​ ​ 103,831 ​ ​ ​ ​ ​ 6.177 ​ ​ ​ ​ ​ (6,179) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 103,829 ​ ​ ​ ​ ​ 12,918 ​ ​ ​ ​ ​ 22,756 ​ ​ ​ ​ ​ (19,325) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 120,178 ​ ​ ​ ​ ​ 23,126 ​ ​
Selling and marketing expenses
​ ​ ​ ​ (33,589) ​ ​ ​ ​ ​ (15,182) ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (48,771) ​ ​ ​ ​ ​ (6,355) ​ ​ ​ ​ ​ (1,680) ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (56,806) ​ ​ ​ ​ ​ (10,931) ​ ​
Administrative expenses
​ ​ ​ ​ (71,667) ​ ​ ​ ​ ​ (567) ​ ​ ​ ​ ​ (11,374) ​ ​ ​ ​ ​ 4(a)(b) ​ ​ ​ ​ ​ (83,608) ​ ​ ​ ​ ​ (16,054) ​ ​ ​ ​ ​ (1,884) ​ ​ ​ ​ ​ (23,212) ​ ​ ​ ​ ​ ​4(a)(g) ​ ​ ​ ​ ​ (124,758) ​ ​ ​ ​ ​ (24,007) ​ ​
Research and development expenses
​ ​ ​ ​ (15,637) ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (15,637) ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (15,637) ​ ​ ​ ​ ​ (3,009) ​ ​
Allowance for credit losses
​ ​ ​ ​ (4,205) ​ ​ ​ ​ ​ (363) ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (4,568) ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (4,568) ​ ​ ​ ​ ​ (879) ​ ​
Other income and expenses, net
​ ​ ​ ​ (840) ​ ​ ​ ​ ​ 30 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (810) ​ ​ ​ ​ ​ (489) ​ ​ ​ ​ ​ (2,330) ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (3,629) ​ ​ ​ ​ ​ (698) ​ ​
Operating profit (loss)
​ ​ ​ ​ (22,107) ​ ​ ​ ​ ​ (9,905) ​ ​ ​ ​ ​ (17,553) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (49,565) ​ ​ ​ ​ ​ (9,980) ​ ​ ​ ​ ​ 16,862 ​ ​ ​ ​ ​ (42,537) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (85,220) ​ ​ ​ ​ ​ (16,398) ​ ​
Finance costs
​ ​ ​ ​ (26,580) ​ ​ ​ ​ ​ (636) ​ ​ ​ ​ ​ (1,997) ​ ​ ​ ​ ​ 4(e) ​ ​ ​ ​ ​ (29,213) ​ ​ ​ ​ ​ (1,418) ​ ​ ​ ​ ​ (96) ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (30,727) ​ ​ ​ ​ ​ (5,913) ​ ​
Finance income
​ ​ ​ ​ 19,217 ​ ​ ​ ​ ​ 104 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 19,321 ​ ​ ​ ​ ​ 239 ​ ​ ​ ​ ​ 87 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 19,647 ​ ​ ​ ​ ​ 3,781 ​ ​
Net finance costs
​ ​ ​ ​ (7,363) ​ ​ ​ ​ ​ (532) ​ ​ ​ ​ ​ (1,997) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (9,892) ​ ​ ​ ​ ​ (1,179) ​ ​ ​ ​
​
(9)
​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (11,080) ​ ​ ​ ​ ​ (2,132) ​ ​
Loss before income tax and social contribution
​ ​ ​ ​ (29,470) ​ ​ ​ ​ ​ (10,437) ​ ​ ​ ​ ​ (19,550) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (59,457) ​ ​ ​ ​ ​ (11,159) ​ ​ ​ ​ ​ 16,853 ​ ​ ​ ​ ​ (42,537) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (96,300) ​ ​ ​ ​ ​ (18,530) ​ ​
Current Income tax and social contribution
​ ​ ​ ​ (441) ​ ​ ​ ​ ​ (40) ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (481) ​ ​ ​ ​ ​ (301) ​ ​ ​ ​ ​ (3,249) ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (4,031) ​ ​ ​ ​ ​ (776) ​ ​
Deferred Income tax and social contribution
​ ​ ​ ​ 8,480 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 5,829 ​ ​ ​ ​ ​ 4(c) ​ ​ ​ ​ ​ 14,309 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 14,462 ​ ​ ​ ​ ​ 4(c) ​ ​ ​ ​ ​ 28,771 ​ ​ ​ ​ ​ 5,537 ​ ​
Profit (loss) for the year
​ ​ ​ ​ (21,431) ​ ​ ​ ​ ​ (10,477) ​ ​ ​ ​ ​ (13,721) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (45,629) ​ ​ ​ ​ ​ (11,460) ​ ​ ​ ​ ​ 13,604 ​ ​ ​ ​ ​ (28,075) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (71,560) ​ ​ ​ ​ ​ (13,769) ​ ​
Earnings (loss) per share
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Basic
​ ​ ​ ​ (0.0047) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 4(f) ​ ​ ​ ​
​
    (8)
​ ​ ​ ​
​
    (8)
​ ​
Diluted
​ ​ ​ ​ (0.0047) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 4(f) ​ ​ ​ ​
​
    (8)
​ ​ ​ ​
​
    (8)
​ ​
Weighted average shares used to calculate earnings per share
​ ​ ​ ​ 4,601,501 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 4(f) ​ ​ ​ ​
​
    (8)
​ ​ ​ ​
​
    (8)
​ ​
​
(1)
Represents the historical audited consolidated statement of profit or loss of Zenvia Mobile Serviços Digitais S.A. for the year ended December 31, 2020.
​
(2)
Represents the historical audited statement of profit or loss of Rodati Motors Corporation for the period from January 1 to July 23 2020. Zenvia Brazil started to consolidate Sirena’s statement of profit and loss as of July 24, 2020 upon consummation of its acquisition by Zenvia Brazil. The historical audited consolidated statement of profit or loss of Sirena is presented in US$, and for the purpose of this pro forma financial presentation, Zenvia Brazil translated into U.S. dollars at the average rate (from January 1 to July 23, 2020) of R$4.9694 to US$1.00, as reported by the Central Bank, and showed in Note 2 below.
​
 
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(3)
Subtotal Zenvia Brazil Pro Forma/Sirena is the result of historical Zenvia Brazil and the additions of historical Sirena, including its transaction accounting adjustments.
​
(4)
Represents the historical audited consolidated statement of profit or loss of One To One Engine Desenvolvimento e Licenciamento de Sistemas de Informática S.A. — Direct One for the year ended December 31, 2020. Since this acquisition has not been consummated to date, Zenvia Brazil has not consolidated D1 in its historical audited consolidated financial statements as of and for the year December 31, 2020.
​
(5)
Represents the historical audited statement of profit or loss of Smarkio Tecnologia Ltda. for the period of eleven months ended November 30, 2020. In December 2020 D1 consummated the acquisition of Smarkio and began to consolidate Smarkio’s results of operations as of December 1, 2020.
​
(6)
Total Zenvia Brazil Pro Forma is the result of historical Zenvia Brazil and the additions of historical Sirena, including its transaction accounting adjustments, and Historical D1 and Smarkio, including its transaction accounting adjustments.
​
(7)
Solely for the convenience of the reader, certain Brazilian real amounts have been translated into U.S. dollars at the selling rate of R$5.1967 to US$1.00, as reported by the Central Bank as of December 31, 2020. The U.S. dollar equivalent information presented in this prospectus should not be construed as implying that the amounts in reais represent, or could have been or could be converted into, U.S. dollars at this rate or any other rate.
​
(8)
Gives effect to the issuance of            Class A common shares in this offering in our earnings per share. See 4(f) of the accompanying notes to the Unaudited Pro Forma Condensed Financial Information.
​
The accompanying notes are an integral part of the unaudited pro forma condensed financial information.
 
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Notes to the Unaudited Pro forma Condensed Financial Information
1.
Basis of Presentation of the Unaudited Pro forma Condensed Financial Information
​
The unaudited pro forma condensed statement of financial position as of December 31, 2020 is based on (a) the historical audited consolidated statement of financial position of Zenvia Brazil which is included in this prospectus, and (b) the historical audited consolidated statement of financial position of D1, also included in this prospectus, and gives effect on a pro forma basis to the D1 Acquisition as if it had been consummated on December 31, 2020. The unaudited pro forma condensed statement of profit or loss as of December 31, 2020 is based on the historical consolidated statement of profit or loss of Zenvia Brazil for the year ended December 31, 2020, which is included in this prospectus, and on the historical audited consolidated statement of profit or loss of D1 for the year ended December 31, 2020, and the historical audited statement of profit or loss of Smarkio for the period of eleven months ended November 30, 2020, and the historical statement of profit or loss of Sirena, for the period from January 1 to July 23, 2020, and gives effect on a pro forma basis to the D1 Acquisition and the Sirena Acquisition as if it had been consummated on January 1, 2020.
The unaudited pro forma condensed financial information was prepared using the acquisition method of accounting in accordance with IFRS 3. IFRS 3 requires, among other things, that assets acquired and liabilities assumed be recognized at their fair values as of their respective acquisition dates. The excess of the consideration transferred over the estimated fair values of the net assets acquired, if applicable, will be recorded as goodwill. Fair value measurements can be highly subjective and it is possible that other professionals, applying reasonable judgment to the same facts and circumstances, could develop and support a range of alternative estimated amounts.
Acquisition costs related to the D1 and Sirena acquisition costs (i.e., advisory, legal, valuation, and other professional fees) are not included as a component of the consideration transferred but are accounted for as expenses in the periods in which the costs are incurred. All of these transactions costs related to the D1 and Sirena Acquisition were recognized as expenses in statement of profit or loss in the year ended December 31, 2020, and no pro forma adjustments were recognized related to these costs since they were already recorded in Zenvia Brazil’s historical audited financial statements of profit or loss as of and for the year ended December 31, 2020.
The unaudited pro forma condensed financial information does not reflect any cost savings, operating synergies or revenue enhancements that Zenvia Brazil may achieve as a result of the D1 and Sirena acquisition or the costs to integrate our operations.
2.
Historical Financial Information of D1, Smarkio and Sirena
​
The historical consolidated financial information of D1 and the historical financial information of Smarkio have been prepared under IFRS and presented in thousands of R$. The amounts reported under the column “Historical D1” and “Historical Smarkio” derive from the historical audited consolidated financial statements of D1 and the historical audited financial statements of Smarkio, respectively. The financial information of Smarkio is being included in the pro forma statement of profit or loss because its omission would render D1’s financial statements to be substantially incomplete.
The historical financial information of Sirena has been prepared under IFRS and presented in US$. The amounts reported under the column “Historical Sirena” derive from Sirena’s historical financial statements have been translated into reais, which is Zenvia Brazil’s functional and presentation currency, using the exchange rates described below:
•
Items from the statement of profit or loss derived from the historical financial statements of Sirena for the period from January 1 to July 23, 2020, have been translated to reais using the weighted-average exchange rate of R$4.9694 per US$1.00, as follows:
​
 
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​ ​ ​
Historical Sirena
January 1 to July 23, 2020
​
​ ​ ​
(in thousands of US$)
​ ​
(in thousands of R$)
​
Revenue
​ ​ ​ ​ 1,693 ​ ​ ​ ​ ​ 8,413 ​ ​
Cost of services
​ ​ ​ ​ (450) ​ ​ ​ ​ ​ (2,236) ​ ​
Gross profit
​ ​ ​ ​ 1,243 ​ ​ ​ ​ ​ 6,177 ​ ​
Selling and marketing expenses
​ ​ ​ ​ (3,055) ​ ​ ​ ​ ​ (15,182) ​ ​
Administrative expenses
​ ​ ​ ​ (114) ​ ​ ​ ​ ​ (567) ​ ​
Impairment loss on trade receivables
​ ​ ​ ​ (73) ​ ​ ​ ​ ​ (363) ​ ​
Other income and expenses, net
​ ​ ​ ​ 6 ​ ​ ​ ​ ​ 30 ​ ​
Operating profit
​ ​ ​
​
(1,993)
​ ​ ​ ​ ​ (9,905) ​ ​
Finance costs
​ ​ ​ ​ (128) ​ ​ ​ ​ ​ (636) ​ ​
Finance income
​ ​ ​ ​ 21 ​ ​ ​ ​
​
104
​ ​
Net finance costs
​ ​ ​
​
(107)
​ ​ ​ ​ ​ (532) ​ ​
Profit (loss) before income tax and social contribution
​ ​ ​ ​ (2,100) ​ ​ ​ ​ ​ (10,437) ​ ​
Current income tax and social contribution
​ ​ ​ ​ 8 ​ ​ ​ ​
​
(40)
​ ​
Profit (loss) for the year
​ ​ ​ ​ (2,108) ​ ​ ​ ​ ​ (10,477) ​ ​
​
3.
Pro Forma Assumptions
​
The preliminary total consideration expected to be transferred, related to the D1 Acquisition, has been used to prepare pro forma adjustments in the pro forma statement of financial position and statement of profit or loss. The D1 Acquisition has not closed to date and its effectiveness is subject to the completion of our initial public offering, which is expected to occur in the second quarter of 2021, and also dependent upon certain metrics that have yet to progress to a future stage where there is sufficient information for a definitive measurement. The actual results of these assumptions depend in part on prevailing market information and conditions, and are based on financial information that are not available, and could impact the fair market value of the total consideration expected to be transferred, as follows:
•
D1 and Zenvia last twelve months (LTM) gross profit ending in March 31, 2021;
​
•
D1 and Zenvia net debt as of March 31, 2021; and
​
•
Zenvia Brazil’s consolidated net debt (already giving effect to the D1 Acquisition and the Sirena Acquisition).
​
Differences between these preliminary estimates and the final acquisition accounting may occur and these differences may have a material impact on the accompanying unaudited pro forma condensed financial information and the company’s future results of operations and financial position. Accordingly, the pro forma adjustments are preliminary and have been made solely for the purpose of providing unaudited pro forma condensed financial information.
The final consideration transferred will be determined when Zenvia completes the detailed valuations and necessary calculations, expected to be completed in the second quarter of 2021, and its final measurement could impact goodwill, total cash to be transferred and contingent consideration. The pro forma adjustments are based on currently available information and certain estimates and assumptions and, therefore, the actual calculations will differ from the pro forma adjustments.
3.1
Estimate of Consideration Expected to be Transferred and Total Consideration Transferred
​
Pending D1 Acquisition
In March 2021, Zenvia Brazil entered into certain purchase agreements for the direct and indirect acquisition of 100% of the share capital of D1. Under the terms of these purchase agreements and as part of the consideration, on the closing date, (1) Zenvia Brazil will contribute R$40 million in cash into D1;
 
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(2) Zenvia Brazil will pay to D1 shareholders an amount which we currently estimate to be R$250 million, which will be based on a valuation of 13 (thirteen) times D1’s gross profit for the last twelve months (LTM) ending on March 31, 2021 (historical numbers) minus D1 net debt as of the same date and adjusted by working capital; and (3) we will deliver a certain number of our Class A common shares to certain D1 shareholders, equivalent to an amount which we currently estimate to correspond to R$83 million, that will be calculated based on the valuation of 13 (thirteen) times D1’s gross profit for the last twelve months (LTM) ending on March 31, 2021 (historical numbers) minus D1 net debt as of the same date and adjusted by working capital, divided by 13 (thirteen) times Zenvia Brazil’s consolidated gross profit last twelve months (LTM) (after giving effect to the D1 Acquisition and the Sirena Acquisition) ending on March 31, 2021 (historical numbers) minus Zenvia Brazil’s consolidated net debt (after giving effect to D1 Acquisition and the Sirena Acquisition) as of the same date. The estimated number of shares to be delivered is based on the valuation of Zenvia, and the number of Zenvia Brazil’s shares prior to the initial public offering, giving effect of D1 acquisition, and based on the metrics required in the acquisition agreement. We expect to deliver approximately 133,184 shares to D1 shareholders in connection with the above. Additionally, as further consideration for the D1 Acquisition, we have also agreed to pay amounts to certain D1 shareholders which we currently estimate to be (i) R$45 million in the first quarter of 2022; and (ii) R$174 million in the first quarter of 2023, based on a certain multiple times D1’s gross profit for the last twelve months (LTM) ending on March 31, 2022 and March 31, 2023, respectively. The arrangement has a range of multiples, which could vary from 7x to 13x gross profit, depending on the achievement of certain gross profit milestones for the relevant periods, and therefore a reasonable change in these estimates would impact the consideration to be transferred.
While the payment estimates above have been prepared in good faith and based on information currently available, the actual consideration to be paid may change including as a result of D1’s and Zenvia Brazil’s results of operations and conclusion of the review of LTM ending March 31, 2021. The estimates presented above are preliminary and subject to that transaction progressing to a sufficiently advanced stage where there is sufficient information for a definitive measurement of final consideration amounts.
Upon consummation of the D1 Acquisition, we will also become indirect holders of 100% of the share capital of Smarkio Tecnologia Ltda., or Smarkio, a wholly -owned subsidiary of D1 and a cloud-based company that combines an automated marketing platform through chatbots with a platform for creating, integrating and processing conversational interfaces that can be used by developers and business users. Smarkio was acquired by D1 in December 2020 and D1 started consolidating Smarkio in its financial statements as of December 1, 2020.
The D1 Acquisition is subject to the satisfaction or waiver of certain closing conditions set forth in the definitive agreements governing this transaction, including the consummation of this offering. To the extent these conditions are not satisfied or waived or to the extent we do not consummate this offering, we may not complete the D1 Acquisition. See “Risk Factors — Certain Risks Relating to Our Business and Industry — We may pursue strategic acquisitions or investments which may divert our management’s attention and result in reduced cash levels, increased indebtedness or dilution to our shareholders. The failure of an acquisition or investment to produce the anticipated results, the failure to consummate a pending acquisition (including the D1 Acquisition), or the inability to integrate an acquired company fully, could adversely affect our business.” We plan to use US$      million (equivalent to R$      million using the Central Bank selling exchange rate of    per U.S. dollar published on            , 2021) from the proceeds of this offering to pay the consideration payable in cash to acquire D1. See “Use of Proceeds.”
Sirena Acquisition
On July 24, 2020, Zenvia Brazil entered into a certain share purchase and sale agreement to purchase 100% of Sirena. As consideration for the Sirena Acquisition, Zenvia Brazil (i) made an upfront cash payment of US$10,923 thousand (amounting to R$56,961 thousand using the Central Bank selling exchange rate published on July 24, 2020) on closing date, and US$392 thousand (R$2,045 thousand using the Central Bank selling exchange rate published on January 24, 2021) which was paid on January 24, 2021, to Sirena shareholders; and (ii) assuming the consummation of this offering, we will deliver a certain number of our Class A common shares to Sirena shareholders, corresponding to an equity interest calculated based on a percentage of the upfront payment made by Zenvia Brazil divided by an established valuation of Zenvia
 
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Brazil set forth in the acquisition agreement governing the Sirena Acquisition. Zenvia Brazil’s valuation for this purpose will be based on Zenvia Brazil’s gross margin minus Zenvia’s net debt as of December 31, 2020. Based on our preliminary estimate, we expect to deliver approximately 15,684 shares, equivalent to R$4,510 thousand, to these Sirena shareholders in connection with the above. The estimated number of shares to be delivered is based on the valuation of Zenvia Brazil, and the number of Zenvia Brazil’s shares prior to our initial public offering, giving effect to the Sirena Acquisition, and based on the metrics required in the acquisition agreement for this transaction.
Moreover, Sirena’s former shareholders are entitled to an additional payment in the aggregate amount estimated at US$13,584 thousand (equivalent to R$70,835 thousand using the Central Bank selling exchange rate published on December 31, 2020) payable in three installments (6, 12 and 24 months following the closing date of the Sirena Acquisition). In addition, former Sirena shareholders that remained working with us are eligible to receive additional earn-out compensation (provided that they remain working with us until the end of the above referred payment period), in an amount up to US$5,514 thousand (equivalent to R$28,752 thousand using the Central Bank selling exchange rate published on the closing date) and payable in two installments (12 and 24 months following the closing date of the Sirena Acquisition), which may vary based on the achievement of certain financial milestones, as defined in the purchase and sale agreement governing the Sirena Acquisition, which are mainly based in the valuation of Sirena calculated considering Sirena’s gross margins. As of December 31, 2020, a provision was recorded in the amount of R$8,833 thousand in connection with such obligations.
This acquisition is in line with our strategy to expand into other Latin American regions. The transaction was consummated on July 24, 2020, and Zenvia Brazil began to consolidate Sirena’s results of operations as of that date.
The following table presents the estimated consideration expected to be transferred, related to the D1 Acquisition, and the total consideration transferred related to the Sirena Acquisition, at fair value:
​ ​ ​
D1
​ ​
Sirena
​
​ ​ ​
(in thousands of R$)
​
Contribution in Cash(1)
​ ​ ​ ​ 40,000 ​ ​ ​ ​ ​ — ​ ​
Cash Payment(1)
​ ​ ​ ​ 250,348 ​ ​ ​ ​ ​ 59,006 ​ ​
Common shares(2)
​ ​ ​ ​ 83,384 ​ ​ ​ ​ ​ 4,510(4) ​ ​
Contingent consideration (earn-out 2022)(3)
​ ​ ​ ​ 45,190 ​ ​ ​ ​ ​ — ​ ​
Contingent consideration (earn-out 2023)(3)
​ ​ ​ ​ 174,081 ​ ​ ​ ​ ​ — ​ ​
Additional Payment
​ ​ ​ ​ — ​ ​ ​ ​ ​ 64,280 ​ ​
Consideration Transferred and Expected to be Transferred
​ ​ ​ ​ 593,003 ​ ​ ​ ​ ​ 127,796 ​ ​
​
(1) The total current cash payment related to the D1 Acquisition amounting R$290,348 thousand was presented as a reduction of the cash and cash equivalents line item in the unaudited pro forma condensed statement of financial position as of December 31, 2020.
(2) D1 acquisition agreements state that part of the total payment will be made with our Class A common shares. In light of the fact that as of the date hereof we have not completed our Corporate Reorganization, for purposes of the calculation of the total consideration in shares to be made by us in connection with the D1 Acquisition we have used Zenvia Brazil shares as reference in order to determine the number of shares to be issued by us in connection with such transaction. The share price was based on the valuation of Zenvia Brazil, and the number of Zenvia Brazil’s shares prior to the initial public offering, giving effect to the D1 acquisition, and based on the metrics required in the acquisition agreement. We expect to deliver approximately 133,184 shares, considering an estimated price of R$626 per share, to D1 shareholders in connection with the above.
(3) The total contingent consideration was presented as non-current liability in the total amount of R$219,271 thousand in the unaudited pro forma condensed statement of financial position as of December 31, 2020. For measurement of the contingent consideration see paragraphs below.
 
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(4) Sirena’s acquisition agreement stated that a fixed amount of US$865 thousand (R$4,510 thousand) can be settled in cash or shares. Assuming the consummation of this offering, we will deliver a certain number of our Class A common shares to Sirena shareholders, corresponding to an equity interest calculation based on a percentage of the upfront payment made by Zenvia Brazil divided by an established valuation of Zenvia Brazil set forth in the acquisition agreement governing the Sirena Acquisition. Zenvia Brazil’s valuation for this purpose will be based on Zenvia Brazil’s gross profit minus Zenvia’s net debt as of December 31, 2020. Based on our preliminary estimate, we expect to deliver approximately 15,684 shares, equivalent to R$4,510 thousand, considering an estimated price of R$626 per share, to these Sirena shareholders in connection with the above. The estimated number of shares to be delivered is based on the valuation of Zenvia Brazil, and the number of Zenvia Brazil’s shares prior to our initial public offering, giving effect to the Sirena Acquisition, and based on the metrics required in the acquisition agreement for this transaction. Since the unaudited pro forma condensed statement of financial position as of December 31, 2020 only requires the presentation of pro forma for D1’s probable acquisition, we have not reclassified this amount to equity in the unaudited pro forma condensed statement of financial position as of December 31, 2020.
The estimated fair value of the contingent consideration (D1Acquisition), currently estimated of R$219,271 thousand, was measured, as described in the acquisitions agreements, based on a certain multiple times D1’s gross profit for the last twelve months (LTM) ending on March 31, 2022 and March 31, 2023, respectively, minus net debt at the same date. Such multiple will vary (from 7x to 13x gross profit) depending on the achievement of certain gross profit milestones for the relevant periods.
Considering that contingent consideration is based on future results, and its dependent on the gross profit and net debt, and applicable multiple, a reasonable change in the assumptions of multiples or LTM gross profit could materialy impact the contingent consideration expected to be transferred (D1 Acquisition). The table below presents an estimate of which could be the contingent consideration depending on the variance of these metrics:
Gross profit - multiple estimate
​ ​
7 x Gross
Profit
​ ​
11.24 x
Gross
Profit
​ ​
Current fair
value estimation
(13 x Gross
Profit – 100%)
​ ​
>13 x Gross Profit(1)
​
D1 Acquisition
​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​
Earnout – 2022
​ ​ ​ ​ 11,153 ​ ​ ​ ​ ​ 27,887 ​ ​ ​ ​ ​ 45,190 ​ ​ ​ ​ ​ 56,039 ​ ​ ​ ​ ​ 56,874 ​ ​
Earnout – 2023
​ ​ ​ ​ 43,707 ​ ​ ​ ​ ​ 118,515 ​ ​ ​ ​ ​ 174,081 ​ ​ ​ ​ ​ 209,868 ​ ​ ​ ​ ​ 241,480 ​ ​
Total contingent consideration
​ ​ ​ ​ 54,860 ​ ​ ​ ​ ​ 146,402 ​ ​ ​ ​ ​ 219,271 ​ ​ ​ ​ ​ 265,908 ​ ​ ​ ​ ​ 298,354 ​ ​
​
(1)
If the multiple exceeds 13x gross profit, then the excess of the 13x gross profit will have incremental of 10x (100%-120%) or 9x (120% and 150%).
​
3.2
Fair value of assets and liabilities
​
We performed a preliminary valuation analysis of the fair market value of D1 assets to be acquired and liabilities to be assumed. This preliminary purchase price allocation has been used to prepare pro forma transaction accounting adjusments in the unaudited pro forma statement of profit or loss. The final purchase price allocation will be determined when we complete the detailed valuations and necessary calculations. The final measurement could differ materially from the preliminary measurement used in the pro forma adjustments. The final measurement may include (1) changes in the measurement of goodwill and (2) changes in the fair value of intangible assets. We have estimated the fair value to such assets and liabilities, based on available information and certain estimates and assumptions and, therefore, the actual effects of these transactions may differ from pro forma transaction accounting adjusments. The following table summarizes
 
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the fair value of assets acquired (Sirena Acquisition) and to be acquired (D1 Acquisition) and the liabilities assumed (Sirena Acquisition) or expect to be assumed (D1 Acquisition):
​ ​ ​
D1
​ ​
Sirena
​
​ ​ ​
(in thousands of R$)
​
Consideration Expected to be Transferred and Total Consideration transferred
(Note 3.1)
​ ​ ​ ​ 593,003 ​ ​ ​ ​ ​ 127,796 ​ ​
Fair value of assets acquired or to be acquired and liabilities assumed or to be
assumed
​ ​ ​ ​ 953 ​ ​ ​ ​ ​ 1,519 ​ ​
Fair value of intangible assets: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Digital Platform
​ ​ ​ ​ 96,626 ​ ​ ​ ​ ​ 54,521 ​ ​
Customer portfolio
​ ​ ​ ​ 1,575 ​ ​ ​ ​ ​ 1,975 ​ ​
Defered tax liability
​ ​ ​ ​ (33,388) ​ ​ ​ ​ ​ (14,835) ​ ​
Total ​ ​ ​ ​ 64,813 ​ ​ ​ ​ ​ 43,180 ​ ​
Goodwill ​ ​ ​ ​ 527,237 ​ ​ ​ ​ ​ 84,616 ​ ​
​
4.
Pro Forma Adjustments
​
(a)
Intangible Assets
​
The fair value adjustment on intangible assets is comprised of the following:
​ ​ ​ ​ ​ ​ ​ ​ ​
Estimated fair value
​ ​ ​ ​ ​ ​ ​ ​
Estimated Pro Forma
amortization expense
(straight-line method)
​ ​
Allocation of
pro- forma
amortization
expense
in the pro 
forma
statement
of income
line item
​
​ ​ ​
Nature
​ ​
Valuation
Methodology
​ ​
D1
​ ​
Sirena
​ ​
Total
Zenvia´s
acquired
intangible
assets
​ ​
Estimated
useful life
Years
​ ​
D1(1)
​ ​
Sirena(2)
​ ​
Total
Zenvia´s
amortization
of acquired
intangible
assets
​
​ ​ ​ ​ ​ ​
(in thousands of R$)
​
Digital Platform
​ ​
Represents the fair value
of digital platform
​ ​
MPEEM – Multi period
excess earnings method
​ ​ ​ ​ 96,626 ​ ​ ​ ​ ​ 54,521 ​ ​ ​ ​ ​ 155,954 ​ ​ ​ ​ ​ 5 ​ ​ ​ ​ ​ 19,325 ​ ​ ​ ​ ​ 6,179 ​ ​ ​ ​ ​ 25,504 ​ ​ ​
Cost of services
​
Costumer portfolio
​ ​ ​ ​ ​
MPEEM – Multi period
excess earnings method
​ ​ ​ ​ 1,575 ​ ​ ​ ​ ​ 1,975 ​ ​ ​ ​ ​ 2,978 ​ ​ ​ ​ ​ 10 ​ ​ ​ ​ ​ 158 ​ ​ ​ ​ ​ 112 ​ ​ ​ ​ ​ 269 ​ ​ ​
Administrative
expenses
​
Total ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 98,201 ​ ​ ​ ​ ​ 56,496 ​ ​ ​ ​ ​ 161,779 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 19,483 ​ ​ ​ ​ ​ 6,291 ​ ​ ​ ​ ​ 25,774 ​ ​ ​ ​ ​
​
(1)
The D1 acquisition pro forma adjustments refers to the period from January 1, 2020 to December 31, 2020. Since this acquisition has not been consummated to date, Zenvia Brazil has not consolidated D1 in its historical audited consolidated financial statements as of and for the year December 31, 2020.
​
(2)
The Sirena acquisition pro forma adjustments refers to the period from January 1, 2020 July 23, 2020. Zenvia Brazil started to consolidate Sirena’s statement of profit and loss as of July 24, 2020 upon consummation of its acquisition by Zenvia Brazil.
​
The MPEEM methodology (Multi Period Excess Earnings Method) is mostly used to measure the value of primary assets or most important assets of a company. According to that method, in determining fair values, the cash flows attributable to all other assets are subtracted through a contributory asset charge (CAC). The MPEEM method assumes that the fair value of an intangible asset is the same as the present value of the cash flows attributable to that asset, less the contribution of other assets, both tangible and intangible ones.
 
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The following are the material underlying assumptions used in determining the fair value estimate adjustments on intangible assets:
​ ​ ​ ​
D1 Acquisition
​ ​
Sirena Acquisition
​
​ ​ ​ ​
Digital platform
​ ​
Customer portfolio
​ ​
Digital platform
​ ​
Customer portfolio
​
​ Revenue ​ ​ Revenue considered entire services provided. Revenue projections were based on the business plan revenue growth rate and estimated attrition. At the reference date, the company had 54.2 million revenue. ​ ​ Revenue considered entire services provided. Revenue projections were based on the business plan revenue growth rate and estimated attrition. At the reference date, the company had 54.2 million revenue. ​ ​ Revenue considered entire services provided. Revenue projections were based on the business plan revenue growth rate and estimated attrition. At the reference date, the company had R$3.6 million revenue (6 months period). ​ ​ Revenue considered entire services provided. Revenue projections were based on the business plan revenue growth rate and estimated attrition. At the reference date, the company had R$3.6 million revenue (6 months period). ​
​ Attrition rate – Churn rate ​ ​ The estimated attrition rate is 19.13% ​ ​ The estimated attrition rate is 10% ​ ​ The estimated attrition rate is 19.03% ​ ​ The estimated attrition rate is 10% ​
​ Useful Life ​ ​ Useful life for the intangible asset is 5 years. ​ ​ Useful life for the intangible asset is 10 years. ​ ​ Useful life for the intangible asset is 5 years. ​ ​ Useful life for the intangible asset is 10 years. ​
​ Contributory Assets Charge ​ ​ The considered CAC includes Working Capital (7.79% p.a), Fixed Assets (7.79%p.a), Workforce (15.07% p.a) and customer portfolio (16.07% p.a). ​ ​ The considered CAC includes Working Capital (16.07% p.a), Fixed Assets (7.79% p.a) and Workforce (15.07% p.a). ​ ​ The considered CAC includes Working Capital (10.97% p.a), Fixed Assets (10.97% p.a), Workforce (15.07% p.a) and customer portfolio (17.42% p.a). ​ ​ The considered CAC includes Working Capital (10.97% p.a), Fixed Assets (10.97% p.a) and Workforce (17.42% p.a). ​
​ Tax Amortization Benefit (TAB) ​ ​ TAB was calculated according to the Target’s projected effective tax rate of 34% and an amortization period equivalent to asset’s remaining useful life. ​ ​ TAB was calculated according to the Target’s projected effective tax rate of 34% and an amortization period equivalent to asset’s remaining useful life. ​ ​ TAB was calculated according to the Target’s projected effective tax rate of 34% and an amortization period equivalent to asset’s remaining useful life. ​ ​ TAB was calculated according to the Target’s projected effective tax rate of 34% and an amortization period equivalent to asset’s remaining useful life. ​
​ Discount Rate ​ ​ The discount rate was equivalent to company’s WACC plus spread, resulting in an after-tax rate of 16.07%. ​ ​ The discount rate was equivalent to company’s WACC plus spread, resulting in an after-tax rate of 16.07%. ​ ​ The discount rate was equivalent to company’s WACC plus spread, resulting in an after-tax rate of 18.42%. ​ ​ The discount rate was equivalent to company’s WACC plus spread, resulting in an after-tax rate of 18.42%. ​
(b)
Compensation to the former shareholders of Sirena
​
Following the Sirena acquisition, Sirena’s former shareholders that remained working with us will be subject to a compensation of up to US$5,514 thousand at acquisition date (equivalent to R$28,752 thousand using the Central Bank selling exchange rate published on the closing date) and payable in two installments (12 and 24 months following the closing date of the Sirena Acquisition). This compensation is calculated based on certain milestones of gross margins (as defined in the share purchase and sale agreement) generated by Sirena solutions, including their continued employment with us.
Zenvia Brazil recognized, as of December 31, 2020, a provision of R$8,833 thousand, for the period from July 24 to December 31, 2020, to be payable if the conditions were met. For the purpose of the unaudited
 
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pro forma condensed information, Zenvia Brazil recognized an additional expense (proportionally calculated), in the “Administrative expenses” line item, of R$11,262 thousand for the period from January 1, 2020 to July 23, 2020.
(c)
Deferred Income Taxes
​
Deferred income taxes on pro forma adjustments were calculated using the statutory income tax rate in Brazil (34%) and in United States of America (21%), where Sirena is located, depending on where pro forma adjustments are reasonably expected to occur. The effective tax rate applicable to us could be significantly different (either higher or lower) depending on post-acquisition activities, including repatriation decisions, cash needs and the actual geographical mix of income.
(d) Transaction Costs
All the transactions costs related to D1 and Sirena Acquisition were recognized as expenses in Zenvia Brazil statement of profit or loss for the period ended December 31, 2020. The transactions costs with lawyers and due diligence were recognized as expenses in Zenvia Brazil’s statement of profit or loss for the year ended December 31, 2020 and amounted to R$180 thousand. We do not expect to incur in additional transaction costs.
(e) Interest Expenses
The Sirena Acquisition agreement has interest expense, related to the amount payables to the former shareholders. pro forma interest expense on the payables to the former shareholders of Sirena. Zenvia Brazil recognized, as of December 31, 2020, a provision of R$1,566 thousand, for the period from July 24 to December 31, 2020, to be payable to the former shareholders of Sirena. For the purpose of the unaudited pro forma condensed information, Zenvia Brazil recognized an additional expense (proportionally calculated), in the “Finance cost” line item, of R$1,997 thousand for the period from January 1, 2020 to July 23, 2020.
(f) Earnings/(loss) per share
(g)
D1 share-based payments
​
In February 2021, D1 has granted a share-based payment plan, to its shareholder´s and executives of 65,548 D1 restricted shares. The award includes a provision that accelerates the vesting in the event of a change in control. Compensation charges resulting from these provisions will be included in the pre-acquisition financial statements of D1. The D1 shares will be transferred to the beneficiaries of the plan before the closing date of the acquisition of D1 by Zenvia Brazil. Zenvia Brazil will then pay these shares to the beneficiaries as part of the D1 Acquisition. For the purpose of unaudited condensed pro forma condensed statement of profit or loss, we are presenting this as a transaction accounting adjustment as if it had been reflected in the historical financial statements of D1 for the year ended December 31, 2020 in the amount of R$23,054 thousand.
(h) Expenses that are not expected to recur beyond 12 months after the transactions
The following amounts presented in the unaudited condensed statement of profit or loss are not expected to recur beyond 12 months after the transaction.
​
(in thousands of R$)
​
​
D1 Share-based payments
​ ​ ​ ​ 23,054 ​ ​
​
Sirena Share Based payments(1)
​ ​ ​ ​ 6,123 ​ ​
​
Transactions Costs
​ ​ ​ ​ 180 ​ ​
​
Deffered income tax and social contribution(2)
​ ​ ​ ​ (7,900) ​ ​
​
Total significant items
​ ​ ​ ​ 21,456 ​ ​
 
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​
(1)
In connection with the Sirena Acquisition, Sirena’s restricted shares plan was cancelled at the acquisition date and the shares were paid by Zenvia Brazil to Sirena’s former shareholders as part of the consideration transferred. Sirena recorded such event in the pre-acquisition period as an acceleration of the vesting period, recognizing all the impacts in profit or loss and a corresponding entry in equity.
​
(2)
Does not include Sirena’s shared based payment expenses since they are considered non-deductible.
​
(i) Costs and Expenses by nature
​ ​ ​
Historical
Zenvia Brazil
​ ​
Historical
Sirena
​ ​
Transaction
Accounting
Adjustments
​ ​
Subtotal
Zenvia Brazil
Pro Forma/​
Sirena
​ ​
Historical
D1
​ ​
Historical
Smarkio
​ ​
Transaction
Accounting
Adjustments
​ ​
Total
Zenvia Brazil
Pro Forma
​
​ ​ ​
(in
thousands
of R$)
​ ​
(in
thousands
of US$)
​ ​
(in thousands of R$)
​
Salaries and charges
​ ​ ​ ​ 78,103(1) ​ ​ ​ ​ ​ 833 ​ ​ ​ ​ ​ 4,142 ​ ​ ​ ​ ​ 11,262 ​ ​ ​ ​ ​ 93,507 ​ ​ ​ ​ ​ 14,227 ​ ​ ​ ​ ​ 2,871 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 110,605 ​ ​
Share-based payments
​ ​ ​ ​ — ​ ​ ​ ​ ​ 1,232 ​ ​ ​ ​ ​ 6,123 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 6,123 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 23,054 ​ ​ ​ ​ ​ 29,177 ​ ​
Business Service Provider (BSP) 
​ ​ ​ ​ 305,561 ​ ​ ​ ​ ​ 389 ​ ​ ​ ​ ​ 1,934 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 307,495 ​ ​ ​ ​ ​ 10,713 ​ ​ ​ ​ ​ 2,208 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 320,416 ​ ​
Depreciation
​ ​ ​ ​ 27,287(2) ​ ​ ​ ​ ​ 9 ​ ​ ​ ​ ​ 45 ​ ​ ​ ​ ​ 6,291 ​ ​ ​ ​ ​ 33,623 ​ ​ ​ ​ ​ 2,569 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 19,483 ​ ​ ​ ​ ​ 55,675 ​ ​
Professional fees
​ ​ ​ ​ 17,319 ​ ​ ​ ​ ​ 680 ​ ​ ​ ​ ​ 3,378 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 20,697 ​ ​ ​ ​ ​ 7,086 ​ ​ ​ ​ ​ 4,248 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 32,031 ​ ​
Rental
​ ​ ​ ​ 2,005 ​ ​ ​ ​ ​ 20 ​ ​ ​ ​ ​ 99 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 2,104 ​ ​ ​ ​ ​ 456 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 2,560 ​ ​
Communications
​ ​ ​ ​ 4,557 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 4,557 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 4,557 ​ ​
Travel expenses
​ ​ ​ ​ 886 ​ ​ ​ ​ ​ 22 ​ ​ ​ ​ ​ 112 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 998 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 998 ​ ​
Impairment of trade receivables
​ ​ ​ ​ 4,205 ​ ​ ​ ​ ​ 73 ​ ​ ​ ​ ​ 362 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 4,567 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 4,567 ​ ​
Marketing expenses
​ ​ ​ ​ 3,540 ​ ​ ​ ​ ​ 34 ​ ​ ​ ​ ​ 167 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 3,707 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 1,680 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 5,387 ​ ​
Others
​ ​ ​ ​ 7,505(3) ​ ​ ​ ​ ​ 393 ​ ​ ​ ​ ​ 1,957 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 9,462 ​ ​ ​ ​ ​ 1,450 ​ ​ ​ ​ ​ (34) ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 10,878 ​ ​
Total expenses
​ ​ ​ ​ 450,968 ​ ​ ​ ​ ​ 3,686 ​ ​ ​ ​ ​ 18,317 ​ ​ ​ ​ ​ 17,553 ​ ​ ​ ​ ​ 486,838 ​ ​ ​ ​ ​ 36,501 ​ ​ ​ ​ ​ 10,973 ​ ​ ​ ​ ​ 42,537 ​ ​ ​ ​ ​ 576,851 ​ ​
​
(1)
Includes R$7,882 thousand related to the estimated compensation payable to Total Voice former shareholders that remained working with us, and R$8,833 thousand related to the estimated compensation payable to Sirena former shareholders that remained working with us.
​
(2)
Includes R$7,042 thousand allocated as cost of services and R$8,468 thousand allocated as administrative expenses related to amortization of intangible assets acquired from business combination (Total Voice and Sirena).
​
(3)
Includes the write-off of leasehold improvements in the amount of R$1,758 thousand and fines paid in connection with the return of property before expiration of contractual term in the amount of R$1,100 thousand.
​
 
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Non-GAAP Pro Forma Financial Measures
Reconciliation of Non-GAAP Pro Forma Financial Measures
Reconciliation of Non-GAAP Gross Profit to Non-GAAP Pro Forma Gross Profit
​ ​ ​
For the year ended December 31, 2020
​
​ ​ ​
Historical
Zenvia Brazil(1)
​ ​
Historical
Sirena(2)
​ ​
Transaction
Accounting
Adjustments
​ ​
Subtotal
Zenvia Brazil
Pro Forma/​
Sirena
​ ​
Historical
D1(3)
​ ​
Historical
Smarkio(4)
​ ​
Transaction
Accounting
Adjustments(5)
​ ​
Total
Zenvia Brazil
Pro Forma(6)
​
​ ​ ​
(in thousands of R$)
​
Gross profit
​ ​ ​
​
103,831
​ ​ ​ ​
​
6,177
​ ​ ​ ​
​
(6,179)(10)
​ ​ ​ ​
​
103,829
​ ​ ​ ​
​
12,918
​ ​ ​ ​
​
22,756
​ ​ ​ ​ ​ (19,325)(10) ​ ​ ​ ​
​
120,178
​ ​
(+) Amortization of intangible assets acquired from business
combinations
​ ​ ​ ​ 7,042 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 6,179(10) ​ ​ ​ ​ ​ 13,221 ​ ​ ​ ​ ​ 732 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 19,325(10) ​ ​ ​ ​ ​ 33,278 ​ ​
Non-GAAP Pro Forma Gross
Profit(7)
​ ​ ​ ​ 110,873 ​ ​ ​ ​ ​ 6,177 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 117,050 ​ ​ ​ ​ ​ 13,650 ​ ​ ​ ​ ​ 22,756 ​ ​ ​ ​
​
—
​ ​ ​ ​ ​ 153,456 ​ ​
Revenue
​ ​ ​ ​ 429,701 ​ ​ ​ ​ ​ 8,413 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 438,114 ​ ​ ​ ​ ​ 26,521 ​ ​ ​ ​ ​ 27,835 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 492,470 ​ ​
Pro forma gross margin(8)
​ ​ ​
​
24.2%
​ ​ ​ ​
​
73.4%
​ ​ ​ ​
​
—
​ ​ ​ ​
​
23.7%
​ ​ ​ ​
​
48.7%
​ ​ ​ ​
​
81.8%
​ ​ ​ ​ ​ — ​ ​ ​ ​
​
24.4%
​ ​
Non-GAAP Pro Forma Gross
Margin(9)
​ ​ ​ ​ 25.8% ​ ​ ​ ​ ​ 73.4% ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 26.7% ​ ​ ​ ​ ​ 51.5% ​ ​ ​ ​ ​ 81.8% ​ ​ ​ ​
​
—
​ ​ ​ ​ ​ 31.2% ​ ​
​
(1)
Represents the historical consolidated statement of profit or loss of Zenvia Brazil for the year ended December 31, 2020.
​
(2)
Represents the historical consolidated statement of profit or loss of Sirena for the period from January 1, 2020 to July 23, 2020. On July 24, 2020 the Sirena Acquisition was consummated and Zenvia Brazil began to consolidate Sirena’s results of operations as of that date.
​
(3)
Represents the historical consolidated statement of profit or loss of D1 for the year ended December 31, 2020.
​
(4)
Represents the historical statement of profit or loss of Smarkio for the period from January 1, 2020 to November 30, 2020. In December 2020, D1 consummated the acquisition of Smarkio and it began to consolidate Smarkio’s results of operations as of December 1, 2020.
​
(5)
For an explanation of these pro forma adjustments, see the accompanying notes to “— Unaudited Pro Forma Condensed Statement of Profit or Loss for the Year Ended December 31, 2020.”
​
(6)
For a discussion on the Sirena Acquisition, the D1 Acquisition and our unaudited pro forma condensed statements of profit or loss and related notes, see “Unaudited Pro Forma Condensed Financial Information.”
​
(7)
We calculate Non-GAAP Pro Forma Gross Profit as pro forma gross profit plus pro forma amortization of intangible assets acquired from business combinations. For further information on Non-GAAP Pro Forma Gross Profit, see “Presentation of Financial and Other Information — Special Note Regarding Non-GAAP Pro Forma Financial Measures.”
​
(8)
We calculate pro forma gross margin as pro forma gross profit divided by Zenvia Brazil pro forma revenue.
​
(9)
We calculate Non-GAAP Pro Forma Gross Margin as Non-GAAP Pro Forma Gross Profit divided by Zenvia Brazil pro forma revenue.
​
(10)
The total pro forma adjustment recognized in gross profit of R$25,504 thousand is comprised of: R$6,179 thousand and R$19,325 thousand of additional expenses (as per note 4(a) of the accompanying notes to the Unaudited Pro Forma Condensed Financial Information) related to the amortization of intangible assets (digital platform) acquired in the Sirena and D1’s Acquisitions, respectively.
​
 
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Reconciliation of Non-GAAP Operating Profit to Non-GAAP Pro Forma Operating Profit
​ ​ ​
For the year ended December 31, 2020
​
​ ​ ​
Historical
Zenvia Brazil(1)
​ ​
Historical
Sirena(2)
​ ​
Transaction
Accounting
Adjustments
​ ​
Subtotal
Zenvia Brazil
Pro Forma/​
Sirena
​ ​
Historical
D1(3)
​ ​
Historical
Smarkio(4)
​ ​
Transaction
Accounting
Adjustments(5)
​ ​
Total
Zenvia Brazil
Pro Forma(6)
​
​ ​ ​
(in thousands of R$)
​
Profit/(Loss) ​ ​ ​ ​ (21,431) ​ ​ ​ ​ ​ (10,477) ​ ​ ​ ​ ​ (13,721)(9) ​ ​ ​ ​ ​ (45,629) ​ ​ ​ ​ ​ (11,460) ​ ​ ​ ​ ​ 13,604 ​ ​ ​ ​ ​ (28,075)(9) ​ ​ ​ ​ ​ (71,560) ​ ​
(+) Income tax and social contribution (current and deferred)
​ ​ ​ ​ (8,039) ​ ​ ​ ​ ​ 40 ​ ​ ​ ​ ​ (5,829)(10) ​ ​ ​ ​ ​ (13,828) ​ ​ ​ ​ ​ 301 ​ ​ ​ ​ ​ 3,249 ​ ​ ​ ​ ​ (14,462)(10) ​ ​ ​ ​ ​ (24,740) ​ ​
(+) Net finance costs
​ ​ ​ ​ 7,363 ​ ​ ​ ​ ​ 532 ​ ​ ​ ​ ​ 1,997(11) ​ ​ ​ ​ ​ 9,892 ​ ​ ​ ​ ​ 1,179 ​ ​ ​ ​ ​ 9 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 11,080 ​ ​
Operating profit/(loss)
​ ​ ​ ​ (22,107) ​ ​ ​ ​ ​ (9,905) ​ ​ ​ ​ ​ (17,553) ​ ​ ​ ​ ​ (49,565) ​ ​ ​ ​ ​ (9,980) ​ ​ ​ ​ ​ 16,862 ​ ​ ​ ​ ​ (42,537) ​ ​ ​ ​ ​ (85,220) ​ ​
(+) Amortization of intangible assets
acquired from business combinations
​ ​ ​ ​ 15,510 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 6,291(12) ​ ​ ​ ​ ​ 21,801 ​ ​ ​ ​ ​ 732 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 19,483(12) ​ ​ ​ ​ ​ 42,016 ​ ​
(+) Share-based payments
​ ​ ​ ​ — ​ ​ ​ ​ ​ 6,123(13) ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 6,123 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 23,054(14) ​ ​ ​ ​ ​ 29,177 ​ ​
(+) Expenses related to branch closing(7)​
​ ​ ​ ​ 2,858 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 2,858 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 2,858 ​ ​
Non-GAAP Pro Forma Operating Profit/(Loss)(8)
​ ​ ​ ​ (3,739) ​ ​ ​ ​ ​ (3,782) ​ ​ ​ ​ ​ (11,262) ​ ​ ​ ​ ​ (18,783) ​ ​ ​ ​ ​ (9,248) ​ ​ ​ ​ ​ 16,862 ​ ​ ​ ​
​
—
​ ​ ​ ​ ​ 11,169 ​ ​
​
(1)
Represents the historical consolidated statement of profit or loss of Zenvia Brazil for the year ended December 31, 2020.
​
(2)
Represents the historical consolidated statement of profit or loss of Sirena for the period from January 1, 2020 to July 23, 2020. On July 24, 2020, the Sirena Acquisition was consummated and Zenvia Brazil began to consolidate Sirena’s results of operations as of that date.
​
(3)
Represents the historical consolidated statement of profit or loss of D1 for the year ended December 31, 2020.
​
(4)
Represents the historical statement of profit or loss of Smarkio for the period from January 1, 2020 to November 30, 2020. In December 2020, D1 consummated the acquisition of Smarkio and it began to consolidate Smarkio’s results of operations as of December 1, 2020.
​
(5)
For an explanation of these pro forma adjustments, see the accompanying notes to “— Unaudited Pro Forma Condensed Statement of Profit or Loss for the Year Ended December 31, 2020.”
​
(6)
For a discussion on the Sirena Acquisition, the D1 Acquisition and our unaudited pro forma condensed statements of profit or loss and related notes, see “Unaudited Pro Forma Condensed Financial Information.”
​
(7)
Corresponds to the write-off of leasehold improvements in the amount of R$1,758 thousand and fines paid in connection with the return of property before expiration of contractual term in the amount of R$1,100 thousand.
​
(8)
We calculate Non-GAAP Pro Forma Operating Profit as pro forma profit adjusted by pro forma income tax and social contribution (current and deferred) and pro forma net finance costs plus pro forma amortization of intangible assets acquired from business combinations and pro forma expenses related to branch closing. For further information on Non-GAAP Pro Forma Operating Profit, see “Presentation of Financial and Other Information — Special Note Regarding Non-GAAP Pro Forma Financial Measures.”
​
(9)
The total pro forma adjustment of R$41,796 thousand recognized in consolidated statements of profit or loss considers all the pro forma adjustments presented in the “Unaudited Pro Forma Condensed Statement of Profit or Loss” and R$13,721 thousand is related to the Sirena’s Acquisition and R$28,075 thousand is related to the D1 Acquisition.
​
(10)
The total income tax and social contribution (current and deferred) of R$20,291 thousand reflects the tax effects of all the pro forma adjustments presented in the “Unaudited Pro Forma Condensed Statement of Profit or Loss” ​(as per note 4(c) of the accompanying notes to the Unaudited Pro Forma Condensed Financial Information), and R$5,829 thousand is related to the Sirena’s Acquisition and R$14,462 thousand is related to the D1 Acquisition.
​
(11)
The Sirena Acquisition agreement has interest expense of R$1,997 thousand, related to the amount payables to the former shareholders (as per note 4(e) of the accompanying notes to the Unaudited Pro Forma Condensed Financial Information).
​
 
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(12)
The total amortization of intangible assets acquired from business combinations of R$25,774 thousand is comprised of: R$6,291 thousand and R$19,483 thousand of additional expenses (as per note 4(a) of the accompanying notes to the Unaudited Pro Forma Condensed Financial Information related to the amortization of intangible assets (digital platform and customer portfolio) acquired in the Sirena and D1’s Acquisitions, respectively.
​
(13)
In connection to the Sirena Acquisition, Sirena’s restricted shares plan was cancelled at the acquisition date and the shares were paid by Zenvia Brazil to Sirena’s former shareholders as part of the consideration transferred. Sirena recorded such event in the pre-acquisition period as an acceleration of the vesting period, recognizing all the impacts in profit or loss and a corresponding entry in equity.
​
(14)
The pro forma adjustment is of R$23,054 thousand related to the D1 share-based payment (as per note 4(g) of the accompanying notes to the Unaudited Pro Forma Condensed Financial Information).
​
 
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Reconciliation of Pro Forma EBITDA and Pro Forma Adjusted EBITDA
​ ​ ​
For the year ended December 31, 2020
​ ​
​ ​ ​
Historical
Zenvia Brazil(1)
​ ​
Historical
Sirena(2)
​ ​
Transaction
Accounting
Adjustments
​ ​
Subtotal
Zenvia Brazil
Pro Forma/​
Sirena
​ ​
Historical
D1(3)
​ ​
Historical
Smarkio(4)
​ ​
Transaction
Accounting
Adjustments(5)
​ ​
Total
Zenvia Brazil
Pro Forma(6)
​
​ ​ ​
(in thousands of R$)
​ ​
Profit/(Loss) ​ ​ ​ ​ (21,431) ​ ​ ​ ​ ​ (10,477) ​ ​ ​ ​ ​ (13,721)(10) ​ ​ ​ ​ ​ (45,629) ​ ​ ​ ​ ​ (11,460) ​ ​ ​ ​ ​ 13,604 ​ ​ ​ ​ ​ (28,075)(10) ​ ​ ​ ​ ​ (71,560) ​ ​
(+) Income tax and social contribution (current and deferred)
​ ​ ​ ​ (8,039) ​ ​ ​ ​ ​ 40 ​ ​ ​ ​ ​ (5,829)(11) ​ ​ ​ ​ ​ (13,828) ​ ​ ​ ​ ​ 301 ​ ​ ​ ​ ​ 3,249 ​ ​ ​ ​ ​ (14,462)(11) ​ ​ ​ ​ ​ (24,740) ​ ​
(+) Net finance costs
​ ​ ​ ​ 7,363 ​ ​ ​ ​ ​ 532 ​ ​ ​ ​ ​ 1,997(12) ​ ​ ​ ​ ​ 9,892 ​ ​ ​ ​ ​ 1,179 ​ ​ ​ ​ ​ 9 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 11,080 ​ ​
(+) Depreciation and amortization
​ ​ ​ ​ 27,287 ​ ​ ​ ​ ​ 45 ​ ​ ​ ​ ​ 6,291 ​ ​ ​ ​ ​ 33,623 ​ ​ ​ ​ ​ 2,568 ​ ​ ​ ​ ​ 143 ​ ​ ​ ​ ​ 19,483(13) ​ ​ ​ ​ ​ 55,817 ​ ​
Pro Forma EBITDA(7)
​ ​ ​ ​ 5,180 ​ ​ ​ ​ ​ (9,860) ​ ​ ​ ​ ​ (11,262) ​ ​ ​ ​ ​ (15,942) ​ ​ ​ ​ ​ (7,412) ​ ​ ​ ​ ​ 17,005 ​ ​ ​ ​ ​ (23,054) ​ ​ ​ ​ ​ (29,403) ​ ​
(+) Share-based payment
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 6,123(14) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 6,123 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 23,054(15) ​ ​ ​ ​ ​ 29,177 ​ ​
(+) Expenses related to branch closing(8)​
​ ​ ​ ​ 2,858 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 2,858 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 2,858 ​ ​
Pro Forma Adjusted EBITDA(9)
​ ​ ​ ​ 8,038 ​ ​ ​ ​ ​ (3,737) ​ ​ ​ ​ ​ (11,262) ​ ​ ​ ​ ​ (6,961) ​ ​ ​ ​ ​ (7,412) ​ ​ ​ ​ ​ 17,005 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 2,632 ​ ​
​
(1)
Represents the historical consolidated statement of profit or loss of Zenvia Brazil for the year ended December 31, 2020.
​
(2)
Represents the historical consolidated statement of profit or loss of Sirena for the period from January 1, 2020 to July 23, 2020. On July 24, 2020, the Sirena Acquisition was consummated and Zenvia Brazil began to consolidate Sirena’s results of operations as of that date.
​
(3)
Represents the historical consolidated statement of profit or loss of D1 for the year ended December 31, 2020.
​
(4)
Represents the historical statement of profit or loss of Smarkio for the period of eleven months ended November 30, 2020. In December 2020, D1 consummated the acquisition of Smarkio and it began to consolidate Smarkio’s results of operations as of December 1, 2020.
​
(5)
For an explanation of these pro forma adjustments, see the accompanying notes to “— Unaudited Pro forma Condensed Statements of Profit or Loss for the Year Ended December 31, 2020.”
​
(6)
For a discussion on the Sirena Acquisition, the D1 Acquisition and our unaudited pro forma condensed statements of profit or loss and related notes, see “Unaudited Pro Forma Condensed Financial Information.”
​
(7)
We calculate Pro Forma EBITDA as pro forma profit adjusted by pro forma income tax and social contribution (current and deferred), pro forma net finance costs and pro forma depreciation and amortization. For further information on Pro Forma EBITDA, see “Presentation of Financial and Other Information — Special Note Regarding Non-GAAP Pro Forma Financial Measures.”
​
(8)
Corresponds to the write-off of leasehold improvements in the amount of R$1,758 thousand and fines paid in connection with the return of property before expiration of contractual term in the amount of R$1,100 thousand.
​
(9)
We calculate Pro Forma Adjusted EBITDA as pro forma EBITDA plus pro forma expenses related to branch closing. For further information on Pro Forma Adjusted EBITDA, see “Presentation of Financial and Other Information — Special Note Regarding Non-GAAP Pro Forma Financial Measures.”
​
(10)
The total pro forma adjustment of R$41,796 thousand recognized in consolidated statements of profit or loss considers all pro forma adjustments presented in the “Unaudited Pro Forma Condensed Statement of Profit or Loss” and R$13,721 thousand is related to the Sirena’s Acquisition and R$28,075 thousand is related to the D1’s Acquisition.
​
(11)
The total income tax and social contribution (current and deferred) of R$20,291 thousand reflects the tax effects of all pro forma adjustments presented in the “Unaudited Pro Forma Condensed Statement of Profit or Loss” ​(as per note 4(c) of the accompanying notes to the Unaudited Pro Forma Condensed Financial Information), and R$5,829 thousand is related to the Sirena’s Acquisition and R$14,462 thousand is related to the D1’s Acquisition.
​
(12)
The Sirena Acquisition agreement has interest expense of R$1,997 thousand, related to the amount payables to the former shareholders (as per note note 4(e) of the accompanying notes to the Unaudited Pro Forma Condensed Financial Information).
​
 
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(13)
The total Amortization of intangible assets acquired from business combinations of R$25,774 thousand is comprised of: R$6,291 thousand and R$19,483 thousand additional expenses (as per note note 4(a) of the accompanying notes to the Unaudited Pro Forma Condensed Financial Information) related to the amortization of intangible assets (digital platform and customer portfolio) acquired in the Sirena and D1’s Acquisitions, respectively.
​
(14)
In connection to with the Sirena Acquisition, Sirena’s restricted shares plan was cancelled at the acquisition date and the shares were paid by Zenvia Brazil to Sirena’s former shareholders as part of the consideration transferred. Sirena recorded such event in the pre-acquisition period as an acceleration of the vesting period, recognizing all the impacts in profit or loss and a corresponding entry in equity.
​
(15)
The pro forma adjustment is of R$23,054 thousand related to the share-based payment to D1 shareholders’ and executives (as per note 4(g) of the accompanying notes to the Unaudited Pro Forma Condensed Financial Information).
​
 
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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
This section contains forward-looking statements that involve risks and uncertainties. Our actual results and the timing of events may differ significantly from those expressed or implied in such forward-looking statements for several reasons, including those described under “Cautionary Statement Regarding Forward-Looking Statements” and “Risk Factors” and other issues discussed herein.
The following analysis and discussion of our financial condition and results of operations should be read in conjunction with our unaudited pro forma condensed financial information and our audited consolidated financial statements included elsewhere in this prospectus, as well as the information set forth under the sections “Presentation of Financial and Other Information,” “Summary Financial and Other Information,” “Selected Financial and Other Information” and “Unaudited Pro Forma Condensed Financial Information.”
Overview
We empower companies to transform their existing customer communications from non-scalable, physical and impersonal interactions into highly scalable, digital first and hyper contextualized customer journey experiences.
Our CX communications platform enables companies to create unique journeys for their end-customers across a variety of channels. Our unified end-to-end CX communications platform provides a combination of (i) solutions focused on campaigns, sales teams, customer service and engagement, (ii) tools, such as software application programming interfaces, or APIs, chatbots, single customer view, journey designer, documents composer and authentication and (iii) channels, such as SMS, Voice, WhatsApp and Webchat. Our comprehensive platform assists our customers in several use cases, including marketing campaigns, customer acquisition, customer information nutrition, customer onboarding actions, warnings, customer services with or without automation, fraud control, cross-selling and customer retention, among others.
We were founded in Brazil 17 years ago as a bootstrapped startup in a garage serving businesses with complex networking infrastructures through our platform of APIs for SMS messaging connectivity. As we continued to grow, we scaled our business by adding new CX communication solutions, tools and channels to our platform, making it more flexible, versatile and comprehensive in order to capitalize on the opportunity to serve customers along their journey. Currently, we are locally present in Brazil, Mexico and Argentina and our technology allows our customers to use our platform based on their individual use case. The adoption of these technologies by our customers, and the willingness of their end-consumers to use these technologies, allows our customers to streamline their decision-making process and day-to-day business operations.
Our software platform facilitated the flow of communication with end-consumers for more than 7,700 customers of all sizes as of December 31, 2019, which increased to more than 9,400 customers as of December 31, 2020, all across a broad range of industries throughout Latin America. Our usage-based recurring revenue model allows us to grow with our customers and increase our revenue base as our clients increase their use of our solutions and communication channels.
Communication is an essential activity for businesses serving their end-consumers. Businesses all over the world are shaping new customer experience with the power of digital communications. However, businesses seeking to implement multi-channel communication experiences for their end-consumers are frequently faced with multiple challenges given the complexities of implementing and integrating such processes and level of investments that they require. We provide businesses with a solution to this problem by offering a unified, end-to-end communications platform at affordable prices.
The CX communication solutions we offer our customers allow any person within any business, from business analysts to tech professionals, to enhance the end-consumer journey for campaigns, sales teams, customer service and engagement purposes. Collectively, these solutions allow us to capture a range of use cases across all economic sectors. We initially adopt a “land and expand” strategy, pursuant to which we introduce our platform to our customers based on one simple use case, and then develop the customer relationship over time, upselling and cross-selling our suite of solutions to them as they grow and improve their customer journey. This strategy has allowed us to achieve a standalone net revenue expansion rate of
 
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112.8% and 117.1% as of December 31, 2020 and 2019, respectively. For more information about our net revenue expansion rate, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Principal Factors Affecting Our Results of Operations — Net Revenue Expansion Rate.”
Businesses use our platform to frequently and more seamlessly connect with their end-consumers while also offering new mobile application experiences. From small family-owned businesses to large corporations, our customers use our platform to attract, convert, serve and nurture their end-consumers. For instance, one of the largest Brazilian banks adopted our platform for several use cases such as multichannel marketing campaigns with SMS and automated telemarketing, SMS transactional authorizations and chatbot invoice collection. In addition, one of the largest electronic retailers in Brazil adopted our platform for order tracking with WhatsApp notifications, retail sales with our WhatsApp sales solution and promotional coupons on rich communication services, or RCS, a communication protocol between mobile telephone carriers and mobile devices aimed at replacing SMS messages with a more sophisticated multimedia enabled text-messaging system. An international education group in Brazil also adopted our platform for communications related to entrance exam information, their student recruitment enrollment process and existing and prospective student communication solutions through chatbot on their website and through WhatsApp, customer service and sales chat services, SMS operational alerts and marketing campaigns.
Small businesses also use our platform for a variety of use cases. For example, a technology company that monitors temperature sensors for medical-grade cold storage uses our Voice solution to monitor, detect and alert its end-consumers of any out-of-range temperature incidents for specific medical supply storage chambers, mitigating the risk of improper medicine storage.
Our platform flexibility allows us to serve many important sectors including:
•
Financial institutions use our platform for SMS transaction confirmation alerts, security tokens and marketing campaigns;
​
•
Service providers use our platform to manage outbound voice calls integrated with their customer relationship management platforms, or CRMs;
​
•
Universities use our platform to support students on multiple communication channels such as WhatsApp and Website;
​
•
Medical and dental clinics and hospitals use our SMS platform to confirm and reschedule appointments as well as send appointment reminders to patients; and
​
•
Retailers use our WhatsApp solution to support their sales teams to manage sales and our SMS platform to inform customers about new products and promotions and to track the status of deliveries.
​
Although we have a diversified client base, our revenues are currently concentrated in a small number of large clients. Our 10 largest clients represented 33.1%, 34.2% and 37.0% of our revenue in the years ended December 31, 2020, 2019 and 2018, respectively. Giving effect to the consummation of the D1 Acquisition, our 10 largest clients would have represented 35% of our revenue in the year ended December 31, 2020. We are working to decrease this concentration by investing in marketing initiatives to attract new small and medium business, or SMBs, customers to our platform and providing additional offerings to our existing customer base. See “Risk Factors—Certain Risks Relating to Our Business and Industry—A significant portion of our revenue is currently concentrated on our outlier customers and an economic slowdown affecting these customers could lead to decreased demand for our products and services, which could adversely affect us.”
We have been a cash flow positive company since 2015. For the year ended December 31, 2020, cash generated from our operating activities amounted to R$53.1 million, compared to R$33.8 million and R$46.6 million for the years ended December 31, 2019 and 2018, respectively. Our revenue totaled R$429.7 million, R$354.0 million and R$276.4 million in the years ended December 31, 2020, 2019 and 2018, respectively, representing a growth rate of 21.4% between the years ended December 31, 2020 and 2019 and 28.1% between the years ended December 31, 2019 and 2018. Our loss for the year ended December 31, 2020 amounted to R$21.4 million, compared to profit amounting to R$13.8 million and R$19.9 million for the years ended December 31, 2019 and 2018, respectively. Our Adjusted EBITDA for the year ended
 
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December 31, 2020 amounted to R$8.0 million, compared to R$36.0 million and R$44.8 million for the years ended December 31, 2019 and 2018, respectively, as we continue to invest in our platform and growth initiatives.
Principal Factors Affecting Our Results of Operations
Evolution of Our Platform
In Latin America, the access of small companies to software and technologies is very restricted. As a result, we have a good opportunity to develop solutions for them. Companies quickly change their preferences and it is difficult for software and technology service providers to offer each company’s chosen communication channel.
We believe that ongoing development and design of solutions help companies to improve their relationship with consumers through a platform designed around the customer, which in turn may contribute to their results. This approach adds value to our consumer and increases our margins. Designing an easy to use solution with a low entry price is core to this strategy.
Product and Market Leadership
We are committed to delivering market-leading products to continue to build and maintain credibility in our target markets. We believe we must maintain our product and market leadership position and the strength of our brand to drive further revenue growth. We intend to continue to invest in our engineering capabilities and marketing activities to maintain our strong position in the market. Our results of operations may fluctuate as we make these investments to drive increased customer adoption and usage.
In addition, we are designing a user journey focused on decision and conversion based on a guided journey by product, given that new acquisitions encompass current customers. We seek to accelerate our customer acquisition by managing our acquisition timeline and costs.
Expansion Strategy and Net Revenue Expansion Rate
We are focused on expanding our existing customers’ use of our products and platform. We believe that there is a significant opportunity to drive additional sales to existing customers. We expect to invest in sales, marketing, and a process to improve customer experience and our proximity to their business to obtain additional revenue growth from existing customers using up-selling and cross-selling strategies that we expect should ultimately result in improving margins over time.
We believe that net revenue expansion rate is one of the most reliable indicators of our future revenue trends. Our ability to drive growth and generate incremental revenue depends, in part, on our ability to maintain and grow our relationships with active customers to increase their use of our platform. An important way in which we track our performance in this regard is by measuring the net revenue expansion rate for our customers.
Our net revenue expansion rate increases, for instance, when (a) customers increase use of a product for the same application, (b) customers increase the use of the same product to new applications, (c) customers adopt new products offered by us; (d) we raise our prices on offered products without change in usage volumes or (e) given that our the net revenue expansion rate is calculated in reais, there is a depreciation of the real vis-à-vis the currency of the countries in which we operate. Our net revenue expansion rate decreases, for instance, when (a) customers cease or reduce usage of a product, (b) we lower our prices on offered products or (c) given that our the net revenue expansion rate is calculated in reais, there is an appreciation of the real vis-à-vis the currency of the countries in which we operate.
We believe measuring our net revenue expansion rate on revenue generated from our customer provides a more meaningful indication of the performance of our efforts to increase revenue from existing customers. In order to calculate net revenue expansion, we first select the cohort of customers on a prior trailing twelve months period, sum up the total revenue of active these customers on the applicable twelve month period and divide this sum by the sum of the total revenue of these same customers for the prior trailing twelve month period.
 
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Number of Active Customers
We believe that the number of our active customers is an important indicator of the growth of our business, the market acceptance of our platform and future revenue trends. We define an active customer as an account (based on an individual taxpayer registration number) at the end of any period that was the source of any amount of revenue for us in the preceding three months. We classify a customer from which we generated no revenue in the preceding three months as an inactive customer.
Maintaining active customers is key to our growth strategy. Our strategy is based on acquiring a customer by a simple and low friction use case, then work with this customer to develop new use cases. In addition, we continue to improve our platform and deliver new products. As a result, our customer base is the best addressable market for our new products due to the lower customer acquisition costs and a high conversion rate, among other factors.
International Growth
Our platform can reach all countries and consumers around the world. In 2021, we expect strong growth in the Latin America market with a specific focus on the SMB segment. Expansion will be carried out through all available channels, emphasizing the self-service channel. Our portfolio has been developed with a variety of products and features to reach different clients and channels through solutions that are not always made widely available by our competitors locally and globally.
Investments at Scale
As our business grows and we continue our platform optimization efforts, we expect to achieve cost savings through economies of scale, for example optimization of cloud usage and self-service. We also use the scale to obtain lower acquisition costs with network service providers. We sometimes choose to pass our cost savings from optimizing the platform or inputs such as SMS to our customers in the form of lower usage prices seeking to increase consumption on the platform. In addition, these potential cost savings may be partially or totally offset by higher costs related to the launch of new products and our expansion into new geographies. There are situations in which we use this savings to acquire certain larger customers that we consider strategic, but which generate a lower gross margin. As a result, our gross margin may fluctuate from period to period. At the same time, we seek high growth in the small and medium-sized market where we obtain better margins.
Macroeconomic Environment
Our operations are currently located mainly in Brazil. As a result, our revenues and profitability are subject to political and economic developments and the effect that these factors have on the availability of credit, disposable income, employment rates and average wages in Brazil. Our results of operations are affected by levels of consumer spending, interest rates and the expansion or retraction of consumer credit in Brazil. For more information, see “Risk Factors — Risks Relating to Our Business and Industry — A significant portion of our revenue is currently concentrated on our outlier customers and an economic slowdown affecting these customers could lead to decreased demand for our products and services, which could adversely affect us” and “Risk Factors — Certain Risks Relating to Brazil.”
The inflation index generally adopted in the agreements with our network service providers is based on the IGP. In 2020, the sharp increase of the IGP-M and IGP-DI inflation indexes (indexes which contrary to the IPCA — the inflation index chosen by the Central Bank for purposes of adopting inflation-targeting measures — captures inflation recorded in certain non end-consumer economic sectors that experienced a significant rise in prices in 2020 (like commodities)) led to one of our network service providers with a significant market share in SMS messages volume to recently notify us of an approximately 28% increase in their 2021 fees. We filed a claim with ANATEL challenging the adequacy of the use of inflation indexes in agreements with network service providers that are not telecommunication sector indexes. We are taking certain measures to contractually pass on this increased cost to our customers as we also have an IGP annual adjustment provision in our contracts with customers to mitigate potential impacts, although the dates of our adjustments may differ. If such measures fail to succeed or if our claim before ANATEL does not prevail, we may have to absorb increases in our cost of services or cancel the agreements with customers
 
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who are not willing to accept any such increase in cost. For further information, see “Risk Factors — Certain Risks Relating to Our Business and Industry — If we cannot pass fee increases from network service providers or developers of IP-based messaging services to our customers, our operating margins may decline” and “Business and Industry — Legal and Administrative Proceedings — Administrative Proceedings.”
The table below shows Brazil’s GDP growth, inflation, interest rates, dollar exchange rates and the appreciation (devaluation) of the real against the dollar for the indicated periods:
​ ​ ​
As of and for the year ended December 31,
​
​ ​ ​
2020
​ ​
2019
​ ​
2018
​
Real GDP growth (contraction)(1)
​ ​ ​ ​ (4.1)% ​ ​ ​ ​ ​ 1.1% ​ ​ ​ ​ ​ 1.1% ​ ​
Inflation (IGP-M)(2)
​ ​ ​ ​ 23.1% ​ ​ ​ ​ ​ 7.3% ​ ​ ​ ​ ​ 7.5% ​ ​
Inflation (IGP-DI)(2)
​ ​ ​ ​ 23.1% ​ ​ ​ ​ ​ 7.7% ​ ​ ​ ​ ​ 7.1% ​ ​
Inflation (IPCA)(3)
​ ​ ​ ​ 4.5% ​ ​ ​ ​ ​ 4.3% ​ ​ ​ ​ ​ 3.8% ​ ​
CDI(4) ​ ​ ​ ​ 2.8% ​ ​ ​ ​ ​ 5.9% ​ ​ ​ ​ ​ 6.4% ​ ​
TJLP(5) ​ ​ ​ ​ 4.6% ​ ​ ​ ​ ​ 6.2% ​ ​ ​ ​ ​ 6.7% ​ ​
SELIC Rate
​ ​ ​ ​ 2.0% ​ ​ ​ ​ ​ 4.5% ​ ​ ​ ​ ​ 6.5% ​ ​
Appreciation (depreciation) of the real against the U.S. dollar
​ ​ ​ ​ (28.9)% ​ ​ ​ ​ ​ (4.0)% ​ ​ ​ ​ ​ (15.0)% ​ ​
Exchange rate (R$ per U.S.$1.00) at the end of the period(6)
​ ​ ​ ​ 5.1967 ​ ​ ​ ​ ​ 4.031 ​ ​ ​ ​ ​ 3.875 ​ ​
​
Sources: FGV, IBGE, Central Bank and Economática.
(1)
As presented by the Central Bank.
​
(2)
Accumulated for the years ended December 31, 2020, 2019 and 2018. Inflation (IGP-M) is the general market price index measured by the FGV while IGP-DI is a price index measured by the FGV with respect to prices that directly affect the economical activity of the country, except exports.
​
(3)
Accumulated for the years ended December 31, 2020, 2019 and 2018. Inflation (IPCA) is a broad consumer price index measured by the IBGE. IPCA is the reference index for the Central Bank inflation-targeting system for the country (which means that it is the official inflation measure of the country) and relates to retail trade prices and household expenditures.
​
(4)
Accumulated for the years ended December 31, 2020, 2019 and 2018. The interbank deposit certificate (Certificado de Depósito Interbancário), or CDI, rate is an average of interbank overnight rates in Brazil.
​
(5)
Accumulated for the years ended December 31, 2020, 2019 and 2018. TJLP is the Brazilian long term interest rate.
​
Description of Principal Line Items
The following is a summary of the principal line items comprising consolidated statements of profit or loss.
Revenue
Revenue is recognized upon the transfer of control of products or services to customers in an amount that reflects the consideration we expect to receive in exchange for those products or services. Revenue is recognized net of deductions as discounts and any taxes collected from customers, which are subsequently remitted to governmental authorities.
Our revenue is mainly derived from fees based on the usage of each of our services available on our communication platform. The use of these services is measured by the individual volume of the component used and revenues based on these volumes are recognized in the period of use.
We also have revenue from subscription-based fees that are derived from certain non-usage contracts, with pre-contracted volumes (take or pay) or with unlimited use of any component. Revenue from subscription-based contracts is recognized monthly by applying the monthly fee.
 
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Small customers and customers who pay by credit card are billed in advance while large customers are billed under the postpaid model. Customers who pay on the prepaid model, draw down their balances as they use our products.
Amounts that have been invoiced are recorded in accounts receivable and in revenue or customer advances depending on whether the revenue recognition criteria have been met.
Our arrangements with customers do not provide for rights of return and our contracts do not provide customers with the right to take possession of the software supporting the applications.
For further information about our revenue, see note 4(d) to our audited consolidated financial statements included elsewhere in this prospectus.
Cost of services
Cost of services consists primarily of costs of communications services purchased from network service providers. Cost of services also include carrier messaging costs, fees to support our cloud infrastructure, personnel costs, such as salaries of employees involved in maintaining the production environment running, and non-personnel costs, such as amortization of capitalized internal-use software development costs and amortization of intangible assets acquired from business combinations. Our arrangements with network service providers require us to pay fees based on the volume of phone calls initiated or text messages, as well as the number of telephone numbers acquired by us to service our customers. Our arrangements with our cloud infrastructure provider require us to pay fees based on our server capacity consumption.
For further information about our cost of services see note 20 to our audited consolidated financial statements included elsewhere in this prospectus.
Other operating (expenses) income
Our other operating (expenses) income is comprised of sales and marketing expenses, administrative expenses, research and development expenses, other income and expenses. For further information about our other operating (expenses) income, see note 22 to our audited consolidated financial statements included elsewhere in this prospectus.
Sales and marketing expenses consist primarily of expenses incurred related to the sales, advertising and marketing of our services. These expenditures mainly comprise personnel expenses for marketing and sales employees, advertising, marketing, brand management, credit card processing fees, professional service fees and allocation of general overhead expenses attributable to these purposes.
Administrative expenses consist primarily of personnel expenses for our accounting, finance, legal, human resources, administrative, support and executives. General and administrative expenses also include costs related to business acquisitions, legal and other professional services fees, sales and other taxes, depreciation and amortization and an allocation of our general overhead expenses.
We expect administrative expenses to increase as a result of becoming a publicly traded company and compliance requirements derived from the Sarbanes-Oxley Act. Public company costs include expenses associated with annual and quarterly reporting, investor relations, registrar and transfer agent fees, incremental insurance costs, accounting and legal services, and other investments to strengthen corporate governance and internal controls.
Research and development expenses consist primarily of personnel expenses for engineering and product development employees, as well as outsourced engineering services and allocation of general overhead expenses attributable to these purposes. We capitalize the portion of our software development costs that meets accounting requirements.
Other income and expenses, consist primarily of one time income or expenses not attributable to other classifications.
 
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Net finance costs
Net finance costs are comprised of finance costs and finance income. Finance costs are comprised of interest expenses and fees related to all financial obligations of the company, as well as expenses with interest and exchange rate variations and finance income is comprised of interest income on investments and interest income from overdue customers as well as positive results from interest and exchange rate variations. For further information about our net finance costs, see note 21 to our audited consolidated financial statements included elsewhere in this prospectus.
Income tax and social contribution
Income and social contribution taxes comprise current and deferred taxes. Current tax relates to tax payable, estimated at the taxable income for the year. Deferred taxes are recognized in relation to temporary differences between the carrying amount of assets and liabilities for accounting purposes and the related amounts used for taxation purposes. Deferred income and social contribution tax assets are reviewed at the date of preparation of financial statements and reduced when their realization is no longer probable.
Income tax and social contribution of the year, both current and deferred, are calculated based on the rates of 15% plus a surcharge of 10% on taxable income in excess of R$240 thousand for income tax and 9% on taxable income for social contribution on net income, and consider the offsetting of tax loss carryforward and negative basis of social contribution, limited to 30% of the taxable income. Expense with income tax and social contribution comprises both current and deferred taxes. Current and deferred taxes are recognized in income (loss) unless they are related to the business combination, or items directly recognized in shareholders’ equity.
We use the benefit derived from the Lei do Bem (Law No. 11,196/05), aimed at companies that perform research and development (R&D) of technological innovations. This benefit provides tax savings by reducing the income and social contribution tax base from 60% to 80% of our research and development expenditures.
For further information about our income tax and social contribution, see note 23 to our audited consolidated financial statements included elsewhere in this prospectus.
Historical Results of Operations
Year Ended December 31, 2020 Compared to Year Ended December 31, 2019
The following table sets forth our consolidated statements of profit or loss for the years ended December 31, 2020 and 2019.
 
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​ ​ ​
Year ended December 31,
​
​ ​ ​
2020
​ ​
2019
​ ​
Variation
​
​ ​ ​
(in R$)
​ ​
(in R$)
​ ​
(%)
​
​ ​ ​
(in thousands)
​
Revenue
​ ​ ​ ​ 429,701 ​ ​ ​ ​ ​ 354,035 ​ ​ ​ ​ ​ 21.4% ​ ​
Cost of services
​ ​ ​ ​ (325,870) ​ ​ ​ ​ ​ (260,786) ​ ​ ​ ​ ​ 25.0% ​ ​
Gross profit
​ ​ ​ ​ 103,831 ​ ​ ​ ​ ​ 93,249 ​ ​ ​ ​ ​ 11.3% ​ ​
Selling and marketing expenses
​ ​ ​ ​ (33,589) ​ ​ ​ ​ ​ (26,018) ​ ​ ​ ​ ​ 29.1% ​ ​
Administrative expenses
​ ​ ​ ​ (71,667) ​ ​ ​ ​ ​ (40,868) ​ ​ ​ ​ ​ 75.4% ​ ​
Research and development expenses
​ ​ ​ ​ (15,637) ​ ​ ​ ​ ​ (9,832) ​ ​ ​ ​ ​ 59.0% ​ ​
Gain on bargain purchase
​ ​ ​ ​ — ​ ​ ​ ​ ​ 2,479 ​ ​ ​ ​ ​ (100.0)% ​ ​
Allowance for credit losses
​ ​ ​ ​ (4,205) ​ ​ ​ ​ ​ (3,733) ​ ​ ​ ​ ​ 12.6% ​ ​
Other income and expenses, net
​ ​ ​ ​ (840) ​ ​ ​ ​ ​ 4,473 ​ ​ ​ ​ ​ (118.8)% ​ ​
Operating profit
​ ​ ​ ​ (22,107) ​ ​ ​ ​ ​ 19,750 ​ ​ ​ ​ ​ (211.9)% ​ ​
Finance costs
​ ​ ​ ​ (26,580) ​ ​ ​ ​ ​ (6,811) ​ ​ ​ ​ ​ 290.3% ​ ​
Finance income
​ ​ ​ ​ 19,217 ​ ​ ​ ​ ​ 4,239 ​ ​ ​ ​ ​ 353.3% ​ ​
Net finance costs
​ ​ ​ ​ (7,363) ​ ​ ​ ​ ​ (2,572) ​ ​ ​ ​ ​ 186.3% ​ ​
Profit (loss) before income tax and social contribution
​ ​ ​ ​ (29,470) ​ ​ ​ ​ ​ 17,178 ​ ​ ​ ​ ​ (271.6)% ​ ​
Deferred income tax and social contribution
​ ​ ​ ​ 8,480 ​ ​ ​ ​ ​ (3,186) ​ ​ ​ ​ ​ (366.2)% ​ ​
Current income tax and social contribution
​ ​ ​ ​ (441) ​ ​ ​ ​ ​ (148) ​ ​ ​ ​ ​ 198.0% ​ ​
Profit (loss) for the year
​ ​ ​ ​ (21,431) ​ ​ ​ ​ ​ 13,844 ​ ​ ​ ​ ​ (254.8)% ​ ​
Revenue
Our revenue increased by R$75,666 thousand, or 21.4%, to R$429,701 thousand in 2020 from R$354,035 thousand in 2019, mainly as a result of: (i) the Sirena Acquisition, with an increase of 1,087 customers and R$10,841 thousand in revenue; (ii) the increase in the volume of use (number of interactions) of our platform by our customers, which resulted in an increase of R$51,300 thousand in revenue in 2020 and (iii) an increase in our average interactions unit price (which consists of the average unit price we charge our customers to use our platform), which increased our revenue by R$13,526 thousand in 2020. The increase in revenue described above is driven by both (a) existing customers (R$ 45,316 thousand), as evidenced by our net revenue expansion rate of 112.8% for the year ended December 31, 2020 and (b) new customers adopting our solutions in 2020 (R$ 30,350 thousand).
Cost of services
Our cost of services increased by R$65,084 thousand, or 25.0%, to R$325,870 thousand in 2020 from R$260,786 thousand in 2019, principally due to an increase in expenses with carriers in the amount of R$55,286 thousand, of which R$ 30,260 thousand related to the increase in volume usage and R$ 25,026 thousand related to the increase in average usage price.
Gross profit
As a result of the above, our gross profit increased by R$10,582 thousand, or 11.3%, to R$103,831 thousand in 2020 from R$93,249 thousand in 2019. As a percentage of our revenue, our gross profit decreased to 24.2% in 2020 from 26.3% in 2019.
Other operating expenses
Selling and marketing expenses
Our selling and marketing expenses increased by R$7,571 thousand, or 29.1%, to R$33,589 thousand in 2020 from R$26,018 thousand in 2019, primarily due to (i) an increase in personnel expenses as part of
 
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our sales expansion strategy (in the amount of R$2,904 thousand), (ii) increased expenses related to the expansion of our infrastructure to meet the growth of sales channel partners, as well as commissions related to the increase in revenue from this channel in the amount of R$2,164 thousand, (iii) an increase in compensation expenses of R$1,326 thousand related to the Total Voice acquisition and (iv) the consolidation of Sirena’s selling and marketing expenses in our results in the amount of R$1,145 thousand (we started to consolidate Sirena in our results on July 24, 2020).
Administrative expenses
Our administrative expenses increased by R$30,799 thousand, or 75.4%, to R$71,667 thousand in 2020 from R$40,868 thousand in 2019, primarily as a result of (i) compensation expenses of R$8,833 thousand related to the consolidation of Sirena’s administrative expenses in our results in the amount of R$7,875 thousand, (ii) increase in personnel expenses due to our increased headcount as part of our growth strategy in the amount of R$4,817 thousand, (iii) adoption of new software and processes related to growth structuring, such as Sales Force, (iv) new billing system and others in the amount of R$2,928 thousand, expenses related to branch closing in Porto Alegre (amounting to R$1,100 thousand) and (v) consultancy expenses related to the (i) auditing, legal and other accounting fees (in the amount of R$1,245 thousand), (ii) M&As processes (in the amount of R$942 thousand) and (iii) tax benefits processes and other tax matters (in the amount of R$ 845 thousand).
Research and development expenses
Our research and development expense increased by R$5,805 thousand, or 59.0%, to R$15,637 thousand in 2020 from R$9,832 thousand in 2019, primarily due to an increase in personnel expenses as a result of our growth in the amount of R$4,207 thousand and compensation expenses of R$1,326 thousand related to the Total Voice acquisition.
Net finance costs
Our net finance costs increased by R$4,791 thousand, or 186.3%, to R$8,532 thousand in 2020 from R$2,572 thousand in 2019, as a result of the following:
Finance costs
Our finance costs increased by R$19,769 thousand, or 290.3%, to R$26,580 thousand in 2020 from R$6,811 thousand in 2019, primarily as a result of a monthly variation of the exchange rate on the amounts payable related to the Sirena Acquisition (in the amount of R$14,354 thousand), monthly variation of the exchange rate on other assets and liabilities of R$ 1,435 thousand, interest expenses over amounts payable related to the Sirena Acquisition and an increase in the interest on loans and borrowings (in the amount of R$956 thousand).
Finance income
Our finance income increased by R$14,978 thousand, or 353.3%, to R$19,217 thousand in 2020 from R$4,239 thousand in 2019, mainly due to a monthly variation of the exchange rate on the amounts payable related Sirena Acquisition (in the amount of R$15,359 thousand), exchange rate from other assets and liabilities of R$ 1,870 thousand, partially offset by a reduction of gains on financial investments in the amount of R$2,339 thousand as a result of the reduction in the CDI interest rate during the period and due to the lower average monthly cash balance outstanding in 2020 when compared to 2019.
Profit (loss) before income tax and social contribution
As a result of the above, our profit before income tax and social contribution decreased by R$46,648 thousand, or 271.6%, to a loss before income tax and social contribution of R$29,470 thousand in 2020 from a profit before income tax and social contribution of R$17,178 thousand in 2019.
 
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Income tax and social contribution
Our income tax and social contribution decreased by R$11,373 thousand, to an income of R$8,039 thousand in 2020 from an expense of R$3,334 thousand in 2019, primarily due to the loss in the period. See note 23 to our audited consolidated financial statements included elsewhere in this prospectus.
Profit (loss) for the year
As a result of the above, our profit decreased by R$35,275 thousand, or 254.8%, to a loss of R$21,431 thousand in 2020 from a profit of R$13,844 thousand in 2019.
Year Ended December 31, 2019 Compared to Year Ended December 31, 2018
The following table sets forth our consolidated statements of profit or loss for the years ended December 31, 2019 and 2018.
​ ​ ​
Year ended December 31,
​
​ ​ ​
2019
​ ​
2018(1)
​ ​
Variation
​
​ ​ ​
(in R$)
​ ​
(in R$)
​ ​
(%)
​
​ ​ ​
(in thousands)
​
Revenue
​ ​ ​ ​ 354,035 ​ ​ ​ ​ ​ 276,380 ​ ​ ​ ​ ​ 28.1% ​ ​
Cost of services
​ ​ ​ ​ (260,786) ​ ​ ​ ​ ​ (186,084) ​ ​ ​ ​ ​ 40.1% ​ ​
Gross profit
​ ​ ​ ​ 93,249 ​ ​ ​ ​ ​ 90,296 ​ ​ ​ ​ ​ 3.3% ​ ​
Selling and marketing expenses
​ ​ ​ ​ (26,018) ​ ​ ​ ​ ​ (18,241) ​ ​ ​ ​ ​ 42.6% ​ ​
Administrative expenses
​ ​ ​ ​ (40,868) ​ ​ ​ ​ ​ (35,683) ​ ​ ​ ​ ​ 14.5% ​ ​
Research and development expenses
​ ​ ​ ​ (9,832) ​ ​ ​ ​ ​ (3,931) ​ ​ ​ ​ ​ 150.1% ​ ​
Gain on bargain purchase
​ ​ ​ ​ 2,479 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ n.m. ​ ​
Allowance for credit losses
​ ​ ​ ​ (3,733) ​ ​ ​ ​ ​ (2,287) ​ ​ ​ ​ ​ 63.2% ​ ​
Other income and expenses, net
​ ​ ​ ​ 4,473 ​ ​ ​ ​ ​ 96 ​ ​ ​ ​ ​ n.m. ​ ​
Operating profit
​ ​ ​ ​ 19,750 ​ ​ ​ ​ ​ 30,250 ​ ​ ​ ​ ​ (34.7)% ​ ​
Finance costs
​ ​ ​ ​ (6,811) ​ ​ ​ ​ ​ (7,352) ​ ​ ​ ​ ​ (7.4)% ​ ​
Finance income
​ ​ ​ ​ 4,239 ​ ​ ​ ​ ​ 3,446 ​ ​ ​ ​ ​ 23.0% ​ ​
Net finance costs
​ ​ ​ ​ (2,572) ​ ​ ​ ​ ​ (3,906) ​ ​ ​ ​ ​ (34.2)% ​ ​
Profit before income tax and social contribution
​ ​ ​ ​ 17,178 ​ ​ ​ ​ ​ 26,344 ​ ​ ​ ​ ​ (34.8)% ​ ​
Deferred income tax and social contribution
​ ​ ​ ​ (3,186) ​ ​ ​ ​ ​ (3,457) ​ ​ ​ ​ ​ (7.8)% ​ ​
Current income tax and social contribution
​ ​ ​ ​ (148) ​ ​ ​ ​ ​ (3,022) ​ ​ ​ ​ ​ (95.1)% ​ ​
Profit for the year
​ ​ ​ ​ 13,844 ​ ​ ​ ​ ​ 19,865 ​ ​ ​ ​ ​ (30.3)% ​ ​
​
n.m. = not meaningful
(1)
Has not been restated to give effect to the adoption of IFRS 16. See “Presentation of Financial and Other Information — Special Note Regarding the Adoption of IFRS 16.”
​
Revenue
Our revenue increased by R$77,655 thousand, or 28.1%, to R$354,035 thousand in 2019 from R$276,380 thousand in 2018, principally as a result of the increase in the volume of use (number of interactions) of our platform by our customers, which resulted in an increase in revenue of R$131,879 thousand in 2019. This increase was partially offset by (i) a reduction in our average interactions unit price (which consists of the average unit price we charge our customers to use the products we offer on our platform) for the period, which decreased our revenue by R$50,845 thousand in 2019 and (ii) a decrease in revenue derived from our carrier billing operations in the amount of R$3,397 thousand. The increase in revenue
 
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described above is driven by both (a) existing customers (R$ 47,261 thousand), as evidenced by our net revenue expansion rate of 117.1% for the year ended December 31, 2019 and (b) new customers (R$ 30,394 thousand) adopting our solutions in 2019).
Cost of services
Our cost of services increased by R$74,702 thousand, or 40.1%, to R$260,786 thousand in 2019 from R$186,084 thousand in 2018, principally due to an increase in expenses with carriers in the amount of R$72,248 thousand, of which R$ 79,850 thousand related to the increase in volume usage, partially offset by R$ 7,602 thousand due to a reduction in average usage price.
Gross profit
As a result of the above, our gross profit increased by R$2,953 thousand, or 3.3%, to R$93,249 thousand in 2019 from R$90,296 thousand in 2018. As a percentage of our revenue, our gross profit decreased to 26.3% in 2019 from 32.7% in 2018.
Other operating expenses
Selling and marketing expenses
Our selling and marketing expenses increased by R$7,777 thousand, or 42.6%, to R$26,018 thousand in 2019 from R$18,241 thousand in 2018, primarily due to expenses with our recently developed value-added reseller sales channel (in the amount of R$1,290 thousand), our increased investment in digital advertising and marketing events (in the amount of R$ 1,173 thousand), an increase in personnel expenses as part of our sales expansion strategy (in the amount of R$1,981 thousand) and compensation expenses of R$2,616 thousand related to Total Voice acquisition.
Administrative expenses
Our administrative expenses increased by R$5,185 thousand, or 14.5%, to R$40,868 thousand in 2019 from R$35,683 thousand in 2018, primarily as a result of expenses in our corporate technology structure (e.g., amortization of personal computers, personnel involved with internal infrastructure and amortization of internal servers) to support our growth and compliance requirements in the amount of R$1,555 thousand, corporate restructuring and mergers and acquisitions expenses for completed and pending transactions in the amount of R$1,477 thousand and an increase in personnel expenses due to our increased headcount as part of our growth strategy in the amount of R$998 thousand.
Research and development expenses
Our research and development expense increased by R$5,901 thousand, or 150.1%, to R$9,832 thousand in 2019 from R$3,931 thousand in 2018, primarily due to an increase in personnel expenses in the amount of R$1,502 thousand and outsourced engineering services in the amount of R$910 thousand, in line with our focus on enhancing existing products and introducing new products as well as enhancing product management and other technical functions. In addition, we had compensation expenses of R$2,614 thousand related to Total Voice acquisition.
Net finance costs
Our net finance costs decreased by R$1,334 thousand, or 34.2% to R$2,572 thousand in 2019 from R$3,906 thousand in 2018, as a result of the following:
Finance costs
Our finance costs decreased by R$541 thousand, or 7.4% to R$6,811 thousand in 2019 from R$7,352 thousand in 2018, as a result of the renegotiation of our Bank Credit Note (Cédula de Crédito Bancário), or CCB, with Banco Santander (Brasil) S.A. contemplating a reduction of interest rates and a
 
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decrease in interest rates to which our indebtedness is linked (such as CDI and TJLP) resulting in a lower debt servicing costs. For more information, see “— Indebtedness — Financing Agreements — Working Capital.”
Finance income
Our finance income increased by R$793 thousand, or 23.0%, to R$4,239 thousand in 2019 from R$3,446 thousand in 2018, primarily due to interest income given our average cash balance for the year.
Profit before income tax and social contribution
As a result of the above, our profit before income tax and social contribution decreased by R$9,166 thousand, or 34.8%, to R$17,178 thousand in 2019 from R$26,344 thousand in 2018. As a percentage of our revenue, our profit before income tax and social contribution decreased to 4.9% in 2019 from 9.5% in 2018.
Income tax and social contribution
Our income tax and social contribution decreased by R$3,145 thousand, to R$3,334 thousand in 2019 from R$6,479 thousand in 2018, primarily due to the reduction in profit before tax and the reduction in the effective tax rate to 19.4% from 24.6% as a result of tax incentives and other non taxable adjustments, such as Lei do Bem research and development tax incentives.
Profit for the year
As a result of the above, our profit decreased by R$6,021 thousand, or 30.3%, to R$13,844 thousand in 2019 from R$19,865 thousand in 2018. As a percentage of our revenue, our profit decreased to 3.9% in 2019 from 7.2% in 2018.
Critical Accounting Policies and Estimates
Our consolidated financial statements are prepared in conformity with IFRS. In preparing our consolidated financial statements, we make assumptions, judgments and estimates that can have a significant impact on amounts reported in our consolidated financial statements. We base our assumptions, judgments and estimates on historical experience and various other factors that we believe to be reasonable under the circumstances. Actual results could differ materially from these estimates under different assumptions or conditions. We regularly reevaluate our assumptions, judgments and estimates. Our significant accounting policies are described in note 4 to our audited consolidated financial statements included elsewhere in this prospectus. We believe that the following critical accounting policies are more affected by the significant judgments and estimates used in the preparation of our consolidated financial statements:
Goodwill
Goodwill represents the excess of the aggregate fair value of consideration transferred in a business combination, over the fair value of assets acquired, net of liabilities assumed.
When we acquire businesses, we allocate the purchase price to the tangible assets and liabilities and identifiable intangible assets acquired. Any residual purchase price is recorded as goodwill. The allocation of the purchase price requires management to make significant estimates in determining the fair values of assets acquired and liabilities assumed, especially with respect to intangible assets. These estimates are based on information obtained from management of the acquired companies, market information and historical experience. These estimates can include, but are not limited to:
•
the time and expenses that would be necessary to recreate the asset;
​
•
the profit margin a market participant would receive;
​
•
cash flows that an asset is expected to generate in the future; and
​
•
discount rates.
​
 
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These estimates are inherently uncertain and unpredictable, and if different estimates were used the purchase price for the acquisition could be allocated to the acquired assets and liabilities differently from the allocation that we have made. In addition, unanticipated events and circumstances may occur which may affect the accuracy or validity of such estimates, and if such events occur we may be required to record a charge against the value ascribed to an acquired asset or an increase in the amounts recorded for assumed liabilities. Under the current authoritative guidance, we are allowed a one-year measurement period to finalize our preliminary valuation of the tangible and intangibles assets and liabilities acquired and make necessary adjustments to goodwill.
Goodwill is allocated to cash-generating units for the purpose of impairment testing. The allocation is made to groups of cash-generating units that are expected to benefit from the business combination in which the goodwill arose. The groups of units are identified at the lowest level at which goodwill is monitored for internal management purposes, being one operating segment. We have one reportable segment as at December 31, 2020, 2019 and 2018.
Goodwill is tested for impairment annually as at December 31 and when circumstances indicate that the carrying value may be impaired. Impairment is determined for goodwill by assessing the recoverable amount of the segment to which the goodwill relates. When the recoverable amount is less than its carrying amount, an impairment loss is recognized. Impairment losses relating to goodwill cannot be reversed in future periods.
Significant unobservable inputs
​ ​ Relationship between significant unobservable inputs and
measurement of the present value of cash flows 		​
•
Annual forecast revenue growth rate;
​
•
Forecast of the growth rate of variable input costs; and
​
•
Risk-adjusted discount rate.
​
​ ​
The present value of cash flows could increase (decrease) if:
•
the annual growth rate of revenue was higher (lower);
​
•
the cost growth rate was (higher) lower; or
​
•
the risk-adjusted discount rate was (higher) lower.
​
​
The recoverable amount is determined by calculating the present value of cash flows based on our economic and/or financial projections for the next 5 years, and a terminal growth rate thereafter. Any kind of reasonably possible change in the key assumptions on which the recoverable amount is based would not cause the carrying amount to exceed the recoverable amount.
For total assets and intangibles we used the following assumptions:
​ ​ ​
2020
​ ​
2019
​ ​
2018
​
Weighted average annual revenue growth
​ ​ ​ ​ 36.38% ​ ​ ​ ​ ​ 16.48% ​ ​ ​ ​ ​ 20.74% ​ ​
Weighted average annual growth of variable cost
​ ​ ​ ​ 26.93% ​ ​ ​ ​ ​ 18.74% ​ ​ ​ ​ ​ 20.08% ​ ​
Weighted average cost of capital (WACC)
​ ​ ​ ​ 16.40% ​ ​ ​ ​ ​ 15.90% ​ ​ ​ ​ ​ 19.00% ​ ​
Growth in terminal value
​ ​ ​ ​ 0% ​ ​ ​ ​ ​ 0% ​ ​ ​ ​ ​ 0% ​ ​
The key assumptions used in the estimation of the recoverable amount are set out above.
The values assigned to the key assumptions represent management’s assessment of future trends for the business and have been based on historical experience and growth projections, and internal and external data.
The estimated recoverable amount exceeded its carrying amount by approximately R$661,284 thousand (R$113,681 thousand in 2019). Management has identified that a reasonably possible change in the revenues could cause the carrying amount to equal the recoverable amount. The following table shows the rate of revenue growth and the corresponding effect on the variable cost growth by which the estimated recoverable amount is equal to the carrying amount
 
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​ ​ ​
2020
​ ​
2019
​ ​
2018
​
Weighted average annual revenue growth
​ ​ ​ ​ 30.62% ​ ​ ​ ​ ​ 9.40% ​ ​ ​ ​ ​ 17.22% ​ ​
Weighted average annual growth of variable cost
​ ​ ​ ​ 21.12% ​ ​ ​ ​ ​ 11.52% ​ ​ ​ ​ ​ 16.58% ​ ​
.
An impairment loss in respect of goodwill is not reversed. For other assets, an impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortization, if no impairment loss had been recognized.
Intangible assets — Research and development expenditures
Expenses with research activities are recognized in the period in which they are incurred. The intangible assets resulting from development expenditures (or of a development phase of an internal project) is recognized if, and only if, all of the following conditions are met: (i) technical feasibility to complete the intangible asset so it will be available for use or sale; (ii) the intention to complete the intangible asset and use it or sell it; (iii) ability to use or sell the intangible asset, (iv) how the intangible asset will generate probable future economic benefits; (v) the availability of proper technical, financial and other resources to complete the development of the intangible asset and to use it or sell it and (vi) the ability to measure reliably the expenditure attributable to the intangible asset during its development.
The amount initially recognized for intangible assets corresponds to the sum of expenses incurred since the intangible asset started to meet the recognition criteria mentioned above until the moment it is considered finished and begins its value generation. After the closure of each capitalized project, they are amortized over their estimated useful lives and are reviewed for impairment if indicators of impairment arise.
We evaluate the recoverability of our intangible assets for impairment annually or whenever events or circumstances indicate that the carrying amount of the assets may not be recoverable. Recoverability of intangible assets are measured by comparison of the carrying amount of the asset to the future undiscounted cash flows the asset is expected to generate. If the asset is considered to be impaired, the amount of any impairment is measured as the difference between the carrying value and the fair value of the impaired asset.
Our main assumptions with respect to intangible assets relate to recoverable amounts. The initially recognized amount of intangible assets corresponds to the sum of the expenses incurred since the intangible asset started meeting the aforementioned recognition criteria. The estimation of recoverable amounts is sensitive to key assumptions including the discount rate used in determining present values, expected future cash-inflows and the long-term growth rate used for estimating cash flows in perpetuity. If the asset is considered to be impaired, the amount of any impairment is measured as the difference between the carrying value and the fair value of the impaired asset. No indicators of impairment were identified for the years ended December 31, 2020, 2019 and 2018.
When no internally generated intangible asset can be recognized, we recognize development expenses in income (loss) for the period, when incurred. After the initial recognition, intangible assets generated internally are recorded at cost, less amortization and accumulated impairment losses, as well as intangible assets separately acquired.
Income tax and social contribution
Current income tax
The current corporate income tax, or CIT, is calculated at a joint nominal rate of approximately 34%. CIT is composed of (i) income tax at the rate of 15% in addition to a surplus rate of 10% for taxable income exceeding R$20.0 thousand per month; and (ii) 9% social contribution tax on net income.
Our tax assets for the current year are calculated based on the expected recoverable amount, and tax liabilities for the current year are calculated based on the amount payable to the applicable tax authorities. The tax rates and tax laws used to calculate this amount are those enacted or substantially enacted at the reporting date. We periodically evaluate our tax positions with respect to interpreting tax regulations and, when appropriate, establish provisions. Due to the nature of income tax and social contributions in Brazil
 
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described above, where income tax and social contributions are payable on a legal entity basis as opposed to on a consolidated basis, tax losses for one subsidiary entity cannot be used to offset income tax owed by other subsidiary entities.
Provisions
A provision is recognized in the statement of financial position when we have a legal or constructive obligation as a result of a past event, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are recognized based on the best estimates of the risk involved.
Possible contingent assets are not recognized until final and unappealable decisions are in our favor and when it is virtually certain that the asset will be realized. Taxes whose enforceability is being challenged in the judicial sphere are recorded taking into consideration the concept of “legal obligation.” Judicial deposits performed as guarantees for lawsuits in progress are recorded under “Judicial deposits.”
Provisions are reviewed on the dates of the financial statements and adjusted to reflect the current best estimate. If it is no longer probable that a cash outflow is required to settle the obligation, the provision is reversed.
Application of New Accounting Standards and Recent Accounting Pronouncements
IFRS 16 replaced the lease standards and introduced a single model of accounting of leases in the balance sheet for lessees. A lessee recognizes an asset of right-of-use that represents its right to use the leased asset and a liability lease that represents its obligation to make payments under the lease. Practical expedients are available to short-term leases and low value leases. This standard became effective as of January 1, 2019.
We adopted IFRS 16 under the simplified retrospective approach, which did not require the restatement of the corresponding amounts or impact the total equity and elected the adoption of practical expedients.
Accordingly, the comparative information was not restated. In the transition, for leases classified as operational leases, under IFRS 16, the lease liabilities were measured at present value of the remaining payments, discounted at the incremental loan rate as at January 1, 2019. Right-of-use assets are measured at an amount equal to the lease liability on the date of the initial adoption, adjusted by any lease payments received or paid in advance.
We have elected to adopt the practical expedients. We did not recognize the right-of-use assets and the lease liabilities for low value leases (up to R$5,000) and for lease terms expiring within twelve months of the date of initial adoption, excluded the initial direct costs of measuring the right-of-use asset as of the date of the initial adoption and used January 1, 2019 as the date of initial adoption to determine the lease term.
For information about the application by us of new accounting standards and recent accounting pronouncements that will apply to us going forward and/or in the future, see note 5 to our audited consolidated financial statements included elsewhere in this prospectus.
Seasonality
Although we have not historically experienced significant seasonality with respect to our revenue throughout the year given the growth in the adoption and usage of our platform, we have seen moderate seasonality in some use cases such as education and brick-and-mortar retail stores. We have experienced revenue growth during the Carnival period in March, the back-to-school periods in July and August, Black Friday at the end of November and the Christmas season. The rapid growth in our business has offset this seasonal trend to date, but its impact on revenue may be more pronounced in future periods. For more information, see “Risk Factors — Certain Risks Relating to Our Business and Industry — Our quarterly results may fluctuate, and if we fail to meet securities analysts’ and investors’ expectations, then the trading price of our Class A common shares and the value of your investment could decline substantially.”
Liquidity and Capital Resources
The following discussion of our liquidity and capital resources is based on the financial information derived from our consolidated financial statements included elsewhere in this prospectus.
 
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Liquidity
Our cash and cash equivalents include cash on hand, immediate demand deposits with financial institutions and other short-term highly liquid investments, which have an immaterial risk of change in value. As of December 31, 2020, our cash and cash equivalents amounted to R$59,979 thousand. For additional information, see note 6 to our audited consolidated financial statements.
We regularly evaluate opportunities to enhance our financial flexibility through a variety of methods, including, without limitation, through the issuance of debt securities and entering of additional credit lines. As a result of any of these actions, we may be subject to restrictions and covenants in the agreements governing these transactions that may place limitations on us, and we may be required to pledge collateral to secure such instruments.
We intend to increase our capital expenditures to support the growth in our business and operations. We believe that our existing cash and cash equivalents and the liquidity provided from other sources of funds (including the proceeds from this offering and the indebtedness incurred in 2021 as further detailed below) will be sufficient to meet our anticipated cash needs for at least the next 12 months and that our debt profile will be adequate vis-à-vis our estimated cash requirements. However, our liquidity assumptions may prove to be incorrect, and we could exhaust our available financial resources sooner than we currently expect. We may seek to raise additional funds at any time through equity, equity-linked or debt financing arrangements. Our future capital requirements and the adequacy of available funds will depend on many factors, including those described in the section of this prospectus captioned “Risk Factors.” We may not be able to secure additional financing to meet our operating requirements on acceptable terms, or at all.
Consolidated Statements of Cash Flows
The following table sets forth certain consolidated cash flow information for the years indicated:
​ ​ ​
For the Year Ended December 31,
​ ​
​ ​ ​
2020
​ ​
2019
​ ​
2018
​
​ ​ ​
(in thousands of R$)
​
Net cash from operating activities
​ ​ ​ ​ 46,143 ​ ​ ​ ​ ​ 26,451 ​ ​ ​ ​ ​ 39,553 ​ ​
Net cash used in investment activities
​ ​ ​ ​ (61,591) ​ ​ ​ ​ ​ (9,927) ​ ​ ​ ​ ​ (10,921) ​ ​
Net cash from (used in) financing activities
​ ​ ​ ​ 62,052 ​ ​ ​ ​ ​ (54,858) ​ ​ ​ ​ ​ (6,616) ​ ​
Net (decrease) increase in cash and cash equivalents
​ ​ ​ ​ 47,637 ​ ​ ​ ​ ​ (38,334) ​ ​ ​ ​ ​ 22,016 ​ ​
Net cash from operating activities
For the year ended December 31, 2020, net cash from operating activities amounted to R$46,143 thousand, primarily as a result of:
•
Loss for the period of R$21,431 thousand, combined with non-cash expenses consisting primarily of an increase in provisions relating to our tax proceeding related to tax on services (imposto sobre serviços), or ISS, in the amount of R$7,265 thousand, allowance for credit losses amounting to R$4,205 thousand, financial costs and foreign exchange, net, of R$5,486 thousand, provision for compensation expenses negotiated in connection with business combination transactions amounting to R$16,715 thousand, write-off of property, plant and equipment in connection with the relocation of the Porto Alegre office to São Paulo, in the amount of R$ 1,758 thousand, lease recognition adjustment in connection with the relocation of the Porto Alegre office to São Paulo, in the amount of R$ 2,183 thousand, income tax credit of R$8,039 thousand and depreciation and amortization of R$27,287 thousand. The total amount of adjustment to net income from non-cash items for the year ended December 31, 2020 amounted to R$58,093 thousand;
​
•
Net cash from changes in operating assets and liabilities, totaled an inflow of R$16,449 thousand, principally due to: (i) an increase in the balance of accounts payables, which led to a positive cash flows of R$48,583 thousand; offset by (ii) an increase in the balance of accounts receivable, which led to
​
 
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negative cash flows of R$26,308 thousand, mainly due to an increase in the revenues; and (iii) an increase in the balance of prepayments and other assets, which led to a negative cash flows of R$5,826 thousand; and
•
Payments of interest of R$5,232 thousand and income tax and social contribution paid of R$1,736 thousand, which generated a net outflow of R$6,968 thousand.
​
For the year ended December 31, 2019, net cash from operating activities amounted to R$26,451 thousand, primarily as a result of:
•
Profit for the period of R$13,844 thousand, combined with non-cash expenses consisting primarily of an increase in provisions relating to our tax proceeding related to ISS in the amount of R$6,477 thousand, financial costs and foreign exchange, net, of R$4,687 thousand, labor incentives provisions of R$4,641 thousand, provision for compensation expenses negotiated in connection with business combination transactions amounting to R$5,230 thousand and depreciation and amortization of R$18,796 thousand. The total amount of adjustment to net income from non-cash items for the year ended December 31, 2019 amounted to R$44,844 thousand;
​
•
Net cash from changes in operating assets and liabilities, totaled an outflow of R$24,934 thousand, principally due to: (i) an increase in the balance of accounts receivable, which led to negative cash flows of R$14,536 thousand, mainly due to an increase in the revenues; and (ii) an decrease in the balance of accounts payables, which led to negative cash flows of R$9,585 thousand; and
​
•
Payments of interest of R$4,691 thousand and income tax and social contribution paid of R$2,612 thousand, which generated a net outflow of R$7,303 thousand.
​
For the year ended December 31, 2018, net cash from operating activities amounted to R$39,553 thousand, primarily as a result of:
•
Profit for the period of R$19,865 thousand, combined with non-cash expenses consisting primarily of an increase in provisions of R$11,148 thousand, financial costs and foreign exchange, net, of R$5,922 thousand and depreciation and amortization of R$14,513 thousand. The total amount of adjustment to net income from non-cash items for the year ended December 31, 2018 amounted to R$38,064 thousand.
​
•
Net cash from changes in working capital, arising from changes in operating assets and liabilities, resulting in an outflow of R$11,360 thousand, principally due to: (i) an increase in the balance of accounts receivable, which led to negative cash flows of R$4,824 thousand, mainly due to an increase in the revenues; (ii) a decrease in the balance of prepaid expenses, which led to positive cash flows of R$4,783 thousand, mainly due to the use of prepayment credit amounts made to carriers in 2017; and (iii) a decrease in the balance of accounts payables, which led to negative cash flows of R$12,361 thousand; and
​
•
Payments of interest of R$4,654 thousand and income tax and social contribution paid of R$2,362 thousand, which generated a net inflow of R$7,016 thousand.
​
Net cash used in investment activities
Net cash used in investment activities increased by R$51,664 thousand, to R$61,591 thousand in 2020 from R$9,927 thousand in 2019, increase in the amount of acquisition of subsidiary net of cash by R$43,482 thousand, primarily due to the impact of the Sirena acquisition, net of cash (which amounted to R$45,344 thousand), platform acquisition in the amount of R$4,400 thousand and increase in other intangible assets in the amount of R$3,786 thousand (totaling R$8,186 thousand of variation in acquisition of intangible assets). Net cash used in investment activities decreased by R$994 thousand, to R$9,927 thousand in 2019 from R$10,921 thousand in 2018, primarily due to the payment in 2019 of the first installment for the acquisition of Total Voice, in the amount of R$1,862 thousand, acquisition of property and equipment, including equipment and hardware for use in our data centers and offices (R$2,303 thousand higher than in 2018), partially offset by liquid investments (R$4,636 thousand higher than in 2018).
 
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Net cash from (used in) financing activities
Net cash from (used in) financing activities changed by R$116,910 thousand, to net cash from financing activities of R$62,052 thousand in 2020 from net cash used in financing activities of R$54,858 thousand in 2019. This change was primarily due to (i) new loans and borrowings in the amount of R$62,000 thousand (compared to R$25,000 thousand in 2019), (ii) a capital increase of R$36,409 thousand in 2020 and (iii) the non-recurrence in 2020 of payment of dividends (which amounted to R$67,719 thousand in 2019), partially offset by an increase in payment of loans and borrowings in the amount of R$33,212 thousand in 2020 (compared to R$9,879 thousand in 2019).
Net cash used in financing activities increased by R$48,242 thousand, to R$54,858 thousand in 2019 from R$6,616 thousand in 2018. This increase was primarily due to a change in our shareholding structure as a result of the departure of certain shareholders, resulting in an extraordinary dividend payment in the amount of R$67,719 thousand (compared to R$2,310 thousand in 2018), which was partially offset by a reduction in debt payment in the period (R$9,879 thousand in 2019 compared to R$28,565 thousand in 2018).
Capital Expenditures
Our capital expenditures (consisting of acquisitions of businesses, property and equipment and intangible assets) represented 14.6%, 2.7% and 3.5% of our revenues in 2020, 2019 and 2018, respectively. Capital expenditures for the years ended December 31, 2020, 2019 and 2018 amounted to R$62,656 thousand, R$9,487 thousand and R$9,722 thousand, respectively, principally due to:
•
Net cash payment for the Sirena acquisition in the amount of R$45,402 thousand in 2020.
​
•
The purchase of a data center and other IT equipment in order to achieve additional capacity to sustain the growth in our transaction volumes (R$3,919 thousand, R$3,655 thousand and R$2,757 thousand for the years ended December 31, 2020, 2019 and 2018, respectively).
​
•
Purchase and development of intangible assets, primarily related to software licenses and capitalized compensation of software developers (R$8,165 thousand, R$4,379 thousand and R$4,902 thousand for the years ended December 31, 2020, 2019 and 2018, respectively).
​
•
The payments in connection with the acquisition of Total Voice (first payment of R$2,015 thousand for the year ended December 31, 2019).
​
As of the date hereof, we expect that our capital expenditures for 2021 will amount to approximately R$94 million, including approximately R$9 million for property and equipment acquisitions, R$15 million for development of intangible assets and R$70 million for the acquisition of Sirena and Total Voice, which will be funded through our operating activities and by financing operations with financial institutions and investors.
Indebtedness
We had total indebtedness (consisting of loans and borrowings) in the amount of R$98,975 thousand as of December 31, 2020, compared to R$63,346 thousand and R$48,229 thousand as of December 31, 2019 and 2018, respectively. The increase in indebtedness is primarily due to incurrence of indebtedness to fund our operations and support our growth.
Zenvia Brazil financing agreements provide the following financial covenants:
•
Net debt-to-EBITDA ratio not exceeding 2.0x: As of December 31, 2020, 2019 and 2018, our net debt-to-EBITDA ratio was 7.53x, 1.32x and (0.05)x, respectively, of our EBITDA for the years ended December 31, 2020, 2019 and 2018. For purposes of our financing agreements, (i) net debt is defined as gross debt (as such term is defined in the agreements) minus cash, financial investments and short- and long-term financial assets (such as derivatives), and (ii) EBITDA is generally defined as results (in the twelve months prior to the date of testing) before income tax and social contribution, depreciation and amortization, financial results, non-operational results, equity income from unconsolidated companies and non-controlling shareholder interest, excluding the effects of IFRS 16 — Leases.
​
 
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•
Shareholders’ equity to assets ratio higher than or equal to 0.25: As of December 31, 2020, 2019 and 2018, our shareholders’ equity to assets ratio was 0.25, 0.40 and 0.55, respectively.
​
•
Annual distributions of dividends and/or interest on shareholders’ equity lower than or equal to 25% of profit for the year: For the year ended December 31, 2019, we had obtained the necessary waivers and we had distributed dividends in the amount of R$67,719 thousand, of which R$11,552 thousand was distributed based on the result for the year, representing 83.4% of the profit for the year. 
​
As of December 31, 2020, we were not in compliance with our Net debt-to-EBITDA covenant. Accordingly, we requested waivers from our financial creditors, which were obtained except from BNDES. Santander provided us with an waiver in 2020 and Itaú provided us with a waiver in 2021 with retroactive effect to 2020. Our indebtedness with Itaú and BNDES were reclassified as short-term loans and borrowings as waivers were not obtained in 2020. Prior to the date of this prospectus, we repaid our BNDES Prosoft loan in full and we are currently seeking a waiver from BNDES with respect to its Progeren working capital facility agreement. As of December 31, 2020, the outstanding balance of this agreement amounted to R$14,074 thousand.
Financing Agreements
The table below sets forth selected information regarding substantially all of our outstanding indebtedness as of December 31, 2020 and 2019:
​ ​ ​ ​ ​ ​
As of December 31,
​
​ ​ ​
Interest
​ ​
2020
​ ​
2019
​
​ ​ ​ ​ ​ ​
(in thousands of R$)
​
Working capital
​ ​
100% CDI+2.40% to 5.46%,TJLP+2.98% or 24%
​ ​ ​ ​ 97,396 ​ ​ ​ ​ ​ 60,985 ​ ​
BNDES Prosoft(1)
​ ​
TJLP+2.96%
​ ​ ​ ​ 1,579 ​ ​ ​ ​ ​ 2,338 ​ ​
Leases
​ ​
100% CDI+2.00% to 3.86% or 7.25%
​ ​ ​ ​ — ​ ​ ​ ​ ​ 23 ​ ​
Total ​ ​ ​ ​ ​ ​ ​ 98,975 ​ ​ ​ ​ ​ 63,346 ​ ​
Current
​ ​ ​ ​ ​ ​ ​ 56,197 ​ ​ ​ ​ ​ 17,696 ​ ​
Noncurrent
​ ​ ​ ​ ​ ​ ​ 42,778 ​ ​ ​ ​ ​ 45,650 ​ ​
​
(1)
Fully prepaid in March 2021.
​
Working Capital
Zenvia Brazil has certain working capital arrangements with the Brazilian Development Bank (Banco Nacional de Desenvolvimento Econômico Social — BNDES), Caixa Econômica Federal, Itaú Unibanco S.A., Banco Santander (Brasil) S.A., Banco Votorantim S.A. and Banco ABC Brasil S.A., as described below. These working capital arrangements bear interest at rates between 100% CDI+2.40% to 100% CDI+5.46% and TJLP+2.98% per annum and mature between September 26, 2022 and February 27, 2025. As of December 31, 2020, the total outstanding amount of the working capital arrangements was R$97,396 thousand.
•
In December 2017, Zenvia Brazil entered into an agreement with BNDES for a revolving credit facility (Progeren) in the aggregate amount of R$20,000 thousand, which is guaranteed by Cassio Bobsin, currently a member of our board of directors and our chief executive officer, amongst others. Following a grace period, this revolving credit facility will be paid in 36 monthly installments with the first installment due on February 15, 2020 and the last installment due on January 15, 2023.
​
•
In December 2019, Zenvia Brazil entered into an agreement with Banco Santander (Brasil) S.A. for an export credit note (cédula de crédito à exportação — CCE) in the aggregate amount of R$10,000 thousand. Following a 6 month grace period during which interest is payable, the CCE would be paid in 8 semi-annual installments, with the first installment due on June 12, 2020. The CCE
​
 
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was amended in December 2020 and its outstanding balance (R$8,500 thousand as of December 31, 2020) has been paid in full as of the date of this prospectus.
•
In December 2019, Zenvia Brazil entered into an agreement with Itaú Unibanco S.A. for an export credit note in the aggregate amount of R$15,000 thousand. Following a 12 month grace period in which interest is due, this agreement will be paid in 8 quarterly installments with the first installment due on November 30, 2020 and the last installment due on November 13, 2023. In October 2020, the export credit note was disqualified as such and converted into a CCB. Itaú Unibanco S.A. paid the Tax on Foreign Exchange Transactions, or the IOF, in connection with this conversion.
​
In addition, in April 2020, Zenvia Brazil entered into an agreement with Itaú Unibanco S.A. for a CCB, in the aggregate amount of R$15,000 thousand. Following a six month grace period during which interest is payable, this CCB will be paid in 30 monthly installments with the first installment due on October 22, 2020 and the last installment due on April 24, 2023.
In June 2020, Zenvia Brazil entered into an agreement with Caixa Econômica Federal for a CCB in the aggregate amount of R$15,000 thousand, which is secured by a fiduciary assignment (cessão fiduciária) of credit rights represented by payment notes (direitos creditórios lastreados em duplicatas mercantis representadas por títulos de cobrança bancária) and certain deposits/financial investments (depósitos/aplicações financeiras). Following a one year grace period during which interest is payable, the CCB will be paid in 36 monthly installments with the first installment of principal and interest due on June 27, 2021 and the last installment due on June 27, 2023.
In October 2020, Zenvia Brazil entered into an agreement with Caixa Econômica Federal for a CCB in the aggregate amount of R$15,000 thousand, which is secured by a fiduciary assignment (cessão fiduciária) of credit rights represented by payment notes (direitos creditórios lastreados em duplicatas mercantis representadas por títulos de cobrança bancária) and certain deposits/financial investments (depósitos/​aplicações financeiras). Following a one and a half year grace period during which interest is payable, the CCB will be paid in 24 monthly installments with the first installment of principal and interest due on May 3, 2021 and the last installment due on April 3, 2024.
In November 2020, Zenvia Brazil entered into an agreement with Banco Votorantim S.A. for a credit line offered by the Brazilian government through the Fundo Garantidor para Investimentos, or FGI, program in the amount of R$10,000 thousand. Through the FGI program, BNDES guarantees the transaction, aiming to facilitate access to credit lines for businesses. Following a one year grace period during which interest is payable, the CCB will be paid in 36 monthly installments with the first installment of principal and interest due on December 10, 2021 and the last installment due on November 11, 2024.
In November 2020, Zenvia Brazil entered into an agreement with Banco ABC Brasil S.A. for a credit line offered by the Brazilian government through the FGI program in the amount of R$7,000 thousand. Following a one year grace period during which interest is payable, the CCB will be paid in 36 monthly installments with the first installment of principal and interest due on December 10, 2021 and the last installment due on November 11, 2024.
On April 23, 2020, Rodati Services S.A. or Sirena Argentina, entered into an agreement with the Industrial and Commercial Bank of China, or the ICBC, for a credit line offered by the Argentine government through the Argentine Guarantee Fund, or FoGar, program in the aggregate amount of ARS540 thousand, which is guaranteed by Sirena. The FoGar program aims to facilitate access to credit for micro, small and medium enterprises. This credit line has been paid in full as of the date of this prospectus.
On June 29, 2020, Sirena Argentina entered into an agreement with the ICBC for a credit line offered by the Argentine government through the FoGar program in the aggregate amount of ARS3,000 thousand, which is guaranteed by Sirena. Following a three-month grace period, the credit line will be paid in 9 monthly installments with the first installment of principal and interest due on Octobert 29, 2020 and the last installment due on June 29, 2021.
On January 20, 2021, Zenvia Brazil entered into a financing agreement with Banco Bradesco S.A. in the aggregate amount of R$30,000 thousand for working capital purposes. Following a one year grace
 
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period during which interest is payable, the loan will be paid in 36 monthly installments with the first installment of principal and interest due on February 21, 2022 and the last installment due on January 20, 2025.
On February 3, 2021, Zenvia Brazil entered into two financing agreements with Banco do Brasil S.A. in the aggregate amount of R$50 million, being one agreement in the amount of R$18,000 thousand with an eighteen-month grace period and 24 months of amortization and the other agreement in the amount of R$32,000 thousand with a twelve-month grace period and 36 months of amortization. Each of the agreements provide that Zenvia Brazil is subject to a financial covenant of maintaining a net-debt to EBITDA ratio of less than or equal to 3.5x and that the last installment is due on August 27, 2024.
On March 25, 2021, Zenvia Brazil entered into an agreement with Banco Votorantim S.A. — Nassau Branch for a CCB in the aggregate amount of US$1,453 thousand, convertible to reais at the execution date under a swap agreement (Contrato para Operações de Derivativos com Pacto de Cessão Fiduciária) entered into with Banco Votorantim S.A., resulting in a total aggregate amount of R$8,000 thousand. The transaction is secured by a fiduciary assignment (cessão fiduciária de direitos creditórios) of certain credits held at a Zenvia Brazil bank account (conta vinculada) held by Zenvia Brazil with Banco Votorantim S.A. Following a six-month grace period during which interest is payable, the loan will be paid in 12 monthly installments, with the first installment of principal and interest due on October 25, 2021 and the last installment due on September 26, 2022.
BNDES Prosoft
On July 14, 2017, Zenvia Brazil entered into an agreement with BNDES for a revolving credit facility in the aggregate amount of R$9,998 thousand, which is guaranteed by Cassio Bobsin, currently a member of our board of directors and our chief executive officer, amongst others. This revolving credit facility bears interest at a rate of TJLP+2.96%. Following a grace period, this revolving credit facility will be paid in 48 monthly installments with the first installment due on February 15, 2019 and the last installment due on January 15, 2023. As of December 31, 2020, the total outstanding amount of this working capital arrangement was R$1,579 thousand and this agreement has been fully repaid in March 2021.
Commitments and Contractual Obligations
The following table sets forth our contractual obligations as of December 31, 2020:
​ ​ ​
Total
​ ​
Less than
1 year
​ ​
1-5 Years
​ ​
More than
5 years
​
​ ​ ​
(in thousands of R$)
​
Lease liabilities
​ ​ ​ ​ 2,758 ​ ​ ​ ​ ​ 1,109 ​ ​ ​ ​ ​ 1,649 ​ ​ ​ ​ ​ — ​ ​
Trade payables
​ ​ ​ ​ 100,237 ​ ​ ​ ​ ​ 100,036 ​ ​ ​ ​ ​ 201 ​ ​ ​ ​ ​ — ​ ​
Total
​ ​ ​
​
102,995
​ ​ ​ ​
​
101,145
​ ​ ​ ​
​
1,850
​ ​ ​ ​ ​ — ​ ​
Off-Balance Sheet Arrangements
As of December 31, 2020, we did not have any off-balance sheet arrangements.
Quantitative and Qualitative Disclosures About Market Risk
We maintain operations with financial instruments that are managed through operating strategies and internal controls to ensure liquidity and profitability. The control policy consists of permanent monitoring of the contracted conditions versus conditions prevailing in the market. We do not make speculative investments in derivatives or any other risky assets and, therefore, the results obtained from these operations are consistent with the defined policies and strategies.
Market risk is the risk that the fair value of future cash flows from a financial instrument will fluctuate due to changes in market prices. Market prices encompass two types of risk: interest rate and exchange rate. Financial instruments affected by market risk include loans payable, deposits and financial instruments measured at fair value through profit or loss.
 
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Liquidity Risk
Liquidity risk is the risk that we and our subsidiaries may not have sufficient funds to honor our commitments on account of the currency variations and the respective rights and obligations. We and our subsidiaries’ cash flow and liquidity positions are monitored on a daily basis by our management, so as to ensure that operating cash generation and fundraising, as necessary, are sufficient for our payment schedules, thus not generating liquidity risk for us and our subsidiaries.
See note 25.4 to our audited consolidated financial statements for further information.
Interest Rate Risk
Interest rate risk is the risk that the fair value of the future cash flows of a financial instrument will fluctuate due to changes in market interest rates. We are exposed to the risk of changes in the rates of the Interbank Deposit Certificate (“CDI”) and Long Term Interest Rates (“TJLP”) for our financial investments and loans and, therefore, our financial result may change as a result of the fluctuation in the variation of these financial indexes. We manage interest rate risk by maintaining a balanced portfolio between financial investments and loans payable subject to fixed and variable rates.
We conducted a sensitivity analysis of the interest rate risks to which our financial investments and loans are exposed as of December 31, 2020. For this analysis, we adopted as a probable scenario for the future interest rates of 2.75% for the CDI rate and of 4.39% for the TJLP rate. When estimating an increase or decrease in current interest rates for the period of one year by 25% and 50%, interest income and interest expenses, net, would be impacted as follows:
​ ​ ​
Balance as of
December 31,
2020
​ ​
Risk
​ ​
Scenario I
(Probable)
​ ​
Scenario II
​ ​
Scenario III
​
​ ​ ​
(in thousands of R$)
​ ​ ​ ​ ​
(in thousands of R$, except percentages)
​
Financial investments
​ ​ ​ ​ 49,107 ​ ​ ​
Decrease of CDI
​ ​ ​ ​ 2.75% ​ ​ ​ ​ ​ 2.06% ​ ​ ​ ​ ​ 1.38% ​ ​
Financial revenues
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 1,350 ​ ​ ​ ​ ​ 1,013 ​ ​ ​ ​ ​ 675 ​ ​
BNDES financing
​ ​ ​ ​ 15,653 ​ ​ ​
Increase of TJLP
​ ​ ​ ​ 769 ​ ​ ​ ​ ​ 961 ​ ​ ​ ​ ​ 1,153 ​ ​
Rates subject to variation
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 4.91% ​ ​ ​ ​ ​ 6.14% ​ ​ ​ ​ ​ 7.37% ​ ​
Financings
​ ​ ​ ​ 83,322 ​ ​ ​
Increase of CDI
​ ​ ​ ​ 2,291 ​ ​ ​ ​ ​ 2,864 ​ ​ ​ ​ ​ 3,437 ​ ​
Rates subject to variation
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2.75% ​ ​ ​ ​ ​ 3.44% ​ ​ ​ ​ ​ 4.13% ​ ​
See note 25.7.1 to our audited consolidated financial statements for further information.
Exchange Rate Risk
Exchange rate risk is the risk that the fair value of future cash flows from a financial instrument will fluctuate due to changes in exchange rates. We are exposed to fluctuations in foreign currency exchange rates in relation to the U.S. dollar for software purchase transactions and amounts receivable from customers. In order to mitigate these risks, we constantly assess fluctuations in exchange rates. We believe that exposure to this risk is low considering that the amounts involved are not material.
Public Company Cost
Upon the closing of our initial public offering, we will become a public company, and our Class A common shares will be publicly traded on the Nasdaq. As a result, we will need to comply with new laws, regulations and requirements that we did not need to comply with as a private company, including provisions of the Sarbanes-Oxley Act, other applicable SEC regulations and the requirements of the Nasdaq. Compliance with the requirements of being a public company will require us to increase our selling and administrative expenses in order to pay our employees, legal counsel and independent registered public accountants to assist us in, among other things, instituting and monitoring a more comprehensive compliance and board governance function, establishing and maintaining internal control over financial reporting in accordance with Section 404 of the Sarbanes-Oxley Act and preparing and distributing periodic public
 
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reports in compliance with our obligations under the federal securities laws. In addition, as a public company, it will be more expensive for us to obtain directors’ and officers’ liability insurance.
Jumpstart Our Business Startups Act of 2012
On April 5, 2012, the JOBS Act was signed into law. The JOBS Act contains provisions that, among other things, reduce certain reporting requirements for qualifying public companies. We are in the process of evaluating the benefits of relying on the other reduced reporting requirements provided by the JOBS Act. Subject to certain conditions set forth in the JOBS Act, if, as an “emerging growth company,” we choose to rely on such exemptions we may not be required to, among other things, provide an auditor’s attestation report on our system of internal controls over financial reporting pursuant to Section 404, and these exemptions will apply until we are no longer an “emerging growth company.” See “Risk Factors — Certain Risks Relating to Our Business and Industry — If we fail to establish and maintain proper and effective system of disclosure controls and internal control over financial reporting, our ability to produce timely and accurate financial statements, our results of operations and our ability to operate our business or comply with applicable regulations may be adversely affected.”
 
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BUSINESS AND INDUSTRY
Overview
We empower companies to transform their existing customer communications from non-scalable, physical and impersonal interactions into highly scalable, digital first and hyper contextualized customer journey experiences.
Our CX communications platform enables companies to create unique journeys for their end-customers across a variety of channels. Our unified end-to-end CX communications platform provides a combination of (i) solutions focused on campaigns, sales teams, customer service and engagement, (ii) tools, such as software application programming interfaces, or APIs, chatbots, single customer view, journey designer, documents composer and authentication and (iii) channels, such as SMS, Voice, WhatsApp and Webchat. Our comprehensive platform assists our customers in several use cases, including marketing campaigns, customer acquisition, customer information nutrition, customer onboarding actions, warnings, customer services with or without automation, fraud control, cross-selling and customer retention, among others.
We were founded in Brazil 17 years ago as a bootstrapped startup in a garage serving businesses with complex networking infrastructures through our platform of APIs for SMS messaging connectivity. As we continued to grow, we scaled our business by adding new CX communication solutions, tools and channels to our platform, making it more flexible, versatile and comprehensive in order to capitalize on the opportunity to serve customers along their journey. Currently, we are locally present in Brazil, Mexico and Argentina and our technology allows our customers to use our platform based on their individual use case. The adoption of these technologies by our customers, and the willingness of their end-consumers to use these technologies, allows our customers to streamline their decision-making process and day-to-day business operations.
Our software platform facilitated the flow of communication with end-consumers for more than 7,700 customers of all sizes as of December 31, 2019, which increased to more than 9,400 customers as of December 31, 2020, all across a broad range of industries throughout Latin America. Our usage-based recurring revenue model allows us to grow with our customers and increase our revenue base as our clients increase their use of our solutions and communication channels.
Communication is an essential activity for businesses serving their end-consumers. Businesses all over the world are shaping new customer experiences with the power of digital communications. However, businesses seeking to implement multi-channel communication experiences for their end-consumers are frequently faced with multiple challenges given the complexities of implementing and integrating such processes and level of investments that they require. We provide businesses with a solution to this problem by offering a unified, end-to-end communications platform at affordable prices.
The CX communication solutions we offer our customers allow any person within any business, from business analysts to tech professionals, to enhance the end-consumer journey for campaigns, sales teams, customer service and engagement purposes. Collectively, these solutions allow us to capture a range of use cases across all economic sectors. We initially adopt a “land and expand” strategy, pursuant to which we introduce our platform to our customers based on one simple use case, and then develop the customer relationship over time, upselling and cross-selling our suite of solutions to them as they grow and improve their customer journey. This strategy has allowed us to achieve a standalone net revenue expansion rate of 112.8% and 117.1% as of December 31, 2020 and 2019, respectively. For more information about our net revenue expansion rate, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Principal Factors Affecting Our Results of Operations — Net Revenue Expansion Rate.”
Businesses use our platform to frequently and more seamlessly connect with their end-consumers while also offering new mobile application experiences. From small family-owned businesses to large corporations, our customers use our platform to attract, convert, serve and nurture their end-consumers. For instance, one of the largest Brazilian banks adopted our platform for several use cases such as multichannel marketing campaigns with SMS and automated telemarketing, SMS transactional authorizations and chatbot invoice collection. In addition, one of the largest electronic retailers in Brazil adopted our platform for order tracking with WhatsApp notifications, retail sales with our WhatsApp sales solution and promotional coupons on rich communication services, or RCS, a communication protocol between mobile telephone carriers and
 
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mobile devices aimed at replacing SMS messages with a more sophisticated multimedia enabled text-messaging system. An international education group in Brazil also adopted our platform for communications related to entrance exam information, their student recruitment enrollment process and existing and prospective student communication solutions through chatbot on their website and through WhatsApp, customer service and sales chat services, SMS operational alerts and marketing campaigns.
We serve many other large corporations including:
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6 out of the top 10 Brazilian retail companies in terms of net revenue;
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6 out of the top 10 Brazilian health care companies in terms of net revenue;
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5 out of the top 10 Brazilian banks in terms of net revenue;
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5 out of the top 10 Brazilian education companies in terms of net revenue;
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5 out of the top 10 Brazilian service provider companies in terms of net revenue;
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5 out of the top 10 Brazilian insurance companies in terms of net revenue; and
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4 out of the top 5 Brazilian telecommunication companies in Brazil in terms of net revenue.
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Small businesses also use our platform for a variety of use cases. For example, a technology company that monitors temperature sensors for medical-grade cold storage uses our Voice solution to monitor, detect and alert its end-consumers of any out-of-range temperature incidents for specific medical supply storage chambers, mitigating the risk of improper medicine storage.
Our platform flexibility allows us to serve many important sectors including:
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Financial institutions use our platform for SMS transaction confirmation alerts, security tokens and marketing campaigns;
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Service providers use our platform to manage outbound voice calls integrated with their customer relationship management platforms, or CRMs;
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Universities use our platform to support students on multiple communication channels such as WhatsApp and Website;
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Medical and dental clinics and hospitals use our SMS platform to confirm and reschedule appointments as well as send appointment reminders to patients; and
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Retailers use our WhatsApp solution to support their sales teams to manage sales and our SMS platform to inform customers about new products and promotions and to track the status of deliveries.
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Although we have a diversified client base, our revenues are currently concentrated in a small number of large clients. Our 10 largest clients represented 33.1%, 34.2% and 37.0% of our revenue in the years ended December 31, 2020, 2019 and 2018, respectively. Giving effect to the consummation of the D1 Acquisition, our 10 largest clients would have represented 35% of our revenue in the year ended December 31, 2020. We are working to decrease this concentration by investing in marketing initiatives to attract new small and medium business, or SMBs, customers to our platform and providing additional offerings to our existing customer base. See “Risk Factors — Certain Risks Relating to Our Business and Industry — A significant portion of our revenue is currently concentrated on our outlier customers and an economic slowdown affecting these customers could lead to decreased demand for our products and services, which could adversely affect us.”
We have been a cash flow positive company since 2015. For the year ended December 31, 2020, cash generated from by our operating activities amounted to R$53.1 million, compared to R$33.8 million and R$46.6 million for the years ended December 31, 2019 and 2018, respectively. Our revenue totaled R$429.7 million, R$354.0 million and R$276.4 million in the years ended December 31, 2020, 2019 and 2018, respectively, representing a growth rate of 21.4% between the years ended December 31, 2020 and 2019 and 28.1% between the years ended December 31, 2019 and 2018. Our loss for the year ended December 31, 2020 amounted to R$21.4 million, compared to profit amounting to R$13.8 million and R$19.9 million for the years ended December 31, 2019 and 2018, respectively. Our Adjusted EBITDA for the year ended
 
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December 31, 2020 amounted to R$8.0 million, compared to R$36.1 million and R$44.8 million for the years ended December 31, 2019 and 2018, respectively, as we continue to invest in our platform and growth initiatives.
Our Competitive Advantages
We believe we have achieved our leadership position in Latin America as a result of the following core competitive advantages:
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Composable Communications Platform:   We are a communications enabler company focused on providing the building blocks to compose communications solutions for businesses and APIs that may be integrated into business applications. We believe that our developers are able to build a very wide range of use cases.
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Comprehensive Platform with Highly Efficient Sales Channels:   We offer a breadth of functionality, including voice and messaging communication that may be used across a range of devices. While businesses can rely on one of our sales channel partners to assist them with their implementation, SMBs can start using them within days of their implementation using our “self-service” platform. We classify our customers by segment according to their potential interaction volumes, employing an efficient sales channel strategy for each customer size.
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Easy Adoption:   Our platform may be adopted one use case at a time, which reduces the sales and adoption cycle. We may give businesses a trial period to allow them to build trust with us and adopt our platform. This approach eliminates upfront costs for our customers and minimizes technical implementation and integration complexities that typically hinder innovation.
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Easy to Scale:   With easy to use products with a high velocity to scale, our platform allows our customers to scale up or down without interruptions and delays caused by required applications redesign or communications infrastructure restructurings. Our platform is user friendly and we have been experiencing a continuous increase in its adoption by customers. The share of our customer base using more than one product increased from 1.8% in December 2019 to 6.8% (excluding Sirena) and 17.5% (including Sirena) in December 2020.
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Reliability and Solid Reputation:   Our platform consists of fault-tolerant systems that have enabled our customers to avoid any significant failures or downtime, making it reliable and robust.
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Long Tail Go-to-Market:   Our low entry price and “self-service” platform allow small businesses to acquire and use our solutions with or without onboarding team support. Our market has high margins and a large addressable market and small businesses can increasingly acquire our products through our “self-service” platform. In recent years, we have successfully automated SMS messaging at a rate of up to 5,350 messages per customer. We plan to continue evolving the process to improve our monthly automated SMS messages and include other products such as Voice, WhatsApp, customer service using chat, amongst others, and plan to simplify onboarding and automation in the future.
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Our Growth Strategy
Our growth strategy is based on:
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Deepening Our Technology Leadership:   We plan to significantly invest in our technology platform by adding new software capabilities, including new solutions (e.g., commerce), tools (e.g., payments) and communication channels (e.g., new messaging apps). The combination of these solutions, tools and channels will enable us to provide new use cases to our customers and reinforce our one-stop shop market position in digital communications.
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Increasing Spend within Our Customer Base:   We plan to invest in initiatives to improve our customers’ spending on our products and services, including new offers and incentives for upselling and cross-selling and better customer education, and invest in improved processes to increase usage of our platform, offers related to customer needs, and also improve our ability to integrate external systems in order to make it easy for our customers to connect their internal systems with our platform. We believe that each communication channel that we enable on our platform results in an upsell and cross-sell opportunity with a self-service acquisition journey and as our platform allows us to
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develop new products quickly and integrates the user journey by a same interface, we can use our software as a products showcase to incentivize users to adopt our offerings.
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Accelerating Our Customer Acquisition Strategy:   Based on a pay-as-you-go model, we plan to accelerate our customer acquisition strategy to increase new customers in the markets in which we operate.
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Pursuing Targeted Acquisitions of Products and Technologies:   We have a track record of successfully acquiring and integrating businesses and technologies that have provided us with new product offerings and capabilities and helped us to penetrate new markets. We may increase our geographic footprint by expanding our addressable market and pursuing acquisitions or strategic investments in businesses to strengthen our presence in the region. On July 24, 2020, we completed the acquisition of Sirena, a startup that offers communication solutions for sales teams via WhatsApp. We intend to continue to explore potential acquisitions and make targeted acquisitions that complement and strengthen our product portfolio and capabilities or provide us with access to new markets.
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Increasing and Deepening Our Pan-Latin American Presence:   We believe a substantial market opportunity exists for us to increase our international footprint across all of our product lines. We plan to invest in our regional expansion in Latin America so we can benefit from our strong brand recognition and scale the benefits of that market.
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Scaling Our Go-to-Market Strategy:   We plan to scale our go-to-market strategy by enhancing our indirect sales channel, which includes digital agencies, system integrators and software sales channel companies. It leverages our platform with additional services, know-how and offerings to educate the market about improving customer experiences with multi-channel communications and makes our products and processes more attractive for a larger target market. See “— Sales and Marketing.”
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Recent Acquisitions
Pending Acquisitions
In March 2021, Zenvia Brazil entered into certain purchase agreements for the direct and indirect acquisition of 100% of the share capital of D1. D1 is a platform that connects different data sources to enable a single customer view layer, allowing the creation of multichannel communications, generation of variable documents, authenticated message delivery and contextualized conversational experiences.
Upon consummation of the D1 Acquisition, we will also become indirect holders of 100% of the share capital of Smarkio, a wholly -owned subsidiary of D1 and a cloud-based company that combines an automated marketing platform through chatbots with a platform for creating, integrating and processing conversational interfaces that can be used by developers and business users.
The D1 Acquisition is subject to the satisfaction or waiver of certain closing conditions set forth in the definitive agreements governing this transaction, including the consummation of this offering. To the extent these conditions are not satisfied or waived or to the extent we do not consummate this offering, we may not complete the D1 Acquisition. See “Risk Factors—Certain Risks Relating to Our Business and Industry—We may pursue strategic acquisitions or investments which may divert our management’s attention and result in reduced cash levels, increased indebtedness or dilution to our shareholders. The failure of an acquisition or investment to produce the anticipated results, the failure to consummate a pending acquisition (including the D1 Acquisition), or the inability to integrate an acquired company fully, could adversely affect our business.” For further information regarding the D1 Acquisition, see “Presentation of Financial and Other Information—D1 Acquisition, Sirena Acquisition and Related Financial Statements.”
We plan to use US$       million (equivalent to R$       million using the Central Bank selling exchange rate of per U.S. dollar published on             , 2021) from the proceeds of this offering to pay the consideration payable in cash to acquire D1. See “Use of Proceeds.”
Consummated Acquisitions
On July 24, 2020, Zenvia Brazil entered into a certain share purchase and sale agreement to purchase 100% of the shares of Sirena, a startup founded in 2014 that offers communication solutions for sales teams
 
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via WhatsApp. This acquisition is in line with our strategy to expand into other Latin American regions. The transaction was consummated on July 24, 2020, and Zenvia Brazil began to consolidate Sirena’s results of operations as of that date. For further information regarding the Sirena Acquisition, see “Presentation of Financial and Other Information—D1 Acquisition, Sirena Acquisition and Related Financial Statements.”
On February 1, 2020, Zenvia Brazil entered into an asset acquisition agreement to acquire Omnize’s customer service platform from Omnize Software Ltda. The purchase price amounted to R$4 million. This acquisition is in line with our strategy to add features to our platform, which permitted the creation of Zenvia Chat, our customer service software. The transaction was consummated on February 1, 2020.
On March 1, 2019, Zenvia Brazil entered into a share purchase agreement to acquire 100% of the equity interest of Total Voice, a cloud-based platform provider that allows businesses to add real-time voice and telephone capabilities (such as conference calling, voice messages, Interactive Voice Response (IVR), 2-Factor Authentication (2FA), SIP trunking and masked numbers) to business applications by deploying application programming interfaces (APIs), enabling great flexibility and incremental adoption of these capabilities on a pay-as-you-go basis. The purchase price was divided into an initial payment and an earnout payment. The purchase price paid at closing amounted to R$2,015 thousand on closing date. Following the acquisition, the former shareholders that remained with the company were subject to additional compensation of R$14,291 thousand payable in monthly installments in 2021, calculated based on the contribution margins generated by our voice solutions for the period of time set forth under the share purchase agreement and based on certain conditions, including their continued employment with the company. This acquisition is in line with our strategy to add features to our platform. The transaction was consummated on March 1, 2019.
Our Technology
Our technology is based on a multi-layered communications platform:
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Solutions layer:   a full suite of communications solutions, such as customer service, marketing and sales teams communications, that leverage our tools and communication channels to provide end-to-end use cases. These solutions provide business users the ability to fully manage communications throughout the end-consumer journey.
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CX Insights layer:   provides recommendations for customer journey improvements based on data and use cases, enabling businesses to enhance their end-consumer experiences.
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Single Customer View layer:   maps and correlates end-consumer data, providing an individual historical view of the customer journey that enables the ability to trigger and contextualize communications.
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Tools layer:   allows implementation of business rules, communication flows and integration connections across multiple channels. This layer acts as a set of building blocks that can be combined to build a variety of use cases.
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Channels layer:   manages a complex third-party network of connections and agreements with providers, such as carriers, messaging apps and social networks that allows communications to reach an end-consumer device. This layer includes the monitoring of provider performance for quality, service and features. We also seek to ensure that our platform is as resilient as possible to network service provider outages or service disruptions.
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Our Business Model and Our Communications Platform
The following chart summarizes our business model, communications platform (including channels and tools), use cases and business relationships with sales channel partners.
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Our communications platform empowers businesses of all sizes to create, scale and improve communications through a variety of communication channels. The solutions we offer range from basic APIs to full communication solutions, focused on providing an ideal fit for business requirements based on each use case and industry.
Businesses use our platform to interact with their end-consumers on communication channels such as SMS, voice and IP-based messaging service products (such as WhatsApp) and use our tools to automate, integrate and manage communications for multiple use cases across these channels. For example, some businesses use our visual builder — a tool that enables businesses to draw conversational flows or automation flow through a visual “non-code” interface — to design communication flows, such as chatbots or automated campaigns, without any need for coding skills. Other businesses adopt our communication solutions to manage marketing, customer services or sales teams’ communications.
Our platform, combined with our business model, empowers innovators within every business, by encouraging them to be autonomous and innovate to evolve their end-consumer journey without upfront payments and complex systems implementation and integration. We may give businesses free access to our platform for a trial period to allow them test their use cases prior to entering into a contract with us. We continue to improve our average sales cycle and expedite the adoption of our solutions by customers. Our average overall sales cycle was 19 days in 2020, compared to 37 days in 2019. For small- and medium-sized companies, our average sales cycle was 11 days and 14 days in 2020, compared to 15 days and 33 days in 2019. For large companies, we also experienced considerable improvement in terms of average sales cycle from 63 days in 2019 to 30 days in 2020. We believe our frictionless sales process strategy for smaller businesses increases our conversion rate when compared to our competitors as most of them need a salesperson available for every customer contact and we do not. We believe we are well-positioned to continue our accelerated growth while maintaining a low cost of acquisition, based on our “self-service” platform, i.e., customers can directly acquire and use our services without interaction with our sales or support team, which allows sales channel partners to integrate some of our platform capabilities in their software to improve the offering of their products together with our cross-selling opportunities.
 
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Our business model is based primarily on interactions volume, which means our revenues scale as our customers increase their usage of our platform, while just a small share of our revenues are derived from subscriptions and project implementation services. As businesses increasingly adopt our platform with new use cases or for other aspects of their business, we have increased revenues and customer retention levels, resulting in a standalone net revenue expansion rate of 112.8% year-over-year as of December 31, 2020 (or 119.7% giving pro forma effect to the Sirena Acquisition and the D1 Acquisition), compared to a net revenue expansion rate of 117.1% and 116.8% year-over-year as of December 31, 2019 and 2018, respectively.
For a detailed description of the products we offer our customers, see “— Our Products.”
Our Products
We offer three main categories of products — communication channels, communication tools and communication solutions — that allow businesses to better interact with their end-consumers.
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Communication channels include all communication channels that can be used for businesses to engage or interact with their customers, such as SMS, Voice, WhatsApp, Facebook Messenger, RCS and video, which we deliver as APIs in order for businesses to integrate such communication channels using their own communication software or one of our proprietary SaaS communication solutions.
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Communication tools include communication flow builders, APIs and software development kits (SDKs) that can improve the customer communication experience and operational efficiency through chatbots, authentication, secure payment, brand verification and automation. Similar to our communication channels products, these communication tools are made to be easily integrated with the IT stack of our customers.
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Communication solutions include SaaS for communication between businesses and end-consumers, such as campaign manager for marketing teams, customer support for support teams, sales CRM for sales teams and chat for on-boarding and operational teams. All products from our communication channels and communication tools can be easily deployed within our SaaS communication solutions.
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We also offer our proprietary CX communications platform products, currently consisting of Zenvia Flow, Zenvia Chat, Zenvia Messenger and Sirena, all of which are designed as automated and/or integrated solutions.
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Zenvia Flow is a visual flow builder that allows our customers to create communication and/or automation flows that more efficiently serve their end-consumers. Zenvia Flow also stores the information received from end-consumers as a response to the flow or automation and connect through any other Zenvia channel or APIs. The visual structure of Zenvia Flow simplifies the development of solutions, facilitating the integration between systems and channels.
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Main functionalities:   Creation of communications flow, ready to use chatbot templates to unlimited users, IVR features, phone tree setup, chatbot personalization, chatbot analytics and API integration.
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Zenvia Chat is a customer service platform that manages different communication channels in a single environment, in addition to ensuring a managerial view with panels and reports to administrators. With omnichannel services, Zenvia Chat increases productivity for customer service and support teams, enabling them to offer the best experience for their end customers.
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Main functionalities:   Single interface regardless of the communication channel, multi-channel (e.g., SMS, web chat, e-mail, Voice, Whatsapp, Facebook Messenger, Telegram and Mercado Livre Chat), analytics, user history, team segmentation into departments and integration with third-party systems.
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Zenvia Message is a campaign manager to trigger voice calls and SMS and WhatsApp messages, allowing quick and personalized messages, messaging with variables, such as text, image, url, gif, and video content, and tracking of campaign results through reports.
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Main functionalities:   Single interface notification system, multiple communications channels (SMS, Whatsapp and Voice), automation/scheduling, sending attachments and personalized content.
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Sirena is a solution for sales teams to communicate with customers through WhatsApp in a unified way without using their personal WhatsApp accounts. With the possibility of integrating with Facebook Messenger and connecting with third-party CRMs, Sirena assists with organizing sales teams on WhatsApp and improving customer experience during sales processes.
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Main functionalities:   WhatsApp shared inboxes (both collaborative and portfolio), Sirena bots enable businesses to activate plug and play automations, WhatsApp templates management, broadcast messages (up to 500 per day), automatic client distribution based on team rules, activity dashboards, API access for platform interoperability (api.getsirena.com), custom tags and close reasons and marketplace integrations to lead generation tools and other business systems.
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Research and Development
Our research and development efforts are focused on enhancing our existing products and developing new products and on ensuring that our platform is resilient and available to our customers at any time.
Our research and development department is built around small development teams. Our small development are autonomous and allow us to be more agile, which enables us to develop new, innovative products and make rapid changes to our infrastructure that increase resiliency and operational efficiency. Our development teams designed, built and continue to expand our communications platform which enables our customers to solve communication business problems in the customer experience journey and allows developers to embed communications channels into their applications. As of December 31, 2020, we had 43 employees (96 employees after giving effect to the expected consummation of the D1 Acquisition) working on our research and development efforts. We intend to continue to invest in our research and development capabilities to extend our platform and bring the power of contextual communications and the simplification of complex communication problems in the end customer journey to a broader range of applications, geographies and customers.
Our Customers
Our platform is suitable for clients of different sizes and we provide our services to small, medium and enterprise clients.
We add value to small companies by facilitating access to technologies that are generally only accessible to large corporations with extensive IT capabilities. We were responsible for giving mass market appeal to corporate SMS communication in Brazil, creating an offer of easy access and use services for small customers. This expertise is also being replicated for other products with simple processes of acquisition, implementation and use. Our customers can expand their use of our platform and increase its usage by themselves or requiring only quick training by our support team.
For medium and large clients, in addition to the same organic land and expand process implemented for the small ones, we added other automated solutions, involving a more consultative sales processes that allows us to deepen our understanding of the customer’s needs and propose the best solution.
Our client base is large and we have clients across a broad range of industries and of all sizes (small, medium and large companies; considering the number of employees). Our 10 largest clients represented 33.1%, 34.2% and 37.0% of our revenue in the years ended December 31, 2020, 2019 and 2018, respectively. For more information, see “Risk Factors — Certain Risks Relating to Our Business and Industry — A significant portion of our revenue is currently concentrated on our outlier customers and an economic slowdown affecting these customers could lead to decreased demand for our products and services, which could adversely affect us.”
Sales and Marketing
Our sales and marketing teams work together to promote awareness and adoption of our platform, accelerate customer acquisition and generate revenue from them.
Our go-to-market model is mainly focused on understanding and meeting the digital communication needs of the our customers’ business departments.
 
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This work involves the process of raising market awareness of business needs or problems that our platform helps to solve and then a process that accelerates the acquisition of customers with inbound and outbound marketing actions supported by a sales process that uses a sales machine methodology from Winning by Design. To complement, we constantly develop processes, tools and agile methods to accelerate the adoption of our solutions by customers.
We have a strong direct sales channel using inbound marketing and our inside sales teams to acquire new customers with sales machine methodology. For large businesses and part of medium businesses, we use inbound marketing and also use outbound marketing with account based marketing strategies and an account manager team. These teams are divided into account executives for new business (previously called hunters) and account executives for base customers (previously called farmers or sales development team).
We have also recently started to reach the developer audience. Once developers are introduced to our platform, we provide them with a low-friction trial experience. By accessing our easy-to-configure APIs, extensive self-service documentation and customer support team, developers can build our products into their applications and then test such applications through free trials. Once they decide to use our products beyond the initial free trial period, customers provide their credit card information and only pay for the actual usage of our products, and can also have a postpaid plan or recommend our products to their customers.
Our recently launched self-serve pricing matrix is publicly available and it allows customers to receive automatic tiered discounts as their usage of our products increases. As customers’ use of our products increases, some may enter into negotiated contracts with terms that dictate pricing. Our “self-service” model has reached potential customers and existing customers of all sizes.
In the last two years, after our rollout of our “self-service” model for the purchase of SMS, we attained the largest number of customers and we intend to expand other offerings.
As customers expand their use of our platform, our relationship with them often evolves to include key users and business leaders in their businesses. When our customers reach a certain level of spending with us, they are served by an account manager and/or the customer success team to guarantee customer satisfaction and encourage them to increase the use of our products.
When potential customers do not have the available developer resources to build their own applications, we refer them to our VAR, who are able to sell and implement our products for such customers. The VAR program is part of our Indirect Sales Channel strategy to reach customers that need advanced solutions as flows, chatbots and consultancy, training to implement business strategies and our products. Beyond this program we have an Alliance program to reach SaaS companies that need our products to complement their solutions. The Alliances program allows software companies to seamlessly integrate their solutions with ours and recommend Zenvia as a communication platform partner.
Customer Support
The mission of our customer support team is to address customer concerns and ensure customer satisfaction. We achieve this through our team of motivated people, that we train to provide customer service with empathy and a positive attitude. In addition, we seek to offer ways for customers to have more autonomy to use our products and solutions and to manage them efficiently and independently. Finally, we seek to interact and respond to customer queries with agility, speed and quality, generating a positive experience for our customers. In order to achieve this, we provide them with multiple communication channels to interact with us (by phone, chat on-line, e-mail, chatbots and WhatsApp). We also divide our support according to the client’s category and respond to requests based on category and incident severity. Our support model is national with 12x5 coverage (available from Monday to Friday from 8 a.m. to 8 p.m. (BRT GMT-3), with a Level 1 team that is responsible for addressing general tickets with medium and low complexity and a Level 2 (technical team) divided into squads, with experts for each product line. Currently, we are starting operations in Mexico, with a local office and support team to guarantee a better communication and relationship with customers located in Mexico.
 
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In addition, we are working to provide a self-service experience: improving our developers webpage (with new articles, clear and complete documentation about our API´s and with a user friendly testing environment for our solutions); and creating a web interface, so that our customers can manage financial and registration data and use of our services.
For 2021, as we seek to further differentiate our service, ensuring faster SLAs and continuous and proactive monitoring of our solutions, we are expanding our operations to offer 24/7 support for an additional cost. In addition, we intend to fully integrate all of our operations and new acquisitions. See “Risk Factors — Certain Risks Relating to Our Business and Industry — We may pursue strategic acquisitions or investments which may divert our management’s attention and result in reduced cash levels, increased indebtedness or dilution to our shareholders. The failure of an acquisition or investment to produce the anticipated results, the failure to consummate a pending acquisition (including the D1 Acquisition) or the inability to integrate an acquired company fully, could adversely affect our business.”
Moreover, we recently acquired Sirena. We are working to complete the integration of Sirena by the end of the first half of 2021. The Sirena team offers effective and fast support service through valuable interactions. Our vision is aligned with what is known as “an effortless experience” where we put systems in place to allow customers to help themselves first. We engineer the customer experience to reduce the need to interact with a person, relying on bots, help articles and tutorials. For users that still need our help or for reporting bugs and incidents, we offer support through an in-app chat and via email from Monday to Friday from 8 a.m. to 7 p.m. (ARG GMT-3) and Saturdays from 9 a.m to 3 p.m. (ARG GMT-3). The customer base of Sirena is categorized according to user types and plans. Plans for 2021 include implementing new methodologies to provide greater customer self service.
Competition
The market for cloud communications is rapidly evolving and increasingly competitive. We believe that the principal competitive factors in our market are:
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completeness of offering;
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credibility with business analysts and leaderships from companies
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credibility with developers;
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ease of integration and programmability;
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product features;
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low cost of adoption our products
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fast use and fast results with our products and services
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platform scalability, reliability, security and performance;
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brand awareness and reputation;
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the strength of sales and marketing efforts;
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customer support; and
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the cost of deploying and using our products.
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Some of our current and future competitors may have greater financial, technical and other resources, greater name recognition, larger sales and marketing budgets and larger intellectual property portfolios. As a result, certain of our current and future competitors may be able to respond more quickly and effectively to new opportunities, technologies and standards or changing customer requirements. In addition, some competitors may offer products or services that serve one or a limited number of functions at lower prices, with greater coverage than our products or geographies where we do not operate. With the introduction of new products and services and new market participants, we expect competition to intensify in the future. In addition, as we expand the scope of our platform, we may face additional competition.
Considering only CPaaS players, our main competitors are Infobip, Sinch (which acquired the Brazilian companies TWW and Wavy, with operations in Brazil and other Latin American countries), Twilio and MessageBird.
 
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Global players, such as Zendesk and Salesforce, in addition to local players, such as Take (Brazil) and Yalo (Mexico), may be considered as our competitors in the CX communications platform market.
Intellectual Property
We rely on patents, copyrights and a number of registered and unregistered trademarks in Brazil and other jurisdictions to protect our proprietary technology.
As of the date of this prospectus, Zenvia Brazil has 15 trademark registration processes in Brazil, of which 14 are in force and one is in progress. Zenvia Brazil is also the holder of 75 Brazilian national domains, all registered at Registro.br and GoDaddy. In addition to the trademark registration processes owned by Zenvia Brazil, there are also 13 trademark registration processes in force in Brazil owned by our Brazilian subsidiaries (27 trademark registration processes, after giving effect to the expected consummation of the D1 Acquisition) as well as a trademark registration in Argentina owned by Sirena.
Despite our efforts to protect our technology and proprietary rights through intellectual property rights, licenses and other contractual protections, unauthorized parties may still copy or otherwise obtain and use our software and other technology. In addition, we intend to continue to expand our operations internationally, and effective intellectual property, copyright, trademark and trade secret protection may not be available or may be limited in foreign countries. Any significant impairment of our intellectual property rights could harm our business or our ability to compete. Further, companies in the communications and technology industries may own large numbers of patents, copyrights and trademarks and may frequently threaten litigation, or file suit against us based on allegations of infringement or other violations of intellectual property rights. We are currently subject to allegations that we have infringed the intellectual property rights of third parties, including our competitors.
Properties
Our principal executive office is located in the city of São Paulo, in the state of São Paulo, Brazil. In addition to our headquarters, we also have representative offices in Delaware, United States, Mexico City, Mexico and Buenos Aires, Argentina.
On March 1, 2015, we entered into a lease agreement, which was amended on March 30, 2016 and July 1, 2018, for approximately 910 square meters of office space at Avenida Paulista, 2300, Suites 182 and 184, CEP 01310-300, in the city of São Paulo, state of São Paulo, Brazil. This lease is valid from March 30, 2015 to June 30, 2023 and not subject to automatic renewal. Pursuant to the lease, monthly lease payments consist of R$86,455.70. We secured our lease obligation with a letter of credit in the amount of three times the monthly lease payment.
We lease all of our facilities and do not own any real property. We intend to procure additional space in the future as we continue to add employees and expand geographically. We believe our facilities are adequate and suitable for our current needs and that, should it be needed, suitable additional or alternative space will be available to accommodate our operations.
Human Resources
As of December 31, 2020, we had 470 employees (672 employees, after giving effect to the expected consummation of the D1 Acquisition), of which 387 were based in Brazil (572 employees, after giving effect to the expected consummation of the D1 Acquisition), 63 were based in Argentina, 14 were based in Mexico and 6 were based in the United States.
As of December 31, 2019 and 2018, we had 226 and 164 full-time employees, respectively. We also engage third-party consultants as needed to support our operations. The table below breaks down our full-time personnel by category of activity as of December 31, 2020.
 
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Activity
​ ​
Number of Employees as
of December 31, 2020
​ ​
% of Total
​
Technology
​ ​ ​ ​ 144 ​ ​ ​ ​ ​ 30.64% ​ ​
Sales / Customer Experience
​ ​ ​ ​ 180 ​ ​ ​ ​ ​ 38.30% ​ ​
Product / Marketing
​ ​ ​ ​ 61 ​ ​ ​ ​ ​ 12.98% ​ ​
Financial / Legal
​ ​ ​ ​ 68 ​ ​ ​ ​ ​ 14.47% ​ ​
Human Resources
​ ​ ​ ​ 17 ​ ​ ​ ​ ​ 3.62% ​ ​
Total ​ ​ ​ ​ 470 ​ ​ ​ ​ ​ 100.0% ​ ​
We also engage third-party consultants as needed to support our operations.
Our employees in Brazil are affiliated with the Rio de Grande Sul State processing data workers union (Sindicato dos Trabalhadores de Processamento de Dados do Estado do Rio Grande do Sul) and the São Paulo State processing data workers union (Sindicato dos Trabalhadores de Processamento de Dados do Estado de São Paulo). We believe we have a constructive relationship with these unions and we have not experienced any strikes, work stoppages or disputes leading to any form of downtime from our employees.
Regulatory Matters
Impacts of the enforcement of Law No. 13,709/2018 (Lei Geral de Proteção de Dados Pessoais), or LGPD, to our products and platform and our business model
Our activities are mainly focused on the provision of a CX communications platform, by which our clients can distribute information, collect survey’s results and perform double factor authentication via instant messages on various communication platforms, such as SMS and social media. The use of such communication platforms implies the processing of the users’ personal data available in such platform, which shall be limited to the necessary data required for the provision of services.
The nature of our business exposes us to risks related to possible shortcomings in data protection. Any undue processing or unauthorized disclosure of personally identifiable information, whether through breach of our network by an unauthorized party, employee theft, misuse or error or otherwise, could harm our reputation, impair our ability to attract and retain our customers, or subject us to claims or litigation arising from damages suffered by individuals.
Law No. 13,709/2018 (Lei Geral de Proteção de Dados Pessoais), or LGPD, was enacted to regulate the processing of personal data in Brazil. The LGPD establishes a new legislation to be observed by individuals or public or private companies in operations involving processing of personal data in Brazil and provides for, among others, the rights of holders of personal data, the legal bases applicable to the processing of personal data, the requisites to obtain consent, the obligations and requisites related to security incidents and leakages and transfers of data, either Brazilian or international, as well as the creation of the National Authority for Data Protection, or ANPD, responsible for the inspection, promotion, disclosure, regulation, establishment of guidelines and application of the law.
Further, Law No. 14,010/2020 was approved in the context of the COVID-19 pandemic, and among other measures postponed the application of the administrative sanctions set out in the LGPD to August 1, 2021. In case of noncompliance with the LGPD, we can be subject to administrative sanctions applicable by the ANPD, from August 1, 2021 onwards, on isolated or cumulative basis, of warning, obligation to disclose incidents; temporary blocking and/or elimination of personal data related to the infraction; simple fine of up to 2% of our revenue, or revenue of the group or conglomerate in Brazil for the last fiscal year, excluding taxes, up to the global amount of R$50 million per infraction; daily fine, up to the aforesaid global limit; suspension of the operation of the database related to the infraction for the maximum period of six months, which can be extended for an equal period, up to the regularization of the processing by the controlling shareholder; suspension of activities related to processing of personal data related to the infraction for a period of six months, which can be extended for an equal period; and partial or total prohibition to exercise activities related to data processing.
 
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The fact that the administrative sanctions of the LGPD will be applicable by the ANPD only in August 2021 does not prevent the imposition of administrative sanctions set forth by other laws that address issues related to data privacy and protection, such as the Brazilian Code of Consumer Defense and the Brazilian Civil Rights Framework for the Internet. These administrative sanctions can be applied by other public authorities, such as the Attorney General’s Office and consumer protection agencies. We can also be held liable at the civil sphere for violation of these laws.
In addition to the administrative sanctions, due to the noncompliance with the obligations established by the LGPD, we can be held liable for individual or collective material damages, and non-material damages caused to holders of personal data, including when caused by service providers or sales channel partners that serve as operators of personal data on our behalf.
Legal and Administrative Proceedings
From time to time, we may be subject to legal and administrative proceedings and claims in the ordinary course of business. We have received, and may in the future continue to receive, claims from third parties. Future litigation may be necessary to defend ourselves, our sales channel partners and our customers by determining the scope, enforceability and validity of third-party proprietary rights, or to establish our proprietary rights. The results of any current or future litigation cannot be predicted with certainty, and regardless of the outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources, and other factors.
We recognize provisions for legal proceedings in our consolidated financial statements when (i) it is probable that an outflow of resources will be required to settle the claim and (ii) a reliable estimate can be made of the amount of the obligation. The assessment of the likelihood of loss includes analysis by our management, with the support of internal and external counsel, of available evidence, the hierarchy of laws, available case law, recent court rulings and their relevance in the legal system. Our provisions for probable losses arising from these matters are estimated and periodically adjusted by our management.
As of December 31, 2020, we recorded provisions in connection with legal and administrative proceedings based on probable loss in an aggregate amount of R$31,780 thousand. However, legal and administrative proceedings are inherently unpredictable and subject to significant uncertainties. If one or more cases result in a judgment against us in any reporting period for amounts that exceed our management’s expectations, the impact on our operating results or financial condition for that reporting period could be material. See “Risk Factors — Risks Relating to Our Business and Industry — The costs and effects of pending and future litigation, investigations or similar matters, or adverse facts and developments related thereto, could materially affect our business, financial position and results of operations.”
Tax Proceedings
As of December 31, 2020, we were party to 10 tax proceedings. In general, the main claims sought in these proceedings relate to (i) the disallowance of ISS tax as part of our basis for calculation of PIS/COFINS tax contributions, (ii) ISS tax assessment on our commercialization and sale of value added services regarding the integration between network service providers and our clients for SMS message traffic for which we have recorded a provision of R$31,336 thousand, and (iii) administrative claims in the amount of approximately R$32,000 thousand related to a fine imposed by the Brazilian federal tax authority for failure to pay income taxes on capital gain from our acquisition of Kanon Serviços em Tecnologia da Informação Ltda. from Spring Mobile Solutions Inc., or Spring, for which we have not recorded a provision as the chance of loss under this proceeding was not considered probable.
Administrative Proceedings
As of December 31, 2020, we were party as plaintiffs to three administrative proceedings for which we have not recorded a provision. Those proceedings were initiated in August 2020 before ANATEL against tier 1 network service providers. In general, the main claims we seek in these proceedings relate to our requests for the establishment of standardized prices for SMS messages and adoption of telecommunication sector monetary inflation indexes for monetary adjustments going forward (rather than the adoption of broader inflation indexes). See “Risk Factors—Certain Risks Relating to Our Business and Industry—If we
 
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cannot pass fee increases from network service providers or developers of IP-based messaging services to our customers, our operating margins may decline.”
Material Contracts
On September 17, 2019, our subsidiary, MKMB Soluções Tecnológicas Ltda, or MKMB, entered into an agreement with Facebook, Inc., or Facebook, for Facebook to provide us with the WhatsApp Business Solution, which we, in turn, offer to our business customers. Pursuant to the terms of the agreement and depending on the number of messages sent to or from countries and regions, we pay certain fees, including taxes and levies, according to a price list established by Facebook. The agreement is valid for an indeterminate period of time, unless either party terminates the agreement upon 30 days’ prior written notice in accordance with its terms.
On November 23, 2017, we entered into an agreement with Claro S.A., or Claro, for Claro to provide us with SMS services. We pay a monthly subscription fee based on the SMS message bundling allowance plus a fixed charge per SMS message over the allowance. The agreement is valid for a period of one year from its date of execution and subject to automatic renewal for the same period of time, unless either party provides 30 days’ prior written notice of the intention to not seek renewal.
On November 14, 2019, we entered into an agreement with Oi Móvel S.A., or Oi, for Oi to provide us with SMS services. The agreement is valid until December 31, 2020 and subject to automatic renewal for periods of twelve months, unless either party provides 30 days’ prior written notice of the intention to not seek renewal. We may terminate the SMS services agreement at any time with 60 days’ prior written notice, subject to the payment of penalties. On January 7, 2020, we entered into an agreement with Oi for Oi to provide us with technology management services related to SMS messages. The agreement is valid until December 31, 2020 and not subject to automatic renewal. We may terminate the technology management services agreement at any time, subject to the payment of penalties. We pay a fixed monthly subscription fee for the services based on the SMS message bundling allowance plus a fixed charge per SMS message over the allowance. On January 7, 2020, we amended both agreements to reflect a revised SMS message bundling allowance plus a fixed charge per SMS message over the allowance as the basis for the fixed monthly subscription fee. Notwithstanding the foregoing, on November 11, 2020, we entered into an agreement with Oi to purchase in advance 900 million SMS messages, to be used by no later than May 13, 2021, at prices more favorable to us than the prices established in the pricing table previously in effect. This purchase suspended the monthly subscription fee referred to above until May 13, 2021.
On April 1, 2020, we entered into an agreement with Telefonica Brasil S.A., or Vivo, for Vivo to provide us with SMS services. We pay a fixed monthly subscription fee based on the SMS message bundling allowance plus a fixed charge per SMS message over the allowance. The agreement is valid until March 31, 2022, unless either party terminates the agreement upon 30 days’ prior written notice in accordance with its terms, and may be renewed upon the execution of an amendment by both parties.
On July 21, 2020, we entered into an agreement with Tim S.A., or TIM, for TIM to provide us with SMS services. We pay a fixed monthly subscription fee based on the SMS message bundling allowance plus a fixed charge per SMS message over the allowance. The agreement is valid until June 14, 2021, unless either party terminates the agreement upon 60 days’ prior written notice in accordance with its terms, and may be renewed upon the execution of an amendment by both parties.
Industry
Communication is critical for the operation and innovation of businesses of all sizes
With unprecedented customer dependence on smartphones and the proliferation of mobile applications, communications have become a major focus for businesses of all sizes. As a result, businesses are integrating mission-critical communications functions in their products and services. In order to provide real-time value to their end-consumers across a myriad of devices, businesses are seeking to effectively operate and innovate to create a “connected” experience.
 
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Ability of businesses to differentiate themselves has driven competition
The ability for businesses to differentiate themselves from competitors has been driving growth across different economic sectors. In order for businesses to continue to be competitive, they need to continue to develop their software development capabilities to allow them to build applications that address their end-consumers’ needs.
Communication is transforming interactions between businesses and their end-consumers
Mobile channels connections between businesses and their end-consumers has been at the forefront of change in the way businesses communicate with their end-consumers and there is a need for a more comprehensive platform to manage such communications.
In addition, the ongoing transformation of the communications industry is demonstrated by the expected change in the mix of services provided by CPaaS companies, which is one of our target markets. According to Juniper Research’s “2020 CPAAS Future Market Outlook — Emerging Opportunities — 2020-2025 — Deep dive Data & Forecasting” study, the CPaaS global market landscape is expected to change over the next five years as a result of the diversification of services offered. Although SMS revenue from CPaaS platforms is expected to grow 21.8% on average annually, it is expected to account only for approximately 70.5% of total CPaaS revenue by 2025, compared to 95.9% of total CPaaS revenue in 2020. These number represents that although and SMS and Application-to-Person (A2P) maybe be perceived as legacy strategies, they will potentially be the platform to leverage and catapult new technologies and strategies across markets.
Our Market Opportunity
We continue to expand in Latin America and this market represents an important area of growth and TAM going forward
Our CX communication platform addresses multiple markets. One of our target markets is CPaaS. We are the only representative vendor in the 2020 Gartner Market Guide for Communications Platform as a Service headquartered in Latin America.* For Gartner disclaimer, see “Presentation of Financial and Other Information—Market Information.” We have a large CPaaS TAM, in Latin America, amounting to US$659.6 million in 2020, and our industry is expected to experience average annual growth in TAM of 34.6% a year as from 2020 and reach US$2.16 billion by 2024, according to IDC’s estimates. Our experience with customers of various sizes and segments also points to great demand for marketing campaign tools that can leverage SMS, RCS, e-mail and other digital channels, so we believe in the potential of multichannel Marketing Campaign Management (MCM) market also as a target market for our solutions. According to IDC estimates, the MCM TAM, in Latin America, amounted to US$1.54 billion in 2020, and this industry is expected to experience average annual growth in TAM of 4.1% a year from 2020 and reach US$1.80 billion by 2024. Our roots in Latin America allow us to understand its complexities and opportunities, to identify the right combination of technologies, sales channel efficiency and go-to-market strategy and to lead the customer experience transformation in the region. On July 24, 2020, in line with our strategy to expand our platform in Latin America, we acquired Sirena, a startup founded in 2014 that offers communication solutions for sales teams via WhatsApp in countries such as Argentina and Mexico. Also, upon consummation of the D1 Acquisition, we expect to expand our Latin America addressable market by adding a multichannel engagement solution and multiple tools to our CX communication platform such as single customer view, journey builder, documents (e.g., invoices, utilities bills, insurance policies) composition and delivery of transaction documents through multiple channels, which are considered part of the Customer Communications Management, or CCM, market. According to IDC estimates, the CCM TAM in Latin America amounted to US$115.6 million in 2020, and this industry is expected to experience average annual growth in TAM of 5.6% a year from 2020 and reach US$143.9 million by 2024. For further information about the Sirena Acquisition and the D1 Acquisition, see “Presentation of Financial and Other Information—D1 Acquisition, Sirena Acquisition and Related Financial Statements” and “Risk Factors—​Certain Risks Relating to Our Business and Industry—We may pursue strategic acquisitions or investments which may divert our management’s attention and result in reduced cash levels, increased indebtedness or dilution to our shareholders. The failure of an acquisition or investment to produce the anticipated results,
 
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the failure to consummate a pending acquisition (including the D1 Acquisition) or the inability to integrate an acquired company fully, could adversely affect our business.” The following chart represents the total addressable market in Latin America for CPaaS, MCM and CCM for the periods indicated below:
[MISSING IMAGE: TM2039074D7-BC_LATINAME4C.JPG]
We believe the Latin American market has significant growth potential as it is in the early stage of digital transformation and the adoption of technology. For example, current business spending on information technology in Latin America remains relatively low compared to spending in developed markets (1.9% in Latin America compared to 4.1% in the United States in terms of percentage of GDP as of 2019, according to data from ABES and the World Bank). Additionally, the ongoing COVID-19 pandemic has highlighted the need for businesses to transform their end-consumer journey by implementing digital platforms and solutions to mitigate disruptions and maintain direct relationships with end-consumers. Accordingly, we believe that the expected recovery of the Latin American economy, coupled with the expectation of pro-business reforms in certain countries of the region, will create opportunities for strategic investments in the private sector, generating an increase in demand for digital solutions, and we believe we are well-positioned to be at the forefront of meeting this increase in demand.
Considering one of our target markets, which includes, but is not limited to the markets mentioned in the chart above, the CPaaS market was negatively impacted by the virtual halt of economic activity in many countries across Europe and North America. However, CPaaS is a digital platform and the creation of applications has been sustained by remote workers. While many companies have shuttered their brick-and-mortar locations, they still depend on digital infrastructure to engage with customers. The IDC reported the market slowed down slightly in 2020, as a result of the economic and social impact of the COVID-19 pandemic. However, growth will resume in 2021, as companies redouble their digital outreach in late 2020 and into 2021.
IDC is forecasting that, post-COVID-19, most large enterprises will conduct most of their business on digital platforms. Companies that are not in the midst of digital transformation are at risk of, at worst, extinction or, at best, falling behind.
“CPaaS will be in integral aspect of customer engagement for enterprises over the next five years, providing the foundation for innovative differentiation,” according to Courtney Munroe, research vice president, Worldwide Telecommunications Research at IDC.
Legacy approach will be insufficient
The COVID-19 pandemic brought some unprecedented challenges which have led to wholesale changes inside businesses across most aspects of their businesses. Digital operations have been significantly impacted and businesses are expected to leverage their developers to lead a CX communications platform-driven digital transformation to be able to survive the impacts of the pandemic.
 
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CPaaS market in 2020 is being led by legacy SMS and A2P services. They are simple to deploy, provide a fast return on investment, and fulfill easy-to-understand use cases — such as appointment reminders and service renewals, which make them the preferable entry point of new clients and businesses that are implement such services during the pandemic. However, as businesses master foundational CPaaS, their development teams advance to richer capabilities such as messaging apps (led by WhatsApp, along with WeChat and Apple Business Chat), omnichannel, video, enhanced security (such as biometrics) and payments. Most of the growth of the next year on the CPaaS industry will come from these new richer capabilities and pioneers should have advantage on this environment.
 
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MANAGEMENT
We are currently reviewing the composition of our board of directors, our committees and our corporate governance practices in light of this offering and applicable requirements of the SEC and the Nasdaq. In subsequent filings with the SEC, we will update any relevant disclosure herein as appropriate.
Upon the consummation of this offering, we will be managed by our board of directors and by our senior management, pursuant to our Articles of Association and the Cayman Islands Companies Act (as amended).
Board of Directors
We are managed by our board of directors. Our Articles of Association provide that, unless otherwise determined by an ordinary resolution of shareholders, the board of directors will be composed of four (4) to eleven (11) directors, with the number being determined by a majority of the directors then in office. See “Description of Share Capital” for further information.
Upon the consummation of this offering, our board of directors will be composed of                   members. Each director holds office for the term, if any, fixed by the shareholders or board of directors that appoints such director, or, if no term is fixed on the appointment of the director, until the earlier of his death, resignation or removal. Our directors do not have a retirement age requirement under our Articles of Association.
The table set forth below presents the name, age and title of the current members and director nominees of our board of directors:
Name
​ ​
Age
​ ​
Position
​
Jorge Steffens
​ ​ 55 ​ ​ Chairman ​
Cassio Bobsin
​ ​ 40 ​ ​ Board member ​
Carlos Henrique Testolini
​ ​ 58 ​ ​ Board member ​
Eduardo Aspesi*
​ ​ 61 ​ ​ Board member ​
Fernando Jorge Wosniak Steler**
​ ​ 43 ​ ​ Director Nominee ​
​
*
Member of our audit committee.
​
**
Nomination to be effected upon consummation of the D1 Acquisition.
​
The following is a summary of the professional experience of our current directors and director nominees. Unless otherwise indicated, the current business addresses of all members of our board of directors is Avenida Paulista, No. 2300, 18th Floor, 01310-300 São Paulo, São Paulo, Brazil.
Jorge Steffens. Mr. Steffens is a founding partner of Oria, primarily responsible for investments and the operational performance of the Oria funds’ portfolio companies. He is the chairman of our board of directors and a member of the board of directors of Navita Mobi All Tecnologia S.A. and Blockbit Tecnologia Ltda, Cipher S.A. Mr. Steffens was CEO of Datasul S.A. from 2003 to 2008, leading the IPO process and also served as the Managing Director of Datasul S.A. in different development activities such as sales and deployment of management software (ERP, CRM, SCM, HR) from 1988 to 1999. He was founder and Director of Systems Integration of Neogrid Software SA from 2000 to 2002. Mr. Steffens holds a degree in information technology from Mackenzie University and the Regional University of Blumenau, a post-graduate degree in marketing from Fundação Getúlio Vargas, or FGV, and a post-graduate degree in production engineering from the State University of Santa Catarina, specialization in management from Stanford University. He is certified by the APICS (CPIM).
Cassio Bobsin. Mr. Bobsin is our founder, a member of our board of directors and our chief executive officer. He is the founder of WOW Accelerator, the largest independent startup accelerator in Brazil. Mr. Bobsin holds a bachelor’s degree in computer science from the Federal University of Rio Grande do Sul, or UFRGS, an MBA at ESPM, MsC in business administration from PPGA/UFRGS and also attended
 
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the Owner/President Management Program at Harvard Business School and Executive Program for Growing Companies at Stanford University. He is a member of the Young Presidents Organization and an Endeavor Entrepreneur.
Carlos Henrique Testolini. Mr. Testolini is a senior partner at Oria since 2015, primarily responsible for investments and the operational performance of the Oria funds’ portfolio companies. He is a member of our board of directors and a member of the board of directors of Britech S.A., Mandic S.A. and Technisys S.A. Mr. Testolini was CEO of Sonda IT from 2007 to 2015, and a member of its board of directors from 2016 to 2018. He was Executive Officer at Procwork Informática Ltda from 1997 to 2007, until its sale to the Sonda IT. Prior to 1987, Mr. Testolini served as an Executive Officer at IBM, SSA and BOSCH. He holds a degree in Information Systems from Pontifical Catholic University — PUC, MBA in Marketing Services by the University of São Paulo, Specialization in Harvard Business School — Private Equity / Venture Capital; Advanced Management at the Kellogg School of Management — Northwestern University.
Eduardo Aspesi. Mr. Aspesi is an independent member of our board of directors. He is also member of financial, audit and administrative committee (2020) and member of portfolio and GTM committee (2020). He held the position of Vice President of Marketing and Sales at NEXTEL Telecommunication Brazil from 2015 to 2017. He was the owner of MEDNET POA, a company in the occupational medicine and safety sector from 2015 until its sale in 2020. He graduated in business administration from Catholic University of Rio Grande do Sul, or PUCRS, and in economic science from UFRGS, holds post graduate degrees in finance from UFRGS and in marketing from UFRGS and he took an advanced management course at FDC/​INSEAD.
Fernando J. Wosniak Steler. Mr. Steler is the founder and chief executive officer of D1 and entrepreneur and mentor at Endeavor. Previously, Fernando was a co-founder and CEO of AG Direct, founder and CEO of 3works Interactive and worked as Product Manager at Brasoft and Omnilink. Mr. Steler holds a bachelor’s degree in business management from USCS and international certification in Direct Marketing by DMA (Direct Marketing Association). He also attended professional development courses at Columbia Business School and Stanford University.
Executive Officers
Our executive officers are primarily responsible for the day-to-day management of our business and for implementing the general policies and directives established by our board of directors. See “Description of Share Capital” for further information.
The table set forth below presents the name, age and title of current executive officers:
Name
​ ​
Age
​ ​
Position
​
Cassio Bobsin
​ ​ 40 ​ ​ Chief Executive Officer ​
Renato Friedrich
​ ​ 62 ​ ​ Chief Financial Officer ​
Lilian Lima
​ ​ 52 ​ ​ Chief Technology Officer ​
Murilo Costa
​ ​ 41 ​ ​ Chief Sales Officer ​
Gabriela Ferreira Vargas
​ ​ 34 ​ ​ Chief Operating Officer ​
Raphael Godoy
​ ​ 38 ​ ​ Chief Marketing Officer ​
Rogério da Costa Perez
​ ​ 43 ​ ​ Chief Experience Officer ​
The following is a summary of the professional experience of our current executive officers. Unless otherwise indicated, the current business addresses of all our executive officers is Avenida Paulista, No. 2300, 18th Floor, 01310-300 São Paulo, São Paulo, Brazil.
Cassio Bobsin. Mr. Bobsin is our founder, a member of our board of directors and our chief executive officer. For biographical information regarding Mr. Bobsin, see “— Directors.”
Renato Friedrich. Mr. Friedrich is our chief financial officer, responsible for audit, financial and tax procedures, reports, corporate systems, compliance, and strategic information since 2017. He has more than 20 years of executive business and financial experience, working in software and technology companies
 
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such as Electrolux do Brasil S.A., BCP Telecomunicações S.A, Datasul S.A., Agentrics LLC, Neogrid Informática S.A, M Abuhab Participações and Kroton Educacional S.A. With extensive experience in auditing, financial and tax procedures, and strategic information. Prior to joining us, Mr. Friedrich served as chief financial officer at Grupo InterPlayers until December 2015; at NeoGrid Group, more specifically at Neogrid Informática S.A., Neogrid Software S.A and Neogrid Datacenter S.A. between January 2016 until June 2017; and at Neogrid Participações S.A. from April 2017 to June 2017. He also worked at M. Abuhab Participações S.A. and Camerite Informática Publicidade e Monitoramento S.A, from September 2016 to June 2017. He holds a bachelor’s in economics from Univille — Educational Foundation of the Region of Joinville, an MBA in Management at ESAG — School of Administration and Management. Executive Programs at Wharton, Yale, IBGC and Amana-Key.
Lilian Lima. Ms. Lima is our chief technology officer. She has more than 30 years of technical and executive experience, working in software companies as Procergs, Mercador and Neogrid and acting as an entrepreneurial consultant in tech startup as MDM. With extensive experience in technology, software architecture, mission-critical operation, software development, management, strategic technology evolution, team building, change management and innovation. Between 2015 and 2019, she was technology director of Neogrid, a technology company for supply chain, responsible for a mission-critical operation with an global scope. She has been working at Zenvia since 2019, being responsible for the technology, software engineering and technology operation teams. Between 2013 and 2015, she was responsible for the architecture team at Neogrid and led important projects in the area of platform development and big data. Between 2018 and 2019, she was responsible for the technology area of a tech startup company that develops a solution for mobile devices management, acting as chief technology officer. Ms. Lima holds a bachelor’s in computer science and a software development post-graduate course at UFRGS.
Murilo Costa. Mr. Costa is our chief sales officer, having been with us since March 2021. He has a solid reputation with Enterprise and SMB software companies. Recently, Mr. Costa was the Vice President of Sales for Latin America for Pipefy. Prior to that, he held executive positions with Honeywell, CA Technologies, Pivotal Software (acquired by VMWare), Software AG, Sensedia and Motorola. Mr. Costa has expertise in sales management, GTM strategy, sales methodologies, ROI/business cases, strategic accounts, inbound, outbound, SMB, People/team management, global and local partner/channel/alliance management, customer success, professional services, pre sales, innovation, marketing programs, new business development. Mr. Costa holds a bachelor’s in computer science and an MBA in sales management from Fundação Getúlio Vargas.
Gabriela Ferreira Vargas. Ms. Vargas is our chief operating officer, having been with us since 2009 on various teams, including marketing and communication manager, a role in which she managed scale selling and digital acquisition, amongst others, director of business development, a role in which she had the mission of implementing a more agile, people centric culture. She has broad experience in marketing strategy in the IT market. Ms. Vargas currently works with portfolio diversification, higher margin products, as well as market strategies. She holds a bachelor’s degree in Marketing and Advertising and an MBA in Marketing Strategy from Unisinos. She also holds a certificate in M&A Integration from Mercer and a certificate in Digital Transformation from SVIC (Silicon Valley Innovation Center).
Raphael Godoy. Mr. Godoy is our chief marketing officer (CMO), having been with us since 2018 when he started his career at Zenvia as marketing manager, with a solid background developing marketing and sales strategies in different business environments such as telecom, real state and health industries. Since January 2021 he has been our chief marketing officer (CMO). Mr. Godoy holds a degree in Design from Universidade Mogi das Cruzes and specializations in Marketing and Business Administration (major in Finance), both from Fundação Getúlio Vargas (EAESP FGV).
Rogério da Costa Perez. Mr. Perez is our chief experience officer, having been with us since 2021. He is responsible for the customer support, customer experience, professional services and education departments. Mr. Perez holds a technology degree in Computer Sciences and Technology from the Instituto Mineiro de Educação Superior – IMES and a bachelor’s degree in journalism from the Social Communications College of Universidade São Judas Tadeu. Currently, he is attending Berkley’s Executive Leadership specialization program and expects to graduate in November 2021.
 
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Committees
Audit Committee
Upon completion of this offering, our board of directors will have established an audit committee. Our audit committee will initially consist of Eduardo Aspesi and                 .                 will be the chairman of our audit committee.                 and                 satisfy the criteria of an audit committee financial expert as set forth under the applicable rules of the SEC. Eduardo Aspesi,           and            will meet the criteria for independence set forth in Rule 10A-3 of the Exchange Act at the time of our initial public offering. Our audit committee will assist our board of directors in overseeing our accounting and financial reporting processes and the audits of our financial statements. In addition, the audit committee will be directly responsible for the appointment, compensation, retention and oversight of the work of our independent registered public accounting firm.
Code of Ethics and Conduct
We have adopted a code of ethics and conduct, which is applicable to all of our directors, officers and employees, as well as third party service providers, customers and business partners. Our code of ethics and conduct is publicly available on our website. We intend to disclose future amendments to, or waivers of, our code of conduct on the same page of our corporate website. Information contained on our website is not incorporated by reference into this prospectus, and you should not consider information contained on our website to be part of this prospectus or in deciding whether to invest in our Class A common shares.
Compensation of Directors and Officers
Under Cayman Islands law, we are not required to disclose compensation paid to our senior management on an individual basis and we have not otherwise publicly disclosed this information elsewhere.
Our directors, executive officers and management in general receive fixed and variable compensation. They also receive benefits in line with market practice in Brazil and elsewhere where we operate. The fixed component of their compensation is set on market terms and adjusted annually.
The variable component consists of cash bonuses and awards of shares (or the cash equivalent). Cash bonuses are paid to executive officers and members of our management based on previously agreed targets for the business. Shares (or the cash equivalent) are awarded under share options long term incentive programs.
For the years ended December 31, 2020, 2019 and 2018, the aggregate compensation expense for the members of the board of directors and our executive officers for services in all capacities was R$10.0 million, R$6.3 million and R$4.6 million, respectively, which includes both benefits paid in kind and compensation.
Post-IPO Equity Incentive Plan
In connection with, and subject to, the consummation of this offering, we have agreed to pay a cash bonus and grant awards of restricted and performance shares to our executive officers and other members of management. Such cash bonus is expected to be in an aggregate amount of up to R$     million, and we expect to issue      Class A common shares in connection such these restricted shares and performance shares grants, in each case, assuming an initial public offering price of US$     per Class A common share, which is the midpoint of the price range set forth on the cover page of this prospectus.
Furthermore, in connection with the consummation of this offering, we intend to implement a share option plan and a restricted share plan in which eligible participants will include certain members of our management and employees. Beneficiaries under the share option plan or the restricted share plan, as the case may be, will be granted rights to buy shares based on certain criteria that shall be determined and disclosed prior to the commencement of this offering. The final eligibility of any beneficiary to participate in the share option plan or restricted share plan will be determined by our board of directors.
The maximum number shares that can be issued to beneficiaries under the restricted share plan may not exceed    % of our share capital at any time.
 
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Agreements with Our Executives
Certain of our executive officers have entered into service agreements with us, certain of which provide for notice of termination periods and restrictive covenants, including with respect to confidentiality, non-compete and exclusivity. None of our directors have entered into service agreements with us.
Directors’ and Officers’ Insurance
Prior to the consummation of this offering, we intend to use commercially reasonable efforts to obtain directors’ and officers’ insurance coverage in reasonable and customary amounts with respect to general civil liability, including liabilities under the Securities Act, for acts carried out by our directors and executive officers in the course of their duties.
Share Ownership
The shares and any outstanding beneficially owned by our directors and officers and/or entities affiliated with these individuals are disclosed in the section entitled “Principal Shareholders.”
Family Relationships
There are no family relationships between our directors and executive officers and shareholders.
 
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PRINCIPAL SHAREHOLDERS
The table below contains information regarding the beneficial ownership of our equity securities (1) immediately prior to the consummation of this offering, (2) following the offering of Class A common shares contemplated hereby, assuming no exercise of the option to purchase additional Class A common shares, and (3) following the sale of Class A common shares in this offering, assuming the underwriters’ option to purchase additional Class A common shares is exercised in full, by:
•
each person, or group of affiliated persons, known by us to own beneficially 5% or more of our common shares;
​
•
each person who is or will be a member of our board of directors and each of our executive officers as of the consummation of this offering, individually; and
​
•
all of the persons who are members of our board of directors and all of our executive officers, as a group.
​
Beneficial ownership is determined under SEC rules and generally includes voting or investment power over securities. Except in cases where community property laws apply or as indicated in the footnotes to this table, we believe that each shareholder identified in the table below possesses sole voting and investment power over all the Class A or Class B common shares shown as beneficially owned by the shareholder in the table.
Common shares subject to options, warrants or rights that are exercisable at the time of completion of this offering, or that will be exercisable within 60 days thereafter, are considered to be outstanding and beneficially owned by the person who holds such options, warrants or rights for purposes of computing that person’s common share ownership, but are not treated as outstanding for the purpose of computing the percentage ownership of any other person.
The percentages of beneficial ownership in the table below are calculated on the basis of the following numbers of shares outstanding:
•
immediately prior to the completion of this offering:           Class A common shares and           Class B common shares;
​
•
following the sale of Class A common shares in this offering, assuming no exercise of the underwriters’ option to purchase additional Class A common shares:           Class A common shares and           Class B common shares; and
​
•
following the sale of Class A common shares in this offering, assuming exercise in full of the underwriters’ option to purchase additional Class A common shares:           Class A common shares and           Class B common shares.
​
The holders of our Class A common shares and Class B common shares have identical rights, except that holders of Class B common shares (i) are entitled to 10 votes per share, whereas holders of our Class A common shares are entitled to one vote per share (ii) has certain conversion rights, (iii) is entitled to maintain a proportional ownership interest in the event that additional Class A common shares are issued and (iv) are subject to certain transfer restrictions. For more information, see “Description of Share Capital.” Each Class B common share is convertible into one Class A common share.
​ ​ ​
Common Shares Beneficially Owned
Prior to Offering
​ ​
Total
Voting
Power
Before
Offering(1)
​ ​
Common Shares Beneficially
Owned After Offering without
Exercise of Underwriters’ Option
​ ​
Total
Voting
Power
After
Offering
without
Exercise of
Underwriters’
Option(1)
​ ​
Common Shares Beneficially
Owned After Offering with Full
Exercise of Underwriters’ Option
​ ​
Total
Voting
Power
After
Offering
with Full
Exercise of
Underwriters’
Option(1)
​
​ ​ ​
Class A
​ ​
Class B
​ ​
Class A
​ ​
Class B
​ ​
Class A
​ ​
Class B
​
​ ​ ​
Shares
​ ​
%
​ ​
Shares
​ ​
%
​ ​
%
​ ​
Shares
​ ​
%
​ ​
Shares
​ ​
%
​ ​
%
​ ​
Shares
​ ​
%
​ ​
Shares
​ ​
%
​ ​
%
​
Pre-IPO Shareholders
​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Cassio Bobsin(2)
​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Oria Zenvia Co-investment Holdings, LP(3)
​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Oria Zenvia Co-investment Holdings II, LP(3)
​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
 
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​ ​ ​
Common Shares Beneficially
Owned
Prior to Offering
​ ​
Total
Voting
Power
Before
Offering(1)
​ ​
Common Shares Beneficially
Owned After Offering without
Exercise of Underwriters’
Option
​ ​
Total
Voting
Power
After
Offering
without
Exercise of
Underwriters’
Option(1)
​ ​
Common Shares Beneficially
Owned After Offering with Full
Exercise of Underwriters’
Option
​ ​
Total
Voting
Power
After
Offering
with Full
Exercise of
Underwriters’
Option(1)
​
​ ​ ​
Class A
​ ​
Class B
​ ​
Class A
​ ​
Class B
​ ​
Class A
​ ​
Class B
​
​ ​ ​
Shares
​ ​
%
​ ​
Shares
​ ​
%
​ ​
%
​ ​
Shares
​ ​
%
​ ​
Shares
​ ​
%
​ ​
%
​ ​
Shares
​ ​
%
​ ​
Shares
​ ​
%
​ ​
%
​
Oria Tech Zenvia Co-investment – Fundo de Investimento em Participações Multiestratégia(3)
​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Oria Tech I Inovação Fundo de Investimento em Participações Multiestratégia (3)
​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Spectra I Fundo de Investimento em Participações Multiestratégia Investimento No Exterior(4)
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​
    
​ ​
    
​ ​
    
​ ​
    
​ ​
    
​ ​
    
​ ​
    
​ ​
    
​ ​
    
​ ​
    
​ ​
    
​
Spectra II Fundo de Investimento em Participações Multiestratégia Investimento No Exterior(4)
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Directors and Executive Officers(3)
​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Total
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​
(1)
Percentage of total voting power represents voting power with respect to all of our Class A common shares and Class B common shares, as a single class. Holders of our Class B common shares are entitled to ten votes per common share, whereas holders of our Class A common shares are entitled to one vote per common share. For more information about the voting rights of our Class A common shares and Class B common shares, see “Description of Share Capital.”
​
(2)
Mr. Bobsin, a member of our board of directors and our chief executive officer, is the sole beneficial owner and indirectly holds common shares in us through his ownership of all participation interests in Bobsin LLC, a limited liability company incorporated under the laws of Delaware. The business address for Mr. Bobsin is Avenida Paulista, 2300, 18th Floor, Suites 182 and 184, São Paulo, São Paulo, 01310-300, Brazil.
​
(3)
Consists of common shares held of record by Oria Zenvia Co-investment Holdings, LP, Oria Zenvia Co-investment Holdings II, LP, Oria Tech Zenvia Co-investment — Fundo de Investimento em Participações Multiestratégia and Oria Tech I Inovação Fundo de Investimento em Participações Multiestratégia, all investment funds ultimately managed by Oria Gestão de Recursos Ltda., a Brazilian independent asset management firm focused on private equity and venture capital with approximately R$1.1 billion of assets under management. The principal executive office of Oria Gestão de Recursos Ltda. is located at Avenida Paulista, 2,278, 3rd Floor, Room 13, São Paulo, SP, Brazil.
​
(4)
Consists of common shares held of record by Spectra I Fundo de Investimento em Participações Multiestratégia Investimento No Exterior and Spectra II Fundo de Investimento em Participações Multiestratégia Investimento No Exterior, both of which are investment funds managed by Spectra Investimentos Ltda. The principal executive office of Spectra Investimentos Ltda. is located at Rua Amauri, 255, 4th Floor, São Paulo, SP, Brazil.
​
As of the date of this prospectus, none of our outstanding Class A or Class B common shares are held by record holders in the United States.
Registration Rights Agreement
Effective upon consummation of this offering, we will enter into a registration rights agreement, or the Registration Rights Agreement, with      and     .
At any time beginning      days following the closing of this offering, subject to several exceptions, including underwriter cutbacks and our right to defer a demand registration under certain circumstances,      and      may require that we register for public resale under the Securities Act all common shares constituting registrable securities that they request be registered so long as the securities requested to be registered in each registration statement have an aggregate estimated market value of at least     . If we become eligible to register the sale of our securities on Form F-3 under the Securities Act, which will not be until at least twelve months after the date of this prospectus,      and      have the right to require us to register the sale of the registrable securities held by them on Form F-3, subject to offering size and other restrictions.
If we propose to register any of our securities under the Securities Act for our own account or the account of any other holder (excluding any registration related to employee benefit plan, a corporate reorganization, other Rule 145 transactions, in connection with a dividend reinvestment plan or for the sole purpose of offering securities to another entity or its security holders in connection with the acquisition of assets or securities of such entity),      and     , are entitled to notice of such registration and to request that we include registrable securities for resale on such registration statement, and we are required, subject to certain exceptions, to include such registrable securities in such registration statement.
In connection with the transfer of their registrable securities, the parties to the Registration Rights Agreement may assign certain of their respective rights under the Registration Rights Agreement under certain circumstances. In connection with the registrations described above, we will indemnify any selling shareholders and we will bear all fees, costs and expenses (except underwriting discounts and spreads).
 
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CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
In the ordinary course of business, we and our subsidiaries enter into and expect to continue to enter into intercompany commercial transactions with entities of our group for the acquisition and lease of equipment, provision of services, right of use and cost sharing arrangements.
Also, in addition to the compensation arrangements with directors and executive officers described under “Management — Compensation of Directors and Officers” and “Management — Post-IPO Equity Incentive Plan” and certain rights granted to our pre-IPO shareholders as described under “Principal Shareholders — Registration Rights Agreement.”
Related Person Transaction Policy
We enter into related party transactions in the ordinary course of business. Prior to the completion of this offering, we intend to enter into a related person transaction policy.
Our Related Party Transactions
In March 2021, Zenvia Brazil entered into certain agreements for the direct and indirect acquisition of 100% of D1, a company which our director nominee, Fernando Jorge Wosniak Steler, has a material equity interest. For more information about this acquisition, see “Business and Industry — Recent Acquisitions.”
Indemnification Agreements
We intend to enter into indemnification agreements with our directors and executive officers. The indemnification agreements will require us to indemnify our directors and executive officers to the fullest extent permitted by law. For instance, under the terms of these agreements, we will agree to cover all expenses actually and reasonably incurred by each beneficiary in connection with any proceeding to the extent that such beneficiary has acted in good faith and in a manner he or she reasonably believed to be in or not to be opposed to our best interests. Each of these agreements will remain in force while a beneficiary is our executive officer, a member of our board of directors, or is or was serving at our request as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise and thereafter if such beneficiary becomes or is threatened to become a party to or a participant in any proceeding due to such beneficiary’s relationship with us.
Agreements relating to Our Common shares
Registration Rights Agreement
Effective upon consummation of this offering, we will enter into a Registration Rights Agreement with our pre-IPO shareholders. See “Principal Shareholders — Registration Rights Agreement.”
Relationships with our Directors and Executive Officers
Upon completion of this offering, and assuming no exercise of the underwriters’ option to purchase additional Class A common shares, Mr. Cassio Bobsin, a member of our board of directors and our chief executive officer will indirectly hold       % of our common shares (and       % of the voting power of our outstanding common shares) through Bobsin LLC. See “Principal Shareholders.”
 
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DESCRIPTION OF SHARE CAPITAL
General
Zenvia Inc., the company whose Class A common shares are being offered in this prospectus, was incorporated on November 3, 2020, as a Cayman Islands exempted company with limited liability duly registered with the Cayman Islands Registrar of Companies. Our corporate purposes are unrestricted, and we have the authority to carry out any object not prohibited by any law as provided by Section 7(4) of Companies Act (as amended) of the Cayman Islands, or the Companies Act.
Our affairs are governed principally by: (1) Articles of Association; (2) the Companies Act; and (3) the common law of the Cayman Islands. As provided in our Articles of Association, subject to Cayman Islands law, we have full capacity to carry on or undertake any business or activity, do any act or enter into any transaction, and, for such purposes, full rights, powers and privileges. Our registered office is c/o Maples Corporate Services Limited, P.O. Box 309, Ugland House, Grand Cayman, KY1-1104, Cayman Islands.
Our Articles of Association authorize the issuance of up to           Class A common shares and      Class B common shares of our authorized share capital. As of the date of this prospectus,           Class A common shares and           Class B common shares of our authorized share capital were issued, fully paid and outstanding. Upon the completion of this offering, we will have           Class A common shares and      Class B common shares of our authorized share capital issued and outstanding, assuming the underwriters do not elect to exercise their option to purchase additional Class A common shares.
We have applied to list our Class A common shares, on the Nasdaq under the symbol “ZENV.”
Initial settlement of our Class A common shares will take place on the closing date of this offering through The Depository Trust Company, or DTC, in accordance with its customary settlement procedures for equity securities. Each person owning Class A common shares held through DTC must rely on the procedures thereof and on institutions that have accounts therewith to exercise any rights of a holder of the Class A common shares. Persons wishing to obtain certificates for their Class A common shares must make arrangements with DTC.
The following is a summary of the material provisions of our authorized share capital and our Articles of Association.
Share Capital
The Memorandum and Articles of Association authorize two classes of common shares: Class A common shares, which are entitled to one vote per share, and Class B common shares, which are entitled to 10 votes per share and to maintain a proportional ownership interest in the event that additional Class A common shares are issued. Any holder of Class B common shares may convert his or her shares at any time into Class A common shares on a share-for-share basis. The rights of the two classes of common shares are otherwise identical, except as described below. See “— Anti-Takeover Provisions in our Articles of Association — Two Classes of Shares.”
At the date of this prospectus, our           total authorized share capital was US$      , divided into        shares with par value of US$      each, of which:
•
       shares are designated as Class A common shares; and
​
•
       shares are designated as Class B common shares.
​
The remaining authorized but unissued shares are presently undesignated and may be issued by our board of directors as common shares of any class or as shares with preferred, deferred or other special rights or restrictions.
Following this offering, we will have a total issued share capital of US$      , divided into      common shares. Those common shares will be divided into      Class A common shares and      Class B common shares (assuming no exercise of the underwriters’ option to purchase additional
 
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common shares); or      Class A common shares and      Class B common shares (assuming full exercise of the underwriters’ option to purchase additional shares). See “Capitalization” and “Dilution.”
Treasury Stock
At the date of this prospectus, we have no shares in treasury.
Issuance of Shares
Except as expressly provided in our Articles of Association, our board of directors has general and unconditional authority to allot, grant options over, offer or otherwise deal with or dispose of any unissued shares in the company’s capital without the approval of our shareholders (whether forming part of the original or any increased share capital), either at a premium or at par, with or without preferred, deferred or other special rights or restrictions, whether in regard to dividend, voting, return of capital or otherwise and to such persons, on such terms and conditions, and at such times as the directors may decide, but so that no share shall be issued at a discount, except in accordance with the provisions of the Companies Act. In accordance with its Articles of Association, we shall not issue bearer shares.
Our Articles of Association provide that at any time that there are Class A common shares in issue, additional Class B common shares may only be issued pursuant to (1) a share split, subdivision of shares or similar transaction or where a dividend or other distribution is paid by the issue of shares or rights to acquire shares or following capitalization of profits, (2) a merger, consolidation, or other business combination involving the issuance of Class B common shares as full or partial consideration, or (3) an issuance of Class A common shares, whereby holders of the Class B common shares are entitled to purchase a number of Class B common shares that would allow them to maintain their proportional ownership interests in us (following an offer by us to each holder of Class B common shares to issue to such holder, upon the same economic terms and at the same price, such number of Class B common shares as would ensure such holder may maintain a proportional ownership interest in us pursuant to our Articles of Association). In light of: (a) the above provisions; (b) the fact that future transfers by holders of Class B common shares will generally result in those shares converting to Class A common shares, subject to limited exceptions as provided in the Articles of Association; and (c) the ten-to-one voting ratio between our Class B common shares and Class A common shares, means that holders of our Class B common shares will in many situations continue to maintain control of all matters requiring shareholder approval. This concentration of ownership and voting power will limit or preclude your ability to influence corporate matters for the foreseeable future. For more information see “— Preemptive or Similar Rights.”
Our Articles of Association also provide that the issuance of non-voting common shares requires the affirmative vote of a majority of the of then-outstanding Class A common shares.
Fiscal Year
Our fiscal year begins on January 1 of each year and ends on December 31 of the same year.
Voting Rights
The holders of the Class A common shares and Class B common shares have identical rights, except that (1) the holder of Class B common shares is entitled to 10 votes per share, whereas holders of Class A common shares are entitled to one vote per share, (2) Class B common shares have certain conversion rights and (3) the holder of Class B common shares is entitled to maintain a proportional ownership interest in the event that additional Class A common shares are issued. For more information see “— Preemptive or Similar Rights” and “— Conversion.” The holders of Class A common shares and Class B common shares vote together as a single class on all matters (including the election of directors) submitted to a vote of shareholders, except as provided below and as otherwise required by law.
Our Articles of Association provide as follows regarding the respective rights of holders of Class A common shares and Class B common shares:
(1)
Class consents from the holders of Class A common shares or Class B common shares, as applicable, shall be required for any variation to the rights attached to their respective class of
​
 
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shares, however, the Directors may treat any two or more classes of shares as forming one class if they consider that all such classes would be affected in the same way by the proposal;
(2)
the rights conferred on holders of Class A common shares shall not be deemed to be varied by the creation or issue of further Class B common shares and vice versa; and
​
(3)
the rights attaching to the Class A common shares and the Class B common shares shall not be deemed to be varied by the creation or issue of shares with preferred or other rights, including, without limitation, shares with enhanced or weighted voting rights.
​
As set forth in the Articles of Association, the holders of Class A common shares and Class B common shares, respectively, do not have the right to vote separately if the number of authorized shares of such class is increased or decreased. Rather, the number of authorized Class A common shares and Class B common shares may be increased or decreased (but not below the number of shares of such class then outstanding) by the affirmative vote of the holders of a majority of the voting power of the issued and outstanding Class A common shares and Class B common shares, voting together in a general meeting.
Preemptive or Similar Rights
The Class A common shares and Class B common shares are not entitled to preemptive rights upon transfer and are not subject to conversion (except as described below under “— Conversion”), redemption or sinking fund provisions.
The Class B common shares are entitled to maintain a proportional ownership interest in the event that additional Class A common shares are issued. As such, except for certain exceptions, including the issuance of Class A common shares in furtherance of this offering, if we issues Class A common shares, we must first make an offer to each holder of Class B common shares to issue to such holder on the same economic terms such number of Class B common shares as would ensure such holder may maintain a proportional ownership interest into us. This right to maintain a proportional ownership interest may be waived by a majority of the holders of Class B common shares.
Conversion
The outstanding Class B common shares are convertible at any time as follows: (1) at the option of the holder, a Class B common share may be converted at any time into one Class A common share or (2) upon the election of the holders of a majority of the then outstanding Class B common shares, all outstanding Class B common shares may be converted into a like number of Class A common shares. In addition, each Class B common share will convert automatically into one Class A common share upon any transfer, whether or not for value, except for certain transfers described in the Articles of Association, including transfers to affiliates and certain transfers to organizations that are exempt from taxation under Section 501(c)(3) of the Internal Revenue Code of 1986, as amended. Furthermore, each Class B common share will convert automatically into one Class A common share and no Class B common shares will be issued thereafter if, at any time, the total number of the issued and outstanding Class B common shares is less than 10% of the total number of shares outstanding.
No class of our common shares may be subdivided or combined unless the other class of common shares is concurrently subdivided or combined in the same proportion and in the same manner.
Equal Status
Except as expressly provided in our Articles of Association, Class A common shares and Class B common shares have the same rights and privileges and rank equally, share proportionally and are identical in all respects as to all matters. In the event of any merger, consolidation, scheme, arrangement or other business combination requiring the approval of our shareholders entitled to vote thereon (whether or not we are the surviving entity), the holders of Class A common shares shall have the right to receive, or the right to elect to receive, the same form of consideration as the holders of Class B common shares, and the holders of Class A common shares shall have the right to receive, or the right to elect to receive, at least the same amount of consideration on a per share basis as the holders of Class B common shares. In the event of any (1) tender or exchange offer to acquire any Class A common shares or Class B common shares by any
 
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third-party pursuant to an agreement to which we are a party, or (2) any tender or exchange offer by us to acquire any Class A common shares or Class B common shares, the holders of Class A common shares shall have the right to receive, or the right to elect to receive, the same form of consideration as the holders of Class B common shares, and the holders of Class A common shares shall have the right to receive, or the right to elect to receive, at least the same amount of consideration on a per share basis as the holders of Class B common shares.
Record Dates
For the purpose of determining shareholders entitled to notice of, or to vote at any general meeting of shareholders or any adjournment thereof, or shareholders entitled to receive dividend or other distribution payments, or in order to make a determination of shareholders for any other purpose, our board of directors may set a record date which shall not exceed forty (40) clear days prior to the date where the determination will be made.
General Meetings of Shareholders
As a condition of admission to a shareholders’ meeting, a shareholder must be duly registered as our shareholder at the applicable record date for that meeting and, in order to vote, all calls or installments then payable by such shareholder to us in respect of the shares that such shareholder holds must have been paid.
Subject to any special rights or restrictions as to voting then attached to any shares, at any general meeting every shareholder who is present in person or by proxy (or, in the case of a shareholder being a corporation, by its duly authorized representative not being himself or herself a shareholder entitled to vote) shall have one vote per Class A common share and 10 votes per Class B common share.
As a Cayman Islands exempted company, we are not obliged by the Companies Act to call annual general meetings; however, the Articles of Association provide that in each year the company will hold an annual general meeting of shareholders, at a time determined by the board of directors, provided that our board of directors of has the discretion whether or not to hold an annual general meeting in 2021. For the annual general meeting of shareholders, the agenda will include, among other things, the presentation of the annual accounts and the report of the directors. In addition, the agenda for an annual general meeting of shareholders will only include such items as have been included therein by the board of directors.
Also, we may, but are not required to (unless required by the laws of the Cayman Islands), hold other extraordinary general meetings during the year. General meetings of shareholders are generally expected to take place in São Paulo, Brazil, but may be held elsewhere if the directors so decide.
The Companies Act provides shareholders a limited right to request a general meeting and does not provide shareholders with any right to put any proposal before a general meeting in default of a company’s Articles of Association. However, these rights may be provided in a company’s Articles of Association. Our Articles of Association provides that upon the requisition of one or more shareholders representing not less than one-third of the voting rights entitled to vote at general meetings, the board will convene an extraordinary general meeting and put the resolutions so requisitioned to a vote at such meeting. The Articles of Association provide no other right to put any proposals before annual general meetings or extraordinary general meetings.
Subject to regulatory requirements, the annual general meeting and any extraordinary general meetings must be called by not less than ten (10) clear days’ notice prior to the relevant shareholders meeting and convened by a notice, as discussed below. Alternatively, upon the prior consent of all holders entitled to receive notice, with regards to the annual general meeting, and the holders of 95% in par value of the shares entitled to attend and vote at an extraordinary general meeting, that meeting may be convened by a shorter notice and in a manner deemed appropriate by those holders.
We will give notice of each general meeting of shareholders by publication on its website and in any other manner that it may be required to follow in order to comply with Cayman Islands law, Nasdaq and SEC requirements. The holders of registered shares may be given notice of a shareholders’ meeting by means
 
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of letters sent to the addresses of those shareholders as registered in our shareholders’ register, or, subject to certain statutory requirements, by electronic means.
Holders whose shares are registered in the name of DTC or its nominee, which we expect will be the case for all holders of Class A common shares, will not be a shareholder or member of the company and must rely on the procedures of DTC regarding notice of shareholders’ meetings and the exercise of rights of a holder of the Class A common shares.
A quorum for a general meeting consists of any one or more persons holding or representing by proxy not less than one-third of the aggregate voting power of all shares in issue and entitled to vote upon the business to be transacted.
A resolution put to a vote at a general meeting shall be decided on a poll. An ordinary resolution to be passed by the shareholders at a general meeting requires the affirmative vote of a simple majority of the votes cast by, or on behalf of, the shareholders entitled to vote, present in person or by proxy and voting at the meeting. A special resolution requires the affirmative vote on a poll of no less than two-thirds of the votes cast by the shareholders entitled to vote who are present in person or by proxy at a general meeting. Both ordinary resolutions and special resolutions may also be passed by a unanimous written resolution signed by all the shareholders of our Company, as permitted by the Companies Act and our Articles of Association.
Pursuant to our Articles of Association, general meetings of shareholders are to be chaired by the chairman of our board of directors or in his absence the vice-chairman of the board of directors. If both the chairman and vice-chairman of our board of directors are absent, the directors present at the meeting shall appoint one of them to be chairman of the general meeting. If neither the chairman nor another director is present at the general meeting within 15 minutes after the time appointed for holding the meeting, the shareholders present in person or by proxy and entitled to vote may elect any one of the shareholders to be chairman. The order of business at each meeting shall be determined by the chairman of the meeting, and he or she shall have the right and authority to prescribe such rules, regulations and procedures and to do all such acts and things as are necessary or desirable for the proper conduct of the meeting, including, without limitation, the establishment of procedures for the maintenance of order and safety, limitations on the time allotted to questions or comments on the affairs of the Company, restrictions on entry to such meeting after the time prescribed for the commencement thereof, and the opening and closing of the polls.
Liquidation Rights
If we are voluntarily wound up, the liquidator, after taking into account and giving effect to the rights of preferred and secured creditors and to any agreement between us and any creditors that the claims of such creditors shall be subordinated or otherwise deferred to the claims of any other creditors and to any contractual rights of set-off or netting of claims between us and any person or persons (including without limitation any bilateral or any multi-lateral set-off or netting arrangements between the company and any person or persons) and subject to any agreement between us and any person or persons to waive or limit the same, shall apply our property in satisfaction of its liabilities pari passu and subject thereto shall distribute the property amongst the shareholders according to their rights and interests into us
Changes to Capital
Pursuant to the Articles of Association, we may from time to time by ordinary resolution:
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increase its share capital by such sum, to be divided into shares of such amount, as the resolution shall prescribe;
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consolidate and divide all or any of its share capital into shares of a larger amount than its existing shares;
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convert all or any of its paid-up shares into stock and reconvert that stock into paid up shares of any denomination;
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subdivide its existing shares or any of them into shares of a smaller amount, provided that in the subdivision the proportion between the amount paid and the amount, if any, unpaid on each reduced share shall be the same as it was in the case of the share from which the reduced share is derived; or
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cancel any shares which, at the date of the passing of the resolution, have not been taken or agreed to be taken by any person and diminish the amount of its share capital by the amount of the shares so cancelled.
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Our shareholders may by special resolution, subject to confirmation by the Grand Court of the Cayman Islands on an application by the Company for an order confirming such reduction, reduce its share capital or any capital redemption reserve in any manner permitted by law.
In addition, subject to the provisions of the Companies Act and our Articles of Association, we may:
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issue shares on terms that they are to be redeemed or are liable to be redeemed;
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purchase its own shares (including any redeemable shares); and
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make a payment in respect of the redemption or purchase of its own shares in any manner authorized by the Companies Act, including out of its own capital.
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Transfer of Shares
Subject to any applicable restrictions set forth in the Articles of Association, any of our shareholder may transfer all or any of his or her common shares by an instrument of transfer in the usual or common form or in the form prescribed by the Nasdaq or any other form approved by the Company’s board of directors.
The Class A common shares sold in this offering will be traded on the Nasdaq in book-entry form and may be transferred in accordance with our Articles of Association and the Nasdaq rules and regulations.
However, our board of directors may, in its absolute discretion, decline to register any transfer of any common share which is either not fully paid up to a person of whom it does not approve or is issued under any share incentive scheme for employees which contains a transfer restriction that is still applicable to such common share. The board of directors may also decline to register any transfer of any common share unless:
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a fee of such maximum sum as the Nasdaq may determine to be payable or such lesser sum as the board of directors may from time to time require is paid to us in respect thereof;
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the instrument of transfer is lodged with us, accompanied by the certificate (if any) for the common shares to which it relates and such other evidence as our board of directors may reasonably require to show the right of the transferor to make the transfer;
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the instrument of transfer is in respect of only one class of shares;
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the instrument of transfer is properly stamped, if required;
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the common shares transferred are free of any lien in our favor; and
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in the case of a transfer to joint holders, the transfer is not to more than four joint holders.
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If the directors refuse to register a transfer they are required, within two months after the date on which the instrument of transfer was lodged, to send to the transferee notice of such refusal.
Share Repurchase
The Companies Act and the Articles of Association permit us to purchase its own shares, subject to certain restrictions. The board of directors may only exercise this power on our behalf, subject to the Companies Act, the Articles of Association and to any applicable requirements imposed from time to time by the SEC, the Nasdaq or any recognized stock exchange on which our securities are listed.
Dividends and Capitalization of Profits
We have not adopted a dividend policy with respect to payments of any future dividends by us. Subject to the Companies Act, our shareholders may, by resolution passed by a simple majority of the voting rights entitled to vote at a general meeting, declare dividends (including interim dividends) to be paid to
 
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shareholders but no dividend shall be declared in excess of the amount recommended by the board of directors. The board of directors may also declare dividends. Dividends may be declared and paid out of funds lawfully available to us. Except as otherwise provided by the rights attached to shares and our Articles of Association, all dividends shall be paid in proportion to the number of Class A common shares or Class B common shares a shareholder holds at the date the dividend is declared (or such other date as may be set as a record date); but, (1) if any share is issued on terms providing that it shall rank for dividend as from a particular date, that share shall rank for dividend accordingly, and (2) where we have shares in issue which are not fully paid up (as to par value) we may pay dividends in proportion to the amounts paid up on each share.
The holders of Class A common shares and Class B common shares shall be entitled to share equally in any dividends that may be declared in respect of our common shares from time to time. In the event that a dividend is paid in the form of Class A common shares or Class B common shares, or rights to acquire Class A common shares or Class B common shares, (1) the holders of Class A common shares shall receive Class A common shares, or rights to acquire Class A common shares, as the case may be; and (2) the holders of Class B common shares shall receive Class B common shares, or rights to acquire Class B common shares, as the case may be.
Appointment, Disqualification and Removal of Directors
We are managed by our board of directors. The Articles of Association provide that, unless otherwise determined by a special resolution of shareholders, the board of directors will be composed of four (4) to eleven (11) directors, with the number being determined by a majority of the directors then in office. There are no provisions relating to retirement of directors upon reaching any age limit. The Articles of Association also provide that, while our shares are admitted to trading on the Nasdaq, the board of directors must always comply with the residency and citizenship requirements of the U.S. securities laws applicable to foreign private issuers.
The Articles of Association provide that directors shall be elected by an ordinary resolution of our shareholders, which requires the affirmative vote of a simple majority of the votes cast on the resolution by the shareholders entitled to vote who are present, in person or by proxy, at the meeting. Each director shall be appointed and elected for such term as the resolution appointing him or her may determine or until his or her death, resignation or removal.
By the listing date of this offering, the directors will be Jorge Steffens, Cassio Bobsin, Carlos Henrique Testolini, Eduardo Aspesi and                 .                 and                 are “independent” as that term is defined under the applicable rules and regulations of the SEC and the listing standards of the Nasdaq. We intend to appoint one additional independent director within one year following the offering.
Any vacancies on the board of directors that arise other than upon the removal of a director by resolution passed at a general meeting can be filled by the remaining directors (notwithstanding that they may constitute less than a quorum). Any such appointment shall be as an interim director to fill such vacancy until the next annual general meeting of shareholders.
Additions to the existing board (within the limits set pursuant to the Articles of Association) may be made by ordinary resolution of the shareholders.
Upon the completion of the offering, the board of directors will have in place an audit committee. See “Management — Audit Committee.”
Grounds for Removing a Director
A director may be removed with or without cause by ordinary resolution. The notice of general meeting must contain a statement of the intention to remove the director and must be served on the director not less than ten calendar days before the meeting. The director is entitled to attend the meeting and be heard on the motion for his removal.
The office of a director will be vacated automatically if he or she (1) becomes prohibited by law from being a director, (2) becomes bankrupt or makes an arrangement or composition with his creditors, (3) dies
 
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or is, in the opinion of all his co-directors, incapable by reason of mental disorder of discharging his duties as director, (4) resigns his office by notice to us or (5) has for more than six months been absent without permission of the directors from meetings of the board of directors held during that period, and the remaining directors resolve that his or her office be vacated.
Proceedings of the Board of Directors
Our Articles of Association provide that our business is to be managed and conducted by the board of directors. The quorum necessary for the board meeting shall be a simple majority of the directors then in office (subject to there being a minimum of two directors present) and business at any meeting shall be decided by a majority of votes. In the case of an equality of votes, the chairman shall have a casting vote.
Subject to the provisions of the Articles of Association, the board of directors may regulate its proceedings as they determine is appropriate. Board meetings shall be held at least once every calendar quarter and shall take place either in São Paulo, Brazil or at such other place as the directors may determine.
Subject to the provisions of the Articles of Association, to any directions given by ordinary resolution of the shareholders and the listing rules of the Nasdaq, the board of directors may from time to time at its discretion exercise all powers of Zenvia Inc., including, subject to the Companies Act, the power to issue debentures, bonds and other securities of the company, whether outright or as collateral security for any debt, liability or obligation of our company or of any third party.
Inspection of Books and Records
Holders of our shares will have no general right under Cayman Islands law to inspect or obtain copies of the list of shareholders or corporate records of the Company. However, the board of directors may determine from time to time whether and to what extent our accounting records and books shall be open to inspection by shareholders who are not members of the board of directors. Notwithstanding the above, the Articles of Association provide shareholders with the right to receive annual financial statements. Such right to receive annual financial statements may be satisfied by publishing the same on the company’s website or filing such annual reports as we are required to file with the SEC.
Register of Shareholders
The Class A common shares offered in this offering will be held through DTC, and DTC or Cede & Co., as nominee for DTC, will be recorded in the shareholders’ register as the holder of our Class A common shares.
Under Cayman Islands law, we must keep a register of shareholders that includes:
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the names and addresses of the shareholders, a statement of the shares held by each member, and of the amount paid or agreed to be considered as paid, on the shares of each member;
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whether voting rights attach to the shares in issue;
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the date on which the name of any person was entered on the register as a member; and
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the date on which any person ceased to be a member.
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Under Cayman Islands law, our register of shareholders is prima facie evidence of the matters set out therein (i.e., the register of shareholders will raise a presumption of fact on the matters referred to above unless rebutted) and a shareholder registered in the register of shareholders is deemed as a matter of Cayman Islands law to have prima facie legal title to the shares as set against his or her name in the register of shareholders. Upon the completion of this offering, the register of shareholders will be immediately updated to record and give effect to the issuance of new Class A common shares in this offering. Once the register of shareholders has been updated, the shareholders recorded in the register of shareholders should be deemed to have legal title to the shares set against their name.
However, there are certain limited circumstances where an application may be made to a Cayman Islands court for a determination on whether the register of shareholders reflects the correct legal position. Further, the Cayman Islands court has the power to order that the register of shareholders maintained by a
 
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company should be rectified where it considers that the register of shareholders does not reflect the correct legal position. If an application for an order for rectification of the register of shareholders were made in respect of our ordinary shares, then the validity of such shares may be subject to re-examination by a Cayman Islands court.
Exempted Company
We are an exempted company with limited liability under the Companies Act. The Companies Act distinguishes between ordinary resident companies and exempted companies. Any company that is registered in the Cayman Islands but conducts business mainly outside of the Cayman Islands may apply to be registered as an exempted company. The requirements for an exempted company are essentially the same as for an ordinary company except for the exemptions and privileges listed below:
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an exempted company does not have to file an annual return of its shareholders with the Registrar of Companies;
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an exempted company’s register of shareholders is not open to inspection;
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an exempted company does not have to hold an annual general meeting;
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an exempted company may obtain an undertaking against the imposition of any future taxation (such undertakings are usually given for 20 years in the first instance);
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an exempted company may register by way of continuation in another jurisdiction and be deregistered in the Cayman Islands;
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an exempted company may register as a limited duration company; and
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an exempted company may register as a segregated portfolio company.
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“Limited liability” means that the liability of each shareholder is limited to the amount unpaid by the shareholder on the shares of the company (except in exceptional circumstances, such as involving fraud, the establishment of an agency relationship or an illegal or improper purpose or other circumstances in which a court may be prepared to pierce or lift the corporate veil).
Upon the closing of this offering, we will be subject to reporting and other informational requirements of the Exchange Act, as applicable to foreign private issuers.
Anti-Takeover Provisions in our Articles of Association
Some provisions of the Articles of Association may discourage, delay or prevent a change in our control or management that shareholders may consider favorable. In particular, our capital structure concentrates ownership of voting rights in the hands of Cassio Bobsin, Oria Zenvia Co-investment Holdings, LP, Oria Zenvia Co-investment Holdings II, LP, Oria Tech Zenvia Co-investment — Fundo de Investimento em Participações Multiestratégia and Oria Tech I Inovação Fundo de Investimento em Participações Multiestratégia. These provisions, which are summarized below, are expected to discourage coercive takeover practices and inadequate takeover bids. These provisions are also designed to encourage persons seeking to acquire our control to first negotiate with the board of directors. However, these provisions could also have the effect of discouraging others from attempting hostile takeovers and, consequently, they may also inhibit temporary fluctuations in the market price of the Class A common shares that often result from actual or rumored hostile takeover attempts. These provisions may also have the effect of preventing changes in our management. It is possible that these provisions could make it more difficult to accomplish transactions that shareholders may otherwise deem to be in their best interests.
Two Classes of Common Shares
Our Class B common shares of are entitled to 10 votes per share, while the Class A common shares are entitled to one vote per share. Since Cassio Bobsin, Oria Zenvia Co-investment Holdings, LP, Oria Zenvia Co-investment Holdings II, LP, Oria Tech Zenvia Co-investment — Fundo de Investimento em Participações Multiestratégia and Oria Tech I Inovação Fundo de Investimento em Participações Multiestratégia own all of our Class B common shares, they have the ability to elect all directors and to determine the outcome
 
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of most matters submitted for a vote of shareholders. This concentrated voting control could discourage others from initiating any potential merger, takeover, or other change of control transaction that other shareholders may view as beneficial.
So long as Cassio Bobsin, Oria Zenvia Co-investment Holdings, LP, Oria Zenvia Co-investment Holdings II, LP, Oria Tech Zenvia Co-investment — Fundo de Investimento em Participações Multiestratégia and Oria Tech I Inovação Fundo de Investimento em Participações Multiestratégia have the ability to determine the outcome of most matters submitted to a vote of shareholders as well as the overall management and direction of Zenvia Inc., third parties may be deterred in their willingness to make an unsolicited merger, takeover, or other change of control proposal, or to engage in a proxy contest for the election of directors. As a result, the fact that we have two classes of common shares may have the effect of depriving you as a holder of Class A common shares of an opportunity to sell your Class A common shares at a premium over prevailing market prices and make it more difficult to replace the directors and management of Zenvia Inc.
Preferred Shares
Our board of directors is given wide powers to issue one or more classes or series of shares with preferred rights. Such preferences may include, for example, dividend rights, conversion rights, redemption privileges, enhanced voting powers and liquidation preferences.
Despite the anti-takeover provisions described above, under Cayman Islands law, our board of directors may only exercise the rights and powers granted to them under the Articles of Association, for what they believe in good faith to be in our best interests.
Protection of Non-Controlling Shareholders
The Grand Court of the Cayman Islands may, on the application of shareholders holding not less than one fifth of our shares in issue, appoint an inspector to examine the Company’s affairs and report thereon in a manner as the Grand Court shall direct.
Subject to the provisions of the Companies Act, any shareholder may petition the Grand Court of the Cayman Islands which may make a winding up order, if the court is of the opinion that this winding up is just and equitable.
Notwithstanding the U.S. securities laws and regulations that are applicable to us, general corporate claims against us by our shareholders must, as a general rule, be based on the general laws of contract or tort applicable in the Cayman Islands or their individual rights as shareholders as established by our Articles of Association.
The Cayman Islands courts ordinarily would be expected to follow English case law precedents, which permit a minority shareholder to commence a representative action against us, or derivative actions in our name, to challenge (1) an act which is ultra vires or illegal, (2) an act which constitutes a fraud against the minority and the wrongdoers themselves control Zenvia Inc., and (3) an irregularity in the passing of a resolution that requires a qualified (or special) majority.
Registration Rights and Restricted Shares
Although none of our shareholders have formal registration rights, they or entities controlled by them or their permitted transferees will, subject to the lock-up agreements described below, be able to sell their shares in the public market from time to time without registering them, subject to certain limitations on the timing, amount and method of those sales imposed by regulations promulgated by the SEC. We, all of our directors, officers and substantially all of our shareholders have agreed to enter into lock-up agreements that restrict us and them, subject to specified exceptions, from selling or otherwise disposing of any shares for a period of 180 days after the date of this prospectus without the prior consent of Goldman Sachs & Co. LLC and Morgan Stanley & Co. LLC. However, Goldman Sachs & Co. LLC and Morgan Stanley & Co. LLC may, in their sole discretion and without notice, release all or any portion of the shares from the restrictions in any of the lock-up agreements described above. In addition, these lock-up agreements are
 
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subject to the exceptions described in “Common Shares Eligible for Future Sale,” including the right for us to issue new shares if we carry out an acquisition or enter into a merger, joint venture or strategic participation.
Principal Differences between Cayman Islands and U.S. Corporate Law
The Companies Act was modelled originally after similar laws in England and Wales but does not follow subsequent statutory enactments in England and Wales. In addition, the Companies Act differs from laws applicable to U.S. corporations and their shareholders. Set forth below is a summary of the significant differences between the provisions of the Companies Act applicable to us and the laws applicable to companies incorporated in the United States and their shareholders.
Mergers and Similar Arrangements
In certain circumstances the Companies Act allows for mergers or consolidations between two Cayman Islands companies, or between a Cayman Islands company and a company incorporated in another jurisdiction (provided that is facilitated by the laws of that other jurisdiction).
Where the merger or consolidation is between two Cayman Islands companies, the directors of each company must approve a written plan of merger or consolidation, containing certain prescribed information. That plan or merger or consolidation must then be authorized by either (a) a special resolution (usually a majority of 662∕3% in value) of the shareholders of each company; or (b) such other authorization, if any, as may be specified in such company’s articles of association. No shareholder resolution is required for a merger between a parent company (i.e., a company that owns at least 90% of the issued shares of each class in a subsidiary company) and its subsidiary company. The consent of each holder of a fixed or floating security interest of a constituent company must be obtained, unless the court waives such requirement. If the Cayman Islands Registrar of Companies is satisfied that the requirements of the Companies Act (which includes certain other formalities) have been complied with, the Registrar of Companies will register the plan of merger or consolidation. Where the merger or consolidation involves a foreign company, the procedure is similar, save that with respect to the foreign company, the director of the Cayman Islands company is required to make a declaration to the effect that, having made due enquiry, he is of the opinion that the requirements set out below have been met: (i) that the merger or consolidation is permitted or not prohibited by the constitutional documents of the foreign company and by the laws of the jurisdiction in which the foreign company is incorporated, and that those laws and any requirements of those constitutional documents have been or will be complied with; (ii) that no petition or other similar proceeding has been filed and remains outstanding or order made or resolution adopted to wind up or liquidate the foreign company in any jurisdictions; (iii) that no receiver, trustee, administrator or other similar person has been appointed in any jurisdiction and is acting in respect of the foreign company, its affairs or property or any part thereof; (iv) that no scheme, order, compromise or other similar arrangement has been entered into or made in any jurisdiction whereby the rights of creditors of the foreign company are and continue to be suspended or restricted.
Where the surviving company is the Cayman Islands company, the director of the Cayman Islands company is further required to make a declaration to the effect that, having made due enquiry, he is of the opinion that the requirements set out below have been met: (i) that the foreign company is able to pay its debts as they fall due and that the merger or consolidated is bona fide and not intended to defraud unsecured creditors of the foreign company; (ii) that in respect of the transfer of any security interest granted by the foreign company to the surviving or consolidated company (a) consent or approval to the transfer has been obtained, released or waived; (b) the transfer is permitted by and has been approved in accordance with the constitutional documents of the foreign company; and (c) the laws of the jurisdiction of the foreign company with respect to the transfer have been or will be complied with; (iii) that the foreign company will, upon the merger or consolidation becoming effective, cease to be incorporated, registered or exist under the laws of the relevant foreign jurisdiction; and (iv) that there is no other reason why it would be against the public interest to permit the merger or consolidation.
Where the above procedures are adopted, the Companies Act provides for a right of dissenting shareholders to be paid a payment of the fair value of his shares upon their dissenting to the merger or consolidation if they follow a prescribed procedure. In essence, that procedure is as follows (a) the shareholder must give his written objection to the merger or consolidation to the constituent company before the vote
 
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on the merger or consolidation, including a statement that the shareholder proposes to demand payment for his shares if the merger or consolidation is authorized by the vote; (b) within 20 days following the date on which the merger or consolidation is approved by the shareholders, the constituent company must give written notice to each shareholder who made a written objection; (c) a shareholder must within 20 days following receipt of such notice from the constituent company, give the constituent company a written notice of his intention to dissent including, among other details, a demand for payment of the fair value of his shares; (d) within seven days following the date of the expiration of the period set out in paragraph (b) above or seven days following the date on which the plan of merger or consolidation is filed, whichever is later, the constituent company, the surviving company or the consolidated company must make a written offer to each dissenting shareholder to purchase his shares at a price that the company determines is the fair value and if the company and the shareholder agree the price within 30 days following the date on which the offer was made, the company must pay the shareholder such amount; (e) if the company and the shareholder fail to agree a price within such 30 day period, within 20 days following the date on which such 30 day period expires, the company (and any dissenting shareholder) must file a petition with the Cayman Islands Grand Court to determine the fair value and such petition must be accompanied by a list of the names and addresses of the dissenting shareholders with whom agreements as to the fair value of their shares have not been reached by the company. At the hearing of that petition, the court has the power to determine the fair value of the shares together with a fair rate of interest, if any, to be paid by the company upon the amount determined to be the fair value. Any dissenting shareholder whose name appears on the list filed by the company may participate fully in all proceedings until the determination of fair value is reached. These rights of a dissenting shareholder are not be available in certain circumstances, for example, to dissenters holding shares of any class in respect of which an open market exists on a recognized stock exchange or recognized interdealer quotation system at the relevant date or where the consideration for such shares to be contributed are shares of any company listed on a national securities exchange or shares of the surviving or consolidated company.
Moreover, Cayman Islands law also has separate statutory provisions that facilitate the reconstruction or amalgamation of companies in certain circumstances, schemes of arrangement will generally be more suited for complex mergers or other transactions involving widely held companies, commonly referred to in the Cayman Islands as a “scheme of arrangement” which may be tantamount to a merger. In the event that a merger was sought pursuant to a scheme of arrangement (the procedure of which are more rigorous and take longer to complete than the procedures typically required to consummate a merger in the United States), the arrangement in question must be approved by a majority in number of each class of shareholders and creditors with whom the arrangement is to be made, and who must in addition represent three-fourths in value of each such class of shareholders or creditors, as the case may be, that are present and voting either in person or by proxy at a meeting, or meeting summoned for that purpose. The convening of the meetings and subsequently the terms of the arrangement must be sanctioned by the Grand Court of the Cayman Islands. While a dissenting shareholder would have the right to express to the court the view that the transaction should not be approved, the court can be expected to approve the arrangement if it satisfies itself that:
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we are not proposing to act illegally or beyond the scope of our corporate authority and the statutory provisions as to majority vote have been complied with;
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the shareholders have been fairly represented at the meeting in question;
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the arrangement is such as a businessman would reasonably approve; and
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the arrangement is not one that would more properly be sanctioned under some other provision of the Companies Act or that would amount to a “fraud on the minority.”
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If a scheme of arrangement or takeover offer (as described below) is approved, any dissenting shareholder would have no rights comparable to appraisal rights, which would otherwise ordinarily be available to dissenting shareholders of United States corporations, providing rights to receive payment in cash for the judicially determined value of the shares.
Squeeze-Out Provisions
When a takeover offer is made and accepted by holders of 90.0% of the shares to whom the offer is made within four months, the offeror may, within a two-month period, require the holders of the remaining
 
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shares to transfer such shares on the terms of the offer. An objection may be made to the Grand Court of the Cayman Islands but is unlikely to succeed unless there is evidence of fraud, bad faith, collusion or inequitable treatment of the shareholders.
Further, transactions similar to a merger, reconstruction and/or an amalgamation may in some circumstances be achieved through other means to these statutory provisions, such as a share capital exchange, asset acquisition or control, through contractual arrangements, of an operating business.
Shareholders’ Suits
Our Cayman Islands counsel is not aware of any reported class action having been brought in a Cayman Islands court. Derivative actions have been brought in the Cayman Islands courts, and the Cayman Islands courts have confirmed the availability for such actions. In most cases, we will be the proper plaintiff in any claim based on a breach of duty owed to us, and a claim against (for example) our officers or directors usually may not be brought by a shareholder. However, based on English authorities, which would in all likelihood be of persuasive authority and be applied by a court in the Cayman Islands, exceptions to the foregoing principle apply in circumstances in which:
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a company is acting or proposing to act illegally or beyond the scope of its authority;
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the act complained of, although not beyond the scope of the authority, could be effected if duly authorized by more than the number of votes which have actually been obtained; or
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those who control the company are perpetrating a “fraud on the minority.”
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A shareholder may have a direct right of action against us where the individual rights of that shareholder have been infringed or are about to be infringed.
Corporate Governance
Cayman Islands law restricts transactions between a company and its directors unless there are provisions in the Articles of Association which provide a mechanism to alleviate possible conflicts of interest. Additionally, Cayman Islands law imposes on directors’ duties of care and skill and fiduciary duties to the companies which they serve. Under our Articles of Association, a director must disclose the nature and extent of his interest in any contract or arrangement, and following such disclosure and subject to any separate requirement under applicable law or the listing rules of the Nasdaq, and unless disqualified by the chairman of the relevant meeting, the interested director may vote in respect of any transaction or arrangement in which he or she is interested. The interested director shall be counted in the quorum at such meeting and the resolution may be passed by a majority of the directors present at the meeting.
Subject to the foregoing and our Articles of Association, our directors may exercise all the powers of Zenvia Inc. to vote compensation to themselves or any member of their body in the absence of an independent quorum. Our Articles of Association provide that, in the event a Compensation Committee is established, it shall be made up of such number of independent directors as is required from time to time by the Nasdaq rules (or as otherwise may be required by law). We currently have no intention to establish a Compensation Committee.
As a foreign private issuer, we are permitted to follow home country practice in lieu of certain Nasdaq corporate governance rules, subject to certain requirements. We currently rely, and will continue to rely, on the foreign private issuer exemption with respect to the following rules:
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Nasdaq Rule 5605(b), which requires that independent directors comprise a majority of a company’s board of directors. As allowed by the laws of the Cayman Islands, independent directors do not comprise a majority of our board of directors.
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Nasdaq Rule 5605(e)(1), which requires that a company have a nomination committee comprised solely of “independent directors” as defined by Nasdaq. As allowed by the laws of the Cayman Islands, we do not have a nomination committee, nor do we have any current intention to establish one.
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Nasdaq Rule 5605(d) & (e), which require that compensation for our executive officers and selection of our director nominees be determined by a majority of independent directors. As allowed by the
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laws of the Cayman Islands, we do not have a nomination and corporate governance committee or remuneration committee nor do we have any current intention to establish either.
Borrowing Powers
Our directors may exercise all the powers of Zenvia Inc. to borrow money and to mortgage or charge its undertaking, property and assets (present and future) and uncalled capital or any part thereof and to issue debentures, debenture stock, mortgages, bonds and other such securities whether outright or as security for any debt, liability or obligation of Zenvia Inc. or of any third party. Such powers may be varied by a special resolution of shareholders (requiring a two-thirds majority vote).
Indemnification of Directors and Executive Officers and Limitation of Liability
The Companies Act does not limit the extent to which a company’s articles of association may provide for indemnification of directors and officers, except to the extent that it may be held by the Cayman Islands courts to be contrary to public policy, such as to provide indemnification against civil fraud or the consequences of committing a crime. Our Articles of Association provides that we shall indemnify and hold harmless our directors and officers against all actions, proceedings, costs, charges, expenses, losses, damages, liabilities, judgments, fines, settlements and other amounts incurred or sustained by such directors or officers, other than by reason of such person’s dishonesty, willful default or fraud, in or about the conduct of our company’s business or affairs (including as a result of any mistake of judgment) or in the execution or discharge of his duties, powers, authorities or discretions, including without prejudice to the generality of the foregoing, any costs, expenses, losses or liabilities incurred by such director or officer in defending (whether successfully or otherwise) any civil, criminal or other proceedings concerning us or our affairs in any court whether in the Cayman Islands or elsewhere. This standard of conduct is generally the same as permitted under the Delaware General Corporation Law for a Delaware corporation.
Insofar as indemnification for liabilities arising under the Securities Act may be permitted to our directors, officers or persons controlling the Company under the foregoing provisions, we have been informed that, in the opinion of the SEC, this indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable.
Directors’ and Controlling Shareholders’ Fiduciary Duties
As a matter of Cayman Islands law, a director of a Cayman Islands company is in the position of a fiduciary with respect to the company. Accordingly, directors owe fiduciary duties to their companies to act bona fide in what they consider to be the best interests of the company, to exercise their powers for the purposes for which they are conferred and not to place themselves in a position where there is a conflict between their personal interests and their duty to the company. Accordingly, a director owes a company a duty not to make a profit based on his or her position as director (unless the company permits him or her to do so) and a duty not to put himself or herself in a position where the interests of the company conflict with his or her personal interest or his or her duty to a third party. However, this obligation may be varied by the company’s articles of association, which may permit a director to vote on a matter in which he has a personal interest provided that he has disclosed that nature of his interest to the board of directors. Our Articles of Association provides that a director must disclose the nature and extent of his or her interest in any contract or arrangement, and following such disclosure and subject to any separate requirement under applicable law or the listing rules of the Nasdaq, and unless disqualified by the chairman of the relevant meeting, such director may vote in respect of any transaction or arrangement in which he or she is interested and may be counted in the quorum at the meeting.
A director of a Cayman Islands company also owes to the company duties to exercise independent judgment in carrying out his functions and to exercise reasonable skill, care and diligence, which has both objective and subjective elements. Recent Cayman Islands case law confirmed that directors must exercise the care, skill and diligence that would be exercised by a reasonably diligent person having the general knowledge, skill and experience reasonably to be expected of a person acting as a director. Additionally, a director must exercise the knowledge, skill and experience which he or she actually possesses.
 
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A general notice may be given to the board of directors to the effect that (1) the director is a member or officer of a specified company or firm and is to be regarded as interested in any contract or arrangement which may after the date of the notice be made with that company or firm; or (2) he or she is to be regarded as interested in any contract or arrangement which may after the date of the notice to the board of directors be made with a specified person who is connected with him or her, will be deemed sufficient declaration of interest. This notice shall specify the nature of the interest in question. Following the disclosure being made pursuant to our Articles of Association and subject to any separate requirement under applicable law or the listing rules of the Nasdaq, and unless disqualified by the chairman of the relevant meeting, a director may vote in respect of any transaction or arrangement in which he or she is interested and may be counted in the quorum at the meeting.
In comparison, under Delaware corporate law, a director of a Delaware corporation has a fiduciary duty to the corporation and its shareholders. This duty has two components: the duty of care and the duty of loyalty. The duty of care requires that a director act in good faith, with the care that an ordinarily prudent person would exercise under similar circumstances. Under this duty, a director must inform himself or herself of, and disclose to shareholders, all material information reasonably available regarding a significant transaction. The duty of loyalty requires that a director act in a manner he or she reasonably believes to be in the best interests of the corporation. He or she must not use his or her corporate position for personal gain or advantage. This duty prohibits self-dealing by a director and mandates that the best interest of the corporation and its shareholders take precedence over any interest possessed by a director, officer or controlling shareholder and not shared by the shareholders generally. In general, actions of a director are presumed to have been made on an informed basis, in good faith and in the honest belief that the action taken was in the best interests of the corporation. However, this presumption may be rebutted by evidence of a breach of one of the fiduciary duties. Should such evidence be presented concerning a transaction by a director, a director must prove the procedural fairness of the transaction, and that the transaction was of fair value to the corporation.
Furthermore, as a matter of Cayman Islands law and in contrast to the position under Delaware corporate law, controlling shareholders of Cayman Islands companies do not owe fiduciary duties to those companies, other than the limited duty that applies to all shareholders to exercise their votes to amend a company’s articles of association in good faith in the interests of the company. The absence of this minority shareholder protection might impact the ability of minority shareholders to protect their interests.
Shareholder Proposals
Under the Delaware General Corporation Law, a shareholder has the right to put any proposal before the annual meeting of shareholders, provided it complies with the notice provisions in the governing documents. The Delaware General Corporation Law does not provide shareholders an express right to put any proposal before the annual meeting of shareholders, but Delaware corporations generally afford shareholders an opportunity to make proposals and nominations provided that they comply with the notice provisions in the certificate of incorporation or bylaws. A special meeting may be called by the board of directors or any other person authorized to do so in the governing documents, but shareholders may be precluded from calling special meetings.
The Companies Act provides shareholders with only limited rights to requisition a general meeting and does not provide shareholders with any right to put any proposal before a general meeting. However, these rights may be provided in a company’s articles of association. Our Articles of Association provides that upon the requisition of one or more shareholders representing not less than one-third of the voting rights entitled to vote at general meetings, the board will convene an extraordinary general meeting and put the resolutions so requisitioned to a vote at such meeting. The Articles of Association provide no other right to put any proposals before annual general meetings or extraordinary general meetings.
Cumulative Voting
Under the Delaware General Corporation Law, cumulative voting for elections of directors is not permitted unless the corporation’s certificate of incorporation specifically provides for it. Cumulative voting potentially facilitates the representation of minority shareholders on a board of directors since it permits the minority shareholder to cast all the votes to which the shareholder is entitled on a single director, which
 
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increases the shareholder’s voting power with respect to electing such director. As permitted under Cayman Islands law, our Articles of Association does not provide for cumulative voting. As a result, our shareholders are not afforded any less protections or rights on this issue than shareholders of a Delaware corporation.
Removal of Directors
The office of a director shall be vacated automatically if, among other things, he or she (1) becomes prohibited by law from being a director, (2) becomes bankrupt or makes an arrangement or composition with his creditors, (3) dies or is, in the opinion of all his co-directors, incapable by reason of mental disorder of discharging his duties as director (4) resigns his office by notice to us or (5) has for more than six months been absent without permission of the directors from meetings of the board of directors held during that period, and the remaining directors resolve that his/her office be vacated.
Transaction with Interested Shareholders
The Delaware General Corporation Law provides that; unless the corporation has specifically elected not to be governed by this statute, it is prohibited from engaging in certain business combinations with an “interested shareholder” for three years following the date that this person becomes an interested shareholder. An interested shareholder generally is a person or a group who or which owns or owned 15% or more of the target’s outstanding voting shares or who or which is an affiliate or associate of the corporation and owned 15% or more of the corporation’s outstanding voting shares within the past three years. This has the effect of limiting the ability of a potential acquirer to make a two-tiered bid for the target in which all shareholders would not be treated equally. The statute does not apply if, among other things, prior to the date on which the shareholder becomes an interested shareholder, the board of directors approves either the business combination or the transaction which resulted in the person becoming an interested shareholder. This encourages any potential acquirer of a Delaware corporation to negotiate the terms of any acquisition transaction with the target’s board of directors.
Cayman Islands law has no comparable statute. As a result, we cannot avail itself of the types of protections afforded by the Delaware business combination statute. However, although Cayman Islands law does not regulate transactions between a company and its significant shareholders, it does provide that the board of directors owe duties to ensure that these transactions are entered into bona fide in the best interests of the company and for a proper corporate purpose and, as noted above, a transaction may be subject to challenge if it has the effect of constituting a fraud on the minority shareholders.
Dissolution; Winding Up
Under the Delaware General Corporation Law, unless the board of directors approves the proposal to dissolve, dissolution must be approved by shareholders holding 100% of the total voting power of the corporation. If the dissolution is initiated by the board of directors, it may be approved by a simple majority of the corporation’s outstanding shares. Delaware law allows a Delaware corporation to include in its certificate of incorporation a supermajority voting requirement in connection with dissolutions initiated by the board. Under Cayman Islands law, a company may be wound up by either an order of the courts of the Cayman Islands or by a special resolution of its members or, if the company resolves by ordinary resolution that it be wound up because it is unable to pay its debts as they fall due. The court has authority to order winding up in a number of specified circumstances including where it is, in the opinion of the court, just and equitable to do so.
Under the Companies Act, we may be dissolved, liquidated or wound up by a special resolution of shareholders (requiring a two-thirds majority vote). Our Articles of Association also give its board of directors the authority to petition the Cayman Islands Court to wind up Zenvia.
Variation of Rights of Shares
Under the Delaware General Corporation Law, a corporation may vary the rights of a class of shares with the approval of a majority of the outstanding shares of that class, unless the certificate of incorporation provides otherwise. Under our Articles of Association, if the share capital is divided into more than one
 
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class of shares, the rights attached to any class may only be varied with the written consent of the holders of two-thirds of the shares of that class or the sanction of a special resolution passed at a separate meeting of the holders of the shares of that class.
Also, except with respect to share capital (as described above), alterations to our Articles of Association may only be made by special resolution of shareholders (requiring a two-thirds majority vote).
Amendment of Governing Documents
Under the Delaware General Corporation Law, a corporation’s certificate of incorporation may be amended only if adopted and declared advisable by the board of directors and approved by a majority of the outstanding shares entitled to vote, and the bylaws may be amended with the approval of a majority of the outstanding shares entitled to vote and may, if so provided in the certificate of incorporation, also be amended by the board of directors. Under Cayman Islands law, our Articles of Association generally (and save for certain amendments to share capital described in this section) may only be amended by special resolution of shareholders (requiring a two-thirds majority vote).
Rights of Non-Resident or Foreign Shareholders
There are no limitations imposed by our Articles of Association on the rights of non-resident or foreign shareholders to hold or exercise voting rights on our shares. In addition, there are no provisions in the Articles of Association governing the ownership threshold above which shareholder ownership must be disclosed.
Handling of Mail
Mail addressed to us and received at our registered office will be forwarded unopened to the forwarding address, which will be supplied by us. None of us, our directors, officers, advisors or service providers (including the organization which provides registered office services in the Cayman Islands) will bear any responsibility for any delay howsoever caused in mail reaching the forwarding address.
Cayman Islands Data Protection
We have certain duties under the Data Protection Act, 2017 of the Cayman Islands, or the DPL, based on internationally accepted principles of data privacy.
Privacy Notice
This privacy notice puts our shareholders on notice that through your investment in us you will provide us with certain personal information which constitutes personal data within the meaning of the DPL, or personal data.
Investor Data
We will collect, use, disclose, retain and secure personal data to the extent reasonably required only and within the parameters that could be reasonably expected during the normal course of business. We will only process, disclose, transfer or retain personal data to the extent legitimately required to conduct our activities of on an ongoing basis or to comply with legal and regulatory obligations to which we are subject. We will only transfer personal data in accordance with the requirements of the DPL, and will apply appropriate technical and organizational information security measures designed to protect against unauthorized or unlawful processing of the personal data and against the accidental loss, destruction or damage to the personal data.
In our use of this personal data, we will be characterized as a “data controller” for the purposes of the DPL, while our affiliates and service providers who may receive this personal data from us in the conduct of our activities may either act as our “data processors” for the purposes of the DPL or may process personal information for their own lawful purposes in connection with services provided to us.
 
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We may also obtain personal data from other public sources. Personal data includes, without limitation, the following information relating to a shareholder and/or any individuals connected with a shareholder as an investor: name, residential address, email address, contact details, corporate contact information, signature, nationality, place of birth, date of birth, tax identification, credit history, correspondence records, passport number, bank account details, source of funds details and details relating to the shareholder’s investment activity.
Who this Affects
If you are a natural person, this will affect you directly. If you are a corporate investor (including, for these purposes, legal arrangements such as trusts or exempted limited partnerships) that provides us with personal data on individuals connected to you for any reason in relation your investment in us, this will be relevant for those individuals and you should transmit the content of this Privacy Notice to such individuals or otherwise advise them of its content.
How We May Use a Shareholder’s Personal Data
We may, as the data controller, collect, store and use personal data for lawful purposes, including, in particular: (i) where this is necessary for the performance of our rights and obligations under any agreements; (ii) where this is necessary for compliance with a legal and regulatory obligation to which we are or may be subject (such as compliance with anti-money laundering and FATCA/CRS requirements); and/or (iii) where this is necessary for the purposes of our legitimate interests and such interests are not overridden by your interests, fundamental rights or freedoms.
Should we wish to use personal data for other specific purposes (including, if applicable, any purpose that requires your consent), we will contact you.
Why We May Transfer Your Personal Data
In certain circumstances we may be legally obliged to share personal data and other information with respect to your shareholding with the relevant regulatory authorities such as the Cayman Islands Monetary Authority or the Tax Information Authority. They, in turn, may exchange this information with foreign authorities, including tax authorities.
We anticipate disclosing personal data to persons who provide services to us and their respective affiliates (which may include certain entities located outside the US, the Cayman Islands or the European Economic Area), who will process your personal data on our behalf.
The Data Protection Measures We Take
Any transfer of personal data by us or our duly authorized affiliates and/or delegates outside of the Cayman Islands shall be in accordance with the requirements of the DPL.
We and our duly authorized affiliates and/or delegates shall apply appropriate technical and organizational information security measures designed to protect against unauthorized or unlawful processing of personal data, and against accidental loss or destruction of, or damage to, personal data.
We shall notify you of any personal data breach that is reasonably likely to result in a risk to your interests, fundamental rights or freedoms or those data subjects to whom the relevant personal data relates.
 
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CLASS A COMMON SHARES ELIGIBLE FOR FUTURE SALE
Prior to this offering, there has been no public market for our Class A common shares, and we cannot assure you that a significant public market for our Class A common shares will develop or be sustained after this offering. Future sales of substantial amounts of our Class A common shares in the public market after this offering, or the possibility of these sales occurring, could materially and adversely affect the prevailing market prices. Furthermore, since only a limited number of Class A common shares will be available for sale shortly after this offering because of contractual and legal restrictions on resale described below, sales of substantial amounts of Class A common shares in the public market after those restrictions lapse could adversely affect the prevailing market price for our Class A common shares, as well as our ability to raise equity capital in the future.
Upon the completion of this offering,                 Class A common shares will be outstanding. The Class A common shares to be sold in this offering by us will be freely tradable, except that any Class A common shares acquired by our “affiliates,” as that term is defined in Rule 144 under the Securities Act, in this offering may only be sold in compliance with the limitations described below. The remaining Class B common shares outstanding after this offering, representing    % of our outstanding shares, will be held by our current shareholders and restricted as a result of securities laws or lock-up agreements as described below. Following the expiration of the lock-up period, all Class  B common shares (as converted into Class A common shares in the event of any such sale) will be eligible for resale in compliance with Rule 144 or Rule 701. “Restricted securities” as defined under Rule 144 were issued and sold by us in reliance on exemptions from the registration requirements of the Securities Act. These Class A common shares may be sold in the public market only if registered or pursuant to an exemption from registration, such as Rule 144 or Rule 701 under the Securities Act.
Lock-up Agreements
Prior to this offering, we, all of our directors, officers and substantially all of our shareholders have agreed with the underwriters that, for a period of 180 days following the date of this prospectus, we or they will not offer, sell, contract to sell, pledge, grant an option to purchase, make any short sale or otherwise dispose of any of our Class A common shares, or any options or warrants to purchase our Class A common shares or any securities so owned convertible into or exchangeable for our Class A common shares, subject to specified exceptions, as set forth under “Underwriting.”Goldman Sachs & Co. LLC and Morgan Stanley& Co. LLC on behalf of the underwriters may, in their sole discretion, at any time without prior notice, release all or any portion of the Class A common shares from the restrictions in any such agreement.
Rule 144
In general, under Rule 144 under the Securities Act, a person (or persons whose shares are aggregated) who is not deemed to have been an affiliate of ours at any time during the three months preceding a sale, and who has beneficially owned restricted securities within the meaning of Rule 144 for at least six months (including any period of consecutive ownership of preceding non-affiliated holders) would be entitled to sell those shares, subject only to the availability of current public information about us. A non-affiliated person who has beneficially owned restricted securities within the meaning of Rule 144 for at least one year would be entitled to sell those shares without regard to the provisions of Rule 144.
A person (or persons whose shares are aggregated) who is deemed to be an affiliate of ours and who has beneficially owned restricted securities within the meaning of Rule 144 for at least six months would be entitled to sell within any three-month period a number of shares that does not exceed the greater of one percent of the then outstanding shares of our Class A common shares or the average weekly trading volume of our Class A common shares on the during the four calendar weeks preceding such sale. Such sales are also subject to certain manner of sale provisions, notice requirements and the availability of current public information about us.
Rule 701
Rule 701 generally allows a shareholder who purchased Class A common shares pursuant to a written compensatory plan or contract and who is not deemed to have been an affiliate of us during the immediately
 
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preceding 90 days to sell these Class A common shares in reliance upon Rule 144, but without being required to comply with the public information, holding period, volume limitation, or notice provisions of Rule 144. Rule 701 also permits affiliates of our company to sell their Rule 701 Class A common shares under Rule 144 without complying with the holding period requirements of Rule 144. All holders of Rule 701 Class A common shares, however, are required to wait until 90 days after the date of this prospectus before selling such Class A common shares pursuant to Rule 701.
Registration Rights
Effective upon consummation of this offering, we intend to enter into a registration rights agreement with our pre-IPO shareholders pursuant to which we will grant them customary registration rights for the resale of the Class A common shares held by them (including Class A common shares acquired upon conversion of Class B common shares). Registration of these shares under the Securities Act would result in these shares becoming freely tradable without restriction under the Securities Act immediately upon the effectiveness of the registration, except for shares purchased by affiliates. Class A common shares covered by a registration statement will be eligible for sales in the public market upon the expiration, or their release from the terms of, the lock-up agreements described above. Any sales of securities by these shareholders could have a material adverse effect on the trading price of our Class A common shares. See “Principal Shareholders — Registration Rights Agreement.”
Equity Incentive Plan
We intend to file a registration statement on Form S-8 under the Securities Act following this offering to register all of the Class A common shares issued or reserved for issuance under our incentive plan. See “Management — Post-IPO Equity Incentive Plan.” We expect to file this registration statement as soon as practicable after this offering. Class A common shares covered by this registration statement will be eligible for sale in the public market, upon the expiration or release from the terms of the lock-up agreements, and subject to vesting of such Class A common shares.
 
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CERTAIN TAX CONSIDERATIONS
The following summary contains a description of material Cayman Islands and U.S. federal income tax consequences of the acquisition, ownership and disposition of our Class A common shares. It does not purport to be a comprehensive description of all the tax considerations that may be relevant to a decision to purchase the Class A common shares, is not applicable to all categories of investors, some of which may be subject to special rules, and does not address all of the Cayman Islands and U.S. federal income tax considerations applicable to any particular holder. The summary is based upon the tax laws of the Cayman Islands and the United States and regulations thereunder as of the date hereof, which are subject to change.
Prospective purchasers of our Class A common shares should consult their own tax advisors about the particular Cayman Islands and U.S. federal, state, local and other tax consequences to them of the acquisition, ownership and disposition of our Class A common shares.
Certain Cayman Islands Tax Considerations
The Cayman Islands laws currently levy no taxes on individuals or corporations based upon profits, income, gains or appreciation and there is no taxation in the nature of inheritance tax or estate duty or withholding tax applicable to us or to any holder of Class A common shares. There are no other taxes likely to be material to us levied by the government of the Cayman Islands except for stamp duties which may be applicable on instruments executed in, or after execution brought within the jurisdiction of the Cayman Islands. No stamp duty is payable in the Cayman Islands on transfers of shares of Cayman Islands companies except those which hold interests in land in the Cayman Islands. The Cayman Islands is not party to any double tax treaties which are applicable to any payments made by or to our company. There are no exchange control regulations or currency restrictions in the Cayman Islands.
As a Cayman Islands exempted company with limited liability, we are entitled, upon application, to receive an undertaking as to tax concessions pursuant to Section 6 of the Tax Concessions Law (2018 Revision). This undertaking would provide that, for a period of 20 years from the date of issue of the undertaking, no law thereafter enacted in the Cayman Islands imposing any taxes to be levied on profits, income, gains or appreciation will apply to us or our operations.
Payments of dividends and capital in respect of our Class A common shares will not be subject to taxation in the Cayman Islands and no withholding will be required on the payment of a dividend or capital to any holder of our Class A common shares, nor will gains derived from the disposal of our Class A common shares be subject to Cayman Islands income or corporation tax.
There is no income tax treaty or convention currently in effect between the United States and the Cayman Islands.
Certain United States Federal Income Tax Considerations
The following discussion describes certain U.S. federal income tax consequences of the purchase, ownership and disposition of our Class A common shares as of the date hereof. This discussion deals only with Class A common shares that are held as capital assets by a U.S. Holder (as defined below).
As used herein, the term “U.S. Holder” means a beneficial owner of our Class A common shares that is, for U.S. federal income tax purposes, any of the following:
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an individual who is a citizen or resident of the United States;
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a corporation (or other entity treated as a corporation for U.S. federal income tax purposes) created or organized in or under the laws of the United States, any state thereof or the District of Columbia;
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•
an estate the income of which is subject to U.S. federal income taxation regardless of its source; or
​
•
a trust if it (1) is subject to the primary supervision of a court within the United States and one or more United States persons have the authority to control all substantial decisions of the trust or (2) has a valid election in effect under applicable United States Treasury regulations to be treated as a United States person.
​
 
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This discussion is based upon provisions of the Code and regulations, rulings and judicial decisions thereunder as of the date hereof. Those authorities may be changed, perhaps retroactively, so as to result in U.S. federal income tax consequences different from those summarized below.
This discussion does not represent a detailed description of the U.S. federal income tax consequences applicable to you if you are subject to special treatment under the U.S. federal income tax laws, including if you are:
•
a dealer or broker in securities or currencies;
​
•
a financial institution;
​
•
a regulated investment company;
​
•
a real estate investment trust;
​
•
an insurance company;
​
•
a tax-exempt organization;
​
•
a person holding our Class A common shares as part of a hedging, integrated or conversion transaction, a constructive sale or a straddle;
​
•
a trader in securities that has elected the mark-to-market method of accounting for your securities;
​
•
a person liable for alternative minimum tax;
​
•
a person who owns or is deemed to own 10% or more of all of our outstanding shares of stock (by vote or value);
​
•
a partnership or other pass-through entity for U.S. federal income tax purposes;
​
•
a person required to accelerate the recognition of any item of gross income with respect to our Class A common shares as a result of such income being recognized on an applicable financial statement; or
​
•
a person whose “functional currency” for U.S. federal income tax purposes is not the U.S. dollar.
​
If a partnership (or other entity treated as a partnership for U.S. federal income tax purposes) holds our Class A common shares, the tax treatment of a partner will generally depend upon the status of the partner and the activities of the partnership. If you are a partnership or partner of a partnership holding our Class A common shares, you should consult your tax advisors.
This summary does not contain a detailed description of all the U.S. federal income tax consequences to you in light of your particular circumstances and does not address the Medicare tax on net investment income or the effects of any state, local or non-United States tax laws. If you are considering the purchase of our Class A common shares, you should consult your own tax advisors concerning the particular U.S. federal income tax consequences to you of the purchase, ownership and disposition of our Class A common shares, as well as the consequences to you arising under other U.S. federal tax laws (such as estate and gift tax laws) and the laws of any other taxing jurisdiction.
Taxation of Dividends
Subject to the discussion under “— Passive Foreign Investment Company” below, the gross amount of distributions on our Class A common shares will be taxable as dividends to the extent paid out of our current or accumulated earnings and profits, as determined under U.S. federal income tax principles. To the extent that the amount of any distribution exceeds our current and accumulated earnings and profits for a taxable year, the distribution will first be treated as a tax-free return of capital, causing a reduction in the tax basis of the Class A common shares, and to the extent the amount of the distribution exceeds your tax basis, the excess will be taxed as capital gain recognized on a sale or exchange (as discussed below under “— Taxation of Sales or Exchanges”). We do not, however, expect to determine earnings and profits in accordance with U.S. federal income tax principles. Therefore, you should expect that a distribution will generally be treated as a dividend for U.S. federal income tax purposes.
 
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Any dividends that you receive (including any withheld taxes) will be includable in your gross income as ordinary income on the day actually or constructively received by you. Such dividends will not be eligible for the dividends received deduction allowed to corporations under the Code. With respect to non-corporate U.S. investors, certain dividends received from a qualified foreign corporation may be subject to reduced rates of taxation. A foreign corporation is treated as a qualified foreign corporation with respect to dividends paid by that corporation on shares that are readily tradable on an established securities market in the United States. United States Treasury Department guidance indicates that our Class A common shares, which will be listed on the          , will be readily tradable on an established securities market in the United States. There can be no assurance, however, that our Class A common shares will be considered readily tradable on an established securities market in later years. Non-corporate holders that do not meet a minimum holding period requirement during which they are not protected from the risk of loss or that elect to treat the dividend income as “investment income” pursuant to Section 163(d)(4) of the Code will not be eligible for the reduced rates of taxation regardless of our status as a qualified foreign corporation. In addition, the rate reduction will not apply to dividends if the recipient of a dividend is obligated to make related payments with respect to positions in substantially similar or related property. This disallowance applies even if the minimum holding period has been met.
However, notwithstanding the foregoing, non-corporate U.S. Holders will not be eligible for reduced rates of taxation on any dividends received from us if we are a passive foreign investment company (as discussed below under “— Passive Foreign Investment Company”) in the taxable year in which such dividends are paid or in the preceding taxable year.
For purposes of calculating the foreign tax credit, dividends paid on our Class A common shares will be treated as income from sources outside the United States and will generally constitute passive category income. The rules governing the foreign tax credit are complex. You are urged to consult your tax advisors regarding the availability of the foreign tax credit under your particular circumstances.
Distributions of Class A common shares, or rights to subscribe for Class A common shares, which are received as part of a pro rata distribution to all of our shareholders generally will not be subject to U.S. federal income tax.
Taxation of Sales or Exchanges
For U.S. federal income tax purposes, you will recognize taxable gain or loss on any sale, exchange or other taxable disposition of Class A common shares in an amount equal to the difference between the amount realized for the Class A common shares and your tax basis in the Class A common shares, both determined in U.S. dollars. Subject to the discussion under “— Passive Foreign Investment Company” below, such gain or loss will generally be capital gain or loss and will generally be long-term capital gain or loss if you have held the Class A common shares for more than one year. Long-term capital gains of non-corporate U.S. Holders are eligible for reduced rates of taxation. The deductibility of capital losses is subject to limitations. Any gain or loss recognized by you will generally be treated as U.S. source gain or loss.
Passive Foreign Investment Company
Based on the past and projected composition of our income and assets, and the valuation of our assets, including goodwill, we do not believe we were a passive foreign investment company, or PFIC, for our most recent taxable year, and we do not expect to become a PFIC in the current taxable year or the foreseeable future, although there can be no assurance in this regard.
In general, for any taxable year, we will be classified as a PFIC for U.S. federal income tax purposes if either (i) 75% or more of our gross income in that taxable year is passive income or (ii) the average percentage of our assets (which includes cash) by value in that taxable year which produce, or are held for the production of, passive income is at least 50%. For this purpose, passive income generally includes dividends, interest, royalties and rents (other than royalties and rents derived in the active conduct of a trade or business and not derived from a related person). If we own at least 25% (by value) of the stock of another corporation, for purposes of determining whether we are a PFIC, we will be treated as owning our proportionate share of the other corporation’s assets and receiving our proportionate share of the other corporation’s income.
 
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The determination of whether we are a PFIC is made annually. Accordingly, it is possible that our PFIC status may change due to changes in our asset or income composition. Because we have valued our goodwill based on the expected market value of our Class A common shares, a decrease in the price of our Class A common shares may also result in our becoming a PFIC. If we are a PFIC for any taxable year during which you hold our Class A common shares, you will be subject to special tax rules discussed below.
If we are a PFIC for any taxable year during which you hold our Class A common shares and you do not make a timely mark-to-market election, as described below, you will be subject to special tax rules with respect to any “excess distribution” received and any gain realized from a sale or other disposition, including a pledge, of Class A common shares. Distributions received in a taxable year will be treated as excess distributions to the extent that they are greater than 125% of the average annual distributions received during the shorter of the three preceding taxable years or your holding period for the Class A common shares. Under these special tax rules:
•
the excess distribution or gain will be allocated ratably over your holding period for the Class A common shares,
​
•
the amount allocated to the current taxable year, and any taxable year prior to the first taxable year in which we were a PFIC, will be treated as ordinary income, and
​
•
the amount allocated to each other year will be subject to tax at the highest tax rate in effect for that year and the interest charge generally applicable to underpayments of tax will be imposed on the resulting tax attributable to each such year.
​
Although the determination of whether we are a PFIC is made annually, if we are a PFIC for any taxable year in which you hold our Class A common shares, you will generally be subject to the special tax rules described above for that year and for each subsequent year in which you hold the Class A common shares (even if we do not qualify as a PFIC in such subsequent years). However, if we cease to be a PFIC, you can avoid the continuing impact of the PFIC rules by making a special election to recognize gain as if your Class A common shares had been sold on the last day of the last taxable year during which we were a PFIC. You are urged to consult your own tax advisor about this election.
In lieu of being subject to the special tax rules discussed above, if we are a PFIC for any taxable year in which you hold our Class A common shares, you may make a mark-to-market election with respect to your Class A common shares provided such Class A common shares are treated as “marketable stock.” The Class A common shares generally will be treated as marketable stock if they are regularly traded on a “qualified exchange or other market” ​(within the meaning of the applicable Treasury regulations). A class of stock is considered regularly traded, for these purposes, for any calendar year during which such class of stock is traded, other than in de minimis quantities, on at least 15 days during each calendar quarter on a qualified exchange or other market. It is intended that the Class A common shares will be listed on the         , which is treated as a qualified exchange for these purposes, but no assurance can be given that the Class A common shares will be “regularly traded” for purposes of the mark-to-market election.
If you make an effective mark-to-market election, for each taxable year that we are a PFIC you will include as ordinary income the excess of the fair market value of your Class A common shares at the end of the year over your adjusted tax basis in the Class A common shares. You will be entitled to deduct as an ordinary loss in each such year the excess of your adjusted tax basis in the Class A common shares over their fair market value at the end of the year, but only to the extent of the net amount previously included in income as a result of the mark-to-market election. Such election will not apply to any of our non-U.S. subsidiaries. Accordingly, you may continue to be subject to tax under the PFIC excess distribution regime with respect to any lower-tier PFICs notwithstanding a mark-to-market election for the Class A common shares. Your adjusted tax basis in the Class A common shares will be increased by the amount of any income inclusion and decreased by the amount of any deductions under the mark-to-market rules. In addition, upon the sale or other disposition of your Class A common shares in a year that we are a PFIC, any gain will be treated as ordinary income and, to the extent of the net amount of previously included income as a result of the mark-to-market election, any loss will be treated as ordinary loss.
If you make a mark-to-market election, it will be effective for the taxable year for which the election is made and all subsequent taxable years unless the Class A common shares are no longer regularly traded on
 
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a qualified exchange or other market, or the Internal Revenue Service consents to the revocation of the election. You are urged to consult your tax advisor about the availability of the mark-to-market election, and whether making the election would be advisable in your particular circumstances.
Alternatively, you can sometimes avoid the special tax rules described above by electing to treat a PFIC as a “qualified electing fund” under Section 1295 of the Code. However, this option is not available to you with respect to our Class A common shares because we do not intend to comply with the requirements necessary to permit you to make this election.
If we are a PFIC for any taxable year during which you hold our Class A common shares and any of our non-U.S. subsidiaries is also a PFIC, you will be treated as owning a proportionate amount (by value) of the shares of the lower-tier PFIC for purposes of the application of the PFIC rules. You are urged to consult your tax advisors about the application of the PFIC rules to any of our subsidiaries.
You will generally be required to file Internal Revenue Service Form 8621 if you hold our Class A common shares in any year in which we are classified as a PFIC. You are urged to consult your tax advisors concerning the U.S. federal income tax consequences of holding Class A common shares if we are considered a PFIC in any taxable year.
Information Reporting and Backup Withholding
In general, information reporting will apply to dividends in respect of our Class A common shares and the proceeds from the sale, exchange or other disposition of Class A common shares that are paid to you within the United States (and in certain cases, outside the United States), unless you are an exempt recipient. Backup withholding may apply to such payments if you fail to provide a taxpayer identification number or certification of exempt status or fail to report in full dividend and interest income.
Backup withholding is not an additional tax. Any amounts withheld under the backup withholding rules will be allowed as a refund or a credit against your U.S. federal income tax liability provided the required information is timely furnished to the Internal Revenue Service.
Certain U.S. Holders are required to report information relating to our Class A common shares, subject to certain exceptions (including an exception for Class A common shares held in accounts maintained by certain financial institutions), by attaching a complete Internal Revenue Service Form 8938, Statement of Specified Foreign Financial Assets, with their tax return for each year in which they hold the Class A common shares. You are urged to consult your own tax advisors regarding information reporting requirements relating to your ownership of the Class A common shares.
 
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UNDERWRITING
We and the underwriters named below have entered into an underwriting agreement dated           , 2021 with respect to the Class A common shares being offered. Subject to certain conditions, each underwriter has severally agreed to purchase the number of shares indicated in the following table. Goldman Sachs & Co. LLC and Morgan Stanley & Co. LLC are the representatives of the underwriters.
Underwriter
​ ​
Number of
Class A
Common
Shares
​
Goldman Sachs & Co. LLC
​ ​ ​ ​
Morgan Stanley & Co. LLC
​ ​ ​ ​
Itau BBA USA Securities, Inc.
​ ​ ​ ​
UBS Securities LLC
​ ​ ​ ​
Banco Bradesco BBI S.A.
​ ​ ​ ​
XP Investments US, LLC
​ ​ ​ ​
Total ​ ​ ​ ​
Bradesco Securities Inc. will act as agent of Banco Bradesco BBI S.A. for sales of the Class A common shares in the United States of America. Banco Bradesco BBI S.A. is not a broker-dealer registered with the SEC, and therefore may not make sales of any shares in the United States to U.S. persons. Banco Bradesco BBI S.A. and Bradesco Securities, Inc. are affiliates of Banco Bradesco S.A.
Subject to the terms and conditions set forth in the underwriting agreement, the underwriters have agreed, severally and not jointly, to purchase all of the Class A common shares sold under the underwriting agreement, if any of these Class A common shares are purchased, other than the shares covered by the option described below unless and until this option is exercised. If an underwriter defaults, the underwriting agreement provides that the purchase commitments of the non-defaulting underwriters may be increased or the underwriting agreement may be terminated.
We have granted the underwriters an option to buy up to an additional           Class A common shares from us to cover sales by the underwriters of a greater number of shares than the total number set forth in the table above. They may exercise that option for 30 days from the date of this prospectus. If any shares are purchased pursuant to this option, the underwriters will severally purchase shares in approximately the same proportion as set forth in the table above.
We have agreed to indemnify the several underwriters against certain liabilities, including liabilities under the Securities Act of 1933 or to contribute to payments the underwriters may be required to make in respect of those liabilities.
Commissions and Discounts
The following table shows the per Class A common share and total public offering price, underwriting discounts and commissions to be paid to the underwriters by us, and proceeds before expenses to us. These amounts are shown assuming both no exercise and full exercise of the underwriters’ option to purchase up to an additional           Class A common shares.
​ ​ ​
Total
​
​ ​ ​
Per Class A
common share
​ ​
No Exercise
​ ​
Full Exercise
​
​ ​ ​
(US$)
​
Initial public offering price
​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Underwriting discounts and commissions to be paid by us
​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Proceeds, before expenses, to us
​ ​ ​ ​ ​ ​ ​ ​ ​ ​
We estimate that our share of the total expenses of this offering, excluding underwriting discounts and commissions, will be approximately US$      .
 
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Class A common shares sold by the underwriters to the public will initially be offered at the initial public offering price set forth on the cover of this prospectus. Any Class A common shares sold by the underwriters to securities dealers may be sold at a discount of up to US$      per Class A common share from the initial public offering price. After the initial offering of our shares, the representatives may change the offering price and the other selling terms. The offering of the shares by the underwriters is subject to receipt and acceptance and subject to the underwriters’ right to reject any order in whole or in part.
Lock-up Agreements
We, our officers, directors and substantially all of our shareholders, have agreed with the underwriters, subject to certain exceptions described below, not to dispose of or hedge any of their Class A common shares or securities convertible into or exchangeable for Class A common shares during the period from the date of this prospectus continuing through the date 180 days after the date of this prospectus, except with the prior written consent of Goldman Sachs & Co. LLC and Morgan Stanley & Co. LLC. Specifically, we and these other persons have agreed, with certain limited exceptions, not to directly or indirectly offer, sell, contract to sell, pledge, grant any option to purchase, make any short sale or otherwise dispose of any Class A common shares, or any options or warrants to purchase any Class A common shares, or any securities convertible into, exchangeable for or that represent the right to receive Class A common shares (including Class B common shares), whether now owned or later acquired, engage in any hedging or other transaction which is designed to or which reasonably would be expected to lead to or result in a sale or disposition of Class A common shares, including any short sale or any purchase, sale or grant of any right (including without limitation any put or call option) with respect to any Class A common shares or with respect to any security that includes, relates to, or derives any significant part of its value from Class A common shares. These lock-up restrictions will not apply to: (a) bona fide gift or gifts, provided that the donee or donees agree to be bound in writing by the terms of the lock-up agreement, (b) any trust for the direct or indirect benefit of the signatories of the lock-up agreement or their immediate family, provided that the trustee of such a trust agrees to be bound in writing by the terms of the lock-up agreement, and provided further that any such transfer shall not involve a disposition for value, (c) transfers that occur by reason of a will or under the laws of descent, or pursuant to statutes governing the effects of a qualified domestic order or divorce settlement, provided that the transferee or transferees agree to be bound in writing by the terms of the lock-up agreement, (d) transactions relating to our Class A common shares or other securities acquired in open market transactions after the completion of our initial public offering, provided that no filing under Section 16(a) of the Exchange Act, and the rules and regulations thereunder, shall be required or shall be voluntarily made in connection with subsequent sales of Class A common shares or other securities acquired in such open market transactions, (e) transfers following the consummation of our initial public offering, pursuant to a bona fide third-party tender offer, merger, consolidation or other similar transaction made to all holders of our issued share capital involving a “change of control” ​(meaning a change in our ownership of not less than     %) that has been approved by our board of directors, provided that should such a transaction not be completed, the lock-up restrictions will continue to apply to the signatories of the lock-up agreement, (f) pursuant to the underwriting agreement and any reclassification, conversion or exchange in connection with such sale of Class A common shares, (g) as a result of the operation of law, or pursuant to an order of a court or regulatory agency, or (h) with the prior written consent of the representatives on behalf of the underwriters.
We also agreed not to file with the SEC a registration statement under the Securities Act relating to, any securities that are substantially similar to the Class A common shares, including but not limited to any options or warrants to purchase Class A common shares or any securities that are convertible into or exchangeable for, or that represent the right to receive, Class A common shares (including Class B common shares) or any such substantially similar securities, or publicly disclose the intention to make any offer, sale, pledge, disposition or filing or enter into any swap or other agreement that transfers, in whole or in part, any of the economic consequences of ownership of Class A common shares or any such other securities. These restrictions will not apply to: (a) the issuance of Class A common shares to be sold pursuant to this offering, (b) the grant by us of any options, warrants or shares or the issuance of Class A common shares upon the exercise of an option or warrant or under our long-term incentive plan described in this prospectus, provided that the recipients of such Class A common shares enter into a written letter agreement agreeing to remain subject to the lock-up restrictions set forth in such agreement with the underwriters, (c) the issuance of Class A common shares upon the conversion of a security, as described in this prospectus outstanding as of the date of this prospectus, provided that the recipients of such Class A common shares
 
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enter into a written letter agreement agreeing to remain subject to the lock-up restrictions set forth in such agreement with the underwriters, (d) the issuance of Class A common shares in connection with a merger, acquisition, joint venture or strategic participation entered into by us, provided that (i) the aggregate number of such Class A common shares issued thereby shall not exceed     % of the total number of Class A common shares issued and outstanding as of the date of such merger, acquisition, joint venture or strategic participation and (ii) the recipients of such Class A common shares enter into a written letter agreement agreeing to remain subject to the lock-up restrictions set forth in such agreement with the underwriters, (e) the filing by us of any registration statement on Form S-8 or a successor form thereto relating to our current or contemplated long-term incentive plans described in this prospectus, (f) a confidential or non-public submission of a registration statement with the SEC during the lock-up period, provided that (x) no public announcement of such confidential or non-public submission shall be made and (y) no such confidential or nonpublic submission shall become a publicly available registration statement during the lock-up period; or (g) the establishment of a trading plan pursuant to Rule 10b5-1 under the Exchange Act for the transfer of Class A common shares, provided that (i) such a plan does not provide for the transfer of Class A common shares during the lock-up period and (ii) no public announcement or filing under the Exchange Act, if any, is required of or voluntarily made by the us regarding the establishment of such plan.
Listing Venue
We expect our Class A common shares to be approved for listing on the Nasdaq, subject to notice of issuance, under the symbol “ZENV.”
Prior to this offering, there has been no public market for the shares. The initial public offering price has been negotiated among us and the representatives. Among the factors to be considered in determining the initial public offering price of the shares, in addition to prevailing market conditions, will be our historical performance, estimates of our business potential and earnings prospects, an assessment of our management and the consideration of the above factors in relation to market valuation of companies in related businesses.
Relationships
The underwriters and their respective affiliates are full service financial institutions engaged in various activities, which may include sales and trading, commercial and investment banking, advisory, investment management, investment research, principal investment, hedging, market making, brokerage and other financial and non-financial activities and services. Certain of the underwriters and their respective affiliates have provided, and may in the future provide, a variety of these services to us and to persons and entities with relationships with us, for which they received or will receive customary fees and expenses.
In the ordinary course of their various business activities, the underwriters and their respective affiliates, officers, directors and employees may purchase, sell or hold a broad array of investments and actively traded securities, derivatives, loans, commodities, currencies, credit default swaps and other financial instruments for their own account and for the accounts of their customers or affiliates, and such investment and trading activities may involve or relate to assets, securities and/or instruments of ours (directly, as collateral securing other obligations or otherwise) and/or persons and entities with relationships with us. The underwriters and their respective affiliates may also communicate independent investment recommendations, market color or trading ideas and/or publish or express independent research views in respect of such assets, securities or instruments and may at any time hold, or recommend to clients that they should acquire, long and/or short positions in such assets, securities and instruments.
Price Stabilization, Short Positions and Penalty Bids
In connection with this offering, the underwriters may purchase and sell Class A common shares in the open market. These transactions may include short sales, stabilizing transactions and purchases to cover positions created by short sales. Short sales involve the sale by the underwriters of a greater number of shares than they are required to purchase in this offering, and a short position represents the amount of such sales that have not been covered by subsequent purchases. A “covered short position” is a short position that is not greater than the number of additional shares for which the underwriters’ option described above may be exercised. The underwriters may cover any covered short position by either exercising their option
 
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to purchase additional shares or purchasing shares in the open market. In determining the source of shares to cover the covered short position, the underwriters will consider, among other things, the price of shares available for purchase in the open market as compared to the price at which they may purchase additional shares pursuant to the option described above. “Naked” short sales are any short sales that create a short position greater than the number of additional shares for which the option described above may be exercised. The underwriters must cover any such naked short position by purchasing shares in the open market. A naked short position is more likely to be created if the underwriters are concerned that there may be downward pressure on the price of the Class A common shares in the open market after pricing that could adversely affect investors who purchase in this offering. Stabilizing transactions consist of various bids for or purchases of Class A common shares made by the underwriters in the open market prior to the completion of this offering.
The underwriters may also impose a penalty bid. This occurs when a particular underwriter repays to the underwriters a portion of the underwriting discount received by it because the representatives have repurchased shares sold by or for the account of such underwriter in stabilizing or short covering transactions.
Purchases to cover a short position and stabilizing transactions, as well as other purchases by the underwriters for their own accounts, may have the effect of preventing or retarding a decline in the market price of our Class A common shares, and together with the imposition of the penalty bid, may stabilize, maintain or otherwise affect the market price of the Class A common shares. As a result, the price of the Class A common shares may be higher than the price that otherwise might exist in the open market. The underwriters are not required to engage in these activities and may end any of these activities at any time. These transactions may be effected on the Nasdaq, in the over-the-counter market or otherwise.
Electronic Distribution
In connection with the offering, certain of the underwriters or securities dealers may distribute prospectuses by electronic means, such as email.
Selling Restrictions
European Economic Area and the United Kingdom
In relation to each Member State of the European Economic Area and the United Kingdom (each a “Relevant State”), no Class A common shares have been offered or will be offered pursuant to the offering to the public in that Relevant State prior to the publication of a prospectus in relation to the Class A com-mon shares which has been approved by the competent authority in that Relevant State or, where appropriate, approved in another Relevant State and notified to the competent authority in that Relevant State, all in accordance with the Prospectus Regulation), except that offers of Class A common shares may be made to the public in that Relevant State at any time under the following exemptions under the Prospectus Regulation:
•
to any legal entity which is a qualified investor as defined under the Prospectus Regulation;
​
•
to fewer than 150 natural or legal persons (other than qualified investors as defined under the Prospectus Regulation), subject to obtaining the prior consent of the representatives for any such offer; or
​
•
in any other circumstances falling within Article 1(4) of the Prospectus Regulation,
​
provided that no such offer of the Class A common shares shall require the Company or any underwriter to publish a prospectus pursuant to Article 3 of the Prospectus Regulation or supplement a prospectus pursuant to Article 23 of the Prospectus Regulation. Neither we nor the representatives of the underwriters named above have authorized, nor do they authorize, the making of any offer of shares in circumstances in which an obligation arises for us or the underwriters to publish a prospectus for such offer pursuant to Article 3 of the Prospectus Regulation or supplement a prospectus pursuant to Article 23 of the Prospectus Regulation.
Each person in a Relevant State who initially acquires any Class A common shares or to whom any offer is made will be deemed to have represented, acknowledged and agreed to and with the Company and each of the underwriters that it is a “qualified investor” within the meaning of the Prospectus Regulation.
 
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In the case of any Class A common shares being offered to a financial intermediary as that term is used in Article 5(1) of the Prospectus Regulation, each such financial intermediary will be deemed to have represented, acknowledged and agreed that the Class A common shares acquired by it in the offer have not been acquired on a non-discretionary basis on behalf of, nor have they been acquired with a view to their offer or resale to, persons in circumstances which may give rise to an offer to the public other than their offer or resale in a Relevant State to qualified investors, in circumstances in which the prior consent of the representatives has been obtained to each such proposed offer or resale.
The Company, the underwriters and their affiliates will rely upon the truth and accuracy of the foregoing representations, acknowledgements and agreements.
For the purposes of this provision, the expression an “offer to the public” in relation to any Class A common shares in any Relevant State means the communication in any form and by any means of sufficient information on the terms of the offer and any Class A common shares to be offered so as to enable an investor to decide to purchase or subscribe for any Class A common shares, and the expression “Prospectus Regulation” means Regulation (EU) 2017/1129.
References to the Prospectus Regulation includes, in relation to the United Kingdom, the Prospectus Regulation as it forms part of UK domestic law by virtue of the European Union (Withdrawal) Act 2018.
The above selling restriction is in addition to any other selling restrictions set out below.
In connection with this offering, the underwriters are not acting for anyone other than the issuer and will not be responsible to anyone other than the issuer for providing the protections afforded to their clients nor for providing advice in relation to this offering.
United Kingdom
This document is for distribution only to persons who (i) have professional experience in matters relating to investments and who qualify as investment professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (as amended, the “Financial Promotion Order”), (ii) are persons falling within Article 49(2)(a) to (d) (“high net worth companies, unincorporated associations etc.”) of the Financial Promotion Order, (iii) are outside the United Kingdom, or (iv) are persons to whom an invitation or inducement to engage in investment activity (within the meaning of Section 21 of the Financial Services and Markets Act 2000, as amended (“FSMA”)) in connection with the issue or sale of any securities may otherwise lawfully be communicated or caused to be communicated (all such persons together being referred to as “relevant persons”). This document is directed only at relevant persons and must not be acted on or relied on by persons who are not relevant persons. Any investment or investment activity to which this document relates is available only to relevant persons and will be engaged in only with relevant persons.
Argentina
The Class A common shares are not authorized for public offering in Argentina by the Comisión Nacional de Valores pursuant to Argentine Public Offering Law No. 17,811, as amended, and they shall not be sold publicly. Therefore, any transaction carried out in Argentina must be made privately.
Australia
No placement document, prospectus, product disclosure statement or other disclosure document has been lodged or will be lodged with the Australian Securities and Investments Commission (ASIC), in relation to this offering. This document does not constitute a prospectus, product disclosure statement or other disclosure document under the Corporations Act 2001 (the Corporations Act) and does not purport to include the information required for a prospectus, product disclosure statement or other disclosure document under the Corporations Act.
Any offer in Australia of the Class A common shares may only be made to persons (the Exempt Investors) who are “sophisticated investors” ​(within the meaning of section 708(8) of the Corporations Act), “professional investors” ​(within the meaning of section 708(11) of the Corporations Act) or otherwise
 
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pursuant to one or more exemptions contained in section 708 of the Corporations Act so that it is lawful to offer the Class A common shares without disclosure to investors under Chapter 6D of the Corporations Act.
The Class A common shares applied for by Exempt Investors in Australia must not be offered for sale in Australia in the period of 12 months after the date of allotment under the offering, except in circumstances where disclosure to investors under Chapter 6D of the Corporations Act would not be required pursuant to an exemption under section 708 of the Corporations Act or otherwise or where the offer is pursuant to a disclosure document which complies with Chapter 6D of the Corporations Act. Any person acquiring Class A common shares must observe such Australian on-sale restrictions.
The Company is not licensed in Australia to provide financial product advice in relation to the Class A common shares. This prospectus contains general information only and does not take account of the investment objectives, financial situation or particular needs of any particular person. It does not contain any securities recommendations or financial product advice. Any advice contained in this document is general advice only. Before making an investment decision on the basis of this document, investors should consider the appropriateness of the information in this document, having regard to their own objectives, financial situation and needs, and, if necessary, seek expert advice on those matters. No cooling off period applies to an acquisition of the Class A common shares.
Brazil
The offer and sale of our Class A common shares has not been, and will not be, registered (or exempted from registration) with the Brazilian Securities Commission (Comissão de Valores Mobiliários — CVM) and, therefore, will not be carried out by any means that would constitute a public offering in Brazil under Law No. 6,385, of December 7, 1976, as amended, under CVM Rule No. 400, of December 29, 2003, as amended, or under CVM Rule No. 476, of January 16, 2009, as amended. Any representation to the contrary is untruthful and unlawful. As a consequence, our Class A common shares cannot be offered in Brazil or to any investor resident or domiciled in Brazil.
Canada
The securities may be sold in Canada only to purchasers purchasing, or deemed to be purchasing, as principal that are accredited investors, as defined in National Instrument 45-106 Prospectus Exemptions or subsection 73.3(1) of the Securities Act (Ontario), and are permitted clients, as defined in National Instrument 31-103 Registration Requirements, Exemptions, and Ongoing Registrant Obligations. Any resale of the securities must be made in accordance with an exemption form, or in a transaction not subject to, the prospectus requirements of applicable securities laws.
Securities legislation in certain provinces or territories of Canada may provide a purchaser with remedies for rescission or damages if this prospectus (including any amendment thereto) contains a misrepresentation, provided that the remedies for rescission or damages are exercised by the purchaser within the time limit prescribed by the securities legislation of the purchaser’s province or territory. The purchaser should refer to any applicable provisions of the securities legislation of the purchaser’s province or territory of these rights or consult with a legal advisor.
Pursuant to section 3A.3 of National Instrument 33-105 Underwriting Conflicts (NI 33-105), the underwriters are not required to comply with the disclosure requirements of NI 33-105 regarding underwriter conflicts of interest in connection with this offering.
Cayman Islands
This prospectus does not constitute a public offer of the Class A common shares, whether by way of sale or subscription, in the Cayman Islands. The Class A common shares have not been offered or sold, and will not be offered or sold, directly or indirectly, in the Cayman Islands.
Chile
The offer of the Class A common shares is subject to CMF Rule 336. The Class A common shares being offered will not be registered under the Chilean Securities Market Law in the Securities Registry
 
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(Registro de Valores) or in the Foreign Securities Registry (Registro de Valores Extranjeros) of the CMF and, therefore, the Class A common shares are not subject to the supervision of the CMF. As unregistered securities, we are not required to disclose public information about the Class A common shares in Chile. Accordingly, the Class A common shares cannot and will not be publicly offered to persons in Chile unless they are registered in the corresponding securities registry. The Class A common shares may only be offered in Chile in circumstances that do not constitute a public offering under Chilean law or in compliance with CMF Rule 336. Pursuant to CMF Rule 336, the Class A common shares may be privately offered in Chile to certain “qualified investors” identified as such therein (which in turn are further described in Rule No. 216, dated June 12, 2008 and in Rule No. 410, dated July 27, 2016, both issued by the CMF).
LA OFERTA DE LAS ACCIONES COMUNES CLASE A SE ACOGE A LA NORMA DE CARÁCTER GENERAL Nº336 DE LA CMF. LAS ACCIONES COMUNES CLASE A QUE SE OFRECEN NO ESTÁN INSCRITOS BAJO LA LEY DE MERCADO DE VALORES EN EL REGISTRO DE VALORES O EN EL REGISTRO DE VALORES EXTRANJEROS QUE LLEVA LA CMF, POR LO QUE TALES VALORES NO ESTÁN SUJETOS A LA FISCALIZACIÓN DE ÉSTA. POR TRATARSE DE VALORES NO INSCRITOS, NO EXISTE OBLIGACIÓN POR PARTE DEL EMISOR DE ENTREGAR EN CHILE INFORMACIÓN PÚBLICA RESPECTO DE ESTOS VALORES. LAS ACCIONES COMUNES CLASE A NO PODRÁN SER OBJETO DE OFERTA PÚBLICA EN CHILE MIENTRAS NO SEAN INSCRITOS EN EL REGISTRO DE VALORES CORRESPONDIENTE. LAS ACCIONES COMUNES CLASE A SOLO PODRÁN SER OFRECIDOS EN CHILE EN CIRCUNSTANCIAS QUE NO CONSTITUYAN UNA OFERTA PÚBLICA O CUMPLIENDO CON LO DISPUESTO EN LA NORMA DE CARÁCTER GENERAL Nº336 DE LA CMF. EN CONFORMIDAD CON LO DISPUESTO POR LA NORMA DE CARÁCTER GENERAL Nº336, LAS ACCIONES COMUNES CLASE A PODRÁN SER OFRECIDOS PRIVADAMENTE A CIERTOS “INVERSIONISTAS CALIFICADOS,” IDENTIFICADOS COMO TAL EN DICHA NORMA (Y QUE A SU VEZ ESTÁN DESCRITOS EN LA NORMA DE CARÁCTER GENERAL Nº216 DE LA CMF DE FECHA 12 DE JUNIO DE 2008 Y EN LA NORMA DE CARÁCTER GENERAL Nº410 DE LA CMF DE FECHA 27 DE JULIO DE 2016).
China
The Class A common shares may not be offered or sold directly or indirectly to the public in the People’s Republic of China (China) and neither this prospectus, which has not been submitted to the Chinese Securities and Regulatory Commission, nor any offering material or information contained herein relating to the Class A common shares may be supplied to the public in China or used in connection with any offer for the subscription or sale of Class A common shares to the public in China. The Class A common shares may only be offered or sold to China-related organizations which are authorized to engage in foreign exchange business and offshore investment from outside of China. Such China-related investors may be subject to foreign exchange control approval and filing requirements under the relevant Chinese foreign exchange regulations. For the purpose of this paragraph, China does not include Taiwan and the special administrative regions of Hong Kong and Macau.
Colombia
The Class A common shares have not been and will not be registered on the Colombian National Registry of Securities and Issuers or in the Colombian Stock Exchange. Therefore, the Class A common shares may not be publicly offered in Colombia. This material is for your sole and exclusive use as a determined entity, including any of your shareholders, administrators or employees, as applicable. You acknowledge the Colombian laws and regulations (specifically foreign exchange and tax regulations) applicable to any transaction or investment consummated pursuant hereto and represent that you are the sole liable party for full compliance with any such laws and regulations.
France
Neither this prospectus nor any other offering material relating to the Class A common shares described in this prospectus has been submitted to the clearance procedures of the Autorité des Marchés Financiers or of the competent authority of another member state of the European Economic Area and notified to the Autorité des Marchés Financiers. The Class A common shares have not been offered or sold and
 
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will not be offered or sold, directly or indirectly, to the public in France. Neither this prospectus nor any other offering material relating to the Class A common shares has been or will be: (1) released, issued, distributed or caused to be released, issued or distributed to the public in France; or (2) used in connection with any offer for subscription or sale of the Class A common shares to the public in France. Such offers, sales and distributions will be made in France only to: (a) persons providing investment services relating to portfolio management for the account of third parties (personnes fournissant le service d’investissement de gestion de portefeuille pour compte de tiers), and/or (b) qualified investors (investisseurs qualifiés) acting for their own account, and/or (c) a limited circle of investors (cercle restreint) acting for their own account, as defined in, and in accordance with, Articles L. 411-1, L. 411-2, D. 411-1 and D. 411-4 of the French Code monétaire et financier.
The Class A common shares may be resold directly or indirectly, only in compliance with articles L.411-1, L.411-2, L.412-1 and L.621-8 through L.621-8-3 of the French Code monétaire et financier.
Germany
The Class A common shares will not be offered, sold or publicly promoted or advertised in the Federal Republic of Germany other than in compliance with the German Securities Prospectus Act (Gesetz uber die Erstellung, Billigung und Veroffentlichung des Prospekts, der beim offentlicken Angebot von Wertpapieren oder bei der Zulassung von Wertpapieren zum Handel an einem organisierten Markt zu veroffenlichen ist — Wertpapierprospektgesetz) as of June 22, 2005, effective as of July 1, 2005, as amended, or any other laws and regulations applicable in the Federal Republic of Germany governing the issue, offering and sale of securities. No selling prospectus (Verkaufsprospeckt) within the meaning of the German Securities Selling Prospectus Act has been or will be registered within the Financial Supervisory Authority of the Federal Republic of Germany or otherwise published in Germany.
Hong Kong
The Class A common shares may not be offered or sold in Hong Kong by means of any document other than (1) in circumstances which do not constitute an offer to the public within the meaning of the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Cap. 32 of the Laws of Hong Kong), or (“Companies (Winding Up and Miscellaneous Provisions) Ordinance”) or which do not constitute an invitation to the public within the meaning of the Securities and Futures Ordinance (Cap. 571 of the Laws of Hong Kong) (“Securities and Futures Ordinance”), or (2) to “professional investors” as defined in the Securities and Futures Ordinance and any rules made thereunder, or (3) in other circumstances which do not result in the document being a “prospectus” as defined in the Companies (Winding Up and Miscellaneous Provisions) Ordinance, and no advertisement, invitation or document relating to the Class A common shares may be issued or may be in the possession of any person for the purpose of issue (in each case whether in Hong Kong or elsewhere), which is directed at, or the contents of which are likely to be accessed or read by, the public in Hong Kong (except if permitted to do so under the securities laws of Hong Kong) other than with respect to Class A common shares which are or are intended to be disposed of only to persons outside Hong Kong or only to “professional investors” in Hong Kong as defined in the Securities and Futures Ordinance and any rules made thereunder.
Ireland
The Class A common shares will not be placed in or involving Ireland otherwise than in conformity with the provisions of the Intermediaries Act 1995 of Ireland (as amended) including, without limitation, Sections 9 and 23 (including advertising restrictions made thereunder) thereof and the codes of conduct made under Section 37 thereof.
Israel
This document does not constitute a prospectus under the Israeli Securities Law, 5728-1968, or the Securities Law, and has not been filed with or approved by the Israel Securities Authority. In Israel, this prospectus is being distributed only to, and is directed only at, and any offer of the Class A common shares is directed only at, (1) a limited number of persons in accordance with the Israeli Securities Law and (2) investors listed in the first addendum, or the Addendum, to the Israeli Securities Law, consisting primarily
 
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of joint investment in trust funds, provident funds, insurance companies, banks, portfolio managers, investment advisors, members of the Tel Aviv Stock Exchange, underwriters, venture capital funds, entities with equity in excess of NIS 50 million and “qualified individuals,” each as defined in the Addendum (as it may be amended from time to time), collectively referred to as qualified investors (in each case, purchasing for their own account or, where permitted under the Addendum, for the accounts of their clients who are investors listed in the Addendum). Qualified investors are required to submit written confirmation that they fall within the scope of the Addendum, are aware of its meaning and agree to it.
Italy
The offering of the Class A common shares has not been registered pursuant to Italian securities legislation and, accordingly, no Class A common shares may be offered or sold in the Republic of Italy in a solicitation to the public, and sales of the Class A common shares in the Republic of Italy shall be effected in accordance with all Italian securities, tax and exchange control and other applicable laws and regulation.
No offer, sale or delivery of the Class A common shares or distribution of copies of any document relating to the Class A common shares will be made in the Republic of Italy except: (a) to “Professional Investors,” as defined in Article 31.2 of Regulation No. 11522 of 1 July 1998 of the Commissione Nazionale per la Società e la Borsa, or the CONSOB, as amended, or CONSOB Regulation No. 11522, pursuant to Article 30.2 and 100 of Legislative Decree No. 58 of 24 February 1998, as amended, or the Italian Financial Act; or (b) in any other circumstances where an express exemption from compliance with the solicitation restrictions applies, as provided under the Italian Financial Act or Regulation No. 11971 of 14 May 1999, as amended.
Any such offer, sale or delivery of the Class A common shares or any document relating to the Class A common shares in the Republic of Italy must be: (1) made by investment firms, banks or financial intermediaries permitted to conduct such activities in the Republic of Italy in accordance with Legislative Decree No. 385 of 1 September 1993 as amended, the Italian Financial Act, CONSOB Regulation No. 11522 and any other applicable laws and regulations; and (2) in compliance with any other applicable notification requirement or limitation which may be imposed by CONSOB or the Bank of Italy.
Investors should also note that, in any subsequent distribution of the Class A common shares in the Republic of Italy, Article 100-bis of the Italian Financial Act may require compliance with the law relating to public offers of securities. Furthermore, where the Class A common shares are placed solely with professional investors and are then systematically resold on the secondary market at any time in the 12 months following such placing, purchasers of Class A common shares who are acting outside of the course of their business or profession may in certain circumstances be entitled to declare such purchase void and to claim damages from any authorized person at whose premises the Class A common shares were purchased, unless an exemption provided for under the Italian Financial Act applies.
Japan
The securities have not been and will not be registered under the Financial Instruments and Exchange Act of Japan (Act No. 25 of 1948, as amended), or the FIEA. The securities may not be offered or sold, directly or indirectly, in Japan or to or for the benefit of any resident of Japan (including any person resident in Japan or any corporation or other entity organized under the laws of Japan) or to others for reoffering or resale, directly or indirectly, in Japan or to or for the benefit of any resident of Japan, except pursuant to an exemption from the registration requirements of the FIEA and otherwise in compliance with any relevant laws and regulations of Japan.
Kuwait
The Class A common shares have not been authorized or licensed for offering, marketing or sale in the State of Kuwait. The distribution of this prospectus and the offering and sale of the Class A common shares in the State of Kuwait is restricted by law unless a license is obtained from the Kuwait Ministry of Commerce and Industry in accordance with Law 31 of 1990. Persons into whose possession this prospectus comes are required by us and the international underwriters to inform themselves about and to observe such restrictions. Investors in the State of Kuwait who approach us or any of the international underwriters to
 
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obtain copies of this prospectus are required by us and the international underwriters to keep such prospectus confidential and not to make copies thereof or distribute the same to any other person and are also required to observe the restrictions provided for in all jurisdictions with respect to offering, marketing and the sale of the Class A common shares.
Mexico
The Class A common shares have not been registered in Mexico with the Securities Section (Sección de Valores) of the National Securities Registry (Registro Nacional de Valores) maintained by the Comisión Nacional Bancaria y de Valores, and that no action has been or will be taken that would permit the offer or sale of the Class A common shares in Mexico absent an available exemption under Article 8 of the Mexican Securities Market Law (Ley del Mercado de Valores).
Netherlands
The Class A common shares may not be offered, sold, transferred or delivered, in or from the Netherlands, as part of the initial distribution or as part of any reoffering, and neither this prospectus nor any other document in respect of the international offering may be distributed in or from the Netherlands, other than to individuals or legal entities who or which trade or invest in securities in the conduct of their profession or trade (which includes banks, investment banks, securities firms, insurance companies, pension funds, other institutional investors and treasury departments and finance companies of large enterprises), in which case, it must be made clear upon making the offer and from any documents or advertisements in which a forthcoming offering of Class A common shares is publicly announced that the offer is exclusively made to said individuals or legal entities.
Peru
The Class A common shares and this prospectus have not been registered in Peru under the Decreto Supremo Nº 093-2002-EF: Texto Único Ordenado de la Ley del Mercado de Valores, (the “Peruvian Securities Law”) or before the Superintendencia del Mercado de Valores and cannot be offered or sold in Peru except in a private offering under the meaning of the Peruvian Securities Laws. The Peruvian Securities Law provides that an offering directed exclusively to “institutional investors” ​(as defined in the Institutional Investors Market Regulations) qualifies as a private offering. The Class A common shares acquired by institutional investors in Peru cannot be transferred to a third party, unless such transfer is made to another institutional investor or the Class A common shares have been previously registered with the Registro Público del Mercado de Valores.
Portugal
No document, circular, advertisement or any offering material in relation to the share has been or will be subject to approval by the Portuguese Securities Market Commission (Comissão do Mercado de Valores Mobiliários), or the CMVM. No Class A common shares may be offered, re-offered, advertised, sold, re-sold or delivered in circumstances which could qualify as a public offer (oferta pública) pursuant to the Portuguese Securities Code (Código dos Valores Mobiliários), and/or in circumstances which could qualify the issue of the Class A common shares as an issue or public placement of securities in the Portuguese market. This prospectus and any document, circular, advertisements or any offering material may not be directly or indirectly distributed to the public. All offers, sales and distributions of the Class A common shares have been and may only be made in Portugal in circumstances that, pursuant to the Portuguese Securities Code, qualify as a private placement (oferta particular), all in accordance with the Portuguese Securities Code. Pursuant to the Portuguese Securities Code, the private placement in Portugal or to Portuguese residents of the Class A common shares by public companies (sociedades abertas) or by companies that are issuers of securities listed on a market must be notified to the CMVM for statistical purposes. Any offer or sale of the Class A common shares in Portugal must comply with all applicable provisions of the Portuguese Securities Code and any applicable CMVM Regulations and all relevant Portuguese laws and regulations. The placement of the Class A common shares in the Portuguese jurisdiction or to any entities which are resident in Portugal, including the publication of a prospectus, when applicable, must comply with all applicable laws
 
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and regulations in force in Portugal and with the Prospectus Directive, and such placement shall only be performed to the extent that there is full compliance with such laws and regulations.
Qatar
The Class A common shares described in this prospectus have not been, and will not be, offered, sold or delivered, at any time, directly or indirectly in the State of Qatar in a manner that would constitute a public offering. This prospectus has not been, and will not be, registered with or approved by the Qatar Financial Markets Authority or Qatar Central Bank and may not be publicly distributed. This prospectus is intended for the original recipient only and must not be provided to any other person. It is not for general circulation in the State of Qatar and may not be reproduced or used for any other purpose.
Saudi Arabia
Any investor in the Kingdom of Saudi Arabia or who is a Saudi person (a Saudi Investor) who acquires the Class A common shares pursuant to the offering should note that the offer of the Class A common shares is an exempt offer under sub-paragraph (3) of paragraph (a) of Article 16 of the “Offer of Securities Regulations” as issued by the Board of the Capital Market Authority resolution number 2-11-2004 dated October 4, 2004 and amended by the resolution of the Board of Capital Market Authority resolution number 1-33-2004 dated December 21, 2004 (the KSA Regulations). The Class A common shares may be offered to no more than 60 Saudi Investors and the minimum amount payable per Saudi Investor must not be less than Saudi Riyal (SR) 1 million or an equivalent amount. The offer of Class A common shares is therefore exempt from the public offer provisions of the KSA Regulations, but is subject to the following restrictions on secondary market activity: (a) A Saudi Investor (the transferor) who has acquired Class A common shares pursuant to this exempt offer may not offer or sell Class A common shares to any person (referred to as a transferee) unless the price to be paid by the transferee for such Class A common shares equals or exceeds SR1 million. (b) If the provisions of paragraph (a) cannot be fulfilled because the price of the Class A common shares being offered or sold to the transferee has declined since the date of the original exempt offer, the transferor may offer or sell the Class A common shares to the transferee if their purchase price during the period of the original exempt offer was equal to or exceeded SR1 million. (c) If the provisions of paragraphs (a) and (b) cannot be fulfilled, the transferor may offer or sell the Class A common shares if he/​she sells his entire holding of the Class A common shares to one transferee.
Singapore
This prospectus has not been and will not be registered as a prospectus with the Monetary Authority of Singapore under the Securities and Futures Act, Chapter 289 of Singapore (the “SFA”). Accordingly, each underwriter has not offered or sold any Class A common shares or caused such Class A common shares to be made the subject of an invitation for subscription or purchase and will not offer or sell such Class A common shares or cause such Class A common shares to be made the subject of an invitation for subscription or purchase, and has not circulated or distributed, nor will it circulate or distribute, this prospectus or any other document or material in connection with the offer or sale, or invitation for subscription or purchase, of such Class A common shares, whether directly or indirectly, to persons in Singapore other than (1) to an institutional investor under Section 274 of the SFA, (2) to a relevant person pursuant to Section 275(1), or any person pursuant to Section 275(1A), and in accordance with the conditions specified in Section 275, of the SFA or (3) otherwise pursuant to, and in accordance with the conditions of, any other applicable provision of the SFA.
Where the Class A common shares are subscribed or purchased under Section 275 of the SFA by a relevant person which is: (a) a corporation (which is not an accredited investor (as defined in Section 4A of the SFA)) the sole business of which is to hold investments and the entire share capital of which is owned by one or more individuals, each of whom is an accredited investor; or (b) a trust (where the trustee is not an accredited investor) whose sole purpose is to hold investments and each beneficiary of the trust is an individual who is an accredited investor, securities (as defined in Section 239(1) of the SFA) of that corporation or the beneficiaries’ rights and interest (howsoever described) in that trust shall not be transferred within six months after that corporation or that trust has acquired the Class A common shares pursuant to an offer made under Section 275 of the SFA, except: (1) to an institutional investor under Section 274 of the SFA
 
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or to a relevant person (as defined in Section 275(2) of the SFA), or to any person arising from an offer referred to in Section 275(1A), or Section 276(4)(i)(B) of the SFA; (2) where no consideration is or will be given for the transfer; (3) where the transfer is by operation of law; (4) as specified in Section 276(7) of the SFA; or (5) as specified in Regulation 32 of the Securities and Futures (Offers of Investments) (Shares and Debentures) Regulations 2005 of Singapore.
Singapore Securities and Futures Act Product Classification — Solely for the purposes of its obligations pursuant to sections 309B(1)(a) and 309B(1)(c) of the Securities and Futures Act (Chapter 289 of Singapore) (the “SFA”), we have determined, and hereby notify all relevant persons (as defined in Section 309A of the SFA) that the Class A common shares are “prescribed capital markets products” ​(as defined in the Securities and Futures (Capital Markets Products) Regulations 2018) and Excluded Investment Products (as defined in MAS Notice SFA 04-N12: Notice on the Sale of Investment Products and MAS Notice FAA-N16: Notice on Recommendations on Investment Products).
South Korea
The Class A common shares have not been and will not be registered with the Financial Services Commission of Korea for public offering in Korea under the Financial Investment Services and Capital Markets Act, or the FSCMA. The Class A common shares may not be offered, sold or delivered, or offered or sold for re-offering or resale, directly or indirectly, in Korea or to any Korean resident (as such term is defined in the Foreign Exchange Transaction Law of Korea, or FETL) other than the Accredited Investors (as such term is defined in Article 11 of the Presidential Decree of the FSCMA), for a period of one year from the date of issuance of the Class A common shares except pursuant to the applicable laws and regulations of Korea, including the FSCMA and the FETL and the decrees and regulations thereunder. The Class A common shares may not be resold to Korean residents unless the purchaser of the Class A common shares complies with all applicable regulatory requirements (including but not limited to government reporting requirements under the FETL and its subordinate decrees and regulations) in connection with the purchase of the Class A common shares.
Spain
The Class A common shares have not been registered with the Spanish National Commission for the Securities Market and, therefore, no Class A common shares may be publicly offered, sold or delivered, nor any public offer in respect of the Class A common shares made, nor may any prospectus or any other offering or publicity material relating to the Class A common shares be distributed in Spain by the international agents or any person acting on their behalf, except in compliance with Spanish laws and regulations.
Switzerland
The Class A common shares may not be publicly offered in Switzerland and will not be listed on the SIX Swiss Exchange (“SIX”) or on any other stock exchange or regulated trading facility in Switzerland. This prospectus has been prepared without regard to the disclosure standards for issuance prospectuses under art. 652a or art. 1156 of the Swiss Code of Obligations or the disclosure standards for listing prospectuses under art. 27 ff. of the SIX Listing Rules or the listing rules of any other stock exchange or regulated trading facility in Switzerland. Neither this prospectus nor any other offering or marketing material relating to the Class A common shares or the offering may be publicly distributed or otherwise made publicly available in Switzerland.
Neither this document nor any other offering or marketing material relating to the offering, the Company, the Class A common shares have been or will be filed with or approved by any Swiss regulatory authority. In particular, this document will not be filed with, and the offer of Class A common shares will not be supervised by, the Swiss Financial Market Supervisory Authority (“FINMA”), and the offer of Class A common shares has not been and will not be authorized under the Swiss Federal Act on Collective Investment Schemes (“CISA”). The investor protection afforded to acquirers of interests in collective investment schemes under the CISA does not extend to acquirers of Class A common shares.
 
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United Arab Emirates
The Class A common shares have not been, and are not being, publicly offered, sold, promoted or advertised in the United Arab Emirates (including the Dubai International Financial Centre) other than in compliance with the laws of the United Arab Emirates (and the Dubai International Financial Centre) governing the issue, offering and sale of securities. Further, this prospectus does not constitute a public offer of securities in the United Arab Emirates (including the Dubai International Financial Centre) and is not intended to be a public offer. This prospectus has not been approved by or filed with the Central Bank of the United Arab Emirates, the Securities and Commodities Authority or the Dubai Financial Services Authority.
 
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EXPENSES OF THE OFFERING
We estimate that our expenses in connection with this offering, other than underwriting discounts and commissions, will be as follows:
​ ​ ​
Amount (US$)
​
Expenses: ​ ​ ​ ​ ​ ​ ​
SEC registration fee
​ ​ ​ ​ ​ ​ ​
Nasdaq listing fee
​ ​ ​ ​ ​ ​ ​
FINRA filing fee
​ ​ ​ ​ ​ ​ ​
Printing and engraving expenses
​ ​ ​ ​ ​ ​ ​
Legal fees and expenses
​ ​ ​ ​ ​ ​ ​
Accounting fees and expenses
​ ​ ​ ​ ​ ​ ​
Miscellaneous costs
​ ​ ​ ​ ​ ​ ​
Total
​ ​ ​ ​        ​ ​
All amounts in the table are estimates except the SEC registration fee, the Nasdaq listing fee and the FINRA filing fee. We will pay all of the expenses of this offering listed above.
 
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LEGAL MATTERS
Certain matters of U.S. federal and New York State law will be passed upon for us by Simpson Thacher & Bartlett LLP, and for the underwriters by Davis Polk & Wardwell LLP. The validity of the Class A common shares offered in this offering and other legal matters as to Cayman Islands law will be passed upon for us by Maples and Calder. Certain other matters of Brazilian law will be passed upon for us by Pinheiro Neto Advogados and for the underwriters by Tauil & Chequer Advogados in association with Mayer Brown LLP.
 
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EXPERTS
The consolidated financial statements of Zenvia Mobile Serviços Digitais S.A. as of December 31, 2020 and 2019, and for each of the years in the three-year period ended December 31, 2020, has been included herein and in the registration statement in reliance upon the report of KPMG Auditores Independentes, or KPMG, independent registered public accounting firm, appearing elsewhere herein, and upon the authority of said firm as experts in accounting and auditing.
The consolidated financial statements of Rodati Motors Corporation as of July 23, 2020 and December 31, 2019 and for the period from January 1, 2020 to July 23, 2020 and for the year ended December 31, 2019, have been included herein and in the registration statement in reliance upon the audit report of KPMG, appearing elsewhere herein, which includes a qualification stating that such consolidated financial statements are not presented in accordance with International Accounting Standard 1, Presentation of Financial Statements, as they do not include a consolidated statement of financial position and related notes as of July 23, 2019, and the related statements of consolidated profit or loss and other comprehensive income, changes in equity, cash flows and the related notes for the comparative period from January 1 to July 23, 2019, which constitute a departure from International Financial Reporting Standards as issued by the International Accounting Standards Board, and upon the authority of said firm as experts in accounting and auditing.
The consolidated financial statements of One Engine Desenvolvimento e Licenciamento de Sistemas de Informática S.A. as of December 31, 2020 and 2019 and for each of the two years in the period ended December 31, 2020, included in this prospectus and in the Registration Statement have been so included in reliance on the report of BDO RCS Auditores Independentes S.S, or BDO, independent accountant, appearing elsewhere herein, and in the Registration Statement, given on the authority of said firm as experts in accounting and auditing. BDO RCS Auditores Independentes S.S. is a member of the Brazilian Institute of Independent Accountants (Instituto dos Auditores Independentes do Brasil), or Ibracon, and the Brazilian Federal Accounting Council (Conselho Federal de Contabilidade), or the CFC.
The financial statements of Smarkio as of November 30, 2020 and December 31, 2019 and for the period of eleven months ended November 30, 2020 and for the year ended December 31, 2019, included in this prospectus and in the Registration Statement have been so included in reliance on the report of BDO, appearing elsewhere herein, and in the Registration Statement, given on the authority of said firm as experts in accounting and auditing.
 
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ENFORCEABILITY OF CIVIL LIABILITIES
Cayman Islands
We are registered under the laws of the Cayman Islands as an exempted company with limited liability. We are registered in the Cayman Islands because of certain benefits associated with being a Cayman Islands company, such as political and economic stability, an effective judicial system, a favorable tax system, the absence of foreign exchange control or currency restrictions and the availability of professional and support services. However, the Cayman Islands have a less prescriptive body of securities laws as compared to the United States and some U.S. states, such as Delaware, have more fulsome and judicially interpreted bodies of corporate law than the Cayman Islands. In addition, Cayman Islands companies may not have standing to sue before the federal courts of the United States.
Enforceability of Civil Liabilities
We have been advised by our Cayman Islands legal counsel, Maples and Calder, that the courts of the Cayman Islands are unlikely (i) to recognize or enforce against us judgments of courts of the United States predicated upon the civil liability provisions of the securities laws of the United States or any State; and (ii) in original actions brought in the Cayman Islands, to impose liabilities against us predicated upon the civil liability provisions of the securities laws of the United States or any State, so far as the liabilities imposed by those provisions are penal in nature. In those circumstances, although there is no statutory enforcement in the Cayman Islands of judgments obtained in the United States, the courts of the Cayman Islands will recognize and enforce a foreign money judgment of a foreign court of competent jurisdiction without retrial on the merits based on the principle that a judgment of a competent foreign court imposes upon the judgment debtor an obligation to pay the sum for which judgment has been given provided certain conditions are met. For a foreign judgment to be enforced in the Cayman Islands, such judgment must be final and conclusive and for a liquidated sum, and must not be in respect of taxes or a fine or penalty, inconsistent with a Cayman Islands judgment in respect of the same matter, impeachable on the grounds of fraud or obtained in a manner, and or be of a kind the enforcement of which is, contrary to natural justice or the public policy of the Cayman Islands (awards of punitive or multiple damages may well be held to be contrary to public policy). A Cayman Islands Court may stay enforcement proceedings if concurrent proceedings are being brought elsewhere.
Anti-Money Laundering
If any person in the Cayman Islands knows or suspects, or has reasonable grounds for knowing or suspecting that another person is engaged in criminal conduct or money laundering, or is involved with terrorism or terrorist financing and property, and the information for that knowledge or suspicion came to their attention in the course of business in the regulated sector, or other trade, profession, business or employment, the person will be required to report such knowledge or suspicion to (i) the Financial Reporting Authority of the Cayman Islands, or FRA, pursuant to the Proceeds of Crime Law (2020 Revision) of the Cayman Islands, or PCL, if the disclosure relates to criminal conduct or money laundering, or (ii) a police officer of the rank of constable or higher, or the FRA, pursuant to the Terrorism Law (2018 Revision) of the Cayman Islands, or Terrorism Law, if the disclosure relates to involvement with terrorism or terrorist financing and property.
Brazil
Most of our assets are located outside the United States, in Brazil. In addition, all of the members of our board of directors and board of executive officers are nationals or residents of Brazil or non-U.S. residents and all or a substantial portion of their assets are located outside the United States. As a result, it may be difficult for investors to effect service of process within the United States upon us or these persons, or to enforce against us or them judgments obtained in United States courts, including judgments predicated upon the civil liability provisions of the securities laws of the United States or any state in the United States.
We have been advised by Pinheiro Neto Advogados, our Brazilian counsel, that a judgment of a United States court for civil liabilities predicated upon the federal securities laws of the United States may be enforced in Brazil, subject to certain requirements described below. Such counsel has advised that a
 
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judgment against us, the members of our board of directors or our executive officers obtained in the United States would be enforceable in Brazil without retrial or re-examination of the merits of the original action including, without limitation, any final judgment for payment of a certain amount rendered by any such court, provided that such judgment has been previously recognized by the Brazilian Superior Tribunal of Justice (Superior Tribunal de Justiça), or STJ. That recognition will only be available, pursuant to Articles 963 and 964 of the Brazilian Code of Civil Procedure (Código de Processo Civil, Law No. 13,105, dated March 16, 2015, as amended), if the U.S. judgment:
•
complies with all formalities required for its enforceability, including issuance by a competent court and/or authority, after proper service of process on the parties is made in accordance with applicable law, considering that service of process on individuals in Brazil must comply with applicable Brazilian law, or after sufficient evidence of the parties’ absence (revelia) has been given, in accordance with the applicable law of the jurisdiction where the foreign judgment was issued;
​
•
is not rendered in an action upon which Brazilian courts have exclusive jurisdiction, pursuant to the provisions of art. 23 of the Brazilian Code of Civil Procedure (Law No. 13,105/2015, as amended);
​
•
is final binding and therefore not subject to appeal in the jurisdiction in which it was issued (res judicata);
​
•
it is not contrary to a final and binding award issued by Brazilian courts in the case records of a lawsuit that involves the same parties, cause of action;
​
•
creates no conflict between the United States judgment and a previous final and binding (res judicata) judgment on the same matter and involving the same parties issued in Brazil;
​
•
is duly apostilled by a competent authority of the United States, according to the Hague Convention Abolishing the Requirement of Legalization for Foreign Public Documents dated as of October 5, 1961 authentication, or the Hague Convention. If such decision emanates from a country that is not a signatory of the Hague Convention, it must be duly authenticated by a Brazilian Diplomatic Office or Consulate;
​
•
is accompanied by a sworn translation into Brazilian Portuguese made by a certified translator in Brazil, unless an exemption is provided by an international treaty to which Brazil is a signatory; and
​
•
is not contrary to Brazilian national sovereignty, good morals or public policy and does not violate the dignity of the human person, as set forth in Brazilian law.
​
The judicial recognition process may be time-consuming and may also give rise to difficulties in enforcing such foreign judgment in Brazil. Accordingly, we cannot assure you that judicial recognition of a foreign judgment would be successful, that the judicial recognition process would be conducted in a timely manner or that a Brazilian court would enforce a judgment of countries other than Brazil.
We believe original actions may be brought in connection with this initial public offering predicated on the federal securities laws of the United States in Brazilian courts and that, subject to applicable law, Brazilian courts may enforce liabilities in such actions against us or the members of our board of directors or our executive officers and certain advisors named herein.
In addition, a plaintiff, whether Brazilian or non-Brazilian, who resides outside Brazil or is outside Brazil during the course of litigation in Brazil and who does not own real property in Brazil must post a bond to guarantee the payment of the defendant’s legal fees and court expenses in connection with court procedures for the collection of money according to Article 83 of the Brazilian Code of Civil Procedure (Código de Processo Civil). This bond must have a value sufficient to satisfy the payment of court fees and defendant’s attorneys’ fees, as determined by the Brazilian judge based on the amount under dispute. This is so except in the case of: (1) claims for collection on a título executivo extrajudicial (an instrument which may be enforced in Brazilian courts without a review on the merits), or (2) in the case of an enforcement of a judgment, including foreign judgments that have been duly recognized by the STJ; (3) counterclaims as established; and (4) when an exemption is provided by an international agreement or treaty to which Brazil is a signatory.
If proceedings are brought in Brazilian courts seeking to enforce our obligations with respect to our Class A common shares, payment shall be made in reais. Any judgment rendered in Brazilian courts in
 
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respect of any payment obligations with respect to our Class A common shares would be expressed in reais. See “Risk Factors — Risks Relating to Our Class A Common Shares and the Offering — Judgments of Brazilian courts to enforce our obligations with respect to our Class A common shares may be payable only in reais. The exchange rate in force at the time may not offer non-Brazilian investors full compensation for any claim arising from our obligations.”
We have also been advised that the ability of a judgment creditor to satisfy a judgment by attaching certain assets of the defendant in Brazil is governed and limited by provisions of Brazilian law.
Notwithstanding the foregoing, we cannot assure you that confirmation of any judgment will be obtained, or that the process described above can be conducted in a timely manner.
Agent for Service of Process
We have appointed Cogency Global Inc. as our agent to receive service of process with respect to any action brought against us in the United States under U.S. federal or state securities laws arising out of or in connection with this offering. The address of Cogency Global Inc. is 122 East 42th Street, 18th Floor, New York, NY 10168.
 
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WHERE YOU CAN FIND MORE INFORMATION
We have filed with the U.S. Securities and Exchange Commission a registration statement on Form F-1 (including amendments and exhibits to the registration statement) under the Securities Act. This prospectus, which is part of the registration statement, does not contain all of the information set forth in the registration statement and the exhibits and schedules to the registration statement. For further information, we refer you to the registration statement and the exhibits and schedules filed as part of the registration statement. If a document has been filed as an exhibit to the registration statement, we refer you to the copy of the document that has been filed. Each statement in this prospectus relating to a document filed as an exhibit is qualified in all respects by the filed exhibit.
Upon completion of this offering, we will be subject to the informational requirements of the Exchange Act that are applicable to foreign private issuers. Accordingly, we will be required to file reports and other information with the SEC, including annual reports on Form 20-F and reports on Form 6-K. The public may obtain information on the operation of the SEC’s Public Reference Room by calling the SEC in the United States at 1-800-SEC-0330. In addition, the SEC maintains an Internet website at http://www.sec.gov, from which you can electronically access the registration statement and its materials.
As a foreign private issuer, we are exempt under the Exchange Act from, among other things, the rules prescribing the furnishing and content of proxy statements, and our executive officers, directors and principal shareholders are exempt from the reporting and short-swing profit recovery provisions contained in Section 16 of the Exchange Act. In addition, we will not be required under the Exchange Act to file periodic reports and financial statements with the SEC as frequently or as promptly as U.S. companies whose securities are registered under the Exchange Act. However, we are required to file with the Securities and Exchange Commission within four months after the end of each fiscal year (which is currently four months from December 31, the end of our fiscal year), or such applicable time as required by the SEC, an annual report on Form 20-F containing financial statements, which will be examined and reported on with an opinion expressed by an independent public accounting firm, and we intend to submit to the SEC a quarterly report on Form 6-K containing unaudited quarterly financial information for the first three quarters of each fiscal year.
We also maintain an investor relations website at https://investors.zenvia.com. Our website and the information contained therein or connected thereto will not be deemed to be incorporated into the prospectus or the registration statement of which this prospectus forms a part, and you should not rely on any such information in making your decision whether to purchase our common shares.
We will send the transfer agent a copy of all notices of shareholders’ meetings and other reports, communications and information that are made generally available to shareholders. The transfer agent has agreed to mail to all shareholders a notice containing the information (or a summary of the information) contained in any notice of a meeting of our shareholders received by the transfer agent and will make available to all shareholders such notices and all such other reports and communications received by the transfer agent.
 
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EXPLANATORY NOTE TO THE FINANCIAL STATEMENTS
The Registrant was incorporated on November 3, 2020 to become the holding entity of Zenvia Brazil in connection with the Registrant’s initial public offering. Prior to the consummation of the Registrant’s initial public offering, the Registrant had not commenced operations and had nominal assets and liabilities and no material contingent liabilities or commitments. Accordingly, the audited financial statements of the Registrant have been omitted from this prospectus. The audited financial statements presented in this prospectus are those of Zenvia Brazil, the Company’s principal operating company and wholly-owned subsidiary.
 
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INDEX TO FINANCIAL STATEMENTS
​
Audited Consolidated Financial Statements of Zenvia Mobile Serviços Digitais S.A as of December 31, 2020 and 2019 and for the years ended December 31, 2020, 2019 and 2018
​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ F-2 ​ ​
​ ​ ​ ​ ​ F-3 ​ ​
​ ​ ​ ​ ​ F-4 ​ ​
​ ​ ​ ​ ​ F-5 ​ ​
​ ​ ​ ​ ​ F-6 ​ ​
​ ​ ​ ​ ​ F-7 ​ ​
​
Audited Consolidated Financial Statements of Rodati Motors Corporation as of July 23, 2020 and December 31, 2019 and for the period from January 1, 2020 to July 23, 2020 and for the year ended December 31, 2019
​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ F-45 ​ ​
​ ​ ​ ​ ​ F-47 ​ ​
​ ​ ​ ​ ​ F-48 ​ ​
​ ​ ​ ​ ​ F-49 ​ ​
​ ​ ​ ​ ​ F-50 ​ ​
​ ​ ​ ​ ​ F-51 ​ ​
​
Audited Consolidated Financial Statements of One Engine Desenvolvimento e Licenciamento de Sistemas de Informática S.A. as of December 31, 2020 and 2019 and for each of the two years in the period ended December 31, 2020
​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ F-72 ​ ​
​ ​ ​ ​ ​ F-74 ​ ​
​ ​ ​ ​ ​ F-75 ​ ​
​ ​ ​ ​ ​ F-77 ​ ​
​ ​ ​ ​ ​ F-78 ​ ​
​ ​ ​ ​ ​ F-79 ​ ​
​
Audited Financial Statements of Smarkio Tecnologia Ltda. as of November 30, 2020 and December 31, 2019 and for the period of eleven months ended November 30, 2020 and for the year ended December 31, 2019
​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ F-111 ​ ​
​ ​ ​ ​ ​ F-113 ​ ​
​ ​ ​ ​ ​ F-114 ​ ​
​ ​ ​ ​ ​ F-116 ​ ​
​ ​ ​ ​ ​ F-117 ​ ​
​ ​ ​ ​ ​ F-118 ​ ​
 
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KPMG Auditores Independentes
Avenida Carlos Gomes, 258 — 6º andar, salas 601 a 606 — Boa Vista
90480-000 — Porto Alegre/RS — Brasil
Caixa Postal 18511 — CEP 90480-000 — Porto Alegre/RS — Brasil
Telefone +55 (51) 3327-0200
kpmg.com.br
Report of independent registered public accounting firm
To the Stockholders and Board of Directors
Zenvia Mobile Serviços Digitais S.A.
Porto Alegre, Brazil
Opinion on the Consolidated Financial Statements
We have audited the accompanying consolidated statements of financial position of Zenvia Mobile Serviços Digitais S.A. (and subsidiaries) (the Company) as of December 31, 2020 and 2019 , the related consolidated statements of profit or loss and other comprehensive income, cash flows, and changes in equity for each of the years in the three-year period ended December 31, 2020, and the related notes (collectively, the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2020 and 2019, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2020, in conformity with International Financial Reporting Standards as issued by the International Accounting Standards Board”.
Basis for Opinion
These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.
We have served as the Company’s auditors since 2013.
/s/ KPMG Auditores Independentes
Porto Alegre, Brazil
March 24, 2021
[MISSING IMAGE: FT_KPMGAUDIT-BW.JPG]
 
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Zenvia Mobile Serviços Digitais S.A.
Consolidated statements of financial position at December 31, 2020, 2019 and 2018
(In thousands of reais)
​ ​ ​
Note
​ ​
2020
​ ​
2019
​ ​ ​ ​ ​
Assets ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Current assets ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Cash and cash equivalents
​ ​ ​ ​ 6 ​ ​ ​ ​ ​ 59,979 ​ ​ ​ ​ ​ 12,342 ​ ​ ​ ​ ​ ​
Trade and other receivables
​ ​ ​ ​ 7 ​ ​ ​ ​ ​ 86,009 ​ ​ ​ ​ ​ 62,136 ​ ​ ​ ​ ​ ​
Tax assets
​ ​ ​ ​ 8 ​ ​ ​ ​ ​ 4,897 ​ ​ ​ ​ ​ 2,703 ​ ​ ​ ​ ​ ​
Prepayments
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2,516 ​ ​ ​ ​ ​ 1,158 ​ ​ ​ ​ ​ ​
Other assets
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 1,285 ​ ​ ​ ​ ​ 750 ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 154,686 ​ ​ ​ ​ ​ 79,089 ​ ​ ​ ​ ​ ​
Non-current assets ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Tax assets
​ ​ ​ ​ 8 ​ ​ ​ ​ ​ 40 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Prepayments
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 1,931 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ ​
Interest earning bank deposits
​ ​ ​ ​ 6 ​ ​ ​ ​ ​ 2,227 ​ ​ ​ ​ ​ 3,292 ​ ​ ​ ​ ​ ​
Property, plant and equipment
​ ​ ​ ​ 9 ​ ​ ​ ​ ​ 12,495 ​ ​ ​ ​ ​ 17,496 ​ ​ ​ ​ ​ ​
Intangible assets and goodwill
​ ​ ​ ​ 10 ​ ​ ​ ​ ​ 281,475 ​ ​ ​ ​ ​ 149,106 ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 298,168 ​ ​ ​ ​ ​ 169,894 ​ ​ ​ ​ ​ ​
Total assets
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 452,854 ​ ​ ​ ​ ​ 248,983 ​ ​ ​ ​ ​ ​
Liabilities ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Current liabilities ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Loans and borrowings
​ ​ ​ ​ 11 ​ ​ ​ ​ ​ 56,197 ​ ​ ​ ​ ​ 17,696 ​ ​ ​ ​ ​ ​
Trade and other payables
​ ​ ​ ​ 13 ​ ​ ​ ​ ​ 100,036 ​ ​ ​ ​ ​ 42,454 ​ ​ ​ ​ ​ ​
Liabilities from aquisitions
​ ​ ​ ​ 17 ​ ​ ​ ​ ​ 53,520 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ ​
Current tax liabilities
​ ​ ​ ​ 14 ​ ​ ​ ​ ​ 8,898 ​ ​ ​ ​ ​ 5,185 ​ ​ ​ ​ ​ ​
Employee benefits
​ ​ ​ ​ 15 ​ ​ ​ ​ ​ 6,678 ​ ​ ​ ​ ​ 6,755 ​ ​ ​ ​ ​ ​
Lease liabilities
​ ​ ​ ​ 12 ​ ​ ​ ​ ​ 1,109 ​ ​ ​ ​ ​ 2,687 ​ ​ ​ ​ ​ ​
Dividends payable
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ ​
Installment payment of taxes
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ ​
Non-current liabilities ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 226,438 ​ ​ ​ ​ ​ 74,777 ​ ​ ​ ​ ​ ​
Liabilities from aquisitions
​ ​ ​ ​ 17 ​ ​ ​ ​ ​ 40,228 ​ ​ ​ ​ ​ 5,230 ​ ​ ​ ​ ​ ​
Trade and other payables
​ ​ ​ ​ 13 ​ ​ ​ ​ ​ 201 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ ​
Loans and borrowings
​ ​ ​ ​ 11 ​ ​ ​ ​ ​ 42,778 ​ ​ ​ ​ ​ 45,650 ​ ​ ​ ​ ​ ​
Employee benefits
​ ​ ​ ​ 15 ​ ​ ​ ​ ​ 1,151 ​ ​ ​ ​ ​ 1,127 ​ ​ ​ ​ ​ ​
Lease liabilities
​ ​ ​ ​ 12 ​ ​ ​ ​ ​ 1,649 ​ ​ ​ ​ ​ 4,604 ​ ​ ​ ​ ​ ​
Provisions for labor, tax and civil risks
​ ​ ​ ​ 16 ​ ​ ​ ​ ​ 2,267 ​ ​ ​ ​ ​ 1,489 ​ ​ ​ ​ ​ ​
Deferred tax liabilities
​ ​ ​ ​ 23 ​ ​ ​ ​ ​ 22,794 ​ ​ ​ ​ ​ 16,769 ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 111,068 ​ ​ ​ ​ ​ 74,869 ​ ​ ​ ​ ​ ​
Shareholders’ equity
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Capital
​ ​ ​ ​ 18 ​ ​ ​ ​ ​ 130,292 ​ ​ ​ ​ ​ 93,883 ​ ​ ​ ​ ​ ​
Reserves
​ ​ ​ ​ 18 ​ ​ ​ ​ ​ 5,454 ​ ​ ​ ​ ​ 5,454 ​ ​ ​ ​ ​ ​
Translation reserve
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 1,033 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ ​
Accumulated Losses
​ ​ ​ ​ 18 ​ ​ ​ ​ ​ (21,431) ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ ​
Total equity
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 115,348 ​ ​ ​ ​ ​ 99,337 ​ ​ ​ ​ ​ ​
Total equity and liabilities
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 452,854 ​ ​ ​ ​ ​ 248,983 ​ ​ ​ ​ ​ ​
See the accompanying notes to the financial statements.
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Zenvia Mobile Serviços Digitais S.A.
Consolidated statements of profit or loss and other comprehensive income
Years ended December 31, 2020, 2019 and 2018
(In thousands of reais)
​ ​ ​
Note
​ ​
2020
​ ​
2019
​ ​
2018
​
Revenue
​ ​ ​ ​ 19 ​ ​ ​ ​ ​ 429,701 ​ ​ ​ ​ ​ 354,035 ​ ​ ​ ​ ​ 276,380 ​ ​
Cost of services
​ ​ ​ ​ 20 ​ ​ ​ ​ ​ (325,870) ​ ​ ​ ​ ​ (260,786) ​ ​ ​ ​ ​ (186,084) ​ ​
Gross profit
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 103,831 ​ ​ ​ ​ ​ 93,249 ​ ​ ​ ​ ​ 90,296 ​ ​
Sales and marketing expenses
​ ​ ​ ​ 20 ​ ​ ​ ​ ​ (33,589) ​ ​ ​ ​ ​ (26,018) ​ ​ ​ ​ ​ (18,241) ​ ​
General and administrative expenses
​ ​ ​ ​ 20 ​ ​ ​ ​ ​ (71,667) ​ ​ ​ ​ ​ (40,868) ​ ​ ​ ​ ​ (35,683) ​ ​
Research and development expenses
​ ​ ​ ​ 20 ​ ​ ​ ​ ​ (15,637) ​ ​ ​ ​ ​ (9,832) ​ ​ ​ ​ ​ (3,931) ​ ​
Allowance for credit losses
​ ​ ​ ​ 20 ​ ​ ​ ​ ​ (4,205) ​ ​ ​ ​ ​ (3,733) ​ ​ ​ ​ ​ (2,287) ​ ​
Gain on bargain purchase
​ ​ ​ ​ 1.b ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 2,479 ​ ​ ​ ​ ​ — ​ ​
Other income and expenses, net
​ ​ ​ ​ 22 ​ ​ ​ ​ ​ (840) ​ ​ ​ ​ ​ 4,473 ​ ​ ​ ​ ​ 96 ​ ​
Operating profit (loss)
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (22,107) ​ ​ ​ ​ ​ 19,750 ​ ​ ​ ​ ​ 30,250 ​ ​
Finance costs
​ ​ ​ ​ 21 ​ ​ ​ ​ ​ (26,580) ​ ​ ​ ​ ​ (6,811) ​ ​ ​ ​ ​ (7,352) ​ ​
Finance income
​ ​ ​ ​ 21 ​ ​ ​ ​ ​ 19,217 ​ ​ ​ ​ ​ 4,239 ​ ​ ​ ​ ​ 3,446 ​ ​
Net finance costs
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (7,363) ​ ​ ​ ​ ​ (2,572) ​ ​ ​ ​ ​ (3,906) ​ ​
Profit (loss) before taxes
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (29,470) ​ ​ ​ ​ ​ 17,178 ​ ​ ​ ​ ​ 26,344 ​ ​
Deferred income tax and social contribution
​ ​ ​ ​ 23 ​ ​ ​ ​ ​ 8,480 ​ ​ ​ ​ ​ (3,186) ​ ​ ​ ​ ​ (3,457) ​ ​
Current income tax and social contribution
​ ​ ​ ​ 23 ​ ​ ​ ​ ​ (441) ​ ​ ​ ​ ​ (148) ​ ​ ​ ​ ​ (3,022) ​ ​
Profit (loss) of the year
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (21,431) ​ ​ ​ ​ ​ 13,844 ​ ​ ​ ​ ​ 19,865 ​ ​
Other comprehensive income ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Items that are or may be reclassified subsequently to profit or loss
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Cumulative translation adjustments from operations in foreign currency
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 1,033 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​
Total comprehensive income (loss) for the year
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (20,398) ​ ​ ​ ​ ​ 13,844 ​ ​ ​ ​ ​ 19,865 ​ ​
Net earnings per share (expressed in Reais per share)
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Basic
​ ​ ​ ​ 24 ​ ​ ​ ​ ​ (4.657) ​ ​ ​ ​ ​ 3.131 ​ ​ ​ ​ ​ 4.493 ​ ​
Diluted
​ ​ ​ ​ 24 ​ ​ ​ ​ ​ (4.657) ​ ​ ​ ​ ​ 3.131 ​ ​ ​ ​ ​ 4.493 ​ ​
See the accompanying notes to the financial statements.
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Zenvia Mobile Serviços Digitais S.A.
Consolidated statement of changes in equity
Years ended December 31, 2020, 2019 and 2018
(In thousands of reais)
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Profit reserves
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​
Note
​ ​
Capital
​ ​
Legal
reserve
​ ​
Investments
reserve
​ ​
Retained
earnings (loss)
​ ​
Translation
reserve
​ ​
Total
shareholders’ equity
​
Balance at January 1, 2018
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 93,883 ​ ​ ​ ​ ​ 2,169 ​ ​ ​ ​ ​ 37,295 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 133,347 ​ ​
Profit for the year
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 19,865 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 19,865 ​ ​
Deductions ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Legal reserve
​ ​ ​
​
18.c
​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 993 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ (993) ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​
Dividends
​ ​ ​
​
18.c
​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ (4,718) ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ (4,718) ​ ​
Investments reserve
​ ​ ​
​
18.c
​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 14,154 ​ ​ ​ ​ ​ (14,154) ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​
Balance at December 31, 2019
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 93,883 ​ ​ ​ ​ ​ 3,162 ​ ​ ​ ​ ​ 51,449 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 148,494 ​ ​
Profit for the year
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 13,844 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 13,844 ​ ​
Deductions ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Legal reserve
​ ​ ​
​
18.c
​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 692 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ (692) ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​
Dividends
​ ​ ​
​
18.c
​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ (51,449) ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ (51,449) ​ ​
Minimum mandatory dividends
​ ​ ​
​
18.c
​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ (3,288) ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ (3,288) ​ ​
Additional dividends paid
​ ​ ​
​
18.c
​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ (8,264) ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ (8,264) ​ ​
Investments reserve
​ ​ ​
​
18.c
​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 1,600 ​ ​ ​ ​ ​ (1,600) ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​
Balance at December 31, 2019
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 93,883 ​ ​ ​ ​ ​ 3,854 ​ ​ ​ ​ ​ 1,600 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 99,337 ​ ​
Loss of the year
​ ​ ​
​
18.c
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (21,431) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (21,431) ​ ​
Capital increase
​ ​ ​
​
18.a
​ ​ ​ ​ ​ 36,409 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 36,409 ​ ​
Cumulative translation adjustments from operations in foreign currency
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 1,033 ​ ​ ​ ​ ​ 1,033 ​ ​
Balance at December 31, 2020
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 130,292 ​ ​ ​ ​ ​ 3,854 ​ ​ ​ ​ ​ 1,600 ​ ​ ​ ​ ​ (21,431) ​ ​ ​ ​ ​ 1,033 ​ ​ ​ ​ ​ 115,348 ​ ​
See the accompanying notes to the financial statements.
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Zenvia Mobile Serviços Digitais S.A.
Consolidated statements of cash flow
Years ended December 31, 2020, 2019 and 2018
(In thousands of reais)
​ ​ ​
2020
​ ​
2019
​ ​
2018
​
Cash flow from operating activities ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Profit (loss) of the year
​ ​ ​ ​ (21,431) ​ ​ ​ ​ ​ 13,844 ​ ​ ​ ​ ​ 19,865 ​ ​
Adjustments for: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Depreciation and amortization
​ ​ ​ ​ 27,287 ​ ​ ​ ​ ​ 18,796 ​ ​ ​ ​ ​ 14,513 ​ ​
Gain on bargain purchase
​ ​ ​ ​ — ​ ​ ​ ​ ​ (2,479) ​ ​ ​ ​ ​ — ​ ​
Additions to allowance for credit losses
​ ​ ​ ​ 4,205 ​ ​ ​ ​ ​ 3,733 ​ ​ ​ ​ ​ 2,698 ​ ​
Provisions for labor, tax and civil risks
​ ​ ​ ​ 7,622 ​ ​ ​ ​ ​ 6,677 ​ ​ ​ ​ ​ 5,418 ​ ​
Provision for bonus and profit sharing
​ ​ ​ ​ 650 ​ ​ ​ ​ ​ 4,641 ​ ​ ​ ​ ​ 3,032 ​ ​
Provision for compensation
​ ​ ​ ​ 16,715 ​ ​ ​ ​ ​ 5,230 ​ ​ ​ ​ ​ — ​ ​
Interest from loans and borrowings
​ ​ ​ ​ 4,826 ​ ​ ​ ​ ​ 3,889 ​ ​ ​ ​ ​ 5,922 ​ ​
Interest on leases
​ ​ ​ ​ 725 ​ ​ ​ ​ ​ 798 ​ ​ ​ ​ ​ — ​ ​
Exchange gains on loans and borrowings
​ ​ ​ ​ (65) ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​
Loss on write-off of intangible assets
​ ​ ​ ​ 50 ​ ​ ​ ​ ​ 170 ​ ​ ​ ​ ​ — ​ ​
Loss on write-off of property, plant and equipment
​ ​ ​ ​ 3,937 ​ ​ ​ ​ ​ 55 ​ ​ ​ ​ ​ 2 ​ ​
Tax (income) expenses
​ ​ ​ ​ (8,039) ​ ​ ​ ​ ​ 3,334 ​ ​ ​ ​ ​ 6,479 ​ ​
Effect on hyperinflation
​ ​ ​ ​ 180 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​
Changes in assets and liabilities ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Trade and other receivables
​ ​ ​ ​ (26,308) ​ ​ ​ ​ ​ (14,536) ​ ​ ​ ​ ​ (4,824) ​ ​
Prepayments
​ ​ ​ ​ (3,289) ​ ​ ​ ​ ​ (1,087) ​ ​ ​ ​ ​ 4,783 ​ ​
Other assets
​ ​ ​ ​ (2,537) ​ ​ ​ ​ ​ 274 ​ ​ ​ ​ ​ 1,042 ​ ​
Suppliers
​ ​ ​ ​ 52,109 ​ ​ ​ ​ ​ (987) ​ ​ ​ ​ ​ (8,618) ​ ​
Trade and other payables and other liabilities
​ ​ ​ ​ (3,526) ​ ​ ​ ​ ​ (8,598) ​ ​ ​ ​ ​ (3,743) ​ ​
Cash generated from operating activities
​ ​ ​ ​ 53,111 ​ ​ ​ ​ ​ 33,754 ​ ​ ​ ​ ​ 46,569 ​ ​
Interest paid on loans and leases
​ ​ ​ ​ (5,232) ​ ​ ​ ​ ​ (4,691) ​ ​ ​ ​ ​ (4,654) ​ ​
Income taxes paid
​ ​ ​ ​ (1,736) ​ ​ ​ ​ ​ (2,612) ​ ​ ​ ​ ​ (2,362) ​ ​
Net cash flow from operating activities
​ ​ ​ ​ 46,143 ​ ​ ​ ​ ​ 26,451 ​ ​ ​ ​ ​ 39,553 ​ ​
Cash flow from investing activities ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Acquisition of subsidiary, net of cash acquired
​ ​ ​ ​ (45,344) ​ ​ ​ ​ ​ (1,862) ​ ​ ​ ​ ​ — ​ ​
Acquisition of property, plant and equipment
​ ​ ​ ​ (4,747) ​ ​ ​ ​ ​ (5,108) ​ ​ ​ ​ ​ (2,805) ​ ​
Investment in interest earning bank deposits
​ ​ ​ ​ 1,065 ​ ​ ​ ​ ​ 1,422 ​ ​ ​ ​ ​ (3,214) ​ ​
Acquisition of Intangible assets
​ ​ ​ ​ (12,565) ​ ​ ​ ​ ​ (4,379) ​ ​ ​ ​ ​ (4,902) ​ ​
Net cash used in investment activities
​ ​ ​ ​ (61,591) ​ ​ ​ ​ ​ (9,927) ​ ​ ​ ​ ​ (10,921) ​ ​
Cash flow from financing activities ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Proceeds from loans and borrowings
​ ​ ​ ​ 62,000 ​ ​ ​ ​ ​ 25,000 ​ ​ ​ ​ ​ 24,259 ​ ​
Repayment of borrowings
​ ​ ​ ​ (33,212) ​ ​ ​ ​ ​ (9,879) ​ ​ ​ ​ ​ (28,565) ​ ​
Payment of lease liabilities
​ ​ ​ ​ (3,145) ​ ​ ​ ​ ​ (2,260) ​ ​ ​ ​ ​ — ​ ​
Dividends paid
​ ​ ​ ​ — ​ ​ ​ ​ ​ (67,719) ​ ​ ​ ​ ​ (2,310) ​ ​
Capital increase
​ ​ ​ ​ 36,409 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​
Net cash from (used in) financing activities
​ ​ ​ ​ 62,052 ​ ​ ​ ​ ​ (54,858) ​ ​ ​ ​ ​ (6,616) ​ ​
Exchange rate change on cash and cash equivalents
​ ​ ​ ​ 1,033 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​
Net (decrease) increase in cash and cash equivalents
​ ​ ​ ​ 47,637 ​ ​ ​ ​ ​ (38,334) ​ ​ ​ ​ ​ 22,016 ​ ​
Cash and cash equivalents at January 1
​ ​ ​ ​ 12,342 ​ ​ ​ ​ ​ 50,676 ​ ​ ​ ​ ​ 28,660 ​ ​
Cash and cash equivalents at December 31
​ ​ ​ ​ 59,979 ​ ​ ​ ​ ​ 12,342 ​ ​ ​ ​ ​ 50,676 ​ ​
See the accompanying notes to the financial statements.
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Notes to the consolidated financial statements
(In thousands of Reais)
1
Operations
​
Zenvia Mobile Serviços Digitais S.A. (“Company”) is a privately-held corporation headquartered in São Paulo, in the State of São Paulo. These consolidated financial statements comprise the Company and its subsidiaries (together referred to as “the Company” or “the Group”). The Group is primarily involved in the development of a cloud-based platform that enables organizations to integrate several communication capabilities (including short message service, or SMS, WhatsApp, Voice, WebChat and Facebook Messenger) into their software applications.
a.
Sale of carrier billing customer relationship
​
The Company signed, in August 17, 2018, an agreement to sell its carrier billing customer relationship. The sale was concluded in 2019 through the formal transfer of the customer relationships related to its carrier billing operations to Syntonic (acquirer).
The carrier billing operation revenue totaled R$ 0 thousand for the year ended December 31, 2019 and R$ 3,397 thousand in the year ended December 31, 2018.
The sales price was equivalent to US$ 700 thousand. On August 20, 2018 partial consideration was paid in advance in the amount of R$ 2,757 (at the exchange rate of R$ 3.94 on August 20, 2018), contingent upon the effective transfer of the contracts with telephone operators from the Company to Syntonic. The contract also provides an earn-out subsequent price adjustment of up to an amount equivalent to US$4,300 thousand (R$ 17,329 at the exchange rate as of December 31, 2019). The measurement periods defined for purposes of calculating the price adjustment relate to the years 2019, 2020 and 2021.
The price is calculated based on certain performance goals, as defined in the agreement, from each of the predefined periods.
As of December 31, 2020 the performance goals were not satisfied and therefore no price adjustment was earned for this period.
b.
Business combination — Rodati Motors Corporation (Sirena)
​
On July 24, 2020, the Company entered into a share purchase and sale agreement to purchase 100% of the shares of Rodati Motors Corporation (also referred to as “Sirena”), a startup founded in 2014 that offers communication solutions for sales teams via WhatsApp. The consideration transferred consisted of an upfront cash payment of US$ 10,923 thousand (R$ 56,961) on July 24, 2020, closing date. Following the acquisition, the former sharesholders will be subject to additional deferred payments of US$ 13,584 thousand (R$ 70,835), due in 3 installments payable in 6, 12 and 24 month after the acquisition date. On January 24, 2021, the Company settled the equivalent to US$ 392 thousand (R$ 2,045) from the deferred consideration. The deferred payments bear interests of 10% p.a. plus 0.75% for each month since the closing date, fully payable on the second installment. In case of a liquidation event (defined in the contract as a strategic sale of the Company or a an Initial Public Offering) within the period until the full settlement of the deferred consideration payable, part of the payment will be made in a variable number of the Company’s own shares, depending on the valuation of such shares associated with the liquidation events, limited to the cash amounts defined in the contract. The total consideration transferred and to be transferred is equivalent to US$ 24,507 (R$127,796). Also, in addition to the consideration transferred to former shareholders, certain of the former sharesholders that remained working at the Company will be subject to additional compensation of up to US$ 5,514 thousand (R$ 28,752) to be paid in 2021 and 2022, calculated based on certain goals of contribution margins (as defined in the agreement) generated by Sirena solutions, including their continued employment with the Company. As of December 31, 2020, a provision was recorded in the amount of R$ 8,833 related to the estimated compensation payable to these individuals. This acquisition is in line with the Company’s strategy to expand into other Latin America regions.
At the acquisition date, Sirena had an outstanding share-based plan represented by a restricted share plan granted to certain Sirena executives, not fully vested. In connection to the acquisition of Sirena by the
 
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Company the plan was cancelled at the acquisition date and the shares were paid by Zenvia to such executives as part of the consideration transferred.
Goodwill arising from the acquisition has been recognized as follows, based purchase price allocation:
​ ​ ​
Rodati Motors
Corporation 2020
​
Consideration transferred
​ ​ ​ ​ 127,796 ​ ​
Other net assets, including PPE and cash
​ ​ ​ ​ 1,519 ​ ​
Intangible assets – Client portfolio(a)
​ ​ ​ ​ 1,975 ​ ​
Intangible assets – Digital platform(b)
​ ​ ​ ​ 54,521 ​ ​
Deferred tax liabilities, net
​ ​ ​ ​ (14,835) ​ ​
Total net assets acquired at fair value
​ ​ ​ ​ 43,180 ​ ​
Goodwill ​ ​ ​ ​ 84,616 ​ ​
​
(a)
The fair value of R$ 1,975 represents client portfolio and was calculated based on discounted future cash flows associated to the portfolio estimated at the acquisition date.
​
(b)
The fair value of R$ 54,521 represents the digital platform acquired, measured based on discounted future cash flows associated to the asset at the acquisition date.
​
Valuation techniques are summarized below:
Assets acquired
​ ​
Valuation technique
​
Intangible assets – Allocation of the customer portfolio and platform ​ ​ Income approach: The MPEEM method (Multi-Period Excess Earnings Method) assumes that the fair value of an intangible asset is equal to the present value of the cash flow attributable to that asset, subtracting the contribution from other assets, tangible or intangible. ​
Since the acquisition, Sirena has generated revenues of R$ 10,841 and loss of R$ 3,597 in the year ended 2020 included in the consolidated financial statements. If the acquisition had occurred on January 1, 2020, management estimates that consolidated revenue would have been R$ 438,114 and consolidated loss for the year would have been R$ 45,016 In determining these amounts, management has assumed that the fair value adjustments that arose on the date of acquisition would have been the same if the acquisition had occurred on January 1, 2020.
The goodwill is attributable mainly to future results and synergies expected to be achieved from business integration. The Company is analyzing tax strategies to enable the future tax deductibility of goodwill. At the time of the acquisition, future tax deductibility is not probable as certain actions are necessary to integrate the businesses from a tax perspective, which are subject to substantive uncertainties associated to applicable tax laws.
The transaction was consummated on July 24, 2020, and Zenvia Brazil began to consolidate Sirena’s results of operations as of that date.
The identification of the intangible assets acquired in business combinations is subject to significant judgements by management as to whether assets are separable from other assets. The measurement of those assets and liabilities assumed also involve judgements and estimates developed by management, based on facts and circumstances known at the time of the business combination that may be not confirmed in the future. Such judgements and estimates are reviewed on an ongoing basis and adjusted prospectively as necessary.
c.
Business combination — Acquisition of Total Voice Telecom S.A. (Total Voice)
​
On March 1, 2019, the Company acquired all shares of Total Voice, a company that operates with communication API (Application Programming Interface). The Total Voice communication API allows
 
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application developers to add voice and text communication directly to their applications. The amount of the acquisition of Total Voice was R$ 2,002, paid in cash to former shareholders who left Total Voice at the acquisition date and R$ 13, paid to the former shareholders that remained as the Company’s employees, totaling R$ 2,015.
Following the acquisition, the former shareholders that remained with the Company will be subject to additional compensation of up to R$ 23,327 to be paid in 2021, based on certain conditions, including their continued employment with the Company. As of December 31, 2020, a provision was recorded in the amount of R$ 13,112 ( as of December 31, 2019, a provision was recorded in the amount of R$ 5,230) related to the estimated compensation earned by these individuals.
Gain on bargain purchase arising from the acquisition has been recognised as follows:
​ ​ ​
Total Voice
2019
​
Consideration transferred
​ ​ ​ ​ 2,015 ​ ​
Fair value of other net assets, including PP&E and cash and equivalents
​ ​ ​ ​ 57 ​ ​
Client portfolio(a)
​ ​ ​ ​ 518 ​ ​
Intangible — Digital platform(b)
​ ​ ​ ​ 3,919 ​ ​
Gain on bargain purchase
​ ​ ​ ​ 2,479 ​ ​
Tax on gain on bargain purchase
​ ​ ​
​
(843)
​ ​
Net gain on bargain purchase
​ ​ ​ ​ 1,636 ​ ​
The gain on bargain purchase, recorded in a separate caption in the statement of profit or loss, resulted from the fact that most of the compensation of the former shareholders that remained as employees is to be paid in form of future compensation, linked to continuous employment.
The current tax law allows the deductibility of the fair value of net assets acquired when a non-substantive action is taken after acquisition by the Company and therefore the tax and accounting basis of the net assets acquired are the same as of the acquisition date. In this regard, the Company considers that actions to complete the merger of the acquiree are non-substantive so that the Company expects to be entitled to the deductibility of the amortization and depreciation of the net assets acquired and, therefore, no deferred income taxes were recorded for the client portfolio and digital platform assets at the acquisition date.
(a)
The fair value of R$ 518 represents client portfolio acquired from Total Voice and was calculated based on discounted future cash flows associated to the portfolio estimated at the acquisition date;
​
(b)
The fair value of R$ 3,919 represents the digital platform acquired, based on its the potential of generating future cashflows, calculated based on estimated future discounted cash flows at the acquisition date;
​
Valuation techniques are summarized below:
Assets acquired
​ ​
Valuation technique
​
Intangible assets – Allocation of the customer portfolio and platform ​ ​ Income approach: The MPEEM method (Multi-Period Excess Earnings Method) assumes that the fair value of an intangible asset is equal to the present value of the cash flow attributable to that asset, subtracting the contribution from other assets, tangible or intangible. ​
​
d.
COVID-19
​
As a result of the global outbreak of COVID-19, unprecedented economic uncertainties have arisen that continue to have an adverse impact on global economic and market conditions, including in Brazil. In March 2020, the World Health Organization declared the COVID-19 outbreak a pandemic, and the Brazilian
 
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Federal Government declared a national emergency with respect to COVID-19. In addition, state and municipal authorities in Brazil suspended a variety of economic activities as part of measures to mitigate the spread of the virus.
The global impact of the COVID-19 outbreak has rapidly evolved and it presents material uncertainty and risk with respect to the future performance and financial results of the Company. In response to the COVID-19 outbreak, the Company implemented several measures aimed at safeguarding the health of employees and the stability of operations, including: (1) the implementation of remote work arrangements; (2) restrictions on all business travel and the postponement or cancellation of other planned events or their shift to virtual-only experiences; and (3) the provision of a utilities stipend to assist employees with increased cost of electricity, internet and other expenses resulting from remote work arrangements.
The COVID-19 pandemic is also having an impact on the Company customers (and prospective customers) behavior as it is accelerating their digitalization plans, which creates opportunities, particularly for the IP-based messaging service products offerings (such as WhatsApp). Nonetheless, in the year ended December 31, 2020, the Company suffered an impact as management believes that sales would have been higher in the absence of COVID-19 pandemic, and such impact may continue for the duration of the COVID-19 pandemic.      Management continues to monitor the impact of the COVID-19 pandemic on the business and the well-being of employees.
2
Company’s subsidiaries
​
​ ​ ​ ​ ​ ​ ​ ​ ​
December 31, 2020
​ ​
December 31, 2019
​
​ ​ ​
Country
​ ​
Direct
​ ​
Indirect
​ ​
Direct
​ ​
Indirect
​
Subsidiaries
​ ​ ​ ​ ​ ​ ​ ​
%
​ ​ ​ ​ ​ ​ ​ ​
%
​ ​ ​ ​ ​ ​ ​
MKMB Soluções Tecnológicas Ltda.
​ ​ ​ ​ Brazil ​ ​ ​ ​ ​ 100 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 99.99 ​ ​ ​ ​ ​ 0.01 ​ ​
Total Voice Telecom S.A.
​ ​ ​ ​ Brazil ​ ​ ​ ​ ​ 100 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 100 ​ ​ ​ ​ ​ — ​ ​
Rodati Motors Corporation
​ ​ ​ ​ USA ​ ​ ​ ​ ​ 100 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​
Indirect subsidiaries ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Rodati Services S.A.
​ ​ ​ ​ Argentina ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 100 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​
Rodati Servicios, S.A. de CV
​ ​ ​ ​ Mexico ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 100 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​
Rodati Motors Central de Informações de Veículos Automotores Ltda.
​ ​ ​ ​ Brazil ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 100 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​
​
3
Preparation basis
​
The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (IASB).
The issuance of these financial statements was approved by the Executive Board on March 24, 2021.
a.
Measurement basis
​
The financial statements were prepared based on historical cost, except for certain financial instruments measured at fair value, as described in the following accounting practices.
The subsidiary Rodati Services S.A. is located in Argentina and has as its functional currency the Argentinean Peso. Argentina has been considered a hyperinflationary economy since July 1 2018. Therefore, the financial information of the subsidiary located in Argentina used for consolidation purposes were adjusted at the monetary measurement unit current at the end of reporting period before being translated and included in the consolidated financial statements. Non-monetary assets and liabilities measured at cost, shareholders’ equity and the statement of profit or loss were adjusted to reflect the change in purchasing power of the Argentinean Pesos by applying a consumer price index (CPI). Impacts of the monetary remeasurement are recorded in profit or loss.
 
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b.
Functional and presentation currency
​
These consolidated financial statements are presented in Brazilian Real, which is the Company’s functional currency. All amounts have been rounded to the nearest thousand, except if otherwise indicated.
The functional currency of the subsidiary Rodati Motors Corporation is the US Dollar. The indirect subsidiaries of the Company have the following functional currencies: Rodati Motors Central de Informaçoes de Veiculos Automotores Ltda. has the local currency, Brazilian Real (BRL), as its functional currency; Rodati Services S.A has the local currency, Argentinean Peso (ARG), as its functional currency; and Rodati Servicios, S.A. de CV. has the local currency, Mexican Pesos (MEX), as its functional currency.
c.
Foreign currency translation
​
For the consolidated Group companies in which functional currency is different from the Brazilian Real, the financial statements are translated to Real as of closing date. Monetary assets and liabilities denominated in foreign currencies are translated into the functional currency at the exchange rate at the reporting date. Non-monetary assets and liabilities that are measured at fair value in a foreign currency are translated into the functional currency at the exchange rate when the fair value was determined. Non-monetary items that are measured based on historical cost in a foreign currency are translated at the exchange rate at the date of the transaction. Foreign currency differences are generally recognised in profit or loss and presented within finance costs.
d.
Accounting and reporting in highly hyperinflationary economy
​
In July 2018, considering that the inflation accumulated in the past three years in Argentina was higher than 100%, the adoption of the accounting and reporting standard in hyperinflationary economy became mandatory in relation to the subsidiary Rodati Services S.A, located in Argentina.
Non monetary assets and liabilities, the shareholders’ equity and the statement of income of subsidiaries that operate in hyperinflationary economies are adjusted by the change in the general purchasing power of the currency, applying a general price index.
The financial statements of an entity whose functional currency is the currency of a hyperinflationary economy, whether they are based on the historical or current cost approach, should be expressed in terms of the current measurement unit at the balance sheet date and translated into Real at the closing exchange rate for the period.
The impacts of changes in general purchasing power as from July 24, 2020 to December 31, 2020 were reported as finance costs in the statements of income of the Company
e.
Use of estimates and judgments
​
In preparing these consolidated financial statements, management has made judgements and estimates that affect the application of the Group’s accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to estimates are recognized prospectively.
(e.1) Judgments
Information about judgments referring to the adoption of accounting policies which impact significantly the amounts recognized in the financial statements are included in the following notes:
Note 1 (b)  — Identification of assets acquired and liabilities assumed;
Note 10 — Intangible assets: determination of useful lives of intangible assets.
(e.2) Uncertainties on assumptions and estimates
Information on uncertainties as to assumptions and estimates that pose a high risk of resulting in a material adjustment within the next fiscal year are included in the following notes:
 
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Note 7 — Allowance for expected losses: main assumptions in the determination of loss rate;
Note 10 — Impairment test of intangible assets and goodwill: assumptions regarding projections of generation of future cashflows;
Note 16 — Provision for labor, tax and civil risks: main assumptions regarding the likelihood and magnitude of the cash outflows;
Note 1 (c)  — business combination: assumptions on the determination of fair value of consideration transferred, assets acquired and liabilities assumed.
(i)
Measurement of fair value
​
A series of Company’s accounting policies and disclosures requires the measurement of fair value, for financial and non-financial assets and liabilities.
The Company established a control structure related to measurement of fair value. It includes the review process of all significant fair value measurements, reporting directly to the Chief Financial Officer.
Evaluation process includes the regular review of significant non-observable data and valuation adjustments. If third-party information, such as brokerage firms’ quotes or pricing services, is used to measure fair value, then the evaluation process analyzes the evidence obtained from the third parties to support the conclusion that such valuations meet the IFRS requirements, including the level in the fair value hierarchy in which such valuations should be classified. Significant assessment matters are reported to the Board of Directors.
When measuring fair value of an asset or liability, the Company uses observable data as much as possible. Fair values are classified at different levels according to hierarchy based on information (inputs) used in valuation techniques, as follows:
•
Level 1: Prices quoted (not adjusted) in active markets for identical assets and liabilities.
​
•
Level 2: Inputs, except for quoted prices, included in Level 1 which are observable for assets or liabilities, directly (prices) or indirectly (derived from prices).
​
•
Level 3: Inputs, for assets or liabilities, which are not based on observable market data (non-observable inputs).
​
The Company recognizes transfers between fair value hierarchy levels at the end of the financial statements’ period in which changes occurred.
Additional information on the assumptions adopted in the measurement of fair values is included in the following notes:
Note 26 — Risk management and financial instruments;
Notes 1 (b) and 1 (c)  — Business combination
4
Significant accounting policies
​
The accounting policies described in detail below have been consistently applied to all the periods presented in these consolidated financial statements, except if otherwise indicated (see also Note 5).
a.
Consolidation procedures
​
(i)
Business Combination
​
The Company accounts for business combinations using the acquisition method when the acquired set of activities and assets meets the definition of a business and control is transferred to the Company. In determining whether a particular set of activities and assets is a business, the Company assesses whether the set of assets and activities acquired includes, at a minimum, an input and substantive process and whether the acquired set has the ability to produce outputs. The Company has an option to apply a ‘concentration test’
 
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that permits a simplified assessment of whether an acquired set of activities and assets is not a business. The optional concentration test is met if substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or group of similar identifiable assets.
The consideration transferred in the acquisition is generally measured at fair value, as are the identifiable net assets acquired. Any goodwill that arises is tested annually for impairment. Any gain on a bargain purchase is recognised in profit or loss immediately. Transaction costs are expensed as incurred, except if related to the issue of debt or equity securities.
The consideration transferred does not include amounts related to the settlement of pre-existing relationships. Such amounts are generally recognised in profit or loss.
Any contingent consideration is measured at fair value at the date of acquisition. If an obligation to pay contingent consideration that meets the definition of a financial instrument is classified as equity, then it is not remeasured and settlement is accounted for within equity. Otherwise, other contingent consideration is remeasured at fair value at each reporting date and subsequent changes in the fair value of the contingent consideration are recognised in profit or loss.
(ii)
Subsidiaries
​
Subsidiaries are entities controlled by the Company. The Company ‘controls’ an entity when it is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. The financial statements of subsidiaries are included in the consolidated financial statements from the date on which control commences until the date on which control ceases.
(iii)
Transactions eliminated on consolidation
​
Intra-group balances and transactions, and any unrealised income and expenses (except for foreign currency transaction gains or losses) arising from intra-group transactions, are eliminated.
b.
Foreign currency
​
(i)
Foreign exchange transactions
​
Transactions in foreign currency, i.e. all transactions that are not carried out in the functional currency, are translated at the exchange rate on the dates of each transaction. Monetary assets and liabilities denominated in foreign currency were translated into functional currency at the foreign exchange rate at the reporting date. The gains and losses from the changes in the exchange rates on monetary assets and liabilities are recognized in the statement of profit or loss.
c.
Segment reporting
​
The segment reporting is based on information used by the Company’s CODM (Company’s Operating Decision Maker), represented by the chief executive officer.
The CODM considers the whole Group as a single operating and reportable segment, monitoring operations, making decisions on fund allocation and evaluating performance based on a single operating segment. The CODM reviews relevant financial data on a combined basis for all subsidiaries.
d.
Revenue
​
The Company generates revenue primarily from the cloud-based platform that enables organizations to integrate several communication capabilities (including short message service — SMS, WhatsApp, Voice, Webchat and Facebook Messenger) into their software applications. Revenues are generated by the number of interactions of the Company’s clients with their own customers, based on prices defined in the contracts.
 
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Net revenue by Geography
​ ​ ​
2020
​ ​
2019
​ ​
2018
​
Primary geographical markets ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Brazil
​ ​ ​ ​ 357,717 ​ ​ ​ ​ ​ 311,699 ​ ​ ​ ​ ​ 265,857 ​ ​
EUA
​ ​ ​ ​ 26,828 ​ ​ ​ ​ ​ 20,143 ​ ​ ​ ​ ​ 2,738 ​ ​
South Africa
​ ​ ​ ​ 4,454 ​ ​ ​ ​ ​ 8,070 ​ ​ ​ ​ ​ 5,058 ​ ​
Argentina
​ ​ ​ ​ 2,829 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​
Ireland
​ ​ ​ ​ 29 ​ ​ ​ ​ ​ 4,350 ​ ​ ​ ​ ​ 2,642 ​ ​
Netherland
​ ​ ​ ​ 2,269 ​ ​ ​ ​ ​ 5,117 ​ ​ ​ ​ ​ — ​ ​
Mexico
​ ​ ​ ​ 5,489 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​
Switzerland
​ ​ ​ ​ 18,024 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​
Others
​ ​ ​ ​ 12,062 ​ ​ ​ ​ ​ 4,656 ​ ​ ​ ​ ​ 85 ​ ​
Total
​ ​ ​ ​ 429,701 ​ ​ ​ ​ ​ 354,035 ​ ​ ​ ​ ​ 276,380 ​ ​
Performance obligations and revenue recognition policies
The following table provides information about the nature and timing of the satisfaction of performance obligations in contracts with customers, including significant payment terms, and the related revenue recognition policies.
Type of service
​ ​
Nature and timing of satisfaction of performance obligations, including significant payment terms
​ ​
Revenue recognition policies
​
Communication Platform
​ ​ The Company revenue is mainly derived from fees based on the usage-based services available on its communication platform. The use of these services is measured by the individual volume and revenues based on these volumes are recognized in the period of use. The Company also has revenue from subscription-based fees that are derived from certain “take or pay” contracts or with unlimited use of the platform functionalities. Revenue from subscription-based contracts is recognized by month. The Company provides services to customers under pay-as-you-go contracts and term-based contracts for a fixed or indefinite period. Small customers and customers who pay by credit card are billed in advance while large customers are monthly billed under the postpaid model. Collections are performed up to an average of thirty days after billings. Customers who pay on the prepaid model, draw down their balances as they use our products. ​ ​ Revenue is recognized upon the transfer of control of services to customers in an amount that reflects the consideration we expect to receive in exchange for those products or services. Revenue is recognized net of any taxes collected from customers, which are subsequently remitted to governmental authorities. Amounts that have been invoiced are recorded in accounts receivable and in revenue or customer advances depending on whether the revenue recognition criteria have been met. Company’s arrangements with customers do not provide for rights of return and the contracts do not provide customers with the right to take possession of the software supporting the applications. ​
 
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Type of service
​ ​
Nature and timing of satisfaction of performance obligations, including significant payment terms
​ ​
Revenue recognition policies
​
Carrier billing
​ ​ Carrier Billing is a business model in which there is a provider that makes its content available through the connections that the Company has with carriers (telephone companies), which provide the service to the final consumer. The provider has the responsibility for the content as well as establishing the price. The company acts as an agent in the process, receiving the amounts collected by the carriers and passing on to the providers their respective amounts. Therefore, net revenue is recorded by the fee charged to content providers for the service. ​ ​ The carrying billing business is characterized as an operation in which Company has contracts with mobile phone operations in Brazil and providers of informational content through digital platforms, in which final customers of the mobile phone companies can subscribe the content from providers and receive information in a regular basis in their cell phones. In this operation, Company performs the billings against mobile phone operators and transfers to the content providers, receiving a fee to perform such service. Revenue is recognized when content providers deliver the services to final customers. Zenvia recognizes revenue at the amount of the net fees to be received in these operations. ​
​
e.
Financial instruments
​
(i)
Recognition and initial measurement
​
Trade accounts receivable is initially recognized on the date that they were originated. All other financial assets and liabilities are initially recognized when the Company becomes a party to the instrument’s contractual provisions.
A financial asset (unless it is trade accounts receivable without a material financing component) or a financial liability is initially measured at fair value, plus, for an item not measured at Fair value through profit or loss (FVTPL), transaction costs which are directly attributable to its acquisition or issue. Trade accounts receivable without a significant financing component are initially measured at the price of the transaction.
(ii)
Subsequent classification and measurement
​
Upon initial recognition, a financial asset is classified as measured: at amortized cost or FVTPL.
Financial assets are not reclassified after initial recognition, unless the Company changes the business model for the management of financial assets, in which case all affected financial assets are reclassified on the first day of the reporting period subsequent to the change in the business model.
A financial asset is measured at amortized cost if it meets both conditions below and is not designated as measured at FVTPL:
•
is held within a business model whose purpose is to maintain financial assets to receive contractual cash flows; and
​
•
its contractual terms generate, on specific dates, cash flows only related to the payment of principal and interest on outstanding principal value.
​
The Company carries out an evaluation of the purpose of the business in which a financial asset is held in the portfolio, since this better reflects the way in which the business is managed and the information is provided to management.
 
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Financial assets held for trading or managed with a performance evaluated based on fair value are measured at fair value through profit or loss.
Financial assets — evaluation whether the contractual cash flows represent solely payments of principal and interest
For this purpose, “principal” is defined as the fair value of the financial asset at initial recognition. “Interest” is defined as a consideration for the amount of cash at the time and for the credit risk associated to the outstanding principal value during a certain period and for other risks and basic costs of loans, as well as for the profit margin.
The Company considers the contractual terms of the instruments to evaluate whether the contractual cash flows are only payments of principal and interest. It includes evaluating whether the financial asset contains a contractual term that could change the time or amount of the contractual cash flows so that it would not meet this condition. In making this evaluation, the Company considers the following:
•
contingent events that change the amount or timing of cash flows;
​
•
terms that may adjust the contractual rate, including variable rates;
​
•
the prepayment and the extension of the term; and
​
•
the terms that limit the Company’s access to cash flows of specific assets.
​
The prepayment is consistent with the principal and interest payment criterion if the prepayment amount mostly represents the unpaid principal and interest amounts on the outstanding principal amount — which may include an additional reasonable compensation due to the early termination of the contract. Furthermore, regarding a financial asset acquired for an amount lower or greater than the nominal value of the contract, the prepayment permission or requirement for an amount representing the nominal value of the contract plus contractual interest (which may also include reasonable additional compensation for early termination of the contract), accrued (but not paid), are treated as consistent with this criterion if the fair value of the prepayment is immaterial at initial recognition.
​
Financial assets at FVTPL
​ ​ These assets are subsequently measured at fair value. Net income, plus interest or dividend income, is recognized in profit or loss. ​
​
Financial assets at amortized cost
​ ​ These assets are subsequently measured at amortized cost using the effective interest rate method. Amortized cost is reduced for impairment losses. Interest income, foreign exchange gains and impairment losses are recognized in the income statement. Any gain or loss on derecognition is recognized in profit or loss. ​
​
f.
Impairment
​
Non-derivative financial assets
(i)
Financial instruments and contractual assets
​
The Company recognizes loss allowances for expected credit losses (ECL) on:
•
financial assets measured at amortized cost;
​
The Company measures loss allowance at an amount equal to credit loss expected for the lifetime of the receivable, except for the items described below, which are measured as credit loss expected for 12 months:
•
debt securities with low credit risk on balance sheet date; and
​
•
other debt securities and bank balances for which the credit risk has not significantly increased since the beginning of initial recognition.
​
Loss allowances for trade receivables is always measured at an amount equal to lifetime ECLs.
 
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When determining whether the credit risk of a financial asset has increased significantly since initial recognition and when estimating ECLs, the Company considers reasonable and supportable information that is relevant and available without undue cost or effort. This includes both quantitative and qualitative information and analysis, based on the Company’s historical experience and informed credit assessment, that includes forward-looking information.
The Company assumes that the credit risk in a financial asset increased significantly if it is more than 30 days past due.
The Company considers a financial asset to be in default when:
•
the debtor is unlikely to pay its credit obligations to the Company in full, without recourse by the Company to actions such as realizing security (if any is held); or
​
•
the financial asset is more than 180 days past due.
​
Lifetime ECLs are the ECLs that result from all possible default events over the expected life of a
financial instrument. 12-month ECLs are the portion of ECLs that result from default events that are possible within the 12 months after the reporting date (or a shorter period if the expected life of the instrument is less than 12 months).
The maximum period considered when estimating ECLs is the maximum contractual period over
which the Company is exposed to credit risk.
(ii)
Measurement of ECLs
​
ECLs are a probability-weighted estimate of credit losses. Credit losses are measured as the
present value of all cash shortfalls.
(iii)
Presentation of allowance for ECL in the statement of financial position
​
Loss allowances for financial assets measured at amortized cost are deducted from the gross carrying amount of the assets.
(iv)
Write-off
​
The gross carrying amount of a financial asset is written off when the Company has no reasonable expectations of recovering a financial asset in its entirety or a portion thereof. The Company expects no significant recovery from the amount written off. However, financial assets that are written off could still be subject to enforcement activities in order to comply with the Company´s procedures for recovery of amounts due.
Non-financial assets
At each reporting date, the Company reviews the carrying amounts of its non-financial assets (customer portfolio, platform, property and plant and equipment) to determine whether there is any indication of impairment. If any such indication exists, then the asset’s recoverable amount is estimated.
For impairment testing, assets are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets. Goodwill is allocated to cash-generating units for the purpose of impairment testing. The allocation is made to groups of cash-generating units that are expected to benefit from the business combination in which the goodwill arose. The groups of units are identified at the lowest level at which goodwill is monitored for internal management purposes, being one operating segment. The Company has one reportable segment as at December 31, 2020, 2019 and 2018.
Goodwill is tested for impairment annually as at December 31 and when circumstances indicate that the carrying value may be impaired. Impairment is determined for goodwill by assessing the recoverable
 
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amount of the segment to which the goodwill relates. When the recoverable amount is less than its carrying amount, an impairment loss is recognized. Impairment losses relating to goodwill cannot be reversed in future periods.
g.
Property, plant and equipment
​
(i)
Recognition and measurement
​
Property, plant and equipment items are stated at historical acquisition or construction cost, net of accumulated depreciation and impairment losses (if applicable).
The cost includes expenditures that are directly attributable to the acquisition of assets.
Gains and losses on disposal of a property, plant and equipment items are determined by comparing the proceeds from disposal with the book value of Property, plant and equipment and are recognized net within “Other income” in the profit or loss.
(ii)
Subsequent costs
​
The replacement cost of a component of property, plant and equipment is recognized in the book value of the item when it is probable that the future economic benefits embodied in the component will flow to the Company and its cost can be reliably measured. The book value of the component that is replaced is written off. Costs of normal maintenance on property, plant and equipment are recognized in profit or loss as incurred.
(iii)
Depreciation
​
Depreciation is recognized in profit or loss under the straight-line method based on the useful life of each component, since this method best reflects the standard of usage of the future economic benefits merged to the asset.
The depreciation methods, useful lives and residual values are reviewed at each reporting date and adjusted, if appropriate.
h.
Intangible assets
​
(i)
Initial recognition
​
Intangible assets acquired by the Company with defined useful lives are measured at cost, net of accumulated amortization and any accumulated impairment losses.
(ii)
Subsequent expenditures
​
Subsequent expenditures are capitalized only when they increase the future economic benefits embodied in the specific asset to which they relate. All other expenditures are recognized in profit or loss as incurred.
(iii)
Amortization
​
Amortization is calculated over the cost of intangible assets less their estimated residual values using the straight-line method over their estimated useful lives and is recognized in profit or loss. Goodwill is not amortized.
(iv)
Intangible assets — Research and development expenditures
​
The expenses with research activities are recognized as expense in the period in which they are incurred. The costs resulting from development expenditures (or of a development phase of an internal project) is recognized as an asset if, and only if, all the following conditions are met:
•
Technical feasibility to complete the intangible asset so it will be available for use or sale.
​
 
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•
The intention to complete the intangible asset and use it or sell it.
​
•
Ability to use or sell the intangible asset.
​
•
How the intangible asset will generate probable future economic benefits.
​
•
The availability of proper technical, financial and other resources to complete the development of the intangible asset and to use it or sell it.
​
•
Ability to measure reliably the expenditure attributable to the intangible asset during its development.
​
The initially recognized amount of intangible assets corresponds to the sum of the expenses incurred since the intangible asset started meeting the aforementioned recognition criteria.
The measurement is made based on employee time records allocated to these developments at the cost of such employees.
When no intangible asset can be recognized, the development expenses are be recognized in the profit or loss for the period, when incurred.
After the initial recognition, intangible assets are recorded at cost, less amortization and accumulated impairment losses.
(v)
Goodwill
​
Goodwill arising on an acquisition of a business is carried at cost as established at the date of acquisition of the business less accumulated impairment losses, if any.
i.
Income tax and social contribution
​
For the entities domiciled in Brazil, the current and deferred income and social contribution taxes are calculated based on the rates of 15% plus a surcharge of 10% on taxable income in excess of Brazilian Reais (BRL) 240 per annum for income tax and 9% on taxable income for social contribution on net income and consider the offsetting of tax loss carryforward and negative basis of social contribution limited to 30% of the taxable income.
Income taxes applicable to the subsidiary located in the United States are calculated at 21% of taxable income for the year. For the subsidiaries in Mexico and Argentina, the current income tax are calculated based on the rate of 30%.
Current and deferred taxes are recognized in profit or loss unless they are related to the business combination, or items directly recognized in shareholders’ equity.
(i)
Current tax
​
Current taxes are the taxes payable or receivable on the taxable income or loss for the year and any adjustments to taxes payable in relation to prior years. It is measured based on rates enacted or substantively enacted at the balance sheet date.
Among the existing tax incentives in Brazil, the Company uses the benefit derived from the Lei do Bem (Law No. 11196/05), aimed at companies that perform research and development (R&D) of technological innovations. This benefit provides tax savings by reducing the income and social contribution tax base from the equivalent to 60% to 80% of R&D expenditures.
(ii)
Deferred tax
​
Deferred taxes are recognized in relation to the temporary differences between the book values of assets and liabilities and the related amounts used for taxation purposes.
A deferred income tax and social contribution asset is recognized for unused tax losses, tax credits and deductible temporary differences, to the extent that it is probable that future taxable income will be available
 
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against which the unused tax losses and credits can be utilized. Deferred income tax and social contribution assets are reviewed at each reporting date and reduced when their realization is no longer probable.
Deferred taxes are measured at tax rates expected to be applied to temporary differences when they are reversed, based on rates enacted or substantively enacted up to the reporting date.
The measurement of deferred tax reflects the tax consequences that would follow the manner in which the Company expects to recover or settle the book value of its assets and liabilities.
Deferred income tax and social contribution assets are reviewed on the dates of financial statements and will be reduced when their realization is no longer probable.
j.
Provisions
​
A provision is recognized in the statement of financial position when the Company has a legal or constructive obligation as a result of a past event, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are recognized based on the best estimates of the risk involved.
The Company records provisions to cover future disbursements that might arise from tax, labor and civil lawsuits in progress. Provisions are recorded based on an analysis of the lawsuits in progress and of the prospects of an unfavorable result implying future disbursement.
Contingent assets are not recognized until final and unappealable decisions in favor of the Company and when it is virtually certain that the asset will be realized. Taxes whose enforceability is being challenged in the judicial sphere are recorded taking into consideration the concept of “legal obligation”. Judicial deposits performed as guarantees for lawsuits in progress are recorded under “Judicial deposits” ​(see note 16).
Provisions are reviewed on the dates of the financial statements and adjusted to reflect the current best estimate. If it is no longer probable that a cash outflow is required to settle the obligation, the provision is reversed.
k.
Capital
​
Incremental costs directly attributable to issuance of new shares or options are presented in shareholders’ equity as a deduction of funds obtained, net of taxes.
The capital is composed of 4,421,399 common shares. Capital increases are allowed by resolution of the Board of Directors independently of amendment to its bylaws up to the limit of 33,575,208 new common shares with no value.
l.
Financial income and costs
​
Finance income include interest on late collections, interest earning bank deposits income and foreign exchange gains on the changes in assets and liabilities indexed in foreign currency. Interest income is recognized in profit or loss under the effective interest method.
Finance costs include expenses with interest on loans and exchange-rate charges on assets and liabilities indexed at a foreign currency. Borrowing costs which are not directly attributable to the acquisition, construction, or production of a qualifying asset are accounted for in profit or loss using the effective interest rate method.
m.
Distribution of dividends
​
Distribution of dividends to the Company’s shareholders is recognized as a liability in the financial statements at the end of each year, based on the Company’s by-laws. Any amount above the mandatory minimum is provisioned only on the date of its approval by the shareholders, during the Shareholders Meeting.
 
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n.
Employee benefits
​
Profit sharing and bonus — The employees’ profit sharing and bonus and the variable compensation of the executives are linked to the attainment of operating and financial goals.
The Company recognizes liabilities and related expenses, which are allocated to costs of services and administrative expenses, when the goals are probable to be met.
5
New standards, amendments and interpretations of standards
​
5.1
New technical pronouncements adopted in the financial statements for the year ended December 31, 2019 — IFRS 16 — Lease
​
Applicable as from January 1, 2019, IFRS 16 establishes the principles for the recognition, measurement, presentation and disclosure of leases and requires lessees to account for all leases under a single model in the statement of financial position, similar to the accounting for financial leases under IAS 17. The standard includes some practical expedients:
•
Leasing of “low value” assets;
​
•
Short-term leases (that is, with a lease term of 12 months or less);
​
•
Leases composed of variable values;
​
•
Leases in which the Company does not have control over the asset; and
​
Leases with indefinite term.
As of the beginning of a lease contract, the lessee recognizes a liability for lease payments (i.e., a lease liability) and an asset that represents the right to use the underlying asset during the lease term (i.e., the right of use asset). Lessees are required to recognize separately the interest expense on the lease liability and the depreciation expense on the right-of-use asset.Lessees are also required to reassess the lease liability in the event of certain events (for example, a change in the lease term, a change in future lease payments as a result of a change in an index or rate used to determine such payments). In general, the lessee will recognize the remeasurement of the lease liability as an adjustment to the right-of-use asset.
IFRS 16 also requires lessees and lessors to make more comprehensive disclosures than those provided for in IAS 17.
Reconciliation of the consolidated balance sheet for year ended December 31, 2018, the opening balance on January 1, 2019, and in comparison, the balance on December 31, 2019 affected by the new standard:
 
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​ ​ ​
Financial
Statements
disclosed on
12/31/2018
​ ​
Impact
of the
adoption of
IFRS 16
​ ​
Financial
statements -
01/01/2019
​ ​
Financial
statements on
12/31/2019
​
Assets ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Current assets
​ ​ ​ ​ 104,281 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 104,281 ​ ​ ​ ​ ​ 79,089 ​ ​
Non-current assets ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Property, plant and equipment
​ ​ ​ ​ 9,198 ​ ​ ​ ​ ​ 8,306 ​ ​ ​ ​ ​ 17,504 ​ ​ ​ ​ ​ 17,496 ​ ​
Other non-current assets
​ ​ ​ ​ 158,885 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 158,885 ​ ​ ​ ​ ​ 152,398 ​ ​
​ ​ ​ ​ ​ 168,083 ​ ​ ​ ​ ​ 8,306 ​ ​ ​ ​ ​ 176,389 ​ ​ ​ ​ ​ 169,894 ​ ​
Total assets
​ ​ ​ ​ 272,364 ​ ​ ​ ​ ​ 8,306 ​ ​ ​ ​ ​ 280,670 ​ ​ ​ ​ ​ 248,983 ​ ​
Liabilities ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Current liabilities ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Lease liabilities
​ ​ ​ ​ — ​ ​ ​ ​ ​ 3,273 ​ ​ ​ ​ ​ 3,273 ​ ​ ​ ​ ​ 2,687 ​ ​
Other current liabilities
​ ​ ​ ​ 73,717 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 73,717 ​ ​ ​ ​ ​ 72,090 ​ ​
​ ​ ​ ​ ​ 73,717 ​ ​ ​ ​ ​ 3,273 ​ ​ ​ ​ ​ 76,990 ​ ​ ​ ​ ​ 74,777 ​ ​
Non-current ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Lease liabilities
​ ​ ​ ​ — ​ ​ ​ ​ ​ 5,033 ​ ​ ​ ​ ​ 5,033 ​ ​ ​ ​ ​ 4,604 ​ ​
Other non-current liabilities
​ ​ ​ ​ 50,153 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 50,153 ​ ​ ​ ​ ​ 70,265 ​ ​
​ ​ ​ ​ ​ 50,153 ​ ​ ​ ​ ​ 5,033 ​ ​ ​ ​ ​ 55,186 ​ ​ ​ ​ ​ 74,869 ​ ​
Shareholders’ equity
​ ​ ​ ​ 148,494 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 148,494 ​ ​ ​ ​ ​ 99,337 ​ ​
Total equity and liabilities
​ ​ ​ ​ 272,364 ​ ​ ​ ​ ​ 8,306 ​ ​ ​ ​ ​ 280,670 ​ ​ ​ ​ ​ 248,983 ​ ​
On transition to IFRS 16, the Company recognized additional right-of-use assets and additional lease liabilities. The impact on transition is summarized below
In thousands of reais
​ ​
01/01/2019
​
Right-of-use assets — property, plant and equipment
​ ​ ​ ​ 8,306 ​ ​
Lease liabilities
​ ​ ​ ​ 8,306 ​ ​
When measuring lease liabilities for leases that were classified as operating leases, the Company discounted lease payments using its incremental borrowing rate at January 1, 2019. The weighted average rate applied is 10.13%.
​ ​ ​
01/01/2019
​
Operating lease commitments at December 31, 2018 as disclosed under IAS 17 in the Company’s consolidated financial statements
​ ​ ​ ​ 10,957 ​ ​
Discounted using the incremental borrowing rate at January 1, 2019
​ ​ ​ ​ 8,306 ​ ​
Finance lease liabilities recognized as at December 31, 2018 (note 11)
​ ​ ​ ​ 1,708 ​ ​
Lease liabilities recognized at January 1, 2019
​ ​ ​ ​ 10,014 ​ ​
Right-of-use assets
The Company recognizes right-of-use assets on the inception of the lease (i.e., the date on which the underlying asset is available for use). Right-of-use assets are measured at cost, minus any accumulated depreciation and impairment losses, and adjusted by any further remeasuring of the lease liabilities. The cost of right-of-use assets includes recognized lease liabilities, initial direct costs incurred, and lease payments made before or on the start date, minus lease incentives received. Unless it is reasonably certain that the Company will take ownership of the leased asset at the end of the lease term, recognized right-of-use assets are depreciated on a straight-line basis during the shortest period of their estimated useful life and the lease term.
 
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5.1
New pronouncements effective for 2020:
​
The following new standards are effective for annual periods beginning on or after January 1, 2020. The following new and amended standards had no significant impact on the Company’s consolidated financial statements:
•
COVID-19-Related Rent Concessions (Amendment to IFRS 16);
​
•
Amendments to references to Conceptual Framework in IFRS Standards;
​
•
Definition of material (Amendments to IAS 1 and IAS 8);
​
•
Definition of a business (Amendment to IFRS 3).
​
5.2
New pronouncements not yet in force:
​
A number of new standards are effective for annual periods beginning on or after January 1, 2021 and earlier application is permitted; however, the Company has not early adopted the new or amended standards in preparing these consolidated financial statements.
The following new and amended standards are not expected to have a significant impact on the Company’s consolidated financial statements:
•
Property, Plant and Equipment: Proceeds before Intended Use (Amendments to IAS 16);
​
•
Reference to Conceptual Framework (Amendments to IFRS 3);
​
•
Classification of Liabilities as Current or Non-current (Amendments to IAS 1).
​
6
Cash and cash equivalents and interest earning bank deposits
​
​ ​ ​
2020
​ ​
2019
​
Cash and banks
​ ​ ​ ​ 13,099 ​ ​ ​ ​ ​ 11,834 ​ ​
Short-term investments maturing in up to 90 days(a)
​ ​ ​ ​ 46,880 ​ ​ ​ ​ ​ 508 ​ ​
Short-term investments maturing in over 90 days(b)
​ ​ ​ ​ 2,227 ​ ​ ​ ​ ​ 3,292 ​ ​
​ ​ ​ ​ ​ 62,206 ​ ​ ​ ​ ​ 15,634 ​ ​
Cash and cash equivalents
​ ​ ​ ​ 59,979 ​ ​ ​ ​ ​ 12,342 ​ ​
Interest earnings bank deposits
​ ​ ​ ​ 2,227 ​ ​ ​ ​ ​ 3,292 ​ ​
​
(a)
Highly liquid short-term interest earning bank deposits are readily convertible into a known amount of cash and subject to an insignificant risk of change of value. They are substantially represented by interest earning bank deposits at rates varying from 96.5% to 99.8% of the CDI rate (Interbank Interest Rate). They are stated at the investment value, plus interests accrued up to December 31, 2020, and 2019..
​
(b)
Financial funds invested at the rate of 99% of CDI, of R$ 2,227 as of December 31, 2020 (R$ 3,292 as of December 31, 2019 and R$ 4,714 as of December 31, 2018), held as guarantee of the working capital borrowing contract entered into in May 2018.
​
7
Trade and other receivables
​
​ ​ ​
2020
​ ​
2019
​
Domestic
​ ​ ​ ​ 81,031 ​ ​ ​ ​ ​ 58,910 ​ ​
Abroad
​ ​ ​ ​ 11,065 ​ ​ ​ ​ ​ 8,314 ​ ​
​ ​ ​ ​ ​ 92,096 ​ ​ ​ ​ ​ 67,224 ​ ​
Allowance for expected credit losses
​ ​ ​ ​ (6,087) ​ ​ ​ ​ ​ (5,088) ​ ​
​ ​ ​ ​ ​ 86,009 ​ ​ ​ ​ ​ 62,136 ​ ​
 
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Changes in allowance for expected credit losses are as follows:
​
Balance at January 1, 2019
​ ​ ​ ​ (5,014) ​ ​
​
Additions
​ ​ ​ ​ (6,940) ​ ​
​
Reversal
​ ​ ​ ​ 3,207 ​ ​
​
Write-offs
​ ​ ​ ​ 3,659 ​ ​
​
Balance at December 31, 2019
​ ​ ​ ​ (5,088) ​ ​
​
Additions
​ ​ ​ ​ (8,756) ​ ​
​
Reversal
​ ​ ​ ​ 4,551 ​ ​
​
Write-offs
​ ​ ​ ​ 3,206 ​ ​
​
Balance at December 31, 2020
​ ​ ​ ​ (6,087) ​ ​
The Company performs write-offs of trade accounts receivable against the allowance for expected credit losses past due over 180 days as this is the period for which management believes there is no reasonable expectation that accounts receivable will be recovered.
The breakdown of trade accounts receivable by maturity is as follows:
​ ​ ​
2020
​ ​
2019
​
Unbilled services(a)
​ ​ ​ ​ 44,324 ​ ​ ​ ​ ​ 31,898 ​ ​
falling due
​ ​ ​ ​ 31,087 ​ ​ ​ ​ ​ 18,996 ​ ​
Overdue (days): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
1-30
​ ​ ​ ​ 7,774 ​ ​ ​ ​ ​ 7,442 ​ ​
31-60
​ ​ ​ ​ 1,043 ​ ​ ​ ​ ​ 3,772 ​ ​
61-90
​ ​ ​ ​ 853 ​ ​ ​ ​ ​ 2,010 ​ ​
91-120
​ ​ ​ ​ 757 ​ ​ ​ ​ ​ 285 ​ ​
121-150
​ ​ ​ ​ 735 ​ ​ ​ ​ ​ 1,059 ​ ​
>150
​ ​ ​ ​ 5,523 ​ ​ ​ ​ ​ 1,762 ​ ​
​ ​ ​ ​ ​ 92,096 ​ ​ ​ ​ ​ 67,224 ​ ​
​
(a)
Revenue recognition in the mobile, fixed and internet communication platform services industry involves complex billing systems, with the processing of large volumes of data and with price variations from different plans. In addition, in this context, the Company’s revenues are recognized on a monthly basis, with the billed portion and the non-billed portion, arising from services provided between the billing date and the end of each month, being identified, processed and recognized within the month in which the service was provided. Thus, unbilled services recorded in the accounts each month are calculated based on the proportion of services performed up to the date of presentation of the financial information.
​
8
Current tax assets
​
​ ​ ​
2020
​ ​
2019
​
Corporate income tax (IRPJ)(a)
​ ​ ​ ​ 3,570 ​ ​ ​ ​ ​ 2,039 ​ ​
Social contribution (CSLL)(a)
​ ​ ​ ​ 1,042 ​ ​ ​ ​ ​ 528 ​ ​
Services tax (ISSQN)
​ ​ ​ ​ 1 ​ ​ ​ ​ ​ 1 ​ ​
Federal VAT (PIS/COFINS)
​ ​ ​ ​ 70 ​ ​ ​ ​ ​ 71 ​ ​
Others
​ ​ ​ ​ 254 ​ ​ ​ ​ ​ 64 ​ ​
​ ​ ​ ​ ​ 4,937 ​ ​ ​ ​ ​ 2,703 ​ ​
 
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​
(a)
Income tax and social contribution — the balance is composed by amounts withheld and advances of corporate income tax and social contribution carried out in the years ended December 31, 2016, 2017 and 2018.
​
9
Property, plant and equipment
​
9.1
Breakdown of balances
​
​ ​ ​
Average annual
depreciation rates (%)
​ ​
Cost
​ ​
Accumulated
depreciation
​ ​
Net balance
in 2020
​
Furniture and fixtures
​ ​
10
​ ​ ​ ​ 1,374 ​ ​ ​ ​ ​ (604) ​ ​ ​ ​ ​ 770 ​ ​
Leasehold improvements
​ ​
10
​ ​ ​ ​ 1,674 ​ ​ ​ ​ ​ (847) ​ ​ ​ ​ ​ 829 ​ ​
Data processing equipment
​ ​
20
​ ​ ​ ​ 14,277 ​ ​ ​ ​ ​ (6,229) ​ ​ ​ ​ ​ 8,047 ​ ​
Right of use – leases(a)
​ ​
20 to 30
​ ​ ​ ​ 4,967 ​ ​ ​ ​ ​ (2,347) ​ ​ ​ ​ ​ 2,620 ​ ​
Machinery and equipment
​ ​
10
​ ​ ​ ​ 515 ​ ​ ​ ​ ​ (411) ​ ​ ​ ​ ​ 104 ​ ​
Other fixed assets
​ ​
10 to 20
​ ​ ​ ​ 309 ​ ​ ​ ​ ​ (183) ​ ​ ​ ​ ​ 125 ​ ​
​ ​ ​ ​ ​ ​ ​ ​ 23,116 ​ ​ ​ ​ ​ (10,621) ​ ​ ​ ​ ​ 12,495 ​ ​
​ ​ ​
Average annual
depreciation rates (%)
​ ​
Cost
​ ​
Accumulated
depreciation
​ ​
Net balance
in 2019
​
Furniture and fixtures
​ ​
10
​ ​ ​ ​ 1,351 ​ ​ ​ ​ ​ (470) ​ ​ ​ ​ ​ 881 ​ ​
Leasehold improvements
​ ​
10
​ ​ ​ ​ 4,171 ​ ​ ​ ​ ​ (1,220) ​ ​ ​ ​ ​ 2,951 ​ ​
Data processing equipment
​ ​
20
​ ​ ​ ​ 12,779 ​ ​ ​ ​ ​ (6,395) ​ ​ ​ ​ ​ 6,384 ​ ​
Right of use – leases(a)
​ ​
20 to 30
​ ​ ​ ​ 9,410 ​ ​ ​ ​ ​ (2,449) ​ ​ ​ ​ ​ 6,961 ​ ​
Machinery and equipment
​ ​
10
​ ​ ​ ​ 517 ​ ​ ​ ​ ​ (335) ​ ​ ​ ​ ​ 182 ​ ​
Other fixed assets
​ ​
10 to 20
​ ​ ​ ​ 298 ​ ​ ​ ​ ​ (161) ​ ​ ​ ​ ​ 137 ​ ​
​ ​ ​ ​ ​ ​ ​ ​ 28,526 ​ ​ ​ ​ ​ (11,030) ​ ​ ​ ​ ​ 17,496 ​ ​
​
9.2
Changes in property, plant and equipment
​
​ ​ ​
Average
annual
depreciation
rates %
​ ​
2019
​ ​
Additions
​ ​
Additions
due to
acquisitions
​ ​
Disposals
​ ​
Hyperinflation
adjustment
​ ​
Exchange
variations
​ ​
2020
​
Furniture and fixtures
​ ​ ​ ​ ​ ​ ​ 1,351 ​ ​ ​ ​ ​ 6 ​ ​ ​ ​ ​ 24 ​ ​ ​ ​ ​ (7) ​ ​ ​ ​ ​ 5 ​ ​ ​ ​ ​ (5) ​ ​ ​ ​ ​ 1,374 ​ ​
Leasehold improvements(a)
​ ​ ​ ​ ​ ​ ​ 4,171 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 36 ​ ​ ​ ​ ​ (2,534) ​ ​ ​ ​ ​ 8 ​ ​ ​ ​ ​ (7) ​ ​ ​ ​ ​ 1,674 ​ ​
Data processing equipment
​ ​ ​ ​ ​ ​ ​ 12,779 ​ ​ ​ ​ ​ 3,919 ​ ​ ​ ​ ​ 158 ​ ​ ​ ​ ​ (2,589) ​ ​ ​ ​ ​ 13 ​ ​ ​ ​ ​ (3) ​ ​ ​ ​ ​ 14,277 ​ ​
Right of use – leases
​ ​ ​ ​ ​ ​ ​ 9,410 ​ ​ ​ ​ ​ 811 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ (5,254) ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 4,967 ​ ​
Machinery and equipment
​ ​ ​ ​ ​ ​ ​ 517 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ (2) ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 515 ​ ​
Other fixed assets
​ ​ ​ ​ ​ ​ ​ 298 ​ ​ ​ ​ ​ 11 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 309 ​ ​
Cost ​ ​ ​ ​ ​ ​ ​ 28,526 ​ ​ ​ ​ ​ 4,747 ​ ​ ​ ​ ​ 218 ​ ​ ​ ​ ​ (10,386) ​ ​ ​ ​ ​ 26 ​ ​ ​ ​ ​ (15) ​ ​ ​ ​ ​ 23,116 ​ ​
Furniture and fixtures
​ ​
10
​ ​ ​ ​ (470) ​ ​ ​ ​ ​ (145) ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 12 ​ ​ ​ ​ ​ (3) ​ ​ ​ ​ ​ 2 ​ ​ ​ ​ ​ (604) ​ ​
Leasehold improvements
​ ​
10
​ ​ ​ ​ (1,220) ​ ​ ​ ​ ​ (397) ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 773 ​ ​ ​ ​ ​ (5) ​ ​ ​ ​ ​ 2 ​ ​ ​ ​ ​ (847) ​ ​
Data processing equipment
​ ​
20
​ ​ ​ ​ (6,395) ​ ​ ​ ​ ​ (2,412) ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 2,585 ​ ​ ​ ​ ​ (19) ​ ​ ​ ​ ​ 12 ​ ​ ​ ​ ​ (6,229) ​ ​
Right of use – leases(a)
​ ​
20 to 30
​ ​ ​ ​ (2,449) ​ ​ ​ ​ ​ (2,969) ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 3,071 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ (2,347) ​ ​
Machinery and equipment
​ ​
10
​ ​ ​ ​ (335) ​ ​ ​ ​ ​ (82) ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 6 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ (411) ​ ​
Other fixed assets
​ ​
10 to 20
​ ​ ​ ​ (161) ​ ​ ​ ​ ​ (24) ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 2 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ (183) ​ ​
(-) Accumulated depreciation
​ ​ ​ ​ ​ ​ ​ (11,030) ​ ​ ​ ​ ​ (6,029) ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 6,449 ​ ​ ​ ​ ​ (27) ​ ​ ​ ​ ​ 16 ​ ​ ​ ​ ​ (10,621) ​ ​
Total ​ ​ ​ ​ ​ ​ ​ 17,496 ​ ​ ​ ​ ​ (1,282) ​ ​ ​ ​ ​ 218 ​ ​ ​ ​ ​ (3,937) ​ ​ ​ ​ ​ (1) ​ ​ ​ ​ ​ 1 ​ ​ ​ ​ ​ 12,495 ​ ​
 
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​ ​ ​
Average
annual
depreciation
rates %
​ ​
2018
​ ​
Additions
​ ​
IFRS 16
adoption
​ ​
Additions
due to
acquisitions
​ ​
Disposals
​ ​
2019
​
Furniture and fixtures
​ ​ ​ ​ ​ ​ ​ 1,339 ​ ​ ​ ​ ​ 20 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 5 ​ ​ ​ ​ ​ (13) ​ ​ ​ ​ ​ 1,351 ​ ​
Leasehold improvements
​ ​ ​ ​ ​ ​ ​ 4,084 ​ ​ ​ ​ ​ 87 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 4,171 ​ ​
Data processing equipment
​ ​ ​ ​ ​ ​ ​ 9,589 ​ ​ ​ ​ ​ 3,655 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 6 ​ ​ ​ ​ ​ (471) ​ ​ ​ ​ ​ 12,779 ​ ​
Right of use – leases
​ ​ ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 1,245 ​ ​ ​ ​ ​ 8,306 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ (141) ​ ​ ​ ​ ​ 9,410 ​ ​
Machinery and equipment
​ ​ ​ ​ ​ ​ ​ 447 ​ ​ ​ ​ ​ 76 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 11 ​ ​ ​ ​ ​ (17) ​ ​ ​ ​ ​ 517 ​ ​
Other fixed assets
​ ​ ​ ​ ​ ​ ​ 274 ​ ​ ​ ​ ​ 25 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 2 ​ ​ ​ ​ ​ (3) ​ ​ ​ ​ ​ 298 ​ ​
Cost ​ ​ ​ ​ ​ ​ ​ 15,733 ​ ​ ​ ​ ​ 5,108 ​ ​ ​ ​ ​ 8,306 ​ ​ ​ ​ ​ 24 ​ ​ ​ ​ ​ (645) ​ ​ ​ ​ ​ 28,526 ​ ​
Furniture and fixtures
​ ​
10
​ ​ ​ ​ (339) ​ ​ ​ ​ ​ (132) ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 1 ​ ​ ​ ​ ​ (470) ​ ​
Leasehold improvements
​ ​
10
​ ​ ​ ​ (806) ​ ​ ​ ​ ​ (414) ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ (1,220) ​ ​
Data processing equipment
​ ​
20
​ ​ ​ ​ (4,998) ​ ​ ​ ​ ​ (1,832) ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 435 ​ ​ ​ ​ ​ (6,395) ​ ​
Right of use – leases
​ ​
20 to 30
​ ​ ​ ​ — ​ ​ ​ ​ ​ (2,590) ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 141 ​ ​ ​ ​ ​ (2,449) ​ ​
Machinery and equipment
​ ​
10
​ ​ ​ ​ (263) ​ ​ ​ ​ ​ (85) ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 13 ​ ​ ​ ​ ​ (335) ​ ​
Other fixed assets
​ ​
10 to 20
​ ​ ​ ​ (129) ​ ​ ​ ​ ​ (32) ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ (161) ​ ​
(-) Accumulated depreciation
​ ​ ​ ​ ​ ​ ​ (6,535) ​ ​ ​ ​ ​ (5,085) ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 590 ​ ​ ​ ​ ​ (11,030) ​ ​
Total ​ ​ ​ ​ ​ ​ ​ 9,198 ​ ​ ​ ​ ​ 23 ​ ​ ​ ​ ​ 8,306 ​ ​ ​ ​ ​ 24 ​ ​ ​ ​ ​ (55) ​ ​ ​ ​ ​ 17,496 ​ ​
​
(a)
In 2020, the Company terminated the lease contract related to the Company’s offices in Porto Alegre, Brazil. As a result, relevant assets represented by leasehold improvements in the amount of R$ 1,758 and the right of use were written off. On December 31, 2020, the Company recognized a contractual penalty provision in the amount of R$ 1,100, which will be paid in 10 installments in 2021.
​
10
Intangible assets and goodwill
​
10.1
Breakdown of balances
​
​ ​ ​
Average annual
amortization rates
%
​ ​
Cost
​ ​
Amortization
​ ​
Net balance
in 2020
​
Intangible assets under development
​ ​
—
​ ​ ​ ​ 8,433 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 8,433 ​ ​
Software license
​ ​
20 to 50
​ ​ ​ ​ 3,584 ​ ​ ​ ​ ​ (2,172) ​ ​ ​ ​ ​ 1,412 ​ ​
Database
​ ​
10
​ ​ ​ ​ 800 ​ ​ ​ ​ ​ (387) ​ ​ ​ ​ ​ 413 ​ ​
Goodwill
​ ​
—
​ ​ ​ ​ 163,394 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 163,394 ​ ​
Customer portfolio
​ ​
10
​ ​ ​ ​ 112,929 ​ ​ ​ ​ ​ (67,524) ​ ​ ​ ​ ​ 45,405 ​ ​
Platform(b) ​ ​
20
​ ​ ​ ​ 75,065 ​ ​ ​ ​ ​ (12,647) ​ ​ ​ ​ ​ 62,418 ​ ​
​ ​ ​ ​ ​ ​ ​ ​ 364,205 ​ ​ ​ ​ ​ (82,730) ​ ​ ​ ​ ​ 281,475 ​ ​
​ ​ ​
Average annual
amortization rates
%
​ ​
Cost
​ ​
Amortization
​ ​
Net balance
in 2019
​
Intangible assets under development
​ ​
—
​ ​ ​ ​ 1,095 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 1,095 ​ ​
Software license
​ ​
20 to 50
​ ​ ​ ​ 2,816 ​ ​ ​ ​ ​ (1,685) ​ ​ ​ ​ ​ 1,131 ​ ​
Database
​ ​
10
​ ​ ​ ​ 800 ​ ​ ​ ​ ​ (307) ​ ​ ​ ​ ​ 493 ​ ​
Goodwill
​ ​
—
​ ​ ​ ​ 78,778 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 78,778 ​ ​
Customer portfolio
​ ​
10
​ ​ ​ ​ 110,954 ​ ​ ​ ​ ​ (56,330) ​ ​ ​ ​ ​ 54,624 ​ ​
Platform
​ ​
20
​ ​ ​ ​ 16,144 ​ ​ ​ ​ ​ (3,159) ​ ​ ​ ​ ​ 12,985 ​ ​
​ ​ ​ ​ ​ ​ ​ ​ 210,587 ​ ​ ​ ​ ​ (61,481) ​ ​ ​ ​ ​ 149,106 ​ ​
 
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10.2
Changes in intangible assets
​
​ ​ ​
Average annual
amortization rates %
​ ​
2019
​ ​
Additions
​ ​
Additions
due to
acquisitions
​ ​
Disposals
​ ​
2020
​
Intangible asset in progress(a)
​ ​ ​ ​ ​ ​ ​ 1,095 ​ ​ ​ ​ ​ 7,394 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ (56) ​ ​ ​ ​ ​ 8,433 ​ ​
Software license
​ ​ ​ ​ ​ ​ ​ 2,816 ​ ​ ​ ​ ​ 771 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ (3) ​ ​ ​ ​ ​ 3,584 ​ ​
Database
​ ​ ​ ​ ​ ​ ​ 800 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 800 ​ ​
Goodwill
​ ​ ​ ​ ​ ​ ​ 78,778 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 84,616 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 163,394 ​ ​
Customer portfolio
​ ​ ​ ​ ​ ​ ​ 110,954 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 1,975 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 112,929 ​ ​
Platform(b) ​ ​ ​ ​ ​ ​ ​ 16,144 ​ ​ ​ ​ ​ 4,400 ​ ​ ​ ​ ​ 54,521 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 75,065 ​ ​
Cost ​ ​ ​ ​ ​ ​ ​ 210,587 ​ ​ ​ ​ ​ 12,565 ​ ​ ​ ​ ​ 141,112 ​ ​ ​ ​ ​ (59) ​ ​ ​ ​ ​ 364,205 ​ ​
Software license
​ ​
20 – 50
​ ​ ​ ​ (1,685) ​ ​ ​ ​ ​ (496) ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 9 ​ ​ ​ ​ ​ (2,172) ​ ​
Database
​ ​
10
​ ​ ​ ​ (307) ​ ​ ​ ​ ​ (80) ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ (387) ​ ​
Customer portfolio
​ ​
10
​ ​ ​ ​ (56,330) ​ ​ ​ ​ ​ (11,194) ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ (67,524) ​ ​
Platform(b) ​ ​
20
​ ​ ​ ​ (3,159) ​ ​ ​ ​ ​ (9,488) ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ (12,647) ​ ​
(-) Accumulated amortizations
​ ​ ​ ​ ​ ​ ​ (61,481) ​ ​ ​ ​ ​ (21,258) ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 9 ​ ​ ​ ​ ​ (82,730) ​ ​
Total ​ ​ ​ ​ ​ ​ ​ 149,106 ​ ​ ​ ​ ​ (8,693) ​ ​ ​ ​ ​ 141,112 ​ ​ ​ ​ ​ (50) ​ ​ ​ ​ ​ 281,475 ​ ​
​ ​ ​
Average annual
amortization rates %
​ ​
2018
​ ​
Additions
​ ​
Transfers
​ ​
Additions
due to
acquisitions
​ ​
Write-offs
​ ​
2019
​
Intangible asset in progress(a)
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 1,531 ​ ​ ​ ​ ​ 3,671 ​ ​ ​ ​ ​ (4,107) ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 1,095 ​ ​
Trademarks and patents
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 133 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ (133) ​ ​ ​ ​ ​ — ​ ​
Software license
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2,149 ​ ​ ​ ​ ​ 708 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ (41) ​ ​ ​ ​ ​ 2,816 ​ ​
Database
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 800 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 800 ​ ​
Goodwill
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 78,778 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 78,778 ​ ​
Customer portfolio
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 110,436 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 518 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 110,954 ​ ​
Platform
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 8,118 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 4,107 ​ ​ ​ ​ ​ 3,919 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 16,144 ​ ​
Cost ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 201,945 ​ ​ ​ ​ ​ 4,379 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 4,437 ​ ​ ​ ​ ​ (174) ​ ​ ​ ​ ​ 210,587 ​ ​
Software license
​ ​ ​ ​ 20 – 50 ​ ​ ​ ​ ​ (1,249) ​ ​ ​ ​ ​ (440) ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 4 ​ ​ ​ ​ ​ (1,685) ​ ​
Database
​ ​ ​ ​ 10 ​ ​ ​ ​ ​ (227) ​ ​ ​ ​ ​ (80) ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ (307) ​ ​
Customer portfolio
​ ​ ​ ​ 10 ​ ​ ​ ​ ​ (45,244) ​ ​ ​ ​ ​ (11,086) ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ (56,330) ​ ​
Platform
​ ​ ​ ​ 20 ​ ​ ​ ​ ​ (1,054) ​ ​ ​ ​ ​ (2,105) ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ (3,159) ​ ​
(-) Accumulated amortizations
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (47,774) ​ ​ ​ ​ ​ (13,711) ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 4 ​ ​ ​ ​ ​ (61,481) ​ ​
Total ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 154,171 ​ ​ ​ ​ ​ (9,332) ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 4,437 ​ ​ ​ ​ ​ (170) ​ ​ ​ ​ ​ 149,106 ​ ​
​
(a)
Since 2018, the Company is developing additional functionalities in its chatting platform that allows to establish the communication through chatbots. The Company continues to develop new components and functionalities recorded as intangible assets in progress. The developments are considered finished when they are available to be sold or incorporated into tools already available for use by customers.
​
(b)
On February 1, 2020, a Private Instrument of Purchase and Sale of Assets and other Covenants was signed between the Company and Omnize Software Ltda., referring to the transfer of software and intellectual property related to the Omnize customer service platform. Zenvia paid R$ 4,400 in cash on the acquisition date of the intangible asset. The asset acquisition of Omnize’s customer service platform provided the technological basis for Zenvia to incorporate chat functionality into its platform.
​
 
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The amortization of intangibles includes the amount of R$ 15,510 for the year ended December 31, 2020 (R$ 11,740 for 2019 and R$ 11,044 for 2018) related to amortization of intangible assets acquired in business combinations, of which R$ 7,042 (R$ 653 for 2019 and R$ 0 for 2018) was recorded in costs of services and R$ 8,468 (R$ 11,087 for 2019 and R$ 11,044 for 2018) in administrative expenses.
Impairment
The Company performed impairment tests for goodwill as of December 31, 2020, as follows:
Significant unobservable inputs
​ ​
Relationship between significant unobservable inputs and measurement of the present value of cash flows
​
•
Annual forecast revenue growth rate;
​
•
Forecast of the growth rate of variable input costs;
​
•
Risk-adjusted discount rate.
​
​ ​
The present value of cash flows could increase (decrease) if:
•
the annual growth rate of revenue was higher (lower);
​
•
the cost growth rate was (higher) lower;
​
•
the risk-adjusted discount rate was (higher) lower.
​
​
The recoverable amount is determined by calculating the present value of cash flows based on the Company’s economic / financial projections for the next 5 years, and a terminal growth rate thereafter. Any kind of reasonably possible change in the key assumptions on which the recoverable amount is based would not cause the carrying amount to exceed the recoverable amount.      
​ ​ ​ ​ ​ ​ 2020 ​ ​ ​ ​ ​ 2019 ​ ​ ​ ​ ​ 2018 ​ ​
​
Weighted average annual revenue growth
​ ​ ​ ​ 36.38% ​ ​ ​ ​ ​ 16.48% ​ ​ ​ ​ ​ 20.74% ​ ​
​
Weighted average annual growth of variable cost
​ ​ ​ ​ 26.93% ​ ​ ​ ​ ​ 18.74% ​ ​ ​ ​ ​ 20.08% ​ ​
​
Weighted average cost of capital (WACC)
​ ​ ​ ​ 16.40% ​ ​ ​ ​ ​ 15.90% ​ ​ ​ ​ ​ 19.00% ​ ​
​
Growth in terminal value
​ ​ ​ ​ 0% ​ ​ ​ ​ ​ 0% ​ ​ ​ ​ ​ 0% ​ ​
The key assumptions used in the estimation of the recoverable amount are set out above.
The values assigned to the key assumptions represent management’s assessment of future trends for the business and have been based on historical experience and projections of growth, based on internal and external data.
The estimated recoverable amount exceeded its carrying amount by approximately R$ 661,284 (2019: R$ 113,681). Management has identified that a reasonably possible change in the revenues could cause the carrying amount to equal the recoverable amount. The following table shows the rate of revenue growth and the corresponding effect on the variable cost growth by which the estimated recoverable amount is equal to the carrying amount.
​ ​ ​
2020
​ ​
2019
​ ​
2018
​
Weighted average annual revenue growth
​ ​ ​ ​ 30.62% ​ ​ ​ ​ ​ 9.40% ​ ​ ​ ​ ​ 17.22% ​ ​
Weighted average annual growth of variable cost
​ ​ ​ ​ 21.12% ​ ​ ​ ​ ​ 11.52% ​ ​ ​ ​ ​ 16.58% ​ ​
An impairment loss in respect of goodwill is not reversed. For other assets, an impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortization, if no impairment loss had been recognized.
 
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11
Loans and borrowings
​
​ ​ ​ ​ ​ ​
2020
​ ​
2019
​ ​ ​ ​
Working capital(a)
​ ​
Interest p.a.
100% CDI + 2.40% to 5.46% and TJLP + 2.98% and 24%
​ ​ ​ ​ 97,396 ​ ​ ​ ​ ​ 60,985 ​ ​ ​
BNDES Prosoft
​ ​ TJLP + 2.96% ​ ​ ​ ​ 1,579 ​ ​ ​ ​ ​ 2,338 ​ ​ ​
Lease
​ ​ 100% CDI + 2.00% to 3.86% and 7.25% ​ ​ ​ ​ — ​ ​ ​ ​ ​ 23 ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ 98,975 ​ ​ ​ ​ ​ 63,346 ​ ​ ​
Current
​ ​ ​ ​ ​ ​ ​ 56,197 ​ ​ ​ ​ ​ 17,696 ​ ​ ​
Non-current
​ ​ ​ ​ ​ ​ ​ 42,778 ​ ​ ​ ​ ​ 45,650 ​ ​ ​
The portion classified in non-current liabilities has the following payment schedule:
​ ​ ​
2020
​ ​
2019
​
2020
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
2021
​ ​ ​ ​ — ​ ​ ​ ​ ​ 22,578 ​ ​
2022
​ ​ ​ ​ 18,167 ​ ​ ​ ​ ​ 14,909 ​ ​
2023
​ ​ ​ ​ 16,918 ​ ​ ​ ​ ​ 8,163 ​ ​
2024
​ ​ ​ ​ 7,693 ​ ​ ​ ​ ​ — ​ ​
​ ​ ​ ​ ​ 42,778 ​ ​ ​ ​ ​ 45,650 ​ ​
Main changes in working capital loans and borrowings
On April 22, 2020, the Company entered into an agreement with Itaú Unibanco S.A. for a CCB (Cédula de Crédito Bancário), in the aggregate amount of R$15,000. This CCB will be paid in 36 monthly installments with the first installment due on May 22, 2020 and the last installment due on April 24, 2023.
On June 26, 2020, the Company also entered into an agreement with Caixa Econômica Federal for a CCB in the aggregate amount of R$15,000, which is secured by fiduciary concession of credit rights. Following a one year grace period during which interest shall be paid, the CCB will be paid in 36 monthly installments with the first installment of principal and interest due on June 27, 2021 and the last installment due on June 27, 2023.
In October 2, 2020, the Companyalso entered into an agreement with Caixa Econômica Federal for a CCB in the aggregate amount of R$15,000, which is secured by fiduciary assignment of credit rights and certain bank deposits. Following a one year and a half grace period during in which interest shall be paid, the CCB will be paid in 24 monthly installments with the first installment of principal and interest due on May 3, 2021 and the last installment due on April 3, 2024.
On November 11, 2020, the Company entered into an agreement with Banco Votorantim in the amount of R$ 10,000. This credit line is offered by the Brazilian Government (FGI — Fundo Garantidor para Investimentos), where the BNDES (Banco Nacional de Desenvolvimento Econômico e Social) works as guarantor for the operation, aiming at facilitating the obtaining of credit by Brazilian companies. Following a one year grace period during which interest shall be paid, the CCB will be paid in 36 monthly installments with the first installment of principal and interest due on December 10, 2021 and the last installment due on November 11, 2024.
On the same credit line, FGI, on November 11, 2020, the Company entered into an agreement with Banco ABC in the amount of R$ 7,000 thousand. Following a one year grace period during which interest shall be paid, the CCB will be paid in 36 monthly installments with the first installment of principal and interest due on December 10, 2021 and the last installment due on November 11, 2024
On April 23, 2020, the subsidiary in Argentina also entered into an agreement with ICBC in the aggregate amount of R$ 6,302 (ARS$ 540 thousand), which is secured by Rodati Motors Corporation. Following a three months grace period during which no paid interest and principal shall be paid, the loan
 
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will be paid in 9 monthly installments with the first installment of principal and interest due on August 23, 2020 and the last installment due on April 23, 2021.
In addition, in June 29, 2020, the subsidiary in Argentina also entered into an agreement with ICBC for a Argentine Guarantee Fund — FoGAr in the aggregate amount of R$ 269 (ARS$ 3.000 thousand), which is secured by Rodati Motors Corporation. Following a three months grace period during which no paid interest and principal shall be paid, the loan will be paid in 9 monthly installments with the first installment of principal and interest due on Octobert 29, 2020 and the last installment due on June 29, 2021.
(i)
Contractual clauses
​
The Company has financing agreements in the amount of R$ 36,049 that establish compliance with financial covenants on the closing dates of each year. They are described below:
•
Net Debt/EBITDA* not exceeding 2.0x;
​
•
Amount of Dividends and/or interest on own capital distributed annually lower than or equal to 25% of net income for the year;
​
* (i) net debt is defined as gross debt (as such term is defined in the agreements) minus cash, financial investments and short-term and long-term financial assets (such as derivatives), and (ii) EBITDA as defined in the agreement is calculated as income (in the twelve months prior to the date of testing) before income tax and social contribution, depreciation and amortization, financial results, non-operational results, equity income from unconsolidated companies and non-controlling shareholder interest, excluding the effects of IFRS 16 — Leases.
The Company has financing agreements in the amount of R$ 15,653 that establish compliance with financial covenants on the closing dates of each year. They are described below:
•
Net Debt/EBITDA* not exceeding 3.5x;
​
•
Amount of Dividends and/or interest on own capital distributed annually lower than or equal to 25% of net income for the year;
​
* (i) net debt is defined as gross debt (as such term is defined in the agreements) minus cash, financial investments and short-term and long-term financial assets (such as derivatives), and (ii) EBITDA as defined in the agreement is calculated as income (in the twelve months prior to the date of testing) before income tax and social contribution, depreciation and amortization, financial results, non-operational results, equity income from unconsolidated companies and non-controlling shareholder interest, excluding the effects of IFRS 16 — Leases.
The Company has financing agreements in the amount of R$ 45,712 guaranteed by 20% to 30% of accounts receivable given as collateral and the balance of interest-earning bank deposits recorded as non-current assets, representing three times the amount of the first payment of principal plus charges.
As of December 31, 2020, the Company was not in compliance with the Net debt-to-EBITDA covenant. In this context, waivers were requested from financial creditors and received, except for BNDES and Itaú (Itaú provided the waiver in 2021, with effects applicable since December 31, 2020). The debts for BNDES and Itaú were reclassified to the current liabilities line.
 
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(ii)
Supplementary information to the cash flow
​
​ ​ ​
Loans and
financing
​
Balance at January 1, 2019
​ ​ ​ ​ 48,229 ​ ​
Changes in cash
​ ​ ​ ​ 11,228 ​ ​
Interest paid
​ ​ ​ ​ (3,893) ​ ​
Proceeds from loans and borrowings
​ ​ ​ ​ 25,000 ​ ​
Repayments of borrowings
​ ​ ​ ​ (9,879) ​ ​
Changes not affecting cash
​ ​ ​ ​ 3,889 ​ ​
Interest and exchange-rate expenses
​ ​ ​ ​ 3,889 ​ ​
Balance at December 31, 2019
​ ​ ​ ​ 63,346 ​ ​
Changes in cash
​ ​ ​ ​ 24,297 ​ ​
Interest paid
​ ​ ​ ​ (4,491) ​ ​
Proceeds from loans and borrowings
​ ​ ​ ​ 62,000 ​ ​
Repayments of borrowings
​ ​ ​ ​ (33,212) ​ ​
Changes not affecting cash
​ ​ ​ ​ 11,332 ​ ​
Interest and exchange-rate expenses
​ ​ ​ ​ 4,761 ​ ​
Additions due to acquisitions
​ ​ ​ ​ 6,571 ​ ​
Balance at December 31, 2020
​ ​ ​ ​ 98,975 ​ ​
​
12
Lease liabilities
​
On December 31, 2020, the Company has lease contracts corresponding mainly to the lease of buildings from third parties, for an average term of 2 to 5 years.
Lease liabilities are related to the following right of use of assets nature:
​ ​ ​
2020
​ ​
2019
​
Lease of properties
​ ​ ​ ​ 2,525 ​ ​ ​ ​ ​ 6,377 ​ ​
Lease of equipment
​ ​ ​ ​ 233 ​ ​ ​ ​ ​ 914 ​ ​
​ ​ ​ ​ ​ 2,758 ​ ​ ​ ​ ​ 7,291 ​ ​
Current
​ ​ ​ ​ 1,109 ​ ​ ​ ​ ​ 2,687 ​ ​
Non-current
​ ​ ​ ​ 1,649 ​ ​ ​ ​ ​ 4,604 ​ ​
​
(i)
Future minimum lease payments
​
On December 31, 2020, the amount classified in non-current liabilities will be paid as follow:
Period
​ ​
2020
​ ​
2019
​
2020
​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​
2021
​ ​ ​ ​ — ​ ​ ​ ​ ​ 2,722 ​ ​
2022
​ ​ ​ ​ 1,186 ​ ​ ​ ​ ​ 1,807 ​ ​
2023
​ ​ ​ ​ 463 ​ ​ ​ ​ ​ 75 ​ ​
Present value of lease payments
​ ​ ​
​
1,649
​ ​ ​ ​
​
4,604
​ ​
 
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The change in the Company’s lease liability balance to December 31, 2020 occurred as follows:
​ ​ ​
Properties
​ ​
Equipment
​ ​
Total
​
Balance on December 31, 2018
​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​
Initial adoption
​ ​ ​ ​ 7,498 ​ ​ ​ ​ ​ 808 ​ ​ ​ ​ ​ 8,306 ​ ​
Balance on January 1, 2019
​ ​ ​ ​ 7,498 ​ ​ ​ ​ ​ 808 ​ ​ ​ ​ ​ 8,306 ​ ​
Remeasurements and new contracts
​ ​ ​ ​ 556 ​ ​ ​ ​ ​ 689 ​ ​ ​ ​ ​ 1,245 ​ ​
Interest
​ ​ ​ ​ 709 ​ ​ ​ ​ ​ 89 ​ ​ ​ ​ ​ 798 ​ ​
Lease payments
​ ​ ​ ​ (2,386) ​ ​ ​ ​ ​ (672) ​ ​ ​ ​ ​ (3,058) ​ ​
Balance on December 31, 2019
​ ​ ​ ​ 6,377 ​ ​ ​ ​ ​ 914 ​ ​ ​ ​ ​ 7,291 ​ ​
Remeasurements and new contracts
​ ​ ​ ​ 444 ​ ​ ​ ​ ​ 367 ​ ​ ​ ​ ​ 811 ​ ​
Lease termination
​ ​ ​ ​ (1,964) ​ ​ ​ ​ ​ (219) ​ ​ ​ ​ ​ (2,183) ​ ​
Interest
​ ​ ​ ​ 622 ​ ​ ​ ​ ​ 103 ​ ​ ​ ​ ​ 725 ​ ​
Interest paid
​ ​ ​ ​ (633) ​ ​ ​ ​ ​ (108) ​ ​ ​ ​ ​ (741) ​ ​
Lease payments
​ ​ ​ ​ (2,321) ​ ​ ​ ​ ​ (824) ​ ​ ​ ​ ​ (3,145) ​ ​
Balance on December 31, 2020
​ ​ ​ ​ 2,525 ​ ​ ​ ​ ​ 233 ​ ​ ​ ​ ​ 2,758 ​ ​
The discount rate adopted by the Company was 10.13% p.a. for property and equipment rental contracts.
The simplified retrospective approach was used and, at the time of transition, lease liabilities were measured at the present value of the remaining payments, discounted at the incremental financing rate. Initially, the right to use the assets was measured at the equivalent amount of the lease liability, being recorded in property, plant and equipment, using the practical expedient that allows the lessee to exclude initial direct costs from measuring of the right-of-use asset.
13
Trade and other payable
​
​ ​ ​
2020
​ ​
2019
​
Domestic suppliers
​ ​ ​ ​ 90,948 ​ ​ ​ ​ ​ 39,216 ​ ​
Abroad suppliers
​ ​ ​ ​ 377 ​ ​ ​ ​ ​ — ​ ​
Advances from clients
​ ​ ​ ​ 2,477 ​ ​ ​ ​ ​ 2,169 ​ ​
Other accounts payable
​ ​ ​ ​ 6,435 ​ ​ ​ ​ ​ 1,069 ​ ​
​ ​ ​ ​ ​ 100,237 ​ ​ ​ ​ ​ 42,454 ​ ​
Current
​ ​ ​ ​ 100,036 ​ ​ ​ ​ ​ 42,454 ​ ​
Non-current
​ ​ ​ ​ 201 ​ ​ ​ ​ ​ — ​ ​
​
14
Current tax liabilities
​
​ ​ ​
2020
​ ​
2019
​
Social security
​ ​ ​ ​ 1,308 ​ ​ ​ ​ ​ 757 ​ ​
Severance indemnity fund (FGTS)
​ ​ ​ ​ 315 ​ ​ ​ ​ ​ 222 ​ ​
Federal VAT (PIS/COFINS)
​ ​ ​ ​ 3,304 ​ ​ ​ ​ ​ 2,323 ​ ​
Withholding income taxes
​ ​ ​ ​ 1,736 ​ ​ ​ ​ ​ 1,007 ​ ​
Service taxes (ISSQN)
​ ​ ​ ​ 1,032 ​ ​ ​ ​ ​ 874 ​ ​
Other
​ ​ ​ ​ 1,203 ​ ​ ​ ​ ​ 2 ​ ​
​ ​ ​ ​ ​ 8,898 ​ ​ ​ ​ ​ 5,185 ​ ​
 
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15
Employee benefits
​
​ ​ ​
2020
​ ​
2019
​
Salary
​ ​ ​ ​ 499 ​ ​ ​ ​ ​ 58 ​ ​
Labor provisions (13th salary and vacation)
​ ​ ​ ​ 4,969 ​ ​ ​ ​ ​ 3,076 ​ ​
Provision for bonus
​ ​ ​ ​ — ​ ​ ​ ​ ​ 3,445 ​ ​
Other obligations
​ ​ ​ ​ 1,210 ​ ​ ​ ​ ​ 176 ​ ​
Long-term benefits(a)
​ ​ ​ ​ 1,151 ​ ​ ​ ​ ​ 1,127 ​ ​
​ ​ ​ ​ ​ 7,829 ​ ​ ​ ​ ​ 7,882 ​ ​
Current
​ ​ ​ ​ 6,678 ​ ​ ​ ​ ​ 6,755 ​ ​
Non-current
​ ​ ​ ​ 1,151 ​ ​ ​ ​ ​ 1,127 ​ ​
​
(a)
The Company has two Long-Term Incentive Programs Granted, in 2018 and 2019, with eligibility to the Company’s Statutory Directors, in a bonus format, in which payments will be made in 2022 and 2023 in cash, respectively, based on goals that must be achieved in December 2020 and 2021, respectively.
​
In 2020, the Company granted to certain employees a bonus program in which those employees may receive additional compensation if certain milestones set forth therein are met, including the consummation of the Company’s initial public offering. The settlement of the bonus may be done by either cash or the Company’s own shares at the choice of the Company, under parameters to be defined in the future by the board of directors. As of December 31, 2020, management estimates indicate that, under current conditions, such milestones were not met, so no amounts were recorded as of December 31, 2020.
16
Provisions for labor, tax and civil risks
​
The Company, in the ordinary course of its business, is subject to tax, civil and labor lawsuit. The Management, supported by its legal advisors’ opinion, assesses the probability of the outcome of the lawsuit in progress and the need to record a provision for contingencies that is considered sufficient to cover the probable losses.
The table below presents the position of provisions for disputes, probable losses and judicial deposits as of December 31, 2020, and2019, and these refer to lawsuits in progress and social security risk.
​ ​ ​
2020
​ ​
2019
​
Service tax (ISSQN) Lawsuit – Company BWMS(a)
​ ​ ​ ​ 1,374 ​ ​ ​ ​ ​ 1,374 ​ ​
Service tax (ISSQN) Lawsuit – Company Zenvia(a)
​ ​ ​ ​ 29,962 ​ ​ ​ ​ ​ 22,697 ​ ​
Labor provisions
​ ​ ​ ​ 444 ​ ​ ​ ​ ​ 115 ​ ​
Other Provisions
​ ​ ​ ​ 1,064 ​ ​ ​ ​ ​ 813 ​ ​
​ ​ ​ ​ ​ 32,844 ​ ​ ​ ​ ​ 24,999 ​ ​
Service tax (ISSQN) judicial deposits – Lawsuit Company BWMS(a)
​ ​ ​ ​ (1,374) ​ ​ ​ ​ ​ (1,374) ​ ​
Service tax (ISSQN) judicial deposits – Lawsuit Company Zenvia(a)
​ ​ ​ ​ (29,193) ​ ​ ​ ​ ​ (22,126) ​ ​
Labor appeals judicial deposits
​ ​ ​ ​ (10) ​ ​ ​ ​ ​ (10) ​ ​
​ ​ ​ ​ ​ (30,577) ​ ​ ​ ​ ​ (23,510) ​ ​
​ ​ ​ ​ ​ 2,267 ​ ​ ​ ​ ​ 1,489 ​ ​
 
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Changes in provisions are as follows:
​ ​ ​
Provisions
​
Balance at January 1, 2019
​ ​ ​ ​ 18,322 ​ ​
Additions
​ ​ ​ ​ 6,795 ​ ​
Reversals
​ ​ ​ ​ (118) ​ ​
Balance at December 31, 2019
​ ​ ​ ​ 24,999 ​ ​
Additions
​ ​ ​ ​ 7,944 ​ ​
Reversals
​ ​ ​ ​ (322) ​ ​
Additions due to acquisitions
​ ​ ​ ​ 223 ​ ​
Balance at December 31, 2020
​ ​ ​ ​ 32,844 ​ ​
Changes in judicial deposits are as follows:
​ ​ ​
Deposits
​
Balance at January 1, 2019
​ ​ ​ ​ 17,129 ​ ​
Additions
​ ​ ​ ​ 6,381 ​ ​
Balance at December 31, 2019
​ ​ ​ ​ 23,510 ​ ​
Additions
​ ​ ​ ​ 7,089 ​ ​
Reversals
​ ​ ​ ​ (22) ​ ​
Balance at December 31, 2020
​ ​ ​ ​ 30,577 ​ ​
​
(a)
The amount of the liability related to the provision for tax risk refers to the lawsuit filed by the City of Porto Alegre about the service tax (ISSQN) against the Company itself and the merged companies Human Serviços para Comunicação Móvel Ltda. and BWMS Soluções Móveis em Informática Ltda.
​
The Company and its subsidiaries are also party to labor lawsuits whose risk of loss, according to its legal advisors and the Company’s Management, is classified as possible, for which no provision was recognized. The updated amount related to these lawsuits is R$ 179 as of December 31, 2020 (R$ 931 as of December 31, 2019).
17
Liabilities from business combinations
​
​ ​ ​
2020
Liabilities from
business combinations
​
Investment acquisition(a) – Total Voice
​ ​ ​ ​ 13,112 ​ ​
Investment acquisition – Sirena
​ ​ ​ ​ 71,792 ​ ​
Investment acquisition(b) – Sirena
​ ​ ​ ​ 8,833 ​ ​
Reimbursements to former shareholders(c)
​ ​ ​ ​ 11 ​ ​
​ ​ ​ ​ ​ 93,748 ​ ​
​ ​ ​
2019
Liabilities from
business
combinations
​
Investment acquisition(a) – Total Voice
​ ​ ​ ​ 5,230 ​ ​
​ ​ ​ ​ ​ 5,230 ​ ​
​
(a)
Refers to the compensation payable related to the acquisition of Total Voice. On December 31, 2020, a provision was recorded in the amount of R$ 13,112, reflecting the best estimate of the Company of
​
 
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the additional payment to former shareholders that become company’ employees. The balance is to be paid to former shareholders and represents the provision for the compensation for continuing employment. The payments will be made up to 12 installments after 2021.
(b)
Refers to the compensation payable related to the acquisition of Sirena. On December 31, 2020, a provision was recorded in the amount of R$ 8,833, reflecting the best estimate of the Company of the additional payment to former shareholders that became Company’s employees. The payments will be made on July, 2021 and July 2022.
​
(c)
Administrative expenses paid by former shareholders to be reimbursed by the Company Rodati Motors Corporation and Rodati Motors Central de Informações de Veículos Automotores Ltda.
​
18
Shareholders’ equity
​
a.
Capital
​
On May 29, 2020, a cash capital increase was approved, from R$ 93,883 to R$ 130,292, in the amount of R$ 36,409, through the issue of 360,203 new common shares, nominative and without par value, fully subscribed by the shareholder Ória Tech Zenvia Co-Investment Fundo de Investimento em Participações Multiestratégia.
The current position of shareholders is shown in the table below.
​ ​ ​
2020
​
Shareholders
​ ​
Balance of shares
​ ​
Percent
​
Oria Tech Zenvia Co-Investment FIP Multiestrategia
​ ​ ​ ​ 2,298,482 ​ ​ ​ ​ ​ 48.0693% ​ ​
Cássio Bobsin Machado
​ ​ ​ ​ 1,915,644 ​ ​ ​ ​ ​ 40.0628% ​ ​
Oria Tech 1 Inovacao Fundo de Investimentos em Participações
​ ​ ​ ​ 527,534 ​ ​ ​ ​ ​ 11.0326% ​ ​
Spectra I – Fundo de Investimento em Partipações
​ ​ ​ ​ 7,988 ​ ​ ​ ​ ​ 0.1671% ​ ​
Spectra II – Fundo de Investimento em Partipações
​ ​ ​ ​ 31,954 ​ ​ ​ ​ ​ 0.6683% ​ ​
Total
​ ​ ​ ​ 4,781,602 ​ ​ ​ ​ ​ 100.0000% ​ ​
​ ​ ​
2019
​
Shareholders
​ ​
Balance of shares
​ ​
Percent
​
Oria Tech Zenvia Co-Investment FIP Multiestrategia
​ ​ ​ ​ 1,938,279 ​ ​ ​ ​ ​ 43.8386% ​ ​
Cássio Bobsin Machado
​ ​ ​ ​ 1,915,644 ​ ​ ​ ​ ​ 43.3266% ​ ​
Oria Tech 1 Inovacao Fundo de Investimentos em Participações
​ ​ ​ ​ 527,534 ​ ​ ​ ​ ​ 11.9314% ​ ​
Spectra I – Fundo de Investimento em Partipações
​ ​ ​ ​ 7,988 ​ ​ ​ ​ ​ 0.1807% ​ ​
Spectra II – Fundo de Investimento em Partipações
​ ​ ​ ​ 31,954 ​ ​ ​ ​ ​ 0.7227% ​ ​
Total
​ ​ ​ ​ 4,421,399 ​ ​ ​ ​ ​ 100.0000% ​ ​
​
b.
Reserves
​
The reserves consist of:
•
Legal reserve: formed at the rate of 5% of the net income determined on each fiscal year under the terms of Article 193 of Law 6404/76 up to the legal limit.
​
•
Investments reserve: Refers to the balance of net income, net of legal reserve and dividends paid to shareholders. The amount allocated to the legal reserve, together with the investment reserve, may not exceed the amount of the capital stock.
​
 
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c.
Dividends
​
​ ​ ​
2020
​ ​
2019
​ ​
2018
​
Profit for the year – Calculation basis
​ ​ ​ ​ (21,431) ​ ​ ​ ​ ​ 13,844 ​ ​ ​ ​ ​ 19,865 ​ ​
Formation of reserves
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Legal (5%)
​ ​ ​ ​ — ​ ​ ​ ​ ​ (692) ​ ​ ​ ​ ​ (993) ​ ​
Mandatory minimum dividends (25%)(i)
​ ​ ​ ​ — ​ ​ ​ ​ ​ (3,288) ​ ​ ​ ​ ​ (4,718) ​ ​
Dividends in addition to the mandatory minimum(i)
​ ​ ​ ​ — ​ ​ ​ ​ ​ (8,264) ​ ​ ​ ​ ​ — ​ ​
Net income after legal reserve – Transferred to the investment reserve
​ ​ ​ ​ — ​ ​ ​ ​ ​ 1,600 ​ ​ ​ ​ ​ 14,154 ​ ​
​
(i)
At the Extraordinary General Meeting held on November 21, 2019 it was approved by shareholders the distribution of dividends of R$ 11,552 related to the period from January to September of 2019, as well as the distribution of dividends in the amount of R$ 51,449, arising from the existing balance in the investment reserve provided for in art. 25 Paragraph 2 of the Company’s Bylaws, according to the Financial Statements as of December 31, 2018.
​
19
Segment reporting
​
The Company’s revenues by geography is presented in note 4 (d). As discussed in note 1(b), it acquired in 2020 Rodati Motor Corporation, including the digital platform of R$ 54,521 and client portforlio of R$ 1,975. These non-financial assets were integrated to the Zenvia business and support the Company’s operations in Brazil, United States, Argentina and Mexico. The Company has no other material non-financial assets outside of Brazil.
20
Expenses by nature
​
​ ​ ​
2020
​ ​
2019
​ ​
2018
​
Personnel expenses(a)
​ ​ ​ ​ 78,103 ​ ​ ​ ​ ​ 47,531 ​ ​ ​ ​ ​ 34,502 ​ ​
Costs with operators/Other costs
​ ​ ​ ​ 305,561 ​ ​ ​ ​ ​ 250,275 ​ ​ ​ ​ ​ 178,027 ​ ​
Depreciation and amortization
​ ​ ​ ​ 27,287 ​ ​ ​ ​ ​ 18,796 ​ ​ ​ ​ ​ 14,513 ​ ​
Outsourced services
​ ​ ​ ​ 17,319 ​ ​ ​ ​ ​ 9,714 ​ ​ ​ ​ ​ 5,795 ​ ​
Rentals/insurance/condominium/water/energy
​ ​ ​ ​ 2,005 ​ ​ ​ ​ ​ 920 ​ ​ ​ ​ ​ 2,908 ​ ​
Communication
​ ​ ​ ​ 4,557 ​ ​ ​ ​ ​ 2,485 ​ ​ ​ ​ ​ 2,196 ​ ​
Travel expenses
​ ​ ​ ​ 886 ​ ​ ​ ​ ​ 1,754 ​ ​ ​ ​ ​ 1,293 ​ ​
Allowance for credit losses
​ ​ ​ ​ 4,205 ​ ​ ​ ​ ​ 3,733 ​ ​ ​ ​ ​ 2,287 ​ ​
Marketing expenses / events
​ ​ ​ ​ 3,540 ​ ​ ​ ​ ​ 2,778 ​ ​ ​ ​ ​ 1,605 ​ ​
Other expenses
​ ​ ​ ​ 7,505 ​ ​ ​ ​ ​ 3,251 ​ ​ ​ ​ ​ 3,100 ​ ​
​ ​ ​ ​ ​ 450,968 ​ ​ ​ ​ ​ 341,237 ​ ​ ​ ​ ​ 246,226 ​ ​
Cost of services
​ ​ ​ ​ 325,870 ​ ​ ​ ​ ​ 260,786 ​ ​ ​ ​ ​ 186,084 ​ ​
Sales and marketing expenses
​ ​ ​ ​ 33,589 ​ ​ ​ ​ ​ 26,018 ​ ​ ​ ​ ​ 18,241 ​ ​
General administrative expenses
​ ​ ​ ​ 71,667 ​ ​ ​ ​ ​ 40,868 ​ ​ ​ ​ ​ 35,683 ​ ​
Research and development expenses
​ ​ ​ ​ 15,637 ​ ​ ​ ​ ​ 9,832 ​ ​ ​ ​ ​ 3,931 ​ ​
Allowance for credit losses
​ ​ ​ ​ 4,205 ​ ​ ​ ​ ​ 3,733 ​ ​ ​ ​ ​ 2,287 ​ ​
​ ​ ​ ​ ​ 450,968 ​ ​ ​ ​ ​ 341,237 ​ ​ ​ ​ ​ 246,226 ​ ​
 
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​
(a)
Personnel expenses:
​
​ ​ ​
2020
​ ​
2019
​ ​
2018
​
Salary
​ ​ ​ ​ 36,102 ​ ​ ​ ​ ​ 21,286 ​ ​ ​ ​ ​ 17,501 ​ ​
Benefits
​ ​ ​ ​ 2,993 ​ ​ ​ ​ ​ 1,521 ​ ​ ​ ​ ​ 1,674 ​ ​
Compulsory contributions to social security
​ ​ ​ ​ 12,586 ​ ​ ​ ​ ​ 9,122 ​ ​ ​ ​ ​ 6,861 ​ ​
Compensation
​ ​ ​ ​ 387 ​ ​ ​ ​ ​ 348 ​ ​ ​ ​ ​ 686 ​ ​
Provisions (vacation/13th salary)
​ ​ ​ ​ 5,757 ​ ​ ​ ​ ​ 3,634 ​ ​ ​ ​ ​ 3,383 ​ ​
Provision for bonus and profit sharing
​ ​ ​ ​ 650 ​ ​ ​ ​ ​ 4,641 ​ ​ ​ ​ ​ 3,032 ​ ​
Compensation(b) ​ ​ ​ ​ 16,715 ​ ​ ​ ​ ​ 5,230 ​ ​ ​ ​ ​ — ​ ​
Other
​ ​ ​ ​ 2,913 ​ ​ ​ ​ ​ 1,749 ​ ​ ​ ​ ​ 1,365 ​ ​
​ ​ ​ ​ ​ 78,103 ​ ​ ​ ​ ​ 47,531 ​ ​ ​ ​ ​ 34,502 ​ ​
​
(b)
Refers to the provision for additional compensation to former shareholders of Total Voice and Sirena linked to continued employment with the Company, in accordance with the acquisition agreement, based on the performance of Total Voice and Sirena, as disclosed in note 1.1.b. and 1.1.c.
​
21
Net finance costs
​
​ ​ ​
2020
​ ​
2019
​ ​
2018
​
Finance cost ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Interest on loans and financing
​ ​ ​ ​ (4,826) ​ ​ ​ ​ ​ (3,870) ​ ​ ​ ​ ​ (5,922) ​ ​
Discounts given
​ ​ ​ ​ (158) ​ ​ ​ ​ ​ (250) ​ ​ ​ ​ ​ (412) ​ ​
Foreign exchange losses
​ ​ ​ ​ (16,615) ​ ​ ​ ​ ​ (480) ​ ​ ​ ​ ​ (299) ​ ​
Bank expenses and IOF (tax on financial transactions)
​ ​ ​ ​ (1,714) ​ ​ ​ ​ ​ (597) ​ ​ ​ ​ ​ (404) ​ ​
Other financial expenses
​ ​ ​ ​ (2,362) ​ ​ ​ ​ ​ (203) ​ ​ ​ ​ ​ (315) ​ ​
Interests on leasing contracts
​ ​ ​ ​ (725) ​ ​ ​ ​ ​ (798) ​ ​ ​ ​ ​ — ​ ​
Losses on derivative instruments
​ ​ ​ ​ — ​ ​ ​ ​ ​ (613) ​ ​ ​ ​ ​ — ​ ​
Inflation adjustment
​ ​ ​ ​ (180) ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​
​ ​ ​ ​ ​ (26,580) ​ ​ ​ ​ ​ (6,811) ​ ​ ​ ​ ​ (7,352) ​ ​
Finance income ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Interest
​ ​ ​ ​ 663 ​ ​ ​ ​ ​ 241 ​ ​ ​ ​ ​ 136 ​ ​
Foreign exchange gain
​ ​ ​ ​ 17,936 ​ ​ ​ ​ ​ 514 ​ ​ ​ ​ ​ 13 ​ ​
Interests on financial instrument
​ ​ ​ ​ 580 ​ ​ ​ ​ ​ 2,926 ​ ​ ​ ​ ​ 2,522 ​ ​
Other financial income
​ ​ ​ ​ 38 ​ ​ ​ ​ ​ 186 ​ ​ ​ ​ ​ 775 ​ ​
Gains with derivative financial instruments
​ ​ ​ ​ — ​ ​ ​ ​ ​ 372 ​ ​ ​ ​ ​ — ​ ​
​ ​ ​ ​ ​ 19,217 ​ ​ ​ ​ ​ 4,239 ​ ​ ​ ​ ​ 3,446 ​ ​
 
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22
Other income and expenses, net
​
​ ​ ​
2020
​ ​
2019
​ ​
2018
​
Other providers(a)
​ ​ ​ ​ — ​ ​ ​ ​ ​ 2,082 ​ ​ ​ ​ ​ — ​ ​
Disposal of leasehold improvement and other assets
​ ​ ​ ​ (1,668) ​ ​ ​ ​ ​ (179) ​ ​ ​ ​ ​ 3 ​ ​
Gain on sale of carrier billing (note 1.a)
​ ​ ​ ​ — ​ ​ ​ ​ ​ 2,757 ​ ​ ​ ​ ​ — ​ ​
Other expenses
​ ​ ​ ​ (813) ​ ​ ​ ​ ​ (362) ​ ​ ​ ​ ​ (151) ​ ​
Other income
​ ​ ​ ​ 1,641 ​ ​ ​ ​ ​ 175 ​ ​ ​ ​ ​ 244 ​ ​
​ ​ ​ ​ ​ (840) ​ ​ ​ ​ ​ 4,473 ​ ​ ​ ​ ​ 96 ​ ​
​
(a)
Refers to the write-off of provisions for payment of services acquired and never claimed by the providers from past periods.
​
23
Income tax and social contribution recognized in income (loss) for the year
​
​ ​ ​
2020
​ ​
2019
​ ​
2018
​
Deferred taxes on temporary differences and tax losses
​ ​ ​ ​ (8,480) ​ ​ ​ ​ ​ 3,186 ​ ​ ​ ​ ​ 3,457 ​ ​
Current tax expenses
​ ​ ​ ​ 441 ​ ​ ​ ​ ​ 148 ​ ​ ​ ​ ​ 3,022 ​ ​
Tax (income) expense
​ ​ ​
​
(8,039)
​ ​ ​ ​
​
3,334
​ ​ ​ ​
​
6,479
​ ​
​
23.1
Reconciliation between the nominal income tax and social contribution rate and effective rate
​
​ ​ ​
2020
​ ​
2019
​ ​
2018
​
Income before income tax and social contribution
​ ​ ​ ​ (29,470) ​ ​ ​ ​ ​ 17,178 ​ ​ ​ ​ ​ 26,344 ​ ​
Basic rate
​ ​ ​ ​ 34% ​ ​ ​ ​ ​ 34% ​ ​ ​ ​ ​ 34% ​ ​
Income tax and social contribution
​ ​ ​ ​ 10,020 ​ ​ ​ ​ ​ (5,841) ​ ​ ​ ​ ​ (8,957) ​ ​
Tax incentives
​ ​ ​ ​ — ​ ​ ​ ​ ​ 2,896 ​ ​ ​ ​ ​ 1,992 ​ ​
Earnings from foreign subsidiaries
​ ​ ​ ​ (36) ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​
Net operation loss carryforward not recorded from subsidiaries
​ ​ ​ ​ (1,900) ​ ​ ​ ​ ​ (46) ​ ​ ​ ​ ​ ​ ​ ​
Others
​ ​ ​ ​ (45) ​ ​ ​ ​ ​ (343) ​ ​ ​ ​ ​ 486 ​ ​
Tax expense
​ ​ ​ ​ 8,039 ​ ​ ​ ​ ​ (3,334) ​ ​ ​ ​ ​ (6,479) ​ ​
Effective rate
​ ​ ​ ​ 27.28% ​ ​ ​ ​ ​ 19.41% ​ ​ ​ ​ ​ 24.59% ​ ​
​
23.2
Breakdown of deferred income tax and social contribution
​
​ ​ ​
2020
​ ​
2019
​ ​
2018
​
Deferred tax assets ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Provision for labor, tax and civil risk
​ ​ ​ ​ 10,885 ​ ​ ​ ​ ​ 8,415 ​ ​ ​ ​ ​ 6,213 ​ ​
Allowance for doubtful accounts
​ ​ ​ ​ 1,610 ​ ​ ​ ​ ​ 1,730 ​ ​ ​ ​ ​ 1,705 ​ ​
Tax losses and negative basis of social contribution tax
​ ​ ​ ​ 5,277 ​ ​ ​ ​ ​ 3,536 ​ ​ ​ ​ ​ 3,931 ​ ​
Provision for compensation from acquisitions
​ ​ ​ ​ 6,277 ​ ​ ​ ​ ​ 1,778 ​ ​ ​ ​ ​ — ​ ​
Other temporary differences
​ ​ ​ ​ 1,041 ​ ​ ​ ​ ​ 931 ​ ​ ​ ​ ​ 2,191 ​ ​
​ ​ ​ ​ ​ 25,090 ​ ​ ​ ​ ​ 16,390 ​ ​ ​ ​ ​ 14,040 ​ ​
Deferred Tax liabilities
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Goodwill
​ ​ ​ ​ (25,879) ​ ​ ​ ​ ​ (22,741) ​ ​ ​ ​ ​ (14,973) ​ ​
Customer portfolio and platform
​ ​ ​ ​ (22,005) ​ ​ ​ ​ ​ (10,418) ​ ​ ​ ​ ​ (12,650) ​ ​
​ ​ ​ ​ ​ (47,884) ​ ​ ​ ​ ​ (33,159) ​ ​ ​ ​ ​ (27,623) ​ ​
​ ​ ​ ​ ​ (22,794) ​ ​ ​ ​ ​ (16,769) ​ ​ ​ ​ ​ (13,583) ​ ​
 
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23.3
Changes in deferred income tax and social contribution
​
​ ​ ​
2020
​ ​
Deferred taxes
2020
variation(a)
​ ​
2019
​ ​
Impact on
profit (loss)
​ ​
2018
​
Provision for tax liabilities
​ ​ ​ ​ 10,885 ​ ​ ​ ​ ​ 2,470 ​ ​ ​ ​ ​ 8,415 ​ ​ ​ ​ ​ 2,202 ​ ​ ​ ​ ​ 6,213 ​ ​
Allowance for doubtful accounts
​ ​ ​ ​ 1,610 ​ ​ ​ ​ ​ (120) ​ ​ ​ ​ ​ 1,730 ​ ​ ​ ​ ​ 25 ​ ​ ​ ​ ​ 1,705 ​ ​
Tax losses and negative basis of social contribution
tax
​ ​ ​ ​ 5,277 ​ ​ ​ ​ ​ 1,741 ​ ​ ​ ​ ​ 3,536 ​ ​ ​ ​ ​ (395) ​ ​ ​ ​ ​ 3,931 ​ ​
Goodwill
​ ​ ​ ​ (25,879) ​ ​ ​ ​ ​ (3,138) ​ ​ ​ ​ ​ (22,741) ​ ​ ​ ​ ​ (7,768) ​ ​ ​ ​ ​ (14,973) ​ ​
Customer portfolio
​ ​ ​ ​ (22,005) ​ ​ ​ ​ ​ (11,719) ​ ​ ​ ​ ​ (10,286) ​ ​ ​ ​ ​ 2,364 ​ ​ ​ ​ ​ (12,650) ​ ​
Provision for compensation from acquisitions
​ ​ ​ ​ 6,277 ​ ​ ​ ​ ​ 5,342 ​ ​ ​ ​ ​ 935 ​ ​ ​ ​ ​ 935 ​ ​ ​ ​ ​ — ​ ​
Other temporary differences
​ ​ ​ ​ 1,041 ​ ​ ​ ​ ​ (601) ​ ​ ​ ​ ​ 1,642 ​ ​ ​ ​ ​ 549 ​ ​ ​ ​ ​ 2,191 ​ ​
Total
​ ​ ​
​
(22,794)
​ ​ ​ ​
​
(6,025)
​ ​ ​ ​
​
(16,769)
​ ​ ​ ​
​
(3,186)
​ ​ ​ ​
​
(13,583)
​ ​
​
(a)
In the following table we have the reconciliation from deferred (income) expenses:
​
​ ​ ​
2020
​
Total 2020 Deferred taxes variation
​ ​ ​ ​ (6,025) ​ ​
Foreign exchange variation on deferred tax balances fro foreign subsidiaries
​ ​ ​ ​ (330) ​ ​
Deferred tax from Sirena tax loss carryforwards
​ ​ ​ ​ (1,393) ​ ​
Deferred tax from Sirena’s client portofio and digital platform
​ ​ ​ ​ 16,228 ​ ​
Deferred tax profit or loss
​ ​ ​ ​ 8,480 ​ ​
The Company did not present taxable income in the prior years, mainly due to the deductibility for tax purposes of goodwill, representing a temporary difference. However, based on projections of taxable income and the reversal of goodwill temporary difference, management believes that sufficient taxable income will be available in future periods to recover deferred tax assets.
24
Earnings per share
​
The calculation of basic earnings per share is calculated by dividing net income for the year by the weighted average number of common shares existing during the year.
Diluted earnings per share are calculated by dividing net income for the year by weighted average number of common shares existing during the year plus weighted average number of common shares that would be issued upon conversion of all potentially diluting common shares into common shares.
The Company does not have financial instruments which could result in a dilution of the earning per share.
The tables below show data of income and shares used in calculating basic and diluted earnings per share:
​ ​ ​
2020
​ ​
2019
​ ​
2018
​
Basic and diluted earnings per share ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Numerator
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Profit (loss) of the year assigned to Company’s shareholders
​ ​ ​ ​ (21,431) ​ ​ ​ ​ ​ 13,844 ​ ​ ​ ​ ​ 19,865 ​ ​
Denominator
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Weighted average for number of common shares
​ ​ ​ ​ 4,601,501 ​ ​ ​ ​ ​ 4,421,401 ​ ​ ​ ​ ​ 4,421,401 ​ ​
Basic and diluted earnings (loss) per share (in reais)
​ ​ ​ ​ (4.657) ​ ​ ​ ​ ​ 3.131 ​ ​ ​ ​ ​ 4.493 ​ ​
 
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25
Risk management and financial instruments
​
25.1
Classification of financial instruments
​
The classification of financial instruments is presented in the table below, and in the understanding of the Company’s Management, there are no financial instruments classified in other categories besides those informed:
​ ​ ​
2020
​ ​
2019
​ ​
2018
​
​ ​ ​
Fair
value
through
profit or
loss
​ ​
Amortized
cost
​ ​
Level 1
​ ​
Fair
value
through
profit or
loss
​ ​
Amortized
cost
​ ​
Level 1
​ ​
Fair
value
through
profit or
loss
​ ​
Amortized
cost
​ ​
Level 1
​
Assets ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Cash and cash equivalents
​ ​ ​ ​ 46,880 ​ ​ ​ ​ ​ 13,099 ​ ​ ​ ​ ​ 47,453 ​ ​ ​ ​ ​ 508 ​ ​ ​ ​ ​ 11,834 ​ ​ ​ ​ ​ 508 ​ ​ ​ ​ ​ 42,291 ​ ​ ​ ​ ​ 8,385 ​ ​ ​ ​ ​ 42,291 ​ ​
Interest earnings bank
deposits
​ ​ ​ ​ 2,227 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 2,227 ​ ​ ​ ​ ​ 3,292 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 3,292 ​ ​ ​ ​ ​ 4,714 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 4,714 ​ ​
Trade accounts receivable
​ ​ ​ ​ — ​ ​ ​ ​ ​ 86,009 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 62,136 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 51,200 ​ ​ ​ ​ ​ — ​ ​
​ ​ ​ ​ ​ 49,107 ​ ​ ​ ​ ​ 99,108 ​ ​ ​ ​ ​ 49,107 ​ ​ ​ ​ ​ 3,800 ​ ​ ​ ​ ​ 73,970 ​ ​ ​ ​ ​ 3,800 ​ ​ ​ ​ ​ 47,005 ​ ​ ​ ​ ​ 59,585 ​ ​ ​ ​ ​ 47,005 ​ ​
Liabilities ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Loans and financing
​ ​ ​ ​ — ​ ​ ​ ​ ​ 98,975 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 63,346 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 48,229 ​ ​ ​ ​ ​ — ​ ​
Trade and other payable
​ ​ ​ ​ — ​ ​ ​ ​ ​ 100,237 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 42,454 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 44,322 ​ ​ ​ ​ ​ — ​ ​
​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 199,212 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 105,800 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 92,551 ​ ​ ​ ​ ​ — ​ ​
​
25.2
Financial risk management
​
The Company has a financial executive board responsible for risk management, with the supervision of the Board of Directors, and is also responsible for defining the policy, managing risks and financial instruments through control systems, which establish foreign exchange exposure limits and interest, and define the allocation of funds with financial institutions. The positions of all financial instruments, as well as the results obtained in relation to the proposed goals, are presented and evaluated monthly by the financial executive board and submitted to the Board of Directors of the Company.
25.3
Credit risk
​
It results from any difficulty in collecting the amounts of services provided to the customers.
The Company and its subsidiaries are also subject to credit risk from their interest earning bank deposits.
The credit risk related to the provision of services is minimized by a strict control of the customer base and active delinquency management by means of clear policies regarding the concession of services. There is no concentration of transactions with customers and the default level is historically very low.
In connection with credit risk relating to financial institutions, the Company and its subsidiaries seek to diversify such exposure among financial institutions.
Credit risk exposure
The book value of financial assets represents the maximum credit exposure. The maximum credit risk exposure on financial information date was:
​ ​ ​
2020
​ ​
2019
​ ​
2018
​
Cash and cash equivalents
​ ​ ​ ​ 59,979 ​ ​ ​ ​ ​ 12,342 ​ ​ ​ ​ ​ 50,676 ​ ​
Interest earnings bank deposits
​ ​ ​ ​ 2,227 ​ ​ ​ ​ ​ 3,292 ​ ​ ​ ​ ​ 4,714 ​ ​
Trade accounts receivable
​ ​ ​ ​ 86,009 ​ ​ ​ ​ ​ 62,136 ​ ​ ​ ​ ​ 51,200 ​ ​
​ ​ ​ ​ ​ 148,215 ​ ​ ​ ​ ​ 77,770 ​ ​ ​ ​ ​ 106,590 ​ ​
 
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The Company determines its allowance for expected credit losses by applying the following criteria:
•
The Company provides for expected losses by applying a loss rate calculated on historical effective losses on sales;
​
Additionally, the Company considers that accounts receivable had a significant increase in credit risk and provides for:
•
All notes receivables past due for more than 6 months;
​
•
Notes subject to additional credit analysis presenting indicators of significant risks of default based on ongoing renegotiations, failure indicators or judicial recovery ongoing processes and customers with relevant evidence of cash deteriorating situation.
​
25.4
Market Risk
​
Interest rate and inflation risk: Interest rate risk arises from the portion of debt and interest earning bank deposits remunerated at CDI (Interbank Deposit Certificate) rate, which may adversely affect the financial income or expenses in the event an unfavorable change in interest and inflation rates takes place.
25.5
Operations with derivatives
​
The Company does not have derivatives on a speculative basis.
25.6
Liquidity risk
​
The liquidity risk consists of the risk of the Company not having sufficient funds to settle its financial liabilities.
The Company’s and its subsidiaries’ cash flow and liquidity control are monitored on a daily basis by Company treasury function, so as to ensure that cash operating generation and previous fund raising, as necessary, are sufficient to maintain payment schedule, thus not generating liquidity risk for the Company and its subsidiaries.
As of the date of issuance of these financial statements, the Company entered into agreement with its financial creditors to obtain R$ 80,000 in credit lines with a grace period of 12 to 18 months and payment terms of 24 to 36 months. For these credit lines there is a covenant of 3.5x net bank debt / EBITDA. With these negotiations, the Company determined that it will have sufficient liquidity for least 12 months from the issuance of these financial statements.
We present below the contractual maturities of financial liabilities including payment of estimated interest.
Non-derivative financial liabilities
​ ​
Book value
​ ​
Contractual
cash flow
​ ​
Up to 12
Months
​ ​
1 – 2
years
​ ​
2 – 3
years
​ ​
>3
years
​
Loans and financing
​ ​ ​ ​ 98,975 ​ ​ ​ ​ ​ 122,565 ​ ​ ​ ​ ​ 74,356 ​ ​ ​ ​ ​ 20,474 ​ ​ ​ ​ ​ 19,066 ​ ​ ​ ​ ​ 8,670 ​ ​
Trade and other payables
​ ​ ​ ​ 100,237 ​ ​ ​ ​ ​ 100,237 ​ ​ ​ ​ ​ 100,036 ​ ​ ​ ​ ​ 201 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​
Lease liabilities
​ ​ ​ ​ 2,758 ​ ​ ​ ​ ​ 3,259 ​ ​ ​ ​ ​ 1,481 ​ ​ ​ ​ ​ 1,186 ​ ​ ​ ​ ​ 592 ​ ​ ​ ​ ​ — ​ ​
​ ​ ​ ​ ​ 201,970 ​ ​ ​ ​ ​ 226,061 ​ ​ ​ ​ ​ 175,873 ​ ​ ​ ​ ​ 21,861 ​ ​ ​ ​ ​ 19,658 ​ ​ ​ ​ ​ 8,670 ​ ​
Management does not expect any early maturities or cash outflows compared to those presented in the table above.
25.7
Sensitivity analysis
​
The main risks linked to the Company’s operations are linked to the variation of the Interbank Deposit Certificate (CDI) for financing and financial investments and the Long-Term Interest Rate (TJLP) for financing.
The Company’s financial instruments are represented by cash and cash equivalents, accounts receivable, accounts payable, loans and financing, and are recorded at amortized cost, plus interests incurred.
 
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On the reporting dates, the profile of instruments remunerated through Company’s interest was:
Variable rate assets
​ ​
2020
​ ​
2019
​ ​
2018
​
Financial assets
​ ​ ​ ​ 49,107 ​ ​ ​ ​ ​ 3,292 ​ ​ ​ ​ ​ 4,714 ​ ​
Financial liabilities
​ ​ ​ ​ 98,975 ​ ​ ​ ​ ​ 63,346 ​ ​ ​ ​ ​ 48,229 ​ ​
​
25.7.1
Sensitivity analysis for variable rate instruments
​
Investments indexed to CDI are recorded at market value, according to quotations published by the respective financial institutions, and the remainder refer mostly to bank deposit certificates. Therefore, the recorded amount of these securities does not differ from the market value.
The table below presents three scenarios for the risk of decreasing the CDI index. The base scenario was the index at December 2020 of 2.75% p.a. Scenario II represents a 25% decrease and scenario III a 50% decrease.
Operation
​ ​
Balance at 2020
​ ​
Risk
​ ​
Scenario I
Current scenario
​ ​
Scenario II
​ ​
Scenario III
​
Interest rate subject to variation
​ ​ ​ ​ 49,107 ​ ​ ​
CDI decrease
​ ​ ​ ​ 2.75% ​ ​ ​ ​ ​ 2.06% ​ ​ ​ ​ ​ 1.38% ​ ​
Financial investments
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 1,350 ​ ​ ​ ​ ​ 1,013 ​ ​ ​ ​ ​ 675 ​ ​
The Company has loans and borrowings linked to the CDI rate and the TJLP rate (long-term interest rate). The table below presents three scenarios for the risk of increasing the CDI and the TJLP indexes where the base scenario is the TJLP and CDI rates in effect at December 31, 2020, and projected scenarios represent increases of 25% and 50%.
Operation
​ ​
Balance at 2020
​ ​
Risk
​ ​
Scenario I
Current scenario
​ ​
Scenario II
​ ​
Scenario III
​
Loans – BNDES
​ ​ ​ ​ 15,653 ​ ​ ​
TJLP increase
​ ​ ​ ​ 769 ​ ​ ​ ​ ​ 961 ​ ​ ​ ​ ​ 1,153 ​ ​
Interest rate subject to variation
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 4.91% ​ ​ ​ ​ ​ 6.14% ​ ​ ​ ​ ​ 7.37% ​ ​
Financing
​ ​ ​ ​ 83,322 ​ ​ ​
CDI increase
​ ​ ​ ​ 2,291 ​ ​ ​ ​ ​ 2,864 ​ ​ ​ ​ ​ 3,437 ​ ​
Interest rate subject to variation
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2.75% ​ ​ ​ ​ ​ 3.44% ​ ​ ​ ​ ​ 4.13% ​ ​
​
25.8
Capital management
​
Company’s capital management aims to ensure that a strong credit rating is maintained before institutions, as well as a strong capital relationship, so as to support Company’s business and leverage shareholders’ value.
The Company controls its capital structure by adjusting it to the current economic conditions. In order to maintain an adjusted structure, the Company may pay dividends, return capital to the shareholders, fund new loans, issue promissory notes and contract derivative transactions.
The Company considers within its net debt structure: loans and financing less cash and cash equivalents. The financial leverage ratios on December 31, 2020, 2019 and 2018 can be summarized as follows:
​ ​ ​
2020
​ ​
2019
​ ​
2018
​
Loans and borrowings
​ ​ ​ ​ 98,975 ​ ​ ​ ​ ​ 63,346 ​ ​ ​ ​ ​ 48,229 ​ ​
Cash and cash equivalents
​ ​ ​ ​ (59,979) ​ ​ ​ ​ ​ (12,342) ​ ​ ​ ​ ​ (50,676) ​ ​
Net debth
​ ​ ​ ​ 38,996 ​ ​ ​ ​ ​ 51,004 ​ ​ ​ ​ ​ (2,447) ​ ​
Total equity
​ ​ ​ ​ 115,348 ​ ​ ​ ​ ​ 99,337 ​ ​ ​ ​ ​ 148,494 ​ ​
Net debt/Shareholders’ equity (%)
​ ​ ​ ​ 0.34 ​ ​ ​ ​ ​ 0.51 ​ ​ ​ ​ ​ (0.02) ​ ​
​
26
Related Parties
​
Balances and transactions between the Company and its subsidiaries, when applicable, were eliminated from the consolidation and are not in this note.
 
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Management remuneration
The Company does not have any additional post-employment obligation. The Company has two Long-Term Incentive Programs Granted, in 2018 and 2019, with eligibility to the Company’s Statutory Directors, in a bonus format, in which payments will be made in 2022 and 2023, respectively, based on goals that must be achieved in December 2020 and 2021, respectively. In order to executives acquire the right of two Long-Term Incentive payments, the program has a retention period, in which it indicates that executives need to remain in the company during the years 2021 and 2022. The provision is recognized in profit or loss.
The total remuneration of management, including bonus and Directors’ salary amounted R$ 10,060 as of December 31, 2020 (R$ 6,341 as of December 31, 2019 and R$ 4,662 as of December 31, 2018). Additionally, in connection with the acquisitions of Sirena in 2020 and Total Voice in 2019, the Company granted to the former shareholders of these companies that remained as employees, compensation programs linked to the continuing employment of those executives with the Company and the achievement of certain performance goals. The Company recognized as personnel expenses related to those programs the amounts of R$ 16,715 in 2020 and R$ 5,230 in 2019.
In 2020, the Company granted to certain employees a bonus program in which those employees may receive additional compensation if certain milestones set forth therein are met, including the consummation of the Company’s initial public offering. The settlement of the bonus may be done by either cash or the Company’s own shares at the choice of the Company, under parameters to be defined in the future by the board of directors. As of December 31, 2020, management estimates indicate that, under current conditions, such milestones were not met, so no amounts were recorded as of December 31, 2020.
27
Subsequent events
​
Probable acquisition of One To One Engine Desenvolvimento e Licenciamento de Sistemas de Informática S.A. — Direct One
On March 2021, Zenvia Brazil entered into purchase agreements for the direct and indirect acquisition of 100% of the share capital of One To One Engine Desenvolvimento e Licenciamento de Sistemas de Informática S.A. – Direct One, or D1. D1 is a platform that connects different data sources to enable a single customer view layer, allowing the creation of multichannel communications, generation of variable documents, authenticated message delivery and contextualized conversational experiences. The consummation of the transaction is subject to certain closing conditions, including the consummation of Zenvia Brazil initial public offering. The transaction is expected to be concluded in the second quarter of 2021. Under the terms of the purchase agreements and as part of the purchase price, on the closing date, (1) Zenvia Brazil will contribute R$40 million in cash into D1; (2) Zenvia Brazil will pay to D1 shareholders an amount which is currently estimated in R$250 million, which will be based on a valuation of 13 (thirteen) times D1’s gross profit for the last twelve months (LTM) ending on March 31, 2021 minus D1 net debt as of the same date and adjusted by working capital; and (3) the Company will deliver a number of its own shares to certain D1 shareholders, equivalent to an amount estimated to correspond to R$83 million, that will be calculated based on the valuation of 13 (thirteen) times D1’s gross profit for the last twelve months (LTM) ending on March 31, 2021 minus D1 net debt as of the same date and adjusted by working capital, divided by 13 (thirteen) times Zenvia Brazil’s consolidated gross profit for the last twelve months (LTM).
Additionally, as further consideration for the D1 Acquisition, the Company also agreed to pay amounts to D1 shareholders which are currently estimatde to be (i) R$45 million in the first quarter of 2022; and (ii) R$174 million in the first quarter of 2023, based on a certain multiple times D1’s gross profit for the last twelve months (LTM) ending on March 31, 2022 and March 31, 2023, respectively.
The estimates are based on information currently available. The actual consideration to be transferred may change as a result of D1’s and Zenvia Brazil’s results of operations and conclusion of the review of LTM ending March 31, 2021. The estimates presented above are preliminary and subject to that transaction progressing to a sufficiently advanced stage where there is sufficient information for a definitive measurement of final consideration amounts.Upon consummation of the D1 Acquisition, the Company will also become indirect holder of 100% of the share capital of Smarkio Tecnologia Ltda., or Smarkio, a
 
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wholly-owned subsidiary of D1 and a cloud-based company that combines an automated marketing platform through chatbots with a platform for creating, integrating and processing conversational interfaces that can be used by developers and business users. Smarkio was acquired by D1 in December 2020 and D1 started consolidating Smarkio in its financial statements as of December 1, 2020.
The acquisition of D1 is subject to the satisfaction or waiver of certain closing conditions set forth in the definitive agreements governing this transaction, including the initial public offering (IPO) of Zenvia Brazil. To the extent these conditions are not satisfied or waived or to the extent the IPO is not concluded, the Company may not complete the D1 Acquisition.
 
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[MISSING IMAGE: LG_KPMGZEUS-4C.JPG]  
KPMG Auditores Independentes
Avenida Carlos Gomes, 258 — 6º andar, salas 601 a 606 — Boa Vista
90480-000 — Porto Alegre/RS — Brasil
Caixa Postal 18511 — CEP 90480-000 — Porto Alegre/RS — Brasil
Telefone +55 (51) 3327-0200
kpmg.com.br
Report of independent registered public accounting firm
To the Shareholders and Board of Directors
Rodati Motors Corporation
Opinion on the Consolidated Financial Statements
We have audited the accompanying consolidated statements of financial position of Rodati Motors Corporation (and subsidiaries) (the Company) as of July 23, 2020 and December 31, 2019, the related consolidated statements of profit or loss and other comprehensive income, changes in equity, and cash flows for the period from January 1 to July 23,2020 and for the year ended December 31,2019, and the related notes (collectively, the consolidated financial statements). In our opinion, except for the omissions described below, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of July 23, 2020 and December 31, 2019 and the results of its operations and its cash flows for the period from January 1 to July 23,2020 and for the year ended December 31, 2019, in conformity with International Financial Reporting Standards as issued by the International Accounting Standards Board (IASB).
As discussed in Note 03, the accompanying consolidated financial statements are not presented in accordance with International Accounting Standard 1 — Presentation of Financial Statements, as they do not include the consolidated statement of financial position and related notes as of July 23, 2019 and the related statements of consolidated profit or loss and other comprehensive income, changes in equity, cash flows and the related notes for the comparative period from January 1 to July 23, 2019, which constitute a departure from International Financial Reporting Standards as issued by the International Accounting Standards Board.
Basis for Opinion
These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.
[MISSING IMAGE: FT_KPMGAUDIT-BW.JPG]
 
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We have served as the Company’s auditors since 2020.
/s/ KPMG Auditores Independentes
Porto Alegre, Brazil
March 24, 2021
 
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Rodati Motors Corporation
Consolidated statements of financial position at July 23, 2020 and December 31, 2019
(In Dollars)
​ ​ ​
Notes
​ ​
07/23/2020
​ ​
12/31/2019
​
Assets ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Current assets ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Cash and cash equivalents
​ ​ ​ ​ 5 ​ ​ ​ ​ ​ 2,227,771 ​ ​ ​ ​ ​ 1,401,617 ​ ​
Trade receivables
​ ​ ​ ​ 6 ​ ​ ​ ​ ​ 373,971 ​ ​ ​ ​ ​ 150,756 ​ ​
Taxes recoverable
​ ​ ​ ​ 7 ​ ​ ​ ​ ​ 15,582 ​ ​ ​ ​ ​ 20,946 ​ ​
Other receivables
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 9,517 ​ ​ ​ ​ ​ 5,071 ​ ​
Total current assets
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2,626,841 ​ ​ ​ ​ ​ 1,578,390 ​ ​
Noncurrent assets ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Taxes recoverable
​ ​ ​ ​ 7 ​ ​ ​ ​ ​ 17,943 ​ ​ ​ ​ ​ 14,028 ​ ​
Guarantee deposit
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 1,452 ​ ​ ​ ​ ​ 1,742 ​ ​
Property, plant and equipment
​ ​ ​ ​ 9 ​ ​ ​ ​ ​ 41,795 ​ ​ ​ ​ ​ 47,938 ​ ​
Total noncurrent assets
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 61,190 ​ ​ ​ ​ ​ 63,708 ​ ​
Total assets
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2,688,031 ​ ​ ​ ​ ​ 1,642,098 ​ ​
Liabilities and equity ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Current liabilities ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Loans and financing
​ ​ ​ ​ 11 ​ ​ ​ ​ ​ 1,272,296 ​ ​ ​ ​ ​ — ​ ​
Trade payables
​ ​ ​ ​ 10 ​ ​ ​ ​ ​ 394,204 ​ ​ ​ ​ ​ 301,491 ​ ​
Taxes payable
​ ​ ​ ​ 12 ​ ​ ​ ​ ​ 131,184 ​ ​ ​ ​ ​ 64,385 ​ ​
Payroll and related taxes
​ ​ ​ ​ 13 ​ ​ ​ ​ ​ 197,983 ​ ​ ​ ​ ​ 181,989 ​ ​
Payables to related parties-shareholders
​ ​ ​ ​ 8 ​ ​ ​ ​ ​ 2,884 ​ ​ ​ ​ ​ 2,462 ​ ​
Legal fees
​ ​ ​ ​ 15 ​ ​ ​ ​ ​ 208,127 ​ ​ ​ ​ ​ — ​ ​
Income taxes payable
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 43,095 ​ ​ ​ ​ ​ — ​ ​
Other payables
​ ​ ​ ​ 14 ​ ​ ​ ​ ​ 147,023 ​ ​ ​ ​ ​ 48.211 ​ ​
Total current liabilities
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2,396,796 ​ ​ ​ ​ ​ 598,538 ​ ​
Equity ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Share capital
​ ​ ​ ​ 16 ​ ​ ​ ​ ​ 5,554,723 ​ ​ ​ ​ ​ 5,554,723 ​ ​
Capital reserve
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 1,971,357 ​ ​ ​ ​ ​ 739,259 ​ ​
Other comprehensive income
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 795,024 ​ ​ ​ ​ ​ 670,942 ​ ​
Accumulated losses
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (8,029,869) ​ ​ ​ ​ ​ (5,921,364) ​ ​
Total equity
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 291,235 ​ ​ ​ ​ ​ 1,043,560 ​ ​
Total liabilities and equity
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2,688,031 ​ ​ ​ ​ ​ 1,642,098 ​ ​
See the accompanying notes to the financial statements.
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Rodati Motors Corporation
Consolidated statements of profit or loss and other comprehensive income
Period ended July 23, 2020 and year ended December 31, 2019
(In Dollars)
​ ​ ​
Notes
​ ​
07/23/2020
​ ​
12/31/2019
​
Revenue
​ ​ ​ ​ 4c ​ ​ ​ ​
​
1,692,699
​ ​ ​ ​
​
1,772,615
​ ​
Cost of services
​ ​ ​ ​ 15 ​ ​ ​ ​ ​ (450,254) ​ ​ ​ ​ ​ (601,188) ​ ​
Gross profit
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 1,242,455 ​ ​ ​ ​ ​ 1,171,427 ​ ​
General administrative expenses
​ ​ ​ ​ 16 ​ ​ ​ ​ ​ (3,054,611) ​ ​ ​ ​ ​ (2,725,475) ​ ​
Sales and marketing expenses
​ ​ ​ ​ 16 ​ ​ ​ ​ ​ (113,568) ​ ​ ​ ​ ​ (336,675) ​ ​
Impairment loss on trade receivables
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (72,762) ​ ​ ​ ​ ​ (76,124) ​ ​
Other income and expenses, net
​ ​ ​ ​ 16 ​ ​ ​ ​ ​ 5,666 ​ ​ ​ ​ ​ 28,582 ​ ​
Operating loss
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (1,992,830) ​ ​ ​ ​ ​ (1,938,265) ​ ​
Finance costs
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (127,995) ​ ​ ​ ​ ​ (432,626) ​ ​
Finance income
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 20,550 ​ ​ ​ ​ ​ 61,549 ​ ​
Net finance costs
​ ​ ​ ​ 17 ​ ​ ​ ​
​
(107,445)
​ ​ ​ ​
​
(371,077)
​ ​
Loss before income tax and social contribution
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (2,100,275) ​ ​ ​ ​ ​ (2,309,342) ​ ​
Current income tax and social contribution
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (8,230) ​ ​ ​ ​ ​ — ​ ​
Loss for the period (year)
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (2,108,505) ​ ​ ​ ​ ​ (2,309,342) ​ ​
Other comprehensive income ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Items that are or may be reclassified subsequently to profit or loss
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Cummulative translation adjustment
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 124,082 ​ ​ ​ ​ ​ 389,228 ​ ​
Total comprehensive income for the year
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (1,984,423) ​ ​ ​ ​ ​ (1.920.114) ​ ​
See the accompanying notes to the financial statements.
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Rodati Motors Corporation
Consolidated statements of changes in equity
Period ended July 23, 2020 and year ended December 31, 2019
(In Dollars)
​ ​ ​
Note
​ ​
Capital
​ ​
Capital
reserve
​ ​
Other
comprehensive
income
​ ​
Accumulated
losses
​ ​
Total
shareholders’
equity
​
Balance at January 1, 2019
​ ​ ​ ​ ​ ​ ​ 5,554,723 ​ ​ ​ ​ ​ 246,420 ​ ​ ​ ​ ​ 281,714 ​ ​ ​ ​ ​ (3,612,022) ​ ​ ​ ​ ​ 2,470,835 ​ ​
Cumulative translation adjustment
​ ​ ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 389,228 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 389,228 ​ ​
Share-based payments
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 492,839 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 492,839 ​ ​
Net loss for the year
​ ​ ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ (2,309,342) ​ ​ ​ ​ ​ (2,309,342) ​ ​
Balance at December 31, 2019
​ ​ ​ ​ ​ ​ ​ 5,554,723 ​ ​ ​ ​ ​ 739,259 ​ ​ ​ ​ ​ 670,942 ​ ​ ​ ​ ​ (5,921,364) ​ ​ ​ ​ ​ 1,043,560 ​ ​
Cumulative translation adjustment
​ ​ ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 124,082 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 124,082 ​ ​
Share-based payments
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 1,232,098 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 1,232,098 ​ ​
Net loss for the period
​ ​ ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ (2,108,505) ​ ​ ​ ​ ​ (2,108,505) ​ ​
Balance at July 23, 2020
​ ​ ​ ​ ​ ​ ​ 5,554,723 ​ ​ ​ ​ ​ 1,971,357 ​ ​ ​ ​ ​ 795,024 ​ ​ ​ ​ ​ (8,029,869) ​ ​ ​ ​ ​ 291,235 ​ ​
See the accompanying notes to the financial statements.
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Rodati Motors Corporation
Consolidated statement of cash flow
Period ended July 23, 2020 and for the year December 31, 2019
(In Dollars)
​ ​ ​
07/23/2020
​ ​
12/31/2019
​
Cash flow from operating activities ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Loss for the period/year
​ ​ ​
​
(2,108,505)
​ ​ ​ ​
​
(2,309,342)
​ ​
Adjustments for: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Income tax and social contribution
​ ​ ​ ​ 8,230 ​ ​ ​ ​ ​ — ​ ​
Depreciation
​ ​ ​ ​ 9,074 ​ ​ ​ ​ ​ 17,574 ​ ​
Hyperinflation impacts
​ ​ ​ ​ 80,791 ​ ​ ​ ​ ​ 399,512 ​ ​
Share-based payments
​ ​ ​ ​ 1,232,098 ​ ​ ​ ​ ​ 492,839 ​ ​
Impairment loss on trade receivables
​ ​ ​ ​ 72,762 ​ ​ ​ ​ ​ 76,124 ​ ​
Interest and fines
​ ​ ​ ​ 11,524 ​ ​ ​ ​ ​ 15,562 ​ ​
Others
​ ​ ​ ​ 43,346 ​ ​ ​ ​ ​ (3,121) ​ ​
Changes in assets and liabilities ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Trade receivable
​ ​ ​ ​ (295,977) ​ ​ ​ ​ ​ (31,302) ​ ​
Other accounts receivables
​ ​ ​ ​ (4,156) ​ ​ ​ ​ ​ 10,464 ​ ​
Taxes recoverable
​ ​ ​ ​ 1,449 ​ ​ ​ ​ ​ (18,922) ​ ​
Trade payables
​ ​ ​ ​ 92,173 ​ ​ ​ ​ ​ 207,633 ​ ​
Payroll and related taxes
​ ​ ​ ​ 15,994 ​ ​ ​ ​ ​ 65,071 ​ ​
Taxes payable
​ ​ ​ ​ 66,799 ​ ​ ​ ​ ​ (20,369) ​ ​
Payables to related parties-partners
​ ​ ​ ​ 422 ​ ​ ​ ​ ​ (58) ​ ​
Other accounts payables
​ ​ ​ ​ 350,034 ​ ​ ​ ​ ​ (16,251) ​ ​
Cash flow used in operating activities
​ ​ ​ ​ (423,401) ​ ​ ​ ​ ​ (1,114,586) ​ ​
Income tax paid
​ ​ ​ ​ (8,230) ​ ​ ​ ​ ​ — ​ ​
Interest and fines paid
​ ​ ​ ​ (8,740) ​ ​ ​ ​ ​ (15,562) ​ ​
Net cash flow from operating activities
​ ​ ​ ​ (440,371) ​ ​ ​ ​ ​ (1,130,148) ​ ​
Cash flow from investment activities ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Property, plant and equipment acquisitions
​ ​ ​ ​ (2,987) ​ ​ ​ ​ ​ (25,104) ​ ​
Net cash used in investment activities
​ ​ ​ ​ (2,987) ​ ​ ​ ​ ​ (25,104) ​ ​
Cash flow from financing activities ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Loans and financing
​ ​ ​ ​ 1,269,512 ​ ​ ​ ​ ​ — ​ ​
Net cash used in financing activities
​ ​ ​ ​ 1,269,512 ​ ​ ​ ​ ​ — ​ ​
Net decrease in cash and cash equivalents
​ ​ ​ ​ 826,154 ​ ​ ​ ​ ​ (1,155,252) ​ ​
Cash and cash equivalents at January 1
​ ​ ​ ​ 1,401,617 ​ ​ ​ ​ ​ 2,556,869 ​ ​
Cash and cash equivalents at July 23/ December 31
​ ​ ​
​
2,227,771
​ ​ ​ ​
​
1,401,617
​ ​
See the accompanying notes to the financial statements.
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Notes to the consolidated financial statements
(in US Dollars)
1    General information
Rodati Motors Corporation (the “Company”) was incorporated on January 28, 2014, in the State of Delaware, United States of America, with its headquarters located at 3500 South Dupont Highway, Dover, Kent County, DE 19901.
Rodati Motors with its subsidiaries are together “the Group” or “the Company”.
Rodati Motors Corporation’s main business purpose is the offering of services involving the Sirena software, which is a multichannel Software as a Service (SaaS) for use by Business to Business (B2B) Client Relationship Management (CRM) companies, mainly focusing on the Whatsapp channel, which allows to centralize, distribute and respond to incoming clients via Facebook, Instagram, chatbots, websites and Whatsapp.
To execute its business purpose, the Company has opened subsidiaries in Argentina, Brazil and Mexico. The Company is in the initial phase of its commercial activities. In this scenario, Management has been focusing on the creation and development of commercial markets. Therefore, operations have been generating recurring losses. The resources to ensure the company’s growth will come from the operations, loans from financial entities and capital contributions from Zenvia. The acquisition of the Company by Zenvia is intended at integrating the operations of both companies in a single technological platform to provide a more complete set of solutions to customers. In management’s assessment, the integration of the businesses and the resulting synergies will enable the Company to increase sales, cash flows from operations and the availability of financial resources generated by its own operations, as well as from the continuous financial support of its parent company.
The Company´s subsidiaries are Rodati Services S.A., a company incorporated in Argentina in July 21, 2014; Rodati Servicios , S.A. de CV, a company incorporated in Mexico in December 13, 2017; and Rodati Motors Central de Informações de Veículos Automotores Ltda., a company incorporated in Brazil in May 12, 2014.
On July 24, 2020, the shareholders of Rodati Motors Corporation entered into a share purchase and sale agreement to sell 100% of its shares to Zenvia Mobile Serviços Digitais S.A. The sale price at the closing date of the transaction amounted to US$ 24 million at the time of closing.
2    Company’s Subsidiaries
​ ​ ​
Country
​ ​
7/23/2020
Interest
​ ​
12/31/2019
Interest
​
​ ​ ​ ​ ​ ​
%
​ ​
%
​
Rodati Services S.A.
​ ​ Argentina ​ ​ ​ ​ 100 ​ ​ ​ ​ ​ 100 ​ ​
Rodati Servicios, S.A. de CV
​ ​ Mexico ​ ​ ​ ​ 100 ​ ​ ​ ​ ​ 100 ​ ​
Rodati Motors Central de Informações de Veículos Automotores Ltda.
​ ​ Brazil ​ ​ ​ ​ 100 ​ ​ ​ ​ ​ 100 ​ ​
Corona virus (Covid-19) — Financial and economic impacts
In March 2020, the World Health Organization (“WHO”) declared that the Corona virus (“COVID-19”) outbreak represented a pandemic. In this context, the Company has been actively working on prevention measures , following WHO guidelines.
Main risks and uncertainties resulting from COVID-19
Aware of the operational risks related to the COVID-19 pandemic, Management has been assessing the impacts of possible losses and impacts on its financial statements, especially in relation to risks and measures that are being taken by companies to mitigate the impact from this pandemic.
 
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Notes to the consolidated financial statements
(in US Dollars)
Considering the scenario of uncertainties regarding the eradication of the pandemic for the resumption of normal activities and its negative impact on global economy, Management has evaluated the effects subsequent to the reporting date of July 23, 2020, including on its estimates of results and cash generation, applying its best estimates, and concluded that there is no need to record provisions for impairment of financial and non-financial assets directly attributable to the pandemic as no material adverse effects on its operations were noted and no other facts that could raise doubts about the Company’s ability to continue as a going concern were identified by management.
3    Basis of preparation
The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (IASB),except for the lack of presentation of a statement of financial position and related notes as of July 23, 2019, and the statement of profit and loss and other comprehensive income and related notes for the comparative period from January 1, 2019 to July 23, 2019, which constitute a departure from IFRS as issued by IASB.
The issuance of these financial statements was approved by the Executive Board on March 24, 2021.
a.
Measurement basis
​
The financial statements were prepared based on the historical cost.
The subsidiary Rodati Services S.A. is located in Argentina and has as its functional currency the Argentinean Peso. Argentina has been considered a hyperinflationary economy since July 1 2018. Therefore, the financial information of the subsidiary located in Argentina used for consolidation purposes were adjusted at the monetary measurement unit current at the end of reporting period before being translated and included in the consolidated financial statements. Non-monetary assets and liabilities measured at cost, shareholders’ equity and the statement of profit or loss were adjusted to reflect the change in purchasing power of the Argentinean Pesos by applying a consumer price index (CPI). Impacts of the monetary restatement are recorded in profit or loss.
b.
Functional and presentation currency
​
The consolidated financial statements are presented in US dollars (US$), the functional and presentation currency of the Company. All financial information has been rounded to the nearest Dollar amount, except where otherwise indicated. Rodati Motors Central de Informaçoes de Veiculos Automotores Ltda. has the local currency, Brazilian Real (BRL), as its functional currency; Rodati Services S.A has the local currency, Argentinean Peso (ARG), as its functional currency; and Rodati Servicios, S.A. de CV. has the local currency, the Mexican Pesos (MEX), as its functional currency.
c.    Use of estimates and judgments
In preparing these consolidated financial statements, management has made judgements and
estimates that affect the application of the Company´s accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to estimates
are recognised prospectively.
(c.1)   Judgments
Information about judgments referring to the adoption of accounting policies which could impact significantly the amounts recognized in the financial statements are included in the following note:
Property, plant and equipment — Note 9: Useful life of property, plant and equipment
 
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Notes to the consolidated financial statements
(in US Dollars)
(c.2)   Uncertainties on assumptions and estimates
Information on uncertainties as to assumptions and estimates that pose a high risk of resulting in a material adjustment within the next fiscal year are included in the following note:
Allowance for for expected credit losses — Note 6: main assumptions in the determination of expected losses rate;
(i)
Measurement of fair value
​
Certain of the Company’s accounting policies and disclosures require the measurement of fair value, for financial and non-financial assets and liabilities.
The Company established a control structure related to measurement of fair value. It includes the review process of all significant fair value measurements, reporting directly to the Chief Financial Officer.
Evaluation process includes the regular review of significant non-observable data and valuation adjustments. If third-party information, such as brokerage firms’ quotes or pricing services, is used to measure fair value, then the evaluation process analyzes the evidence obtained from the third parties to support the conclusion that such valuations meet the IFRS requirements, including the level in the fair value hierarchy in which such valuations should be classified. Significant assessment matters are reported to the Board of Directors.
When measuring fair value of an asset or liability, the Company uses observable data as much as possible. Fair values are classified at different levels according to hierarchy based on information (inputs) used in valuation techniques, as follows:
Level 1: Prices quoted (not adjusted) in active markets for identical assets and liabilities.
Level 2: Inputs, except for quoted prices, included in Level 1 which are observable for assets or liabilities, directly (prices) or indirectly (derived from prices).
Level 3: Inputs, for assets or liabilities, which are not based on observable market data (non-observable inputs).
The Company recognizes transfers between fair value hierarchy levels at the end of the financial statements’ period in which changes occurred.
Additional information on the assumptions adopted in the measurement of fair values is included in Note 20 — Risk management and financial instruments.
4    Significant accounting policies
The main accounting policies used to prepare these consolidated financial statements are as follows.
a.
Consolidation procedures
​
a.i)    Subsidiaries
Subsidiaries are entities controlled by the Company. The Company controls an entity when it is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. The financial statements of subsidiaries are included in the consolidated financial statements from the date in which control commences until the date on which control ceases.
a.ii)    Transactions eliminated on consolidation
Intra-group balances and transactions and any unrealized income or expenses (except for foreign currency transaction gains and losses) arising from intra-group transactions, are eliminated.
 
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Notes to the consolidated financial statements
(in US Dollars)
b.
Translation of the financial statements of subsidiaries
​
For subsidiaries abroad whose functional currency is different from the US dollar, the asset and liability accounts are translated into the Company’s functional currency, using the exchange rates as of the reporting date, and revenue and expenses are translated using the average monthly foreign exchange rate. The resulting translation adjustments are recognized in the specific “Cumulative Translation Adjustments” line item in equity.
c.
Revenue
​
Performance obligations and revenue recognition policies
The following table provides information about the nature and timing of the satisfaction of performance obligations in contracts with customers, including significant payment terms, and the related revenue recognition policies.
Type of service
​ ​
Nature and timing of satisfaction of performance obligations, including significant payment terms
​ ​
Revenue recognition policies
​
SaaS
​ ​ Revenues are mainly derived from fees based on the usage-based services. The use of these services is measured at the time the service is available to customers or based on volumes of interactions between the Company’s clients and their own customers. Revenues are recognized through the period of time the service is available for use or based on usage by customers, depending on each agreement and on the particular agreement with customers. ​ ​ Revenue is recognized upon the transfer of control of the services to customers in an amount that reflects the consideration the company expects to receive in exchange for those services. Revenue is recognized net of any taxes collected from customers, which are subsequently remitted to governmental authorities. Amounts that have been invoiced are recorded in accounts receivable and in revenue or deferred revenue (classified in other liabilities), depending on whether the revenue recognition criteria have been met. Arrangements with customers do not provide for rights of return of right to take possession of the software supporting the applications. ​
 
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Notes to the consolidated financial statements
(in US Dollars)
Revenue by Geography
Net revenue by geography is as follows:
​ ​ ​
07/23/2020
​ ​
12/31/2019
​
Argentina
​ ​ ​ ​ 420,212 ​ ​ ​ ​ ​ 517,642 ​ ​
Bolivia
​ ​ ​ ​ 10,387 ​ ​ ​ ​ ​ — ​ ​
Brazil
​ ​ ​ ​ 193,449 ​ ​ ​ ​ ​ 111,481 ​ ​
Chile
​ ​ ​ ​ 139,722 ​ ​ ​ ​ ​ 180,380 ​ ​
Colombia
​ ​ ​ ​ 102,678 ​ ​ ​ ​ ​ 37,446 ​ ​
Costa Rica
​ ​ ​ ​ 15,854 ​ ​ ​ ​ ​ 6,674 ​ ​
Ecuador
​ ​ ​ ​ 109,937 ​ ​ ​ ​ ​ 18,710 ​ ​
Guatemala
​ ​ ​ ​ 22,853 ​ ​ ​ ​ ​ — ​ ​
Mexico
​ ​ ​ ​ 461,623 ​ ​ ​ ​ ​ 813,520 ​ ​
Nicaragua
​ ​ ​ ​ 7,790 ​ ​ ​ ​ ​ — ​ ​
Peru
​ ​ ​ ​ 93,962 ​ ​ ​ ​ ​ 20,516 ​ ​
Panama
​ ​ ​ ​ 25,335 ​ ​ ​ ​ ​ 9,757 ​ ​
Paraguay
​ ​ ​ ​ 23,452 ​ ​ ​ ​ ​ 25,258 ​ ​
United States
​ ​ ​ ​ 18,778 ​ ​ ​ ​ ​ 6,802 ​ ​
Uruguay
​ ​ ​ ​ 18,721 ​ ​ ​ ​ ​ 14,285 ​ ​
Others
​ ​ ​ ​ 27,946 ​ ​ ​ ​ ​ 10,144 ​ ​
​ ​ ​ ​ ​ 1,692,699 ​ ​ ​ ​ ​       1,772,615 ​ ​
​
d.
Financial instruments
​
(i)    Recognition and initial measurement
Trade accounts receivable are initially recognized on the date that they were originated. All other financial assets and liabilities are initially recognized when the Company becomes a party to the instrument’s contractual provisions.
A financial asset (unless it is trade accounts receivable without a material financing component) or a financial liability is initially measured at fair value, plus, for an item not measured at Fair value through profit or loss (FVTPL), transaction costs which are directly attributable to its acquisition or issue. Trade accounts receivable without a significant financing component are initially measured at the price of the transaction.
(ii)    Subsequent classification and measurement
Upon initial recognition, a financial asset is classified as measured: at amortized cost or FVTPL.
Financial assets are not reclassified after initial recognition, unless the Company changes the business model for the management of financial assets, in which case all affected financial assets are reclassified on the first day of the reporting period subsequent to the change in the business model.
A financial asset is measured at amortized cost if it meets both conditions below and is not designated as measured at FVTPL:
•
is held within a business model whose purpose is to maintain financial assets to receive contractual cash flows; and
​
 
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Notes to the consolidated financial statements
(in US Dollars)
•
its contractual terms generate, on specific dates, cash flows only related to the payment of principal and interest on outstanding principal value.
​
The Company carries out an evaluation of the purpose of the business in which a financial asset is held in the portfolio, since this better reflects the way in which the business is managed and the information is provided to management.
Financial assets held for trading or managed with a performance evaluated based on fair value are measured at fair value through profit or loss.
Financial assets — evaluation whether the contractual cash flows represent solely payments of principal and interest
For this purpose, “principal” is defined as the fair value of the financial asset at initial recognition. “Interest” is defined as a consideration for the amount of cash at the time and for the credit risk associated to the outstanding principal value during a certain period and for other risks and basic costs of loans, as well as for the profit margin.
The Company considers the contractual terms of the instruments to evaluate whether the contractual cash flows are only payments of principal and interest. It includes evaluating whether the financial asset contains a contractual term that could change the time or amount of the contractual cash flows so that it would not meet this condition. In making this evaluation, the Company considers the following:
•
contingent events that change the amount or timing of cash flows;
​
•
terms that may adjust the contractual rate, including variable rates;
​
•
the prepayment and the extension of the term; and
​
•
the terms that limit the Company’s access to cash flows of specific assets.
​
Whenever applicable, the prepayment is consistent with the principal and interest payment criterion if the prepayment amount mostly represents the unpaid principal and interest amounts on the outstanding principal amount — which may include an additional reasonable compensation due to the early termination of the contract. Furthermore, regarding a financial asset acquired for an amount lower or greater than the nominal value of the contract, the prepayment permission or requirement for an amount representing the nominal value of the contract plus contractual interest (which may also include reasonable additional compensation for early termination of the contract), accrued (but not paid), are treated as consistent with this criterion if the fair value of the prepayment is immaterial at initial recognition.
​
Financial assets
at FVTPL
​ ​ These assets are subsequently measured at fair value. Net income, plus interest or dividend income, is recognized in profit or loss. ​
​
Financial assets
at amortized cost
​ ​ These assets are subsequently measured at amortized cost using the effective interest rate method. Amortized cost is reduced for impairment losses. Interest income, foreign exchange gains and impairment losses are recognized in the income statement. Any gain or loss on derecognition is recognized in profit or loss. ​
d.    Impairment
Non-derivative financial assets
(i)    Financial instruments and contractual assets
The Company recognizes allowances for expected credit losses (ECL) on financial assets measured at amortized cost;
 
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Notes to the consolidated financial statements
(in US Dollars)
The Company measures loss allowance at an amount equal to credit loss expected for the lifetime of the receivable, except for the items described below, which are measured as credit loss expected for 12 months:
•
debt securities with low credit risk on the statement of financial position date; and
​
•
other debt securities and bank balances for which the credit risk has not significantly increased since the beginning of initial recognition.
​
Allowances for trade receivables are always measured at an amount equal to lifetime ECLs.
When determining whether the credit risk of a financial asset has increased significantly since initial recognition and when estimating ECLs, the Company considers reasonable and supportable information that is relevant and available without undue cost or effort. This includes both quantitative and qualitative information and analysis, based on the Company’s historical experience and informed credit assessment, that includes forward-looking information.
The Company assumes that the credit risk in a financial asset increased significantly if it is more than 30 days past due.
The Company considers a financial asset to be in default when:
 — the debtor is unlikely to pay its credit obligations to the Company in full, without recourse by the Company to actions such as realising security (if any is held); or
 — the financial asset is more than 180 days past due.
Lifetime ECLs are the ECLs that result from all possible default events over the expected life of a financial instrument. 12-month ECLs are the portion of ECLs that result from default events that are possible within the 12 months after the reporting date (or a shorter period if the expected life of the instrument is less than 12 months).
The maximum period considered when estimating ECLs is the maximum contractual period over which the Company is exposed to credit risk.
(ii)    Measurement of ECLs
ECLs are a probability-weighted estimate of credit losses. Credit losses are measured as the present value of all cash shortfalls.
(iii)    Presentation of allowance for ECL in the statement of financial position
Loss allowances for financial assets measured at amortised cost are deducted from the gross carrying amount of the assets.
(iv)    Write-off
The gross carrying amount of a financial asset is written-off when the Company has no reasonable expectations of recovering a financial asset in its entirety or a portion thereof. The Company expects no significant recovery from the amount written-off. However, financial assets that are written off could still be subject to enforcement activities in order to comply with the Company´s procedures for recovery of amounts due.
Non financial assets
At each reporting date, the Company reviews the carrying amounts of its non-financial assets (property and plant and equipment) to determine whether there is any indication of impairment. If any such indication exists, then the asset’s recoverable amount is estimated.
 
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Notes to the consolidated financial statements
(in US Dollars)
For impairment testing, assets are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets.
The recoverable amount of an asset is the greater of its value in use and its fair value less costs to sell. Value in use is based on the estimated future cash flows, discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset.
An impairment loss is recognised if the carrying amount of an asset exceeds its recoverable amount. As at July 23, 2020, no impairment indicators were identified by the Company.
e.
Property, plant and equipment
​
(i)
Recognition and measurement
​
Property and equipment items are measured at the historical purchase cost, restated by inflationary effects for subsidiaries operating in hyperinflationary economies, less accumulated depreciation and accumulated impairment losses (if applicable).
The cost includes expenditures that are directly attributable to the acquisition of assets.
Gains and losses on disposal of property, plant and equipment items are determined by comparing the proceeds from disposal with the book value of Property, plant and equipment and are recognized net within “Other income” in the profit or loss.
(ii)
Subsequent costs
​
The replacement cost of a component of property, plant and equipment is recognized in the book value of the item when it is probable that the future economic benefits embodied in the component will flow to the Company and its cost can be reliably measured. The book value of the component that is replaced is written off. Costs of normal maintenance on property, plant and equipment are recognized in profit or loss as incurred.
(iii) Depreciation
Depreciation is recognized in profit or loss under the straight-line method based on the useful life of each component, since this method best reflects the standard of usage of the future economic benefits merged to the asset.
The depreciation methods, useful lives and residual values are reviewed at each reporting date and changes are ecognized as a change in accounting estimate.
f.
Income tax and social contribution
​
Current and deferred income taxes for the year are calculated at the rate in force in each country in which the Company and its subsidiaries operate, levied on taxable profit as established by ruling legislation of each country; this calculation takes into consideration offset of tax loss carry forwards, following applicable ruling limitations.
Income tax and social contribution expenses comprise current and deferred income taxes. The current and deferred taxes are recognized in profit or loss unless they are related to business combinations or items directly recognized in equity.
Income taxes applicable to the parent company, located in the United States are calculated at 21% of taxable income for the year.
For the subsidiary in Brazil, the current income and social contribution taxes are calculated based on the rates of 15% plus a surcharge of 10% on taxable income in excess of Brazilian Reais (BRL) 240,000
 
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Notes to the consolidated financial statements
(in US Dollars)
(US$ 46,469 at the exchange rate at July 23, 2020) per annum for income tax and 9% on taxable income for social contribution and consider the offsetting of tax loss carryforwards and negative basis of social contribution limited to 30% of annual taxable income.
For the subsidiaries in Mexico and Argentina, the current income taxes are calculated based on the rate of 30%.
(i)    Current tax
Current tax is the tax payable or receivable on the taxable income or loss for the year and any adjustments to taxes payable or receivable in relation to previous years.
The amount of current tax payable or receivable is the best estimate of the amount expected to be paid or received that reflects uncertainty related to income taxes, if any. They are measured using the tax rates enacted or substantively enacted at the reporting date.
Current tax assets and liabilities are offset only if certain criteria are met.
(ii)    Deferred tax
Deferred tax is recognized on temporary differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used for tax purposes.
Deferred income tax and social contribution assets are recognized for unused tax losses, tax credits and deductible temporary differences, to the extent that it is probable that future taxable profits will be available against which they can be utilized. Deferred income tax and social contribution assets are reviewed at the end of each reporting period and reduced when their realization is no longer probable.
Deferred taxes are measured at the tax rates that are expected to apply to temporary differences when they reverse, based on the rates enacted or substantively enacted up to the reporting date.
The measurement of deferred taxes reflects the tax consequences that would follow from the manner in which the Company expects to recover or settle the carrying amount of its assets and liabilities.
Deferred income tax and social contribution assets are reviewed at the end of the reporting period and will be reduced to the extent their realization is no longer probable.
e.    Provisions
A provision is recognized in the statement of financial position when the Company has a legal or constructive obligation as a result of a past event, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are recognized based on the best estimates of the risk involved.
The Company records provisions to cover future disbursements that might arise from tax, labor and civil lawsuits in progress. Provisions are recorded based on an analysis of the lawsuits in progress and of the prospects of an unfavorable result implying future disbursement.
Contingent assets are not recognized until a decision on lawsuits is final and unappealable in favor of the Company on a permanent basis and when it is virtually certain that the asset will be realized. Taxes whose enforceability is being challenged in the judicial sphere are recorded taking into consideration the concept of “legal obligation”.
Provisions are reviewed on the dates of the financial statements and adjusted to reflect the current best estimate. If it is no longer probable that a cash outflow is required to settle the obligation, the provision is reversed.
 
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Notes to the consolidated financial statements
(in US Dollars)
g.    Leases
Applicable as from January 1, 2019, IFRS 16 establishes the principles for the recognition, measurement, presentation and disclosure of leases and requires lessees to account for all leases under a single model in the statement of financial position, similar to the accounting for financial leases under IAS 17. The standard includes some practical expedients:
•
Leasing of “low value” assets;
​
•
Short-term leases (that is, with a lease term of 12 months or less);
​
•
Leases composed of variable amounts;
​
•
Leases in which the Company does not have control over the asset; and
​
•
Leases with indefinite term.
​
As of the beginning of a lease contract, the lessee recognizes a liability for lease payments (ie, a lease liability) and an asset that represents the right to use the underlying asset during the lease term (ie, the right of use asset). Lessees are required to recognize separately the interest expense on the lease liability and the depreciation expense on the right-of-use asset.
Lessees are also required to reassess the lease liability in the event of certain events (for example, a change in the lease term, a change in future lease payments as a result of a change in an index or rate used to determine such payments). In general, the lessee recognizes the remeasurement of the lease liability as an adjustment to the right-of-use asset.
IFRS 16 also requires lessees and lessors to make more comprehensive disclosures than those provided for in IAS 17.
There are no material leases to be recorded in financial statements.
Accounting policies as of January 1, 2019
At the beginning of a contract, the Company assesses whether a contract is or contains a lease. A contract is, or contains a lease, if the contract transfers the right to control the use of an identified asset for a period of time in exchange for consideration.
Leasing of low value assets
The Company opted not to recognize right of use asset and lease liabilities for leases of low value assets and short-term leases. The Company recognizes lease payments associated with these leases as an expense on a straight-line basis over the lease term.
h.    Finance income and costs
Finance income include interest on late collections, interest earning bank deposits income and foreign exchange gains on the changes in assets and liabilities indexed in foreign currency. Interest income is recognized in profit or loss under the effective interest method.
Finance costs include expenses with interest on loans and exchange-rate charges on assets and liabilities indexed at a foreign currency. Borrowing costs which are not directly attributable to the acquisition, construction, or production of a qualifying asset are accounted for in profit or loss using the effective interest rate method.
i.    Foreign currency
(i)    Foreign exchange transactions
Transactions in foreign currency, i.e. all transactions that are not carried out in the functional currency, are translated at the exchange rate on the dates of each transaction. Monetary assets and liabilities
 
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Notes to the consolidated financial statements
(in US Dollars)
denominated in foreign currency were translated into functional currency at the foreign exchange rate prevailing at the balance sheet date. The gains and losses from the fluctuations in the exchange rates on monetary assets and liabilities are recognized in the statement of operations.
j.    Hyperinflationary economy
As from July 2018, considering that the accumulated inflation in the last three years in Argentina was over 100%, the application of the Financial Reporting in Hyperinflationary Economies (IAS 29) has been required in the preparation of financial information on the subsidiary located in Argentina. In accordance with IAS 29, non-monetary assets and liabilities, Equity and the statement of income of subsidiaries operating in highly inflationary economies are adjusted by the change in the Consumer price index of the currency. As a result of that, the Company applied IAS 29 to its subsidiary in Argentina. The non-monetary assets and liabilities recorded at historical cost and the Equity and the results of the subsidiary in Argentina were updated for inflation. The impacts of hyperinflation resulting from changes in general purchasing power up to January 1, 2019 (first time adoption of IFRS) were reported as equity adjustment and the impacts of changes in general purchasing power as from January 1, 2019 to December 31, 2019 and from January 1, 2020 to July 23, 2020 were reported as finance costs in the statements of profit or loss.
k.    Share-based payments
The grant-date fair value of equity-settled share-based payment arrangements granted to employees is generally recognised as an expense, with a corresponding increase in equity, over the vesting period of the awards. The amount recognised as an expense is adjusted to reflect the number of awards for which the related service and non-market performance conditions are expected to be met, such that the amount ultimately recognised is based on the number of awards that meet the related service and non-market performance conditions at the vesting date. The cost of equity-settled transactions is determined by the fair value at the grant date.
5    Cash and cash equivalents and financial investments
​ ​ ​
07/23/2020
​ ​
12/31/2019
​
Cash and banks
​ ​ ​ ​ 185,784 ​ ​ ​
297, 756
​
Cash on payment platform(a)
​ ​ ​ ​ 180,702 ​ ​ ​
56,026
​
Financial investments(b)
​ ​ ​ ​ 1,861,285 ​ ​ ​
1,047,835
​
​ ​ ​ ​ ​ 2,227,771 ​ ​ ​
1,401,617
​
Cash and cash equivalents and financial investments by currency:
​ ​ ​
07/23/20
​ ​
12/31/2019
​
Argentinean Peso
​ ​ ​ ​ 162,882 ​ ​ ​ ​ ​ 118,942 ​ ​
Brazilean Real
​ ​ ​ ​ 62,026 ​ ​ ​ ​ ​ 15,064 ​ ​
Mexican Peso
​ ​ ​ ​ 93,563 ​ ​ ​ ​ ​ 82,042 ​ ​
US Dollar
​ ​ ​ ​ 1,909,300 ​ ​ ​ ​ ​ 1,185,569 ​ ​
​ ​ ​ ​ ​ 2,227,771 ​ ​ ​ ​ ​ 1,401,617 ​ ​
​
(a)
Cash on payment platform refers to amounts available with Stripe and Mercado Pago, payment platform where the company collects cash from its customers. These payment platform companies transfer cash to the banks accounts of the Company for up to 14 days.
​
(b)
Financial investments are highly liquid and readily convertible into a known amount of cash and are subject to an insignificant risk of change in value. Financial investments substantially refer to money
​
 
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Notes to the consolidated financial statements
(in US Dollars)
market account, with an average earning interest rate of 1.41% per annun. Information about the Company’s exposure to credit and market risks, and fair value measurement is included in Note 20.
6    Trade receivables
​ ​ ​
07/23/2020
​ ​
12/31/2019
​
Trade receivables
​ ​ ​ ​ 532,989 ​ ​ ​ ​ ​ 237,012 ​ ​
(-) Allowance for expected credit losses (ECL)
​ ​ ​ ​ (159,018) ​ ​ ​ ​ ​ (86,256) ​ ​
Total
​ ​ ​
​
373,971
​ ​ ​ ​
​
150,756
​ ​
Trade receivables by currency:
​ ​ ​
07/23/2020
​ ​
12/31/2019
​
Argentine Peso
​ ​ ​ ​ 36,575 ​ ​ ​ ​ ​ 34,075 ​ ​
Brazilean Real
​ ​ ​ ​ 70,379 ​ ​ ​ ​ ​ 41,050 ​ ​
Mexican Peso
​ ​ ​ ​ 216,960 ​ ​ ​ ​ ​ 45,386 ​ ​
US Dollar
​ ​ ​ ​ 50,057 ​ ​ ​ ​ ​ 30,245 ​ ​
​ ​ ​ ​ ​ 373,971 ​ ​ ​ ​ ​ 150,756 ​ ​
Changes in expected credit losses from trade receivables are as follows:
​
Balance at January 1, 2019
​ ​ ​ ​ (10,132) ​ ​
​
Additions
​ ​ ​ ​ (76,124) ​ ​
​
Balance at December 31, 2019
​ ​ ​ ​ (86,256) ​ ​
​
Additions
​ ​ ​ ​ (72,762) ​ ​
​
Balance at July 23, 2020
​ ​ ​ ​ (159,018) ​ ​
We set out below the amounts receivable by aging:
​ ​ ​
07/23/2020
​ ​
12/31/2019
​
Falling due
​ ​ ​ ​ 38,828 ​ ​ ​ ​ ​ 40,153 ​ ​
Past due
​ ​ ​ ​ 494,161 ​ ​ ​ ​ ​ 196,859 ​ ​
30 days
​ ​ ​ ​ 164,882 ​ ​ ​ ​ ​ 92,019 ​ ​
From 31 to 60 days
​ ​ ​ ​ 69,225 ​ ​ ​ ​ ​ 21,710 ​ ​
From 61 to 90 days
​ ​ ​ ​ 34,788 ​ ​ ​ ​ ​ 8,531 ​ ​
From 91 to 120 days
​ ​ ​ ​ 60,177 ​ ​ ​ ​ ​ 5,704 ​ ​
From 121 to 150 days
​ ​ ​ ​ 7,380 ​ ​ ​ ​ ​ 2,809 ​ ​
From 151 to 180 days
​ ​ ​ ​ 31,798 ​ ​ ​ ​ ​ 981 ​ ​
Over 180 days
​ ​ ​ ​ 125,911 ​ ​ ​ ​ ​ 65,105 ​ ​
​ ​ ​ ​ ​ 532,989 ​ ​ ​ ​ ​ 237,012 ​ ​
 
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Notes to the consolidated financial statements
(in US Dollars)
7    Taxes recoverable
​ ​ ​
07/23/2020
​ ​
12/31/2019
​
Tax enacted by Law 25,413
​ ​ ​ ​ 17,943 ​ ​ ​ ​ ​ 14,028 ​ ​
Corporate income tax
​ ​ ​ ​ 30 ​ ​ ​ ​ ​ 11,699 ​ ​
Value Added Tax (VAT)
​ ​ ​ ​ 11,009 ​ ​ ​ ​ ​ 1,826 ​ ​
Other taxes recoverable
​ ​ ​ ​ 4,543 ​ ​ ​ ​ ​ 7,421 ​ ​
Total
​ ​ ​
​
33,525
​ ​ ​ ​
​
34,974
​ ​
Current assets
​ ​ ​ ​ 15,582 ​ ​ ​ ​ ​ 20,946 ​ ​
Non-current assets
​ ​ ​ ​ 17,943 ​ ​ ​ ​ ​ 14,028 ​ ​
Tax enacted by Law 25,413 refers to Competitivity Law No. 25,413 has created a tax on credits and debits in bank checking accounts opened in financial institutions in Argentina. The general tax rate is 0.6 percent (six per thousand) for credits and 0.6 percent (six per thousand) for debits.
This amount may be fully offset against income tax as long as there are amounts payable in the same period of collection. For compensation in subsequent periods, compensation of 33% of the amount paid is allowed.
8    Related parties
The Company has amounts payable to its shareholders, as follows:
​ ​ ​
07/23/2020
​ ​
12/31/2019
​
Reimbursement to shareholders(a)
​ ​ ​ ​ 2,884 ​ ​ ​ ​ ​ 2,462 ​ ​
Total liabilities
​ ​ ​ ​ 2,884 ​ ​ ​ ​ ​ 2,462 ​ ​
​
(a)
Administrative expenses paid by shareholders on behalf of the Company to be reimbursed by the Company
​
The total key management personnel compensation amounted to US$ 1,367,324 for the period ended July 23, 2020 (US$ 713,877 December 31, 2019), as demonstrated below:
​ ​ ​
07/23/2020
​ ​
12/31/2019
​
Short-term benefits (salaries)
​ ​ ​ ​ 135,226 ​ ​ ​ ​ ​ 221,038 ​ ​
Share-based payments (Note 16.b)
​ ​ ​ ​ 1,232,098 ​ ​ ​ ​ ​ 492,839 ​ ​
Total ​ ​ ​ ​ 1,367,324 ​ ​ ​ ​ ​ 713,877 ​ ​
9    Property, plant and equipment
9.1    Breakdown of balances
​ ​ ​
Average
annual
rate %
​ ​
Cost
​ ​
Accumulated
depreciation
​ ​
Net balance at
07/23/2020
​ ​
Net balance at
12/31/2019
​
IT equipment
​ ​ ​
​
20
​ ​ ​
69,125
​ ​
(38,837)
​ ​
30,289
​ ​
35,737
​
Furniture and fixtures
​ ​ ​
​
10
​ ​ ​
6,773
​ ​
(2,066)
​ ​
4,707
​ ​
5,089
​
Facilities
​ ​ ​
​
10
​ ​ ​
9,731
​ ​
(2,931)
​ ​
6,799
​ ​
7,112
​
Total
​ ​ ​ ​ ​ ​ ​ ​
85,629
​ ​
(43,834)
​ ​
41,795
​ ​
47,938
​
 
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Notes to the consolidated financial statements
(in US Dollars)
9.2    Changes in property, plant and equipment
​ ​ ​
Average
annual
rate %
​ ​
12/31/19
​ ​
Additions
​ ​
Exchange rate
changes
​ ​
Hyperinflation
​ ​
07/23/20
​
IT equipment
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 69,813 ​ ​ ​ ​ ​ 2,803 ​ ​ ​ ​ ​ (5,490) ​ ​ ​ ​ ​ 1,999 ​ ​ ​ ​ ​ 69,125 ​ ​
Furniture and fixtures
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 7,051 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ (1,173) ​ ​ ​ ​ ​ 895 ​ ​ ​ ​ ​ 6,773 ​ ​
Facilities
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 9,914 ​ ​ ​ ​ ​ 184 ​ ​ ​ ​ ​ (1,649) ​ ​ ​ ​ ​ 1,282 ​ ​ ​ ​ ​ 9,731 ​ ​
Cost ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 86,778 ​ ​ ​ ​ ​ 2,987 ​ ​ ​ ​ ​ (8,312) ​ ​ ​ ​ ​ 4,176 ​ ​ ​ ​ ​ 85,629 ​ ​
IT equipment
​ ​ ​ ​ 20 ​ ​ ​ ​ ​ (34,076) ​ ​ ​ ​ ​ (8,654) ​ ​ ​ ​ ​ 5,288 ​ ​ ​ ​ ​ (1,395) ​ ​ ​ ​ ​ (38,837) ​ ​
Furniture and fixtures
​ ​ ​ ​ 10 ​ ​ ​ ​ ​ (1,962) ​ ​ ​ ​ ​ (182) ​ ​ ​ ​ ​ 327 ​ ​ ​ ​ ​ (249) ​ ​ ​ ​ ​ (2,066) ​ ​
Facilities
​ ​ ​ ​ 10 ​ ​ ​ ​ ​ (2,802) ​ ​ ​ ​ ​ (238) ​ ​ ​ ​ ​ 465 ​ ​ ​ ​ ​ (356) ​ ​ ​ ​ ​ (2,931) ​ ​
(-) Accumulated depreciation
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (38,840) ​ ​ ​ ​ ​ (9,074) ​ ​ ​ ​ ​ 6,080 ​ ​ ​ ​ ​ (2,000) ​ ​ ​ ​ ​ (43,834) ​ ​
Total ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 47,938 ​ ​ ​ ​ ​ (6,087) ​ ​ ​ ​ ​ (2,232) ​ ​ ​ ​ ​ 2,176 ​ ​ ​ ​ ​ 41,795 ​ ​
10    Trade payables
​ ​ ​
07/23/2020
​ ​
12/31/2019
​
Domestic suppliers
​ ​
357,950
​ ​
218,048
​
Foreign suppliers
​ ​
36,254
​ ​
83,443
​
Total ​ ​
394,204
​ ​
301,491
​
11    Loan and financing
​ ​ ​
Interests
p.a.
​ ​
Consolidated
​
​ ​ ​ ​ ​ ​
07/23/20
​ ​
12/31/2019
​
Working capital(a)
​ ​
—
​ ​
1,220,233
​ ​
—
​
Government Loan – Covid 19(b)
​ ​
24% p.a.
​ ​
52,063
​ ​
—
​
​ ​ ​ ​ ​ ​
1,272,296
​ ​
—
​
​
(a)
Working capital financing refers to agreements between investors and shareholders and the Company to fund the Company’s operations. The contract provides the contribution of this amount as equity in case of default. The amounts were fully paid in cash in July and August 2020 with no interest.
​
(b)
The Company entered into an agreement with Argentinean Government for a loan with lower interest rate than market rates due to the COVID. The loan will be paid in nine installments with due dates from August 2020 to April 2021.
​
​ ​ ​
12/31/19
​ ​
Proceeds
​ ​
Interests
​ ​
07/23/20
​
Working capital
​ ​ ​ ​ — ​ ​ ​ ​ ​ 1,220,233 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 1,220,233 ​ ​
Government Loan
​ ​ ​ ​ — ​ ​ ​ ​ ​ 49,279 ​ ​ ​ ​ ​ 2,784 ​ ​ ​ ​ ​ 52,063 ​ ​
Total ​ ​ ​ ​ — ​ ​ ​ ​ ​ 1,269,512 ​ ​ ​ ​ ​ 2,784 ​ ​ ​ ​ ​ 1,272,296 ​ ​
 
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Notes to the consolidated financial statements
(in US Dollars)
12    Taxes payable
​ ​ ​
07/23/2020
​ ​
12/31/2019
​
Value Added Tax (VAT)
​ ​ ​ ​ 103,586 ​ ​ ​ ​ ​ 46,334 ​ ​
Other taxes
​ ​ ​ ​ 27,598 ​ ​ ​ ​ ​ 18,051 ​ ​
Total ​ ​ ​ ​ 131,184 ​ ​ ​ ​ ​ 64,385 ​ ​
13    Payroll and related taxes
​ ​ ​
07/23/2020
​ ​
12/31/2019
​
Salaries payable
​ ​ ​ ​ 70,783 ​ ​ ​ ​ ​ 56,096 ​ ​
Management compensation
​ ​ ​ ​ 26,925 ​ ​ ​ ​ ​ 69,019 ​ ​
Labor provisions (13th salary and vacation pay)
​ ​ ​ ​ 7,675 ​ ​ ​ ​ ​ 7,087 ​ ​
Social security contribution
​ ​ ​ ​ 37,686 ​ ​ ​ ​ ​ 29,171 ​ ​
Social security contribution – Plan
​ ​ ​ ​ 46,541 ​ ​ ​ ​ ​ 13,946 ​ ​
Other obligations
​ ​ ​ ​ 8,373 ​ ​ ​ ​ ​ 6,670 ​ ​
Total ​ ​ ​ ​ 197,983 ​ ​ ​ ​ ​ 181,989 ​ ​
Social Security Contribution Plan refers to the Argentinean installment program of the withheld social security contribution of employees and the social security contribution to be paid by the Company in February 2021.
The Company does not have any additional post-employment obligation and does not offer other long-term benefits.
14    Other liabilities
​ ​ ​
07/23/2020
​ ​
12/31/2019
​
Overpayments due to customers
​ ​ ​ ​ 24,476 ​ ​ ​ ​ ​ 19,802 ​ ​
Deferred revenue
​ ​ ​ ​ 95,777 ​ ​ ​ ​ ​ 12,830 ​ ​
Advances from customers
​ ​ ​ ​ 23,382 ​ ​ ​ ​ ​ 15,520 ​ ​
Others
​ ​ ​ ​ 3,388 ​ ​ ​ ​ ​       59 ​ ​
Total ​ ​ ​ ​ 147,023 ​ ​ ​ ​ ​ 48,211 ​ ​
Deferred revenue refers to invoices and/or payment orders issued in the period in connection with services to be rendered in subsequent months.
Advances from customers refer to collections related to services to be rendered in subsequent months.
15    Legal Fees
The legal fees amount of US$ 208,127 refers to the accruals for payments to lawyers that supported the Company on the negotiations in connection with the transfer of control mentioned in note 1.
16    Equity
a.    Share capital
As at July 23, 2020, the Company’s share capital is USD 5,554,723, represented by 18,906,169 registered common shares and 18,300,792 preferred shares. The table below sets out the number of shares held by the Company’s shareholders.
 
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Notes to the consolidated financial statements
(in US Dollars)
​ ​ ​
07/23/2020
​
Shareholders
​ ​
Number of shares
​ ​
Percentage
​
Investors
​ ​
22,550,792
​ ​
60.61%
​
Founders of the Company
​ ​
13,167,561
​ ​
35.39%
​
Current and former Company employees
​ ​
1,488,608
​ ​
4.00%
​
Total
​ ​
37,206,961
​ ​
100.00%
​
Preferred shares have priority in distribution of dividends and in the reimbursement of capital, in any event of extinguishment of the Company, and have no voting rights.
b.    Share-based payments
The Company granted in 2018 a stock option plan (the 2018 plan) linked to a service agreement, classified as an equity-settled arrangement. The grant-date fair value of equity-settled share-based payment arrangements granted was determined based on the best estimate of the fair value of the Company’s shares is recognized as an expense, with a corresponding increase in equity, over the vesting period of the awards. At June 26, 2019, the Company replaced the 2018 plan by a restricted stocks plan at the same terms previously in force and included a restriction contingent to a future initial public offering of the Company, therefore the grantee needs to meet a cumulative vesting condition being the service period of 48 months and the occurrence of an IPO.
Summary of the restricted stock plan for the period ended July 23, 2020:
Grant date
​ ​
Commencement
of vesting
​ ​
Vesting
period
​ ​
Number of
shares
​ ​
Expenses
recognized in 2020
​
6/28/2018 ​ ​
6/28/2018
​ ​
48 months
​ ​
6,503,686
​ ​
1,232,098
​
On July 24, 2020, the Company was 100% acquired by Zenvia Mobile Serviços Digitais S.A. The purchase price consisted of an upfront cash payment of US$ 10,923 on July 24, 2020, the closing date. Following the acquisition, the former sharesholders will be subject to additional deferred payments of US$ 13,584, due in 3 installments payable in 6, 12 and 24 month after the acquisition date. The deferred payments bear interests of 10% p.a. plus 0.75% for each month since the closing date, fully payable on the second installment. In case of a liquidation event (defined in the contract as a strategic sale of the Company or a an Initial Public Offering) within the period until the full settlement of the deferred consideration payable, part of the payment will be made in a variable quantity of the Zenvia shares, depending on the valuation of such shares associated with the liquidation events, limited to the cash amounts defined in the contract. The total consideration transferred was equivalent to US$ 24,507.
In connection to the acquisition, the restricted shares plan was cancelled at the acquisition date and the shares were cash settled by Zenvia to the former shareholders as part of the consideration transferred. Due to a provision in the share-based payment arrangement whereby the restrict stocks would fully vest upon a change in control, the Company recorded such event in the pre-acquisition period as an acceleration of the vesting period, recognizing all the impacts in profit or loss and a corresponding entry in equity.
 
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Notes to the consolidated financial statements
(in US Dollars)
17    Expenses by nature
​ ​ ​
07/23/2020
​ ​
12/31/2019
​
Salaries and charges
​ ​ ​ ​ (833,433) ​ ​ ​ ​ ​ (1,440,007) ​ ​
Share-based paymens
​ ​ ​ ​ (1,232,098) ​ ​ ​ ​ ​ (492,839) ​ ​
Business Service Provider (BSP)
​ ​ ​ ​ (389,121) ​ ​ ​ ​ ​ (490,921) ​ ​
Other general expenses
​ ​ ​ ​ (135,765) ​ ​ ​ ​ ​ (305,528) ​ ​
Professional fees
​ ​ ​ ​ (679,732) ​ ​ ​ ​ ​ (386,197) ​ ​
IT expenses
​ ​ ​ ​ (22,471) ​ ​ ​ ​ ​ (15,023) ​ ​
Travel expenses
​ ​ ​ ​ (22,495) ​ ​ ​ ​ ​ (120,825) ​ ​
Reserch and development of new technologies
​ ​ ​ ​ (21,520) ​ ​ ​ ​ ​ (90,183) ​ ​
Rental
​ ​ ​ ​ (19,845) ​ ​ ​ ​ ​ (79,427) ​ ​
Marketing expenses
​ ​ ​ ​ (33,523) ​ ​ ​ ​ ​ (71,921) ​ ​
Commissions
​ ​ ​ ​ (58,159) ​ ​ ​ ​ ​ (20,944) ​ ​
Internet and phones
​ ​ ​ ​ (19,831) ​ ​ ​ ​ ​ (8,058) ​ ​
Impairment of trade receivables
​ ​ ​ ​ (72,762) ​ ​ ​ ​ ​ (76,124) ​ ​
Depreciation
​ ​ ​ ​ (9,074) ​ ​ ​ ​ ​ (15,509) ​ ​
Others
​ ​ ​ ​ (135,700) ​ ​ ​ ​ ​ (97,374) ​ ​
​ ​ ​ ​ ​ (3,685,529) ​ ​ ​ ​ ​ (3,710,880) ​ ​
​ ​ ​
07/23/2020
​ ​
12/31/2019
​
Cost of services
​ ​ ​ ​ (450,254) ​ ​ ​ ​ ​ (601,188) ​ ​
General administrative expenses
​ ​ ​ ​ (3,054,611) ​ ​ ​ ​ ​ (2,725,475) ​ ​
Sales and marketing expenses
​ ​ ​ ​ (113,568) ​ ​ ​ ​ ​ (336,675) ​ ​
Impairment on trade receivables
​ ​ ​ ​ (72,762) ​ ​ ​ ​ ​ (76,124) ​ ​
Other income and expenses, net
​ ​ ​ ​ 5,666 ​ ​ ​ ​ ​ 28.582 ​ ​
​ ​ ​ ​ ​ (3,685,529) ​ ​ ​ ​ ​ (3,710,880) ​ ​
18    Net finance costs
​ ​ ​
07/23/2020
​ ​
12/31/2019
​
Finance costs ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Inflation adjustment
​ ​ ​ ​ (80,791) ​ ​ ​ ​ ​ (399,512) ​ ​
Banking expenses
​ ​ ​ ​ (26,750) ​ ​ ​ ​ ​       (13,973) ​ ​
Exchange losses
​ ​ ​ ​ (8,319) ​ ​ ​ ​ ​       (1,952) ​ ​
Interest and fines
​ ​ ​ ​ (11,524) ​ ​ ​ ​ ​       (15,562) ​ ​
Others
​ ​ ​ ​ (611) ​ ​ ​ ​ ​ (1,627) ​ ​
​ ​ ​ ​ ​ (127,995) ​ ​ ​ ​ ​ (432,626) ​ ​
Financial income ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Interest income
​ ​ ​ ​ 20,550 ​ ​ ​ ​ ​       61,549 ​ ​
​ ​ ​ ​
​
20,550
​ ​ ​ ​
​
      61,549
​ ​
​ ​ ​ ​ ​ (107,445) ​ ​ ​ ​ ​ (371,077) ​ ​
 
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Notes to the consolidated financial statements
(in US Dollars)
19    Income taxes
Deferred tax assets have not been recognized in respect of tax loss carry forwards and temporary differences, because it is not probable that future taxable income will be available against which the Company can use the benefits. The Company has not recorded a tax assets of US$ 1,005,432 as of July 23, 2020 (US$ 873,651 as of December 31, 2019). US$ 404,317 refers to a subsidiary located in Argentina that has a term of use of up to 5 years in accordance with tax legislation and the remaining balance does not expire.
19.1
Reconciliation of income tax and social contribution on the losses for the period ended July 23, 2020and the year ended December 31, 2019.
​
​ ​ ​
07/23/2020
​ ​
12/31/2019
​
Loss before income tax
​ ​ ​ ​ (2,100,265) ​ ​ ​ ​ ​ (2,309,342) ​ ​
Parent Company rate
​ ​ ​ ​ 21% ​ ​ ​ ​ ​ 21% ​ ​
Income tax benefit
​ ​ ​ ​ 441,056 ​ ​ ​ ​ ​ 484,962 ​ ​
Differences of tax rate on subsidiaries
​ ​ ​ ​ 23,110 ​ ​ ​ ​ ​ 90,232 ​ ​
Non-deductible expenses
​ ​ ​ ​ (307,232) ​ ​ ​ ​ ​ (113,664) ​ ​
Others
​ ​ ​ ​ (16,927) ​ ​ ​ ​ ​ 10,404 ​ ​
Net Operating Loss Carryforward not recorded
​ ​ ​ ​ (131,777) ​ ​ ​ ​ ​ (471,932) ​ ​
Income taxes on statement of profit or loss
​ ​ ​ ​ (8,230) ​ ​ ​ ​ ​ — ​ ​
20    Risk management and financial instruments
20.1   Classification of financial instruments
The classification of financial instruments is presented in the table below, and in the understanding of the Company’s Management, there are no financial instruments classified in other categories besides those informed:
​ ​ ​
Fair value
through
profit or loss
​ ​
07/23/2020
Amortized Cost
​ ​
Fair value
through
profit or loss
​ ​
12/31/2019
Amortized Cost
​
Assets ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Cash and cash equivalents
​ ​
—
​ ​
366,486
​ ​
—
​ ​
353,782
​
Financial investments
​ ​
1,861,285
​ ​ ​ ​ ​
1,047,835
​ ​
—
​
Trade account receivables
​ ​
—
​ ​
373,791
​ ​
—
​ ​
150,756
​
​ ​ ​
1,861,285
​ ​
740,277
​ ​
1,047,835
​ ​
504,538
​
Liabilities ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Loans and financing
​ ​
52,063
​ ​
1,220,233
​ ​
—
​ ​ ​ ​
Trade payables
​ ​
—
​ ​
      394,204
​ ​
—
​ ​
301,491
​
​ ​ ​
52,063
​ ​
1,614,437
​ ​
—
​ ​
301,491
​
The fair value of financial assets and liabilities is substantially equivalent to the book values.
20.2    Financial risk
The Company has a financial executive board responsible for risk management, with the supervision of the Board of Directors, and is also responsible for defining the policy, managing risks and financial instruments through control systems, which establish foreign exchange exposure limits and interest, and define the allocation of funds with financial institutions. The positions of all financial instruments, as well
 
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Notes to the consolidated financial statements
(in US Dollars)
as the results obtained in relation to the proposed goals, are presented and evaluated monthly by the financial executive board and submitted to the Board of Directors of the Company.
20.3    Credit Risk
It results from any difficulty in collecting the amounts of services provided to the customers.
The Company and its subsidiaries are also subject to credit risk from their interest earning bank deposits.
The Company has been implementing policies of credit risk related to the provision of services to minimize credit related to trade accounts receivable by improving controls on the customer base and delinquency management by means of creating policies regarding the concession of services. There is no concentration of transactions with customers.
In connection with credit risk relating to financial institutions, the Company and its subsidiaries seek to diversify such exposure among financial institutions.
Credit risk exposure
The book value of financial assets represents the maximum credit exposure. The maximum credit risk exposure on financial information date was:
​ ​ ​
07/23/2020
​ ​
12/31/2019
​
Cash and cash equivalents
​ ​ ​ ​ 366,486 ​ ​ ​ ​ ​ 353,782 ​ ​
Financial investments
​ ​ ​ ​ 1,861,285 ​ ​ ​ ​ ​ 1,047,835 ​ ​
Trade accounts receivable
​ ​ ​ ​ 373,971 ​ ​ ​ ​ ​ 150,756 ​ ​
​ ​ ​ ​ ​ 2,601,742 ​ ​ ​ ​ ​ 1,552,373 ​ ​
The Company determines its allowance for expected credit losses by applying the following criteria:
•
The Company provides for expected losses by applying a percentage of historical effective losses;
​
Additionaly the Company considers that accounts receivable had a significant increase in credit risk and provides them for:
•
All notes receivables past due for more than 6 months;
​
•
Notes subject to additional credit analysis presenting indicators of significant risks of default based on ongoing renegotiations, failure indicators or judicial recovery ongoing processes and customers with relevant evidence of cash deteriorating situation.
​
20.4    Market risk
Interest rate: Interest rate risk arises from interest earning bank deposits rate in the United States of America, which may adversely affect the financial income in the event an unfavorable change in interest and inflation rates takes place. Inflation rates in the Argentina market can adversely affect financial costs on the consolidated financial statements due to monetary correction of non-monetary assets, liabilities and equity.
Sensitivity analysis
The main risks linked to the Company’s operations are linked to the variation of the interests bearing bank deposits rate .
The Company’s financial instruments are represented by cash and cash equivalents, accounts receivable, accounts payable, loans and financing, and are recorded at amortized cost, plus interests incurred.
 
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Notes to the consolidated financial statements
(in US Dollars)
As of July 23, 2020 and December 31,2019 the profile of instruments remunerated through Company’s interest was:
Variable rate assets
​ ​
07/23/2020
​ ​
12/31/2019
​
Financial assets
​ ​ ​ ​ 1,861,285 ​ ​ ​ ​ ​ 1,047,835 ​ ​
Financial liabilities
​ ​ ​ ​ (52,063) ​ ​ ​ ​ ​ — ​ ​
Fair value sensitivity analysis for fixed rate instruments
The Company has no fixed rate financial assets or liabilities at fair value through profit or loss, and no derivative instruments.
Sensitivity analysis for variable rate instruments
Financial investments are recorded at fair value, according to quotations published by the respective financial institutions.
In order to verify the sensitivity of the index in the financial investments to which the Company was exposed as of July 23, 2020, three different scenarios were defined for the risk of decreasing the interests bearing bank deposits rate. Based on the July index, which was 1.41% for financial investments this was defined as a probable scenario; from there, it was increased and decreased by 25% and 50%.
Operation
​ ​
Balance at
07/23/2020
​ ​
Risk
​ ​
Scenario I
Current
​ ​
Scenario II
​ ​
Scenario III
​
Interest rate subject to variation
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Financial investments
​ ​ ​ ​ 1.861.285 ​ ​ ​
Index decrease
​ ​ ​ ​ 1,41% ​ ​ ​ ​ ​ 1,06% ​ ​ ​ ​ ​ 0,71% ​ ​
Impact on profit and loss
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (26.244) ​ ​ ​ ​ ​ (19.683) ​ ​ ​ ​ ​ (13.122) ​ ​
Based on the July index, which was 24% for financial liabilities, this was defined as a probable scenario; from there, it was increased and decreased by 25% and 50%.
Operation
​ ​
Balance at
07/23/2020
​ ​
Risk
​ ​
Scenario I
Current
​ ​
Scenario II
​ ​
Scenario III
​
Financial liabilities
​ ​ ​ ​ (52,063) ​ ​ ​
Index increase
​ ​ ​ ​ 24% ​ ​ ​ ​ ​ 18,00% ​ ​ ​ ​ ​ 12,00% ​ ​
Impact on profit and loss
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 12.495 ​ ​ ​ ​ ​ 9.371 ​ ​ ​ ​ ​ 6.248 ​ ​
20.5    Operations with derivatives
The Company had no derivative instruments in July 23, 2020.
20.6    Liquidity risk
The liquidity risk consists of the Company and its subsidiaries having no sufficient funds to settle their obligations.
The Company and its subsidiaries’ cash flow and liquidity are monitored on a daily basis by Company management so as to ensure that cash operating generation and cash and cash equivalents position are sufficient to maintain payment schedules, thus not increasing liquidity risk.
The table below presents the contractual maturities of financial liabilities:
Non-derivative
financial liabilities 		​ ​
Book value
​ ​
Contractual cash
flows up to 12 months
​
Trade payables
​ ​
394,204
​ ​
394,204
​
Loan and financing
​ ​
1,272,296
​ ​
1,272,296
​
​ ​ ​
1,614,437
​ ​
1,614,437
​
 
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Notes to the consolidated financial statements
(in US Dollars)
No cash outflows are expected to occur significantly sooner or in amounts significantly different.
23    Events after the reporting period
Sale of the Company
On July 24, 2020, the Company entered into a share purchase and sale agreement to sell 100% of the Company’s shares. The selling price consists of an upfront cash payment of US$ 10,923 on July 24,2020, closing date. Following the acquisition, the former sharesholders will be subject to additional deferred payments of US$ 13,584, due in 3 installments payable in 6, 12 and 24 month after the acquisition date. The total consideration transferred was equivalent to US$ 24,507. Also, in addition to the consideration transferred to former shareholders, certain of the former sharesholders that remained working at the Company will be subject to additional compensation of up to US$ 5,514 thousand to be paid in 2021 and 2022, calculated based on certain goals of contribution margins (as defined in the agreement) generated by Sirena solutions, including their continued employment with the Company.
* * *
 
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​ ​ ​ ​ Tel.: +55 11 3848 5880
Fax: + 55 11 3045 7363
www.bdo.com.br 		​ ​ Rua Major Quedinho 90
Consolação — São Paulo,SP — Brasil
01050-030 		​
INDEPENDENT AUDITOR’S REPORT
To
Board of Directors
One to One Engine Desenvolvimento e Licenciamento de Sistemas de Informática S.A.
São Paulo — SP
Opinion
We have audited the consolidated financial statements of One to One Engine Desenvolvimento e Licenciamento de Sistemas de Informática S.A. and its subsidiaries, which comprise the consolidated balance sheets as of 31 December 2020 and 2019 and 1 January 2019, and the related consolidated statements of income / (loss) and comprehensive income / (loss), changes in equity, and cash flows for the years ended 31 December 2020 and 2019, and the related notes to the consolidated financial statements.
In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the financial position of the Company as of 31 December 2020 and 2019 and 1 January 2019, and the results of its operations and its cash flows for the years ended 31 December 2020 and 2019 in accordance with International Financial Reporting Standards as issued by the International Accounting Standard Board.
Basis for opinion
We conducted our audits in accordance with auditing standards generally accepted in the United States of America (GAAS). Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the Company and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audits. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Responsibilities of management for the financial statements
Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with International Financial Reporting Standards as issued by the International Accounting Standard Board, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date that the consolidated financial statements are issued or available to be issued.
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion.
[MISSING IMAGE: TM2039074D4-FTR_BDORCSBW.JPG]
 
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Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the consolidated financial statements.
In performing an audit in accordance with GAAS, we:
•
Exercise professional judgment and maintain professional skepticism throughout the audit.
​
•
Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements.
​
•
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control. Accordingly, no such opinion is expressed.
​
•
Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the consolidated financial statements.
​
•
Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern for a reasonable period of time.
​
We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control-related matters that we identified during the audit.
/s/ BDO RCS Auditores Independentes S.S.
​
BDO RCS Auditores Independentes S.S.
São Paulo, Brazil
March 18, 2021
 
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ONE TO ONE ENGINE DESENVOLVIMENTO E LICENCIAMENTO DE SISTEMAS DE INFORMATICA S.A.
Consolidated statement of financial position
As at December 31, 2020 and 2019 and January 1, 2019
(In thousands of Brazilian reais)
​ ​ ​
Note #
​ ​
December 31,
2020
​ ​
December 31,
2019
​ ​
January 1,
2019
​
Assets ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Current assets ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Cash and cash equivalents
​ ​ ​ ​ 4 ​ ​ ​ ​ ​ 22,952 ​ ​ ​ ​ ​ 3,886 ​ ​ ​ ​ ​ 164 ​ ​
Accounts receivable
​ ​ ​ ​ 5 ​ ​ ​ ​ ​ 12,048 ​ ​ ​ ​ ​ 2,401 ​ ​ ​ ​ ​ 1,528 ​ ​
Recoverable taxes
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 134 ​ ​ ​ ​ ​ 299 ​ ​ ​ ​ ​ 266 ​ ​
Advances
​ ​ ​ ​ 6 ​ ​ ​ ​ ​ 54 ​ ​ ​ ​ ​ 187 ​ ​ ​ ​ ​ 57 ​ ​
Prepaid expenses
​ ​ ​ ​ 7 ​ ​ ​ ​ ​ 235 ​ ​ ​ ​ ​ 34 ​ ​ ​ ​ ​ 5 ​ ​
Other receivables
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 1 ​ ​ ​ ​ ​ 1 ​ ​ ​ ​ ​ 1 ​ ​
Total current assets
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 35,424 ​ ​ ​ ​ ​ 6,808 ​ ​ ​ ​ ​ 2,021 ​ ​
Noncurrent assets
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Related-party transactions
​ ​ ​ ​ 15 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 57 ​ ​ ​ ​ ​ 501 ​ ​
Prepaid expenses
​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 2 ​ ​
Other receivables
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 10 ​ ​ ​ ​ ​ 9 ​ ​ ​ ​ ​ 80 ​ ​
Deposits into court
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 13 ​ ​ ​ ​ ​ — ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 10 ​ ​ ​ ​ ​ 79 ​ ​ ​ ​ ​ 583 ​ ​
Property, plant and equipment
​ ​ ​ ​ 8 ​ ​ ​ ​ ​ 3,810 ​ ​ ​ ​ ​ 627 ​ ​ ​ ​ ​ 1,042 ​ ​
Goodwill
​ ​ ​ ​ 9 ​ ​ ​ ​ ​ 21,726 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​
Intangible assets
​ ​ ​ ​ 9 ​ ​ ​ ​ ​ 37,238 ​ ​ ​ ​ ​ 4,197 ​ ​ ​ ​ ​ 1,219 ​ ​
Total noncurrent assets
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 62,784 ​ ​ ​ ​ ​ 4,903 ​ ​ ​ ​ ​ 2,844 ​ ​
Total assets
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 98,208 ​ ​ ​ ​ ​ 11,711 ​ ​ ​ ​ ​ 4,865 ​ ​
Liabilities and equity ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Current liabilities ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Trade accounts payable
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 3,311 ​ ​ ​ ​ ​ 1,433 ​ ​ ​ ​ ​ 462 ​ ​
Loans and financing
​ ​ ​ ​ 10 ​ ​ ​ ​ ​ 3,179 ​ ​ ​ ​ ​ 962 ​ ​ ​ ​ ​ 1,297 ​ ​
Lease liabilities
​ ​ ​ ​ 11 ​ ​ ​ ​ ​ 668 ​ ​ ​ ​ ​ 130 ​ ​ ​ ​ ​ 295 ​ ​
Employees’ pay and related charges
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 1,932 ​ ​ ​ ​ ​ 538 ​ ​ ​ ​ ​ 465 ​ ​
Taxes payable
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2,281 ​ ​ ​ ​ ​ 430 ​ ​ ​ ​ ​ 260 ​ ​
Taxes to be paid in installments
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 532 ​ ​ ​ ​ ​ 508 ​ ​ ​ ​ ​ 495 ​ ​
Interest on equity capital
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 11 ​ ​ ​ ​ ​ 183 ​ ​ ​ ​ ​ 393 ​ ​
Other payables
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 127 ​ ​ ​ ​ ​ 540 ​ ​ ​ ​ ​ 415 ​ ​
Consideration to be transferred to former shareholders
​ ​ ​ ​ 14 ​ ​ ​ ​ ​ 61,464 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​
Payable to related party
​ ​ ​ ​ 15 ​ ​ ​ ​ ​ 2,442 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​
Deferred revenue
​ ​ ​ ​ 12 ​ ​ ​ ​ ​ 1,435 ​ ​ ​ ​ ​ 53 ​ ​ ​ ​ ​ — ​ ​
Total current liabilities
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 77,382 ​ ​ ​ ​ ​ 4,777 ​ ​ ​ ​ ​ 4,083 ​ ​
Noncurrent liabilities ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Loans and financing
​ ​ ​ ​ 10 ​ ​ ​ ​ ​ 8,291 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 118 ​ ​
Lease liabilities
​ ​ ​ ​ 11 ​ ​ ​ ​ ​ 2,496 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 130 ​ ​
Provision for contingencies
​ ​ ​
​
13
​ ​ ​ ​ ​ 507 ​ ​ ​ ​ ​ 587 ​ ​ ​ ​ ​ 587 ​ ​
Other payables
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 119 ​ ​ ​ ​ ​ — ​ ​
Payable to related party
​ ​ ​ ​ 15 ​ ​ ​ ​ ​ 7,386 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​
Taxes to be paid in installments
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 1,193 ​ ​ ​ ​ ​ 1,670 ​ ​ ​ ​ ​ 1,417 ​ ​
Total noncurrent liabilities
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 19,873 ​ ​ ​ ​ ​ 2,376 ​ ​ ​ ​ ​ 2,252 ​ ​
Equity ​ ​ ​ ​ 16 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Capital
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 24,489 ​ ​ ​ ​ ​ 16,634 ​ ​ ​ ​ ​ 6,284 ​ ​
Capital reserves and treasury shares
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (1,575) ​ ​ ​ ​ ​ (1,575) ​ ​ ​ ​ ​ (633) ​ ​
Accumulated losses
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (21,961) ​ ​ ​ ​ ​ (10,501) ​ ​ ​ ​ ​ (7,118) ​ ​
Equity attributed to the controlling shareholders
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 953 ​ ​ ​ ​ ​ 4,558 ​ ​ ​ ​ ​ (1,467) ​ ​
Minority interest
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ (3) ​ ​
Total equity
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 953 ​ ​ ​ ​ ​ 4,558 ​ ​ ​ ​ ​ (1,470) ​ ​
Total liabilities and equity
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 98,208 ​ ​ ​ ​ ​ 11,711 ​ ​ ​ ​ ​ 4,865 ​ ​
Management’s notes are an integral part of these financial statements.
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ONE TO ONE ENGINE DESENVOLVIMENTO E LICENCIAMENTO
DE SISTEMAS DE INFORMATICA S.A.
Consolidated statement of profit or loss
As at December 31, 2020 and 2019
(In thousands of Brazilian reais)
​ ​ ​
Note #
​ ​
December 31,
2020
​ ​
December 31,
2019
​
Net operating revenue
​ ​ ​ ​ 17 ​ ​ ​ ​ ​ 26,521 ​ ​ ​ ​ ​ 13,556 ​ ​
Cost of services provided
​ ​ ​ ​ 18 ​ ​ ​ ​ ​ (13,603) ​ ​ ​ ​ ​ (7,804) ​ ​
Gross income
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 12,918 ​ ​ ​ ​ ​ 5,752 ​ ​
Operating expenses ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Sales and marketing expenses
​ ​ ​
​
18
​ ​ ​ ​ ​ (6,355) ​ ​ ​ ​ ​ (3,224) ​ ​
General and administrative expenses
​ ​ ​
​
18
​ ​ ​ ​ ​ (16,054) ​ ​ ​ ​ ​ (4,649) ​ ​
Operating revenue and expenses
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (489) ​ ​ ​ ​ ​ (564) ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (22,898) ​ ​ ​ ​ ​ (8,437) ​ ​
Income before financial income (expenses)
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (9,980) ​ ​ ​ ​ ​ (2,685) ​ ​
Financial revenue
​ ​ ​
​
19
​ ​ ​ ​ ​ 239 ​ ​ ​ ​
​
198
​ ​
Financial expenses
​ ​ ​
​
19
​ ​ ​ ​ ​ (1,418) ​ ​ ​ ​
​
(896)
​ ​
Loss before income and social contribution taxes
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (11,159) ​ ​ ​ ​ ​ (3,383) ​ ​
Current income and social contribution taxes
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (301) ​ ​ ​ ​ ​ — ​ ​
Loss for the year
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (11,460) ​ ​ ​ ​ ​ (3,383) ​ ​
Income attributable to: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Controlling shareholders
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (11,460) ​ ​ ​ ​ ​ (3,383) ​ ​
Loss for the year
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (11,460) ​ ​ ​ ​ ​ (3,383) ​ ​
Management’s notes are an integral part of these financial statements.
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ONE TO ONE ENGINE DESENVOLVIMENTO E LICENCIAMENTO
DE SISTEMAS DE INFORMATICA S.A.
Consolidated statement of comprehensive loss
As at December 31, 2020 and 2019
(In thousands of Brazilian reais)
​ ​ ​
December 31,
2020
​ ​
December 31,
2019
​
Comprehensive loss ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Loss for the year
​ ​ ​ ​ (11,460) ​ ​ ​ ​ ​ (3,383) ​ ​
Total comprehensive loss
​ ​ ​ ​ (11,460) ​ ​ ​ ​ ​ (3,383) ​ ​
Total comprehensive loss attributed to: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Controlling shareholders
​ ​ ​
​
(11,460)
​ ​ ​ ​
​
(3,383)
​ ​
​ ​ ​ ​ ​ (11,460) ​ ​ ​ ​ ​ (3,383) ​ ​
Management’s notes are an integral part of these financial statements.
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ONE TO ONE ENGINE DESENVOLVIMENTO E LICENCIAMENTO
DE SISTEMAS DE INFORMATICA S.A.
Consolidated statement of change in equity
(In thousands of Brazilian reais)
​ ​ ​
Capital
​ ​
Treasury
shares
​ ​
Accumulated
losses
​ ​
Total
​ ​
Minority
interest
​ ​
Consolidated
equity
​
Balances as at January 1, 2019
​ ​ ​ ​ 6,284 ​ ​ ​ ​ ​ (633) ​ ​ ​ ​ ​ (7,118) ​ ​ ​ ​ ​ (1,467) ​ ​ ​ ​ ​ (3) ​ ​ ​ ​ ​ (1,470) ​ ​
Increase in capital
​ ​ ​ ​ 10,350 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 10,350 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 10,350 ​ ​
Loss for the year
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (3,383) ​ ​ ​ ​ ​ (3,383) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (3,383) ​ ​
Merger of a controlled company
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 3 ​ ​ ​ ​ ​ 3 ​ ​
Treasury shares acquired
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (942) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (942) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (942) ​ ​
Balances as at December 31, 2019
​ ​ ​ ​ 16,634 ​ ​ ​ ​ ​ (1,575) ​ ​ ​ ​ ​ (10,501) ​ ​ ​ ​ ​ 4,558 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 4,558 ​ ​
Increase in capital
​ ​ ​ ​ 7,855 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 7,855 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 7,855 ​ ​
Loss for the year
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (11,460) ​ ​ ​ ​ ​ (11,460) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (11,460) ​ ​
Balances as at December 31, 2020
​ ​ ​ ​ 24,489 ​ ​ ​ ​
​
(1,575)
​ ​ ​ ​
​
(21,961)
​ ​ ​ ​
​
953
​ ​ ​ ​ ​ — ​ ​ ​ ​
​
953
​ ​
Management’s notes are an integral part of these financial statements.
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ONE TO ONE ENGINE DESENVOLVIMENTO E LICENCIAMENTO
DE SISTEMAS DE INFORMATICA S.A.
Consolidated statement of cash flows
As at December 31, 2020 and 2019
(In thousands of Brazilian reais)
​ ​ ​
Note #
​ ​
December 31,
2020
​ ​
December 31,
2019
​
Cash flows from operating activities ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Loss for the year
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (11,460) ​ ​ ​ ​ ​ (3,383) ​ ​
Adjustment to reconcile income (loss) before income and social contribution taxes to net cash
provided by (used in) operating activities:
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Income taxes accrued
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 301 ​ ​ ​ ​ ​ — ​ ​
Depreciation and amortization
​ ​ ​ ​ 8 ​ ​ ​ ​ ​ 2,568 ​ ​ ​ ​ ​ 1,116 ​ ​
Provision for labor contingencies
​ ​ ​ ​ 13 ​ ​ ​ ​ ​ (80) ​ ​ ​ ​ ​ — ​ ​
Recognition of interest on lease liabilities
​ ​ ​ ​ 11 ​ ​ ​ ​ ​ (256) ​ ​ ​ ​ ​ 31 ​ ​
Recognition of interest on loans with related parties
​ ​ ​ ​ 15 ​ ​ ​ ​ ​ 328 ​ ​ ​ ​ ​ — ​ ​
Recognition of interest on other loans
​ ​ ​ ​ 10 ​ ​ ​ ​ ​ 414 ​ ​ ​ ​ ​ 318 ​ ​
Donation of assets
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 10 ​ ​ ​ ​ ​ — ​ ​
Losses incurred with assets
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 87 ​ ​
Estimated credit losses
​ ​ ​ ​ 5 ​ ​ ​ ​ ​ 257 ​ ​ ​ ​ ​ — ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (7,918) ​ ​ ​ ​ ​ (1,831) ​ ​
Decrease (increase) in assets ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Trade accounts receivable
​ ​ ​ ​ 5 ​ ​ ​ ​ ​ 88 ​ ​ ​ ​ ​ (874) ​ ​
Recoverable taxes
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 165 ​ ​ ​ ​ ​ (32) ​ ​
Advances
​ ​ ​ ​ 6 ​ ​ ​ ​ ​ 267 ​ ​ ​ ​ ​ (130) ​ ​
Prepaid expenses
​ ​ ​ ​ 7 ​ ​ ​ ​ ​ (175) ​ ​ ​ ​ ​ (27) ​ ​
Other receivables
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (1) ​ ​ ​ ​ ​ 70 ​ ​
Deposits into court
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 13 ​ ​ ​ ​ ​ (14) ​ ​
Increase (decrease) in liabilities ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Trade accounts payable
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 970 ​ ​ ​ ​ ​ 970 ​ ​
Employees’ pay and related charges
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 491 ​ ​ ​ ​ ​ 74 ​ ​
Taxes payable
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 147 ​ ​ ​ ​ ​ 170 ​ ​
Taxes to be paid in installments
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (453) ​ ​ ​ ​ ​ 266 ​ ​
Other payables
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (3,839) ​ ​ ​ ​ ​ 243 ​ ​
Deferred revenue
​ ​ ​ ​ 12 ​ ​ ​ ​ ​ 1,297 ​ ​ ​ ​ ​ 53 ​ ​
Payment of interest
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (429) ​ ​ ​ ​ ​ (349) ​ ​
Net cash provided by (used) in operating activities
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (9,377) ​ ​ ​ ​ ​ (1,411) ​ ​
Cash flows from investing activities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Purchase of property, plant and equipment
​ ​ ​ ​ 8 ​ ​ ​ ​ ​ (3,430) ​ ​ ​ ​ ​ (225) ​ ​
Increase in intangible assets
​ ​ ​ ​ 9 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ (3,541) ​ ​
Net cash effect of the acquired company
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 1,091 ​ ​ ​ ​ ​ — ​ ​
Net funds used in investing activities
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (2,339) ​ ​ ​ ​ ​ (3,766) ​ ​
Cash flows from financing activities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
From financing activities with third parties ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Contracting of new loans
​ ​ ​ ​ 10 ​ ​ ​ ​ ​ 11,420 ​ ​ ​ ​ ​ 7,689 ​ ​
Contracting of new lease liabilities
​ ​ ​ ​ 11 ​ ​ ​ ​ ​ 3,257 ​ ​ ​ ​ ​ — ​ ​
Repayment of loans
​ ​ ​ ​ 10 ​ ​ ​ ​ ​ (916) ​ ​ ​ ​ ​ (8,141) ​ ​
Payment of lease liabilities
​ ​ ​ ​ 11 ​ ​ ​ ​ ​ (219) ​ ​ ​ ​ ​ (295) ​ ​
Interest on equity capital
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (172) ​ ​ ​ ​ ​ (210) ​ ​
Treasury shares
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ (942) ​ ​
Cash provided by (used) in financing activities with third parties
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 13,370 ​ ​ ​ ​ ​ (1,899) ​ ​
From financing activities with shareholders and related parties ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Increase in capital
​ ​ ​ ​ 16 ​ ​ ​ ​ ​ 7,855 ​ ​ ​ ​ ​ 10,350 ​ ​
Related party transactions
​ ​ ​ ​ 15 ​ ​ ​ ​ ​ 9,557 ​ ​ ​ ​ ​ 448 ​ ​
Cash provided by financing activities with shareholders
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 17,412 ​ ​ ​ ​ ​ 10,798 ​ ​
Cash provided by (used) in financing activities
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 30,782 ​ ​ ​ ​ ​ 8,899 ​ ​
Net increase/(decrease) in cash and cash equivalents
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 19,066 ​ ​ ​ ​ ​ 3,722 ​ ​
Cash and cash equivalents
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Cash at beginning of year
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 3,886 ​ ​ ​ ​ ​ 164 ​ ​
Cash at end of year
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 22,952 ​ ​ ​ ​ ​ 3,886 ​ ​
Net increase/(decrease) in cash and cash equivalents
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 19,066 ​ ​ ​ ​ ​ 3,722 ​ ​
Supplemental cash flow disclosure: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Consideration to be transferred to former shareholders
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 61,464 ​ ​ ​ ​ ​ — ​ ​
Management’s notes are an integral part of these financial statements.
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Management’s notes to the consolidated financial statements
As at December 31, 2020 and 2019
(In thousands of Brazilian reais)
1.
Operations
​
One to One Engine Desenvolvimento e Licenciamento de Sistemas de Informática S.A. (the “Company”) is a closely held corporation governed by articles of incorporation since May 2015, and, in compliance with prevailing regulations, it is established to run for an undetermined period of time. It is headquartered at Rua Luís Correia de Melo, 92, conjunto 281 a 282, in the city of São Paulo.
It is engaged in the development, licensing and sale of software, as well as providing information technology support, assistance and consulting services, in addition to holding ownership interest in other companies as a member or shareholder.
The Company works in the development and licensing of software for companies with high volumes of communication with customers. The software generates the documentation and organizes the sending of multi-channel messages. Smarkio works in the development and licensing of virtual assistant software (“chatbots”). In addition to the software licensing, consulting in information technology is also part of the services provided, with the specific purpose of implementing and deploying the software that is being licensed.
Both the Company’s and Smarkio’s customers work in three main industries: financial services, insurance and retailing and are spread all through the Brazilian territory.
Impacts of the Covid-19 pandemic
The Covid-19 pandemic had a positive effect to the Company’s net revenue, as it increased the adoption of the software solutions that the Company and its subsidiary Smarkio offer. Digitization and automation of services, as well as electronic sending of documentation and other communications and a consequent reduction in the dependence on human services (including printing and mailing) became part of the strategy of customers and potential customers.
We have a variable cost structure, mainly related to net revenues. Our marketing and sales expenses are also variable and depend on our strategy to leverage customer acquisition. As a response to the increasing market potential, marketing and sales expenses increased in 2020. The increase in G&A Expenses is rather related to the strengthening of the management team and is not directly related to the effects of the pandemic.
Other impacts brought by the pandemic are the following: i. 100% of the employees started working from home; ii. the need of some positions was revalued and some workers dismissed; iii. the working hours of employees were reduced by 25% from April to July 2020; and iv. payment periods and conditions were renegotiated with suppliers.
Liquidity and continuity of operations
A growth in revenue was attempted as part of the strategy for the years 2019 and 2020, which was based on a reinforcement of the sales and engineering teams, what accounts for the significant increase in fixed expenses with payroll and accumulated losses.
The Company has had accounting loss and negative working capital in the last years and recorded accumulated losses of R$21,961 as at December 31, 2020 (R$10,501 as at December 31, 2019).
The consolidated financial statements have been prepared under the assumption of the Company continuing as a going concern, as well as recovery of assets and settlement of liabilities in the ordinary course of activities.
A successful transition to profitable operations depends on an appropriate level of positive cash flows to cover expenses.
 
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Management’s notes to the consolidated financial statements
As at December 31, 2020 and 2019
(In thousands of Brazilian reais)
Other initiatives that support the operating continuity of the Company are described below:
(a)
Improvement in gross margin due to reduction in main costs, in particular brokerage and cloud computing;
​
(b)
Reversal of the negative working capital through an increase in liabilities and issuance of private bonds corresponding to a total amount of R$42,000 maturing in 54 months, under conditions agreed upon in a memorandum of understanding executed with the creditor on December 30, 2020, in addition to settlement of obligations with selling shareholders of Smarkio, as described in note 14, by using part of the loan and other already existing funds;
​
On October 9, 2020, a memorandum of understandings was executed with the company Zenvia Mobile Serviços Digitais S.A. (“Zenvia”), which indicates the intension of signing an agreement to acquire 100% of shares of the Company. If the transaction takes place, a primary investment is projected through the issuance of shares (increase in capital) corresponding to R$40,000. The Acquisition has not closed to date and its effectiveness is subject to the Company´s IPO and customary contractual closing conditions.
1.1.
Approval of the financial statements
​
The Board of Directors approved these financial statements during a meeting held on March 15, 2021.
1.2.
Declaration of compliance
​
Previously, the Company’s financial statements had been prepared based on Brazilian accounting practices and Brazilian standard NBC TG 1000 — Accounting for small and medium size companies, approved by the Federal Accounting Council (CFC) and pronouncements issued by the Committed of Accounting Pronouncements (CPCs).
These consolidated financial statements have been prepared under the responsibility of the Company’s Management and in compliance with International Financial Reporting Standards (“IFRS”) issued by the International Accounting Standards Board (“IASB”) (please refer to note 1.3 for more details on the first time adoption).
The consolidated financial statements have been prepared based on historical cost, except for financial instruments measured at fair value. These consolidated financial statements include all significant consolidation information, which is consistent with the data Management used in running the Company.
The preparation of the consolidated financial statements requires the use of certain critical accounting estimates. This also requires Management to make use of judgment in applying the Company’s accounting policies. The areas that involve a larger degree of judgment or complexity, or areas where the assumptions and estimates are significant for the consolidated financial statements are described in item 1.6 below.
The consolidated financial statements are presented in Brazilian reais, the Company’s functional currency.
The consolidated statement of financial position is presented according to the order of realization or settlement of assets and liabilities. The moment of their realization or settlement depends not only on liquidity, but also on judgment on the part of Management about the expected changes in market prices and other significant aspects.
1.3.
First time adoption of IFRS
​
International Financial Reporting Standards (“IFRS”) were adopted for the first time in the Company’s consolidated financial statements as at January 1, 2019. IFRS 1 “First time adoption of IFRS” requires an
 
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Management’s notes to the consolidated financial statements
As at December 31, 2020 and 2019
(In thousands of Brazilian reais)
entity that is adopting IFRS for the first time to prepare a complete set of the consolidated financial statements covering its first IFRS reporting period. IFRS 1 also demands the entity to use the same accounting practices to the preceding year and throughout all periods presented in its first IFRS in the consolidated financial statements (that is, January 1, 2019).
Before the first time adoption of IFRS, the Company presented consolidated statements prepared according to Brazilian Generally Accepted Accounting Principles (“BR GAAP”), based on Brazilian standard NBC TG 1000 — Accounting for small and mid size companies, approved by the Federal Accounting Council (CFC) and also based on pronouncements issued by the Committee of Accounting Pronouncements (CPC) for small and mid size companies (“CPC PME”).
These consolidated financial statements are the first consolidated financial statements prepared in accordance with IFRS and are consistent with the accounting practices mentioned in note 2. As established in accounting standards, the Company’s consolidated financial statements have been prepared according to IFRS applicable as at December 31, 2020, together with comparative period data for the year ended December 31, 2019. In preparing these consolidated financial statements, the date adopted as transition to IFRS was the one of the consolidated statement of financial position prepared on January 1, 2019.
Note 3 presents the impact of the transition to IFRS.
1.4.
Business combinations
​
Business combinations are accounted for using the acquisition method. The cost of an acquisition is measured as the fair value of the consideration transferred measured at acquisition date and the amount of any limited partner interests in the acquired entity. For each business combination, the Company elects whether to measure the limited partner interests in the acquired entity at fair value or at the proportionate share of the acquired entity’s identifiable net assets. Acquisition-related costs are expensed as incurred and included in general and administrative expenses.
When the Company acquires a business, it assesses the assets acquired and liabilities assumed for appropriate classification and designation in accordance with the contractual terms, economic circumstances and pertinent conditions as at the acquisition date. If the business combination is achieved in stages, any previously held equity interest is re-measured at its acquisition date fair value and any resulting gain or loss is recognized in profit or loss.
Any contingent consideration to be transferred by the acquirer will be recognized at fair value at the Acquisition date. Contingent consideration classified as an asset or liability that is a financial instrument and within the scope of IFRS 9 is measured at fair value, with changes in fair value recognized either in the consolidated statements of profit or loss and other comprehensive income (loss) or as a change to other comprehensive income (loss). Contingent consideration that is classified as equity is not re-measured and subsequent settlement is accounted for within equity.
On November 11, 2020, during a special meeting of shareholders it was approved the acquisition of all ownership interest of the company Smarkio Tecnologia S.A. Such enterprise is engaged in the development, and operating of corporate conversational interfaces, such as chatbots and virtual assistants.
On November 30, 2020, an acquisition agreement was executed between One to One, as acquirer, and the selling company to allow the internal use of the services of the purchased enterprise, besides making possible to take advantage of existing synergies in their markets.
The fair value of Smarkio’s equity was R$5,859, based on the fair values of assets obtained and liabilities assumed in the acquisition.
 
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Management’s notes to the consolidated financial statements
As at December 31, 2020 and 2019
(In thousands of Brazilian reais)
Since the acquisition date, Smarkio has contributed R$3,318 to the Company’s net revenues and a positive impact of R$587 to Company’s statement of profit and loss. If the acquisition had occurred on 1 January 2020, the Company’s net revenue would have been R$54,086 and the Company’s statement of profit or loss would the year ended December 31, 2020 would have been a net income of R$2,144.
As set forth in the sale and purchase agreement, the total consideration to be transferred is R$62,331 to be settled as follows:
(a)
First payment: R$17,331, of which R$867 was paid at closing date and the remaining R$16,464 are due in up to 180 from closing date;
​
(b)
Second payment: R$40,000 due in up to 180 days from closing date;
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(c)
Price Adjustment — fair value of earn-out payments which will payable if the following metrics are reached: i. Growth of at least 20% in net operating revenue from January to December 2021 in comparison to the same period of 2020; and ii. Net margin of at least 15% determined from January to December 2021): R$5,000 due in up to 180 days from closing date.
​
The fair value of the acquired assets and liabilities assumed is presented below:
Assets
​ ​ ​ ​ ​ ​ ​ ​
Liabilities
​ ​ ​ ​ ​ ​ ​
Current assets
​ ​ ​ ​ 12,110 ​ ​ ​
Current liabilities
​ ​ ​ ​ 6,714 ​ ​
Cash and cash equivalents
​ ​ ​ ​ 1,958 ​ ​ ​
Trade accounts payable
​ ​ ​ ​ 908 ​ ​
Accounts receivable
​ ​ ​ ​ 9,992 ​ ​ ​
Employment related charges
​ ​ ​ ​ 903 ​ ​
Advances
​ ​ ​ ​ 134 ​ ​ ​
Taxes payable
​ ​ ​ ​ 1,403 ​ ​
Prepaid expenses
​ ​ ​ ​ 26 ​ ​ ​
Other payables
​ ​ ​ ​ 3,500 ​ ​
Noncurrent assets
​ ​ ​ ​ 626 ​ ​ ​
Noncurrent liabilities
​ ​ ​ ​ 163 ​ ​
Property, plant and equipment
​ ​ ​ ​ 625 ​ ​ ​
Long-term lease liabilities
​ ​ ​ ​ 163 ​ ​
Intangible assets
​ ​ ​ ​ 1 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ Equity ​ ​ ​ ​ 5,859 ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​
Capital
​ ​ ​ ​ 267 ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​
Income Reserve
​ ​ ​ ​ 5,592 ​ ​
Total assets
​ ​ ​ ​ 12,736 ​ ​ ​
Total liabilities
​ ​ ​ ​ 12,736 ​ ​
​ ​ ​
Value (R$’000)
​
Consideration to be transferred
​ ​ ​ ​ 62,331 ​ ​
Fair value of assets acquired or to be acquired and liabilities assumed or to be assumed
​ ​ ​ ​ 5,859 ​ ​
Fair value of intangible assets
​ ​ ​ ​ ​ ​ ​
Software(a) ​ ​ ​ ​ 25,926 ​ ​
Customer portfolio(b)
​ ​ ​ ​ 5,586 ​ ​
Non-compete(c) ​ ​ ​ ​ 3,234 ​ ​
Goodwill ​ ​ ​ ​ 21,726 ​ ​
​
(a)
Represents the fair value of the digital platform acquired and is based on its potential of generating future cash flows, which was determined based on discounted future cash flows;
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Management’s notes to the consolidated financial statements
As at December 31, 2020 and 2019
(In thousands of Brazilian reais)
(b)
Represents the fair value of customers portfolio considering that such customers tend to maintain the generation of revenue for certain a period of time. The fair value considers the future economic benefits generated by the permanence of such customers portfolio;
​
(c)
Represents the fair value of the non-compete which prevents the selling shareholders of developing any businesses that may represent competition with Smarkio’s activities for a period of 4 years.
​
The valuation techniques used are described below:
Assets acquired
​ ​
Valuation technique
​
Intangible assets — 
Recognition of the platform 		​ ​ The MPEEM methodology (Multi Period Excess Earnings Method) is mostly used to measure the value of primary assets or most important assets of a company. According to that method, in determining fair values, the cash flows attributable to all other assets are subtracted through a contributory asset charge (CAC). The MPEEM method assumes that the fair value of an intangible asset is the same as the present value of the cash flows attributable to that asset, less the contribution of other assets, both tangible and intangible ones. ​
Intangible assets — Recognition of the portfolio of customers and of the non-competition clause ​ ​ The With or without methodology consists in comparing the actual scenario with a hypothetical one, the first where the non-competition is valid and a hypothetical situation where such agreement did not exist and, as a consequence, competition would be in place to reduce part of the expected economic benefits of the Company. ​
​
1.5.
Basis of consolidation
​
​ ​ ​
December 31,
2020
​ ​
December 31,
2019
​
​ ​ ​
Direct
​ ​
Indirect
​ ​
Direct
​ ​
Indirect
​
Subsidiaries ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Printers United Comunicação Integrada Ltda (fully incorporated into the
Company’s statement of financial position in 2019)
​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 100% ​ ​ ​ ​ ​ — ​ ​
Smarkio Tecnologia S.A
​ ​ ​ ​ 100% ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​
​
1.6
Use of estimates and judgments
​
In preparing these consolidated financial statements, management has made judgements and estimates that affect the application of the Company’s accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to estimates are recognized prospectively.
(c.1)   Judgments
Information about judgments referring to the adoption of accounting policies which impact significantly the amounts recognized in the consolidated financial statements are included in the following notes:
Note 1.4 — Identification of assets acquired and liabilities assumed;
Note 9 — Impairment of intangible assets and goodwill: main premises regarding recoverable amount.
 
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Management’s notes to the consolidated financial statements
As at December 31, 2020 and 2019
(In thousands of Brazilian reais)
(c.2)    Uncertainties on assumptions and estimates
Information on uncertainties as to assumptions and estimates that pose a high risk of resulting in a material adjustment within the next fiscal year are included in the following notes:
Note 5 — Allowance for expected losses: main assumptions in the determination of loss rate;
Note 13 — Provision for labor, tax and civil risks: main assumptions regarding the likelihood and magnitude of the cash outflows;
Note 1.4 — Business combination: assumptions on the determination of fair value of consideration transferred, assets acquired and liabilities assumed.
(i) Measurement of fair value
The Company’s accounting policies and disclosures requires the measurement of fair value, for financial and non-financial assets and liabilities.
The Company established a control structure related to measurement of fair value. It includes the review process of all significant fair value measurements, reporting directly to the Chief Financial Officer.
Evaluation process includes the regular review of significant non-observable data and valuation adjustments. If third-party information, such as brokerage firms’ quotes or pricing services, is used to measure fair value, then the evaluation process analyzes the evidence obtained from the third parties to support the conclusion that such valuations meet the IFRS requirements, including the level in the fair value hierarchy in which such valuations should be classified. Significant assessment matters are reported to the Board of Directors.
When measuring fair value of an asset or liability, the Company uses observable data as much as possible. Fair values are classified at different levels according to hierarchy based on information (inputs) used in valuation techniques, as follows:
Level 1: Prices quoted (not adjusted) in active markets for identical assets and liabilities.
Level 2: Inputs, except for quoted prices, included in Level 1 which are observable for assets or liabilities, directly (prices) or indirectly (derived from prices).
Level 3: Inputs, for assets or liabilities, which are not based on observable market data (non-observable inputs).
Additional information on the assumptions adopted in the measurement of fair values is included in the following notes:
Note 21 — Risk management and financial instruments;
Notes 1.4 — Business combination
2. Summary of significant accounting practices
The main accounting practices adopted in the preparation of the consolidated financial statements are the following:
2.1.
Consolidation procedures
​
Intragroup balances and transactions, as well as any revenue or expenses arising from intragroup transactions are eliminated in the consolidation.
 
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Management’s notes to the consolidated financial statements
As at December 31, 2020 and 2019
(In thousands of Brazilian reais)
2.2.
Revenue recognition
​
Revenue is invoiced and recognized as services are provided, or in other words, at the moment the services agreement are delivered to the customer.
IFRS15 — Revenue from agreement with customers establishes a new and comprehensive model in five steps that must be applied to revenue obtained from customers. According to such standard, revenue is recognized at an amount that reflects the consideration expected to be received in exchange for the transfer of goods or services to a customer. It was published in December 2016, coming into effect starting January 2018. The changes brought by the standard have not significantly impacted the Company’s consolidated financial statements, seeing revenue is recognized according to the accrual basis when the control over the service is transferred, creating the consideration that the Company will receive.
Revenue comes mainly from the software use licensing of the cloud-based platform that control multi-channel communications, including the services of generation and safeguard of documents, blockchain registration and sending of messages through SMS, e-mail, Whatsapp and RCS channels, in addition to push notifications. Revenue also comes from the professional services of implantation and maintenance of software.
​ ​ ​
December 31, 2020
​ ​
December 31, 2019
​
Net revenues ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Software use licensing
​ ​ ​ ​ 22,752 ​ ​ ​ ​ ​ 12,411 ​ ​
Professional services
​ ​ ​ ​ 3,769 ​ ​ ​ ​ ​ 1,145 ​ ​
​ ​ ​ ​ ​ 26,521 ​ ​ ​ ​ ​ 13,556 ​ ​
2.2.1. Performance obligations and revenue recognition practices
The table below supplies information on the types and moment of fulfillment of performance obligations established in sales agreement with customers, including significant payment terms and related revenue recognition policies.
Type of Service
​ ​
Moment of the fulfillment of performance obligations, including significant payment terms
​ ​
Revenue recognition policy
​
Software use licensing
​ ​ Such revenue is based mainly on a fixed amount charged for the use of the platform (subscription) according to the sales agreements executed with customers. It is monthly recognized starting the moment the access to the platform is made available until cancellation. There are also additional services, such as generation of documents, organization of multi-channel communications and triggered messages. The use of those services is measured according to the individual volume consumed. Revenue is based on those ​ ​ Revenue is recognized when the control over the services is transferred to the customer at an amount that reflects the consideration expected to be received in exchange for those products or services. Revenue is recognized at gross value, considering the taxation to be paid to governmental authorities. The amounts billed are recorded in accounts receivable or advances from customers depending on certain recognition criteria. The agreements of the Company with customers do not establish the right of items being ​
 
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Management’s notes to the consolidated financial statements
As at December 31, 2020 and 2019
(In thousands of Brazilian reais)
Type of Service
​ ​
Moment of the fulfillment of performance obligations, including significant payment terms
​ ​
Revenue recognition policy
​
​ ​ ​ volumes and on the unit values established in the sales agreement, monthly recognized according to the use. The issuance of invoices is made at the beginning of the month following the use. There are some cases where customers validate the amounts before the issuance of invoices. Receivables are collected from 15 to 60 days after billing. ​ ​ returned nor grant them ownership rights to the licensed software. ​
Type of Service
​ ​ Moment of the fulfillment of performance
obligations, including significant payment
terms 		​ ​
Revenue recognition policy
​
Professional services
​ ​ Revenue from professional services is based on the provision of information technology related services, focused on the integration and maintenance of the platform (software). The amounts collected are usually based on the hour/labor price established in the sales agreement, multiplied by the number of hours worked. Revenue recognition takes place according to the delivery of the services or adjusted by the percentage of completion. However, the issuance of invoices is previously made at the moment of execution of the sales agreement or proposal. Receivables are collected from 15 to 60 days after billing. ​ ​ Revenue is recognized when the control over the services is transferred to customers at an amount that reflects the consideration expected to be received in exchange for those services. Revenue is recognized at gross value, considering the taxation to be paid later to governmental authorities. The amounts billed are recorded in accounts receivable or advances from customers, depending on certain recognition criteria. ​
 
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Management’s notes to the consolidated financial statements
As at December 31, 2020 and 2019
(In thousands of Brazilian reais)
2.3.
Cash and cash equivalents
​
Include petty cash, positive balances in bank accounts, as well as short-term financial investment maturing within up to three months and with insignificant risk of change in value. Short-term financial investment included in cash equivalents is measured as a financial asset at fair value through profit or loss.
2.4.
Financial instruments
​
A financial instrument is only recognized when the Company becomes a party to the contractual provisions of the instrument. Financial instruments are initially recognized at fair value plus transaction costs directly attributable to their acquisition or issuance, except for financial assets and financial liabilities stated at fair value through profit or loss, where such costs are carried directly into the consolidated statement of profit or loss. Subsequent measurements take place at the dates where the consolidated statements of financial position are prepared, according to rules established for each type of financial asset and liability.
As at December 31, 2020 and 2019, there were no operations with derivative financial instruments, or hedging operations.
IFRS9 — Financial instruments addresses the classification, measurement and recognition of financial assets and liabilities. IFRS 9 was adopted by the Company on January 1, 2019 and did not have material impact on the Company’s consolidated financial statements.
2.4.1. Recognition and initial measurement
Trade accounts receivable are initially recognized on the date they were originated. All other financial assets and liabilities are initially recognized at the date where the Company becomes a party to a contract.
A financial liability, or a financial asset (unless it is a receivable without a significant financing component) is initially measured at fair value. Measurement includes transaction costs directly attributable to the acquisition or issuance of items not measured at fair value through profit or loss. A trade account receivable without a significant financing component is initially measured at transaction price.
2.4.2. Subsequent classification and measurement
During initial recognition, a financial asset is classified at amortized cost or FVTPL.
Financial assets held for trading or managed based on fair value performance are measured at FVTPL.
Financial assets — evaluation of whether contractual cash flows are only payments of principal and interest
​
Financial assets measured at FVTPL
​ ​ After initial measurement, they are carried at fair value. Net revenue, including interest or dividends, is recognized in the statement of income. ​
​
Financial assets recognized at amortized cost
​ ​ After initial measurement, they are measured at amortized cost according to the effective interest rate method and impairment is deducted from amortized cost. Revenue from interest received, foreign exchange gains and impairment losses is recognized in the statement of income. Any earnings or losses determined in reversals are also carried in the statement of income. ​
 
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Management’s notes to the consolidated financial statements
As at December 31, 2020 and 2019
(In thousands of Brazilian reais)
2.5.
Trade accounts receivable
​
Trade accounts receivable correspond to the amounts to be received from customers for the rendering of services along the ordinary course of business. They are initially recognized at fair value and, subsequently, recognized at amortized cost under the effective interest method, less estimated impairment, if any.
2.6.
Property, plant and equipment
​
Property, plant and equipment is stated at depreciated cost. Depreciation is provided over the estimated useful lives of the assets using the straight-line method. The Company capitalizes expenditures for major nonrecurring projects that increase the square footage, extend the useful life of, or enhance the value of the property and have a useful life that exceeds the current period. These assets are depreciated over the lesser of the remaining life of the property or the estimated useful life of the asset.
​ ​ ​
Annual depreciation rate
​ ​
Useful lives of assets
​
Furniture and fixtures
​ ​ ​ ​ 10.00% ​ ​ ​
10 years
​
Machinery, devices and equipment
​ ​ ​ ​ 10.00% ​ ​ ​
10 years
​
Vehicles
​ ​ ​ ​ 10.00% ​ ​ ​
10 years
​
IT equipment
​ ​ ​ ​ 20.00% ​ ​ ​
5 years
​
Communications devices
​ ​ ​ ​ 10.00% ​ ​ ​
10 years
​
Facilities
​ ​ ​ ​ 10.00% ​ ​ ​
10 years
​
Leasehold improvements
​ ​ ​ ​ 38.71% ​ ​ ​
2.6 years
​
Hardware
​ ​ ​ ​ 20.00% ​ ​ ​
5 years
​
Rights obtained on assets destined for the maintenance of the activities of the Company and of its subsidiaries involving financial lease operations are recorded as if they were finance leases. At the beginning of each operation, a fixed asset and a financing liability are recognized, and, when there is no purchase option, the assets are submitted to depreciation along the term of the contract.
Gains and losses from the disposal of items are determined by comparison of sales values with residual book amounts and they are recognized in the statement of income.
2.7.
Intangible assets
​
Intangible assets result from contractual rights or other legally established rights. The Company´s software rights are recorded at investment cost until the software is registered, less amortizable amounts, calculated on a straight-line basis along its useful life.
Internally developed software expenditure on the research phase of projects to develop new customized software for IT is recognized as an expense as incurred. Costs that are directly attributable to a project’s development phase are recognized as intangible assets, provided they meet the following recognition requirements:
•
the development costs can be measured reliably
​
•
the project is technically and commercially feasible
​
•
the Company intends to and has sufficient resources to complete the project
​
•
the Company has the ability to use or sell the software
​
•
the software will generate probable future economic benefits.
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Management’s notes to the consolidated financial statements
As at December 31, 2020 and 2019
(In thousands of Brazilian reais)
Development costs not meeting these criteria for capitalization are expensed as incurred. Directly attributable costs include employee costs incurred on software development along with an appropriate portion of relevant overheads and borrowing costs.
2.8.
Goodwill
​
Goodwill arising on an acquisition of a business is carried at cost as established at the date of acquisition of the business less accumulated impairment losses, if any.
2.9.
Impairment test
​
The Company assesses whether there has been an impairment in the value of its long-lived assets whenever events or changes in circumstances indicate the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount to the future cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets.
If an indication of impairment exists, the recoverable amount is established to measure the loss. If it is not possible to determine the recoverable amount for the individual asset, then the recoverable amount of the cash-generating unit of the asset must be determined. Assets are allocated to cash-generating units or smallest group of cash-generating units for which a reasonable and consistent allocation base can be identified.
The recoverable amount is the higher of an asset’s fair value and carrying amount, less its costs of disposal or value in use. In evaluating the value in use, the estimated future cash flows are discounted to present value at a discount rate before taxes that reflects the current market time value of money and the specific risks the asset is exposed to for which the estimate of future cash flows was not adjusted.
If the recoverable amount (or cash-generating unit) determined is lower than its carrying amount, such carrying amount (or cash-generating unit) is reduced to its recoverable value and the impairment immediately recognized in the statement of income.
2.10.
Discount to present value of assets and liabilities
​
Monetary assets and liabilities are discounted to present value during initial recognition of a transaction, considering contractual cash flows, as well as explicit, and in certain cases, implicit interest rates of the assets and liabilities, in addition to the rates charged in the market for similar transactions. Subsequently, such interest is transferred to financial revenue and expense accounts in the statement of income under the effective interest rate method.
2.11.
Loans and financing
​
Loans and financing are state at amortized cost, plus inflation and interest incurred through the end of the reporting period. Any differences between the amounts raised (net of transaction costs) and repayment value are recognized under the effective interest method in the statement of income along the period where loans are outstanding.
2.12.
Provisions
​
A provision is recognized in the statement of financial position when the Company has a legal or constructive obligation as a result of a past event, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are recognized based on the best estimates of the risk involved.
 
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Management’s notes to the consolidated financial statements
As at December 31, 2020 and 2019
(In thousands of Brazilian reais)
The Company records provisions to cover future disbursements that might arise from tax, labor and civil lawsuits in progress. Provisions are recorded based on an analysis of the lawsuits in progress and of the prospects of an unfavorable result implying future disbursement.
Provisions are reviewed on the dates of the financial statements and adjusted to reflect the current best estimate. If it is no longer probable that a cash outflow is required to settle the obligation, the provision is reversed.
2.13.
Other current and noncurrent assets and liabilities
​
An asset is recognized in the balance sheet when it is probable that future economic benefits will flow to the Company and its cost or value can be reliably measured. A liability is recognized in the balance sheet when the Company has a legal or construed obligation as a result of a past event and it is probable that an outflow of funds will be required to settle it. Where applicable, the corresponding charges and monetary variation incurred are added to it. Provisions are recorded when:
(a) A present obligation (legal or constructive) has arisen as a result of a past event;
(b) Its settlement is expected to result in an outflow of resources;
(c) The amount can be estimated reliably.
Assets and liabilities are classified as current when their realization or settlement will probably take place within the following 12 months. Otherwise, they are stated as noncurrent ones.
2.14.
Income taxes
​
The Company follows guidance in IAS 12 — Income Taxes, with respect to accounting for uncertainty in income taxes. The Company must determine whether a tax position meets the more-likely-than-not threshold based on the technical merits of the position. Once a position meets the recognition threshold, measurement of the position reported in the consolidated financial statements is determined. The Company has determined that no material unrecognized tax benefits or liabilities exist at December 31, 2020 and 2019.
According to Brazilian regulations, income and social contribution taxes are based on the entity’s taxable income at a rate of 25% in relation to income tax and 9% for social contribution tax.
2.15.
Deferred income tax and social contribution
​
Deferred income and social contribution taxes are determined on temporary differences between the tax bases of assets and liabilities and the book values included in the consolidated financial statements. The rates of those taxes are the same used for the calculation of current levying. As a result of a lack of profit in recent years, there has been no recognition of any deferred tax credit.
3.
Impacts from the first time adoption of IFRS
​
International Financial Reporting Standards (“IFRS”) were adopted for the first time in the Company’s consolidated financial statements as at January 1, 2019. IFRS 1 “First time adoption of IFRS” requires an entity that is adopting IFRS for the first time to prepare a complete set of the consolidated financial statements covering its first IFRS reporting period. IFRS 1 also demands the entity to use the same accounting practices to the preceding year and throughout all periods presented in its first IFRS in the consolidated financial statements (that is, January 1, 2019).
Before the first time adoption of IFRS, the Company presented consolidated statements prepared according to Brazilian Generally Accepted Accounting Principles (“BR GAAP”), based on Brazilian
 
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Management’s notes to the consolidated financial statements
As at December 31, 2020 and 2019
(In thousands of Brazilian reais)
standard NBC TG 1000 — Accounting for small and mid size companies, approved by the Federal Accounting Council (CFC) and also based on pronouncements issued by the Committee of Accounting Pronouncements (CPC) for small and mid size companies (“CPC PME”).
The estimates as at January 1, 2019 and as at December 31, 2019 are consistent with those made for the same dates in accordance with BR GAAP (after adjustments to reflect any differences in accounting policies), apart from the following items where application of BR GAAP did not require estimation:
•
Pensions and other postemployment benefits;
​
•
Share-based payment transactions; and
​
•
Investments in equity instruments — unquoted equity shares.
​
The estimates used by the Company to present these amounts in accordance with IFRS reflect conditions as at January 1, 2019 (the date of transition to IFRS) and as at December 31, 2019.
Reconciliation between BR GAAP and IFRS on the transition date — January 1, 2019:
Consolidated statement of financial position
​ ​ ​
Opening Balance
​ ​
IFRS16
Remeasurements
​ ​
IFRS
​
Assets ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Total current assets
​ ​ ​ ​ 2,021 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 2,021 ​ ​
Property, plant and equipment(i)
​ ​ ​ ​ 617 ​ ​ ​ ​ ​ 425 ​ ​ ​ ​ ​ 1,042 ​ ​
Other Non-current assets
​ ​ ​ ​ 1,802 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 1,802 ​ ​
Total non-current assets
​ ​ ​ ​ 2,418 ​ ​ ​ ​ ​ 425 ​ ​ ​ ​ ​ 2,844 ​ ​
Total assets
​ ​ ​ ​ 4,440 ​ ​ ​ ​ ​ 425 ​ ​ ​ ​ ​ 4,865 ​ ​
​ ​ ​
Opening Balance
​ ​
IFRS16
Remeasurements
​ ​
IFRS
​
Current liabilities ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Lease liabilities – IFRS 16(ii)
​ ​ ​ ​ — ​ ​ ​ ​ ​ 295 ​ ​ ​ ​ ​ 295 ​ ​
Other current liabilities
​ ​ ​ ​ 3,788 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 3,788 ​ ​
Total current liabilities
​ ​ ​ ​ 3,788 ​ ​ ​ ​ ​ 295 ​ ​ ​ ​ ​ 4,083 ​ ​
Noncurrent liabilities ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Other noncurrent liabilities
​ ​ ​ ​ 2,122 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2,122 ​ ​
Lease liabilities – IFRS 16(ii)
​ ​ ​ ​ — ​ ​ ​ ​ ​ 130 ​ ​ ​ ​ ​ 130 ​ ​
Total noncurrent liabilities
​ ​ ​ ​ 2,122 ​ ​ ​ ​ ​ 130 ​ ​ ​ ​ ​ 2,252 ​ ​
Shareholder’s equity
​ ​ ​ ​ (1,470) ​ ​ ​ ​ ​ - ​ ​ ​ ​ ​ (1,470) ​ ​
Total shareholder’s equity and liabilities
​ ​ ​ ​ 4,440 ​ ​ ​ ​ ​ 425 ​ ​ ​ ​ ​ 4,865 ​ ​
​
(i)
The remeasurement to comply with IFRS 16 resulted in an increase of R$425 in property, plant and equipment referring the use rights, which is detailed ahead in this note under item ‘a’;
​
(ii)
The adjustment made to leases was R$295 in current liabilities and R$130 in noncurrent liabilities.
​
Reconciliation between BR GAAP and IFRS on the transition date — December 31, 2019:
 
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Management’s notes to the consolidated financial statements
As at December 31, 2020 and 2019
(In thousands of Brazilian reais)
Consolidated statement of financial position
​ ​ ​
Opening balance
​ ​
IFRS16
Remeasurements
​ ​
Full IFRS
​
Assets ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Total current assets
​ ​ ​ ​ 6,808 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 6,808 ​ ​
Property, plant and equipment(i)
​ ​ ​ ​ 502 ​ ​ ​ ​ ​ 125 ​ ​ ​ ​ ​ 627 ​ ​
Other Non-current assets
​ ​ ​ ​ 4,276 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 4,276 ​ ​
Total non-current assets
​ ​ ​
​
4,778
​ ​ ​ ​ ​ 125 ​ ​ ​ ​
​
4,903
​ ​
Total assets
​ ​ ​ ​ 11,586 ​ ​ ​ ​
​
125
​ ​ ​ ​ ​ 11,711 ​ ​
​ ​ ​
Opening balance
​ ​
IFRS16
Remeasurements
​ ​
Full IFRS
​
Current liabilities ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Other current liabilities
​ ​ ​ ​ 4,647 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 4,647 ​ ​
Lease liabilities – IFRS 16(ii)
​ ​ ​ ​ — ​ ​ ​ ​ ​ 130 ​ ​ ​ ​ ​ 130 ​ ​
Total current liabilities
​ ​ ​
​
4,647
​ ​ ​ ​ ​ 130 ​ ​ ​ ​
​
4,777
​ ​
Total non-current liabilities
​ ​ ​ ​ 2,376 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 2,376 ​ ​
Shareholder’s equity
​ ​ ​ ​ 4,563 ​ ​ ​ ​ ​ (5) ​ ​ ​ ​ ​ 4,558 ​ ​
Total equity and liabilities
​ ​ ​ ​ 11,586 ​ ​ ​ ​ ​ 125 ​ ​ ​ ​ ​ 11,711 ​ ​
​
(i)
The remeasurement to comply with IFRS 16 resulted in an increase of R$125 in property, plant and equipment referring the use rights;
​
(ii)
The adjustment made to leases was R$130 in current liabilities and R$0 in noncurrent liabilities.
​
Consolidated statement of profit or loss for the year ended December 31, 2019:
​ ​ ​
Opening Balance
​ ​
IFRS 16
Remeasurements
​ ​
Full IFRS
​
Net operating revenue
​ ​ ​ ​ 13,556 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 13,556 ​ ​
Cost of services provided
​ ​ ​ ​ (7,804) ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ (7,804) ​ ​
Gross income
​ ​ ​ ​ 5,752 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 5,752 ​ ​
General and administrative expenses(i)
​ ​ ​ ​ (4,688) ​ ​ ​ ​ ​ 39 ​ ​ ​ ​ ​ (4,649) ​ ​
Other operating expenses
​ ​ ​ ​ (3,788) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (3,788) ​ ​
​ ​ ​ ​ ​ (8,476) ​ ​ ​ ​ ​ 39 ​ ​ ​ ​ ​ (8,437) ​ ​
Net financial result(ii)
​ ​ ​ ​ (654) ​ ​ ​ ​ ​ (44) ​ ​ ​ ​ ​ (698) ​ ​
Loss of the year
​ ​ ​ ​ (3,378) ​ ​ ​ ​ ​ (5) ​ ​ ​ ​ ​ (3,383) ​ ​
​
(i)
The adjustment made resulted in a reduction of General and administrative expenses of R$39, referring to the depreciation of the use rights minus the previously booked rent expenses;
​
(ii)
The adjustment made to financial result as the expense of interest paid on the lease liability totaled R$44.
​
 
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Management’s notes to the consolidated financial statements
As at December 31, 2020 and 2019
(In thousands of Brazilian reais)
(a) IFRS 16 Remeasurements — Lease liabilities
In effect commencing January 1, 2019, IFRS 16 establishes the principles for recognition, measurement, presentation and disclosure of lease liabilities. It demands lessees to account for all lease liabilities according to a single model in the consolidated statement of financial position. IFRS 16 includes some practical guidelines on:
(i)
Leases for which the underlying asset is “low value;”
​
(ii)
Short-term leases (or in other words, leases with a terms of 12months or less).
​
During the commencement of a lease agreement, the lessee must recognize a lease liability, measured at the present value of the contractual payments due to the lessor over the lease term and an asset that represents the right of using the underlying asset during the lease term and is required to separately recognize the expense of interest paid on the lease liability and the depreciation expense on the right-of-use asset.
Lessees must also revalue the lease liability after certain events (for example, a change in the lease term, an adjustment in future lease payments as a result of a change in an index or rate used to determine those payments).
When the Company revises its estimate of the term of any lease (because, for example, a reassessment of the probability of a lessee extension or termination option being exercised), it should adjust the carrying amount of the lease liability to reflect the payments to make over the revised term, which are discounted using a revised discount rate. The carrying value of lease liabilities is similarly revised when the variable element of future lease payments dependent on a rate or index is revised, except the discount rate remains unchanged. In both cases, an equivalent adjustment is made to the carrying value of the right-of-use asset, with the revised carrying amount being amortized over the remaining (revised) lease term. If the carrying amount of the right-of-use asset is adjusted to zero, any further reduction is recognized in profit or loss.
IFRS 16 also requires lessees and lessors to make more comprehensive disclosures than the ones established in IAS 17.
Lease payments were discounted at an incremental borrowing rate as at January 1, 2019. The weighted average rate applied for discount purpose was 11.08% per year.
Right-of-use assets
At the commencement of a lease agreement (or in other words, when the underlying asset is available for use), a lessee must recognize a right-of-use asset, which is initially measured at the amount of the lease liability, reduced for any lease incentives received, and increased for:
•
lease payments made at or before commencement of the lease agreement;
​
•
initial direct costs incurred; and
​
•
the amount of any provision recognized where the group is contractually required to dismantle, remove or restore the leased asset.
​
The recognized right-of-use assets are depreciated on a straight-line basis along the shorter period between its estimated useful life and the lease term.
3.1.
New standards not yet in effect:
​
Amendment to IFRS 16 — Covid-19-Related Rent Concessions:   Clarifies aspects as for the practical treatment and disclosure of concessions in lease agreement as a result of the Covid-19 pandemic. Such
 
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Management’s notes to the consolidated financial statements
As at December 31, 2020 and 2019
(In thousands of Brazilian reais)
amendment is effect for years commencing on/after June 1, 2020 and may be applied in advance. Therefore, the standard has already been adopted by the Company and no significant effects have arisen from its adoption.
New IFRS and interpretations of the IFRIC (IFRS Interpretations Committee of IASB) — The amendments of IFRS made by IASB effective for the year 2020 did not have impact to the Company’s consolidated financial statements. IASB reviewed some IFRS, which will be effective beginning 2021 and the Company’s Management is in the process of evaluating its effects to the Company’s consolidated financial statements.
Amendment to Standard IAS 1 — Classification of liabilities as current or noncurrent. Clarifies aspects to be considered in the classification of liabilities as current or noncurrent. Such amendment is effective for years starting on/or after January 1, 2023. No significant effects are expected to the Company’s consolidated financial statements.
Amendment to IFRS 3 — Reference to the Conceptual Framework:   Clarifies the conceptual framework of IFRS. This amendment is effective for years started on/after January 1, 2022. No significant impacts are expected to the Company’s consolidated financial statements.
Amendment to IFRS 4 — Deferral of temporary exemptions of IFRS 9:   Clarifies aspects referring insurance contracts and temporary exemption in the application of IFRS 9 for insurance companies. Such amendment is effective for years commencing on/after January 1, 2023. No significant impacts are expected to the Company’s consolidated financial statements.
4.
Cash and cash equivalents
​
​ ​ ​
December 31, 2020
​ ​
December 31, 2019
​ ​
January 1, 2019
​
Cash
​ ​ ​ ​ 2 ​ ​ ​ ​ ​ 2 ​ ​ ​ ​ ​ 2 ​ ​
Cash at banks
​ ​ ​ ​ 856 ​ ​ ​ ​ ​ 106 ​ ​ ​ ​ ​ 6 ​ ​
Short-term financial investment(i)
​ ​ ​ ​ 22,094 ​ ​ ​ ​ ​ 3,778 ​ ​ ​ ​ ​ 156 ​ ​
​ ​ ​ ​ ​ 22,952 ​ ​ ​ ​ ​ 3,886 ​ ​ ​ ​ ​ 164 ​ ​
​
(i)
Short-term financial investment included:
​
a.
Certificates of deposit and instruments issued and guaranteed by top-rated financial institutions in Brazil, whose yield is pegged to the variation of the Interbank Deposit Certificate rate (CDI);
​
b.
Investment funds;
​
c.
Savings account.
​
5.
Accounts receivable
​
​ ​ ​
December 31, 2020
​ ​
December 31, 2019
​ ​
January 1, 2019
​
Trade accounts receivable
​ ​ ​ ​ 12,476 ​ ​ ​ ​ ​ 2,401 ​ ​ ​ ​ ​ 1,528 ​ ​
(-) Estimated credit losses
​ ​ ​ ​ (426) ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​
​ ​ ​ ​ ​ 12,048 ​ ​ ​ ​ ​ 2,401 ​ ​ ​ ​ ​ 1,528 ​ ​
The estimated credit losses refer to customers with high probability of default. Those amounts are projected at the Company, seeing the loss has not yet been incurred.
 
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Management’s notes to the consolidated financial statements
As at December 31, 2020 and 2019
(In thousands of Brazilian reais)
6.
Advances
​
​ ​ ​
December 31, 2020
​ ​
December 31, 2019
​ ​
January 1, 2019
​
Employees
​ ​ ​ ​ 45 ​ ​ ​ ​ ​ 45 ​ ​ ​ ​ ​ 30 ​ ​
Suppliers
​ ​ ​ ​ 9 ​ ​ ​ ​ ​ 142 ​ ​ ​ ​ ​ 27 ​ ​
​ ​ ​ ​ ​ 54 ​ ​ ​ ​ ​ 187 ​ ​ ​ ​ ​ 57 ​ ​
​
7.
Prepaid expenses
​
​ ​ ​
December 31, 2020
​ ​
December 31, 2019
​ ​
January 1, 2019
​
Expenses to recognize (i)
​ ​ ​ ​ 129 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​
Use licenses
​ ​ ​ ​ 19 ​ ​ ​ ​ ​ 14 ​ ​ ​ ​ ​ — ​ ​
Insurance
​ ​ ​ ​ 61 ​ ​ ​ ​ ​ 20 ​ ​ ​ ​ ​ 5 ​ ​
Guarantees
​ ​ ​ ​ 26 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​
​ ​ ​ ​ ​ 235 ​ ​ ​ ​ ​ 34 ​ ​ ​ ​ ​ 5 ​ ​
​
(i)
Refers to operating expenses of future periods, but already invoiced by suppliers.
​
8.
Property, plant and equipment
​
​ ​ ​
December 31, 2020
​ ​
December 31, 2019
​ ​
January 1, 2019
​
Property, plant and equipment (a)
​ ​ ​ ​ 1,380 ​ ​ ​ ​ ​ 502 ​ ​ ​ ​ ​ 617 ​ ​
Right-of-use IFRS 16(b)
​ ​ ​ ​ 2,430 ​ ​ ​ ​ ​ 125 ​ ​ ​ ​ ​ 425 ​ ​
​ ​ ​ ​ ​ 3,810 ​ ​ ​ ​ ​ 627 ​ ​ ​ ​ ​ 1,042 ​ ​
(a) Property, plant and equipment
Description
​ ​
Annual
depreciation
rate
​ ​
Cost
​ ​
Accumulated
depreciation
​ ​
December 31,
2020
​ ​
December 31,
2019
​ ​
January 1,
2019
​
Furniture and fixtures
​ ​ ​ ​ 10.00% ​ ​ ​ ​ ​ 325 ​ ​ ​ ​ ​ (158) ​ ​ ​ ​ ​ 167 ​ ​ ​ ​ ​ 144 ​ ​ ​ ​ ​ 137 ​ ​
Machinery, devices and equipment
​ ​ ​ ​ 10.00% ​ ​ ​ ​ ​ 3 ​ ​ ​ ​ ​ (1) ​ ​ ​ ​ ​ 2 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 87 ​ ​
Vehicles
​ ​ ​ ​ 10.00% ​ ​ ​ ​ ​ 39 ​ ​ ​ ​ ​ (39) ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​
IT equipment
​ ​ ​ ​ 20.00% ​ ​ ​ ​ ​ 1,015 ​ ​ ​ ​ ​ (343) ​ ​ ​ ​ ​ 672 ​ ​ ​ ​ ​ 241 ​ ​ ​ ​ ​ 83 ​ ​
Communications devices
​ ​ ​ ​ 10.00% ​ ​ ​ ​ ​ 7 ​ ​ ​ ​ ​ (3) ​ ​ ​ ​ ​ 4 ​ ​ ​ ​ ​ 4 ​ ​ ​ ​ ​ 5 ​ ​
Facilities
​ ​ ​ ​ 10.00% ​ ​ ​ ​ ​ 76 ​ ​ ​ ​ ​ (44) ​ ​ ​ ​ ​ 32 ​ ​ ​ ​ ​ 39 ​ ​ ​ ​ ​ 47 ​ ​
Leasehold improvements
​ ​ ​ ​ 38.71% ​ ​ ​ ​ ​ 130 ​ ​ ​ ​ ​ (42) ​ ​ ​ ​ ​ 88 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​
Hardware
​ ​ ​ ​ 20.00% ​ ​ ​ ​ ​ 920 ​ ​ ​ ​ ​ (920) ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 74 ​ ​ ​ ​ ​ 258 ​ ​
Improvements to third party properties in progress
​ ​ ​ ​ — ​ ​ ​ ​ ​ 416 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 416 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2,931 ​ ​ ​ ​ ​ (1,551) ​ ​ ​ ​ ​ 1,380 ​ ​ ​ ​ ​ 502 ​ ​ ​ ​ ​ 617 ​ ​
 
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Management’s notes to the consolidated financial statements
As at December 31, 2020 and 2019
(In thousands of Brazilian reais)
The following table presents amounts of the change in assets of the Company.
​ ​ ​
Annual
depreciation
rate
​ ​
December 31, 2019
​ ​
Additions
​ ​
Transfers
​ ​
Write-offs
​ ​
December 31, 2020
​
Furniture and fixtures
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 266 ​ ​ ​ ​ ​ 12 ​ ​ ​ ​ ​ 47 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 325 ​ ​
Machinery, devices and equipment
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 1 ​ ​ ​ ​ ​ 2 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 3 ​ ​
Vehicles
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 39 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 39 ​ ​
IT equipment
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 443 ​ ​ ​ ​ ​ 257 ​ ​ ​ ​ ​ 326 ​ ​ ​ ​ ​ (12) ​ ​ ​ ​ ​ 1,014 ​ ​
Communications devices
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 7 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 7 ​ ​
Facilities
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 76 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 76 ​ ​
Leasehold improvements
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 35 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 95 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 130 ​ ​
Hardware
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 921 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 921 ​ ​
Improvements to third party properties in progress
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 416 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 416 ​ ​
Cost
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 1,788 ​ ​ ​ ​ ​ 687 ​ ​ ​ ​ ​ 468 ​ ​ ​ ​ ​ (12) ​ ​ ​ ​ ​ 2,931 ​ ​
Furniture and fixtures
​ ​ ​ ​ 10.00% ​ ​ ​ ​ ​ (122) ​ ​ ​ ​ ​ (28) ​ ​ ​ ​ ​ (7) ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ (157) ​ ​
Machinery, devices and equipment
​ ​ ​ ​ 10.00% ​ ​ ​ ​ ​ (1) ​ ​ ​ ​ ​ (0) ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ (1) ​ ​
Vehicles
​ ​ ​ ​ 10.00% ​ ​ ​ ​ ​ (39) ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ (39) ​ ​
IT equipment
​ ​ ​ ​ 20.00% ​ ​ ​ ​ ​ (202) ​ ​ ​ ​ ​ (84) ​ ​ ​ ​ ​ (60) ​ ​ ​ ​ ​ 2 ​ ​ ​ ​ ​ (344) ​ ​
Communications devices
​ ​ ​ ​ 10.00% ​ ​ ​ ​ ​ (3) ​ ​ ​ ​ ​ (1) ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ (4) ​ ​
Facilities
​ ​ ​ ​ 10.00% ​ ​ ​ ​ ​ (37) ​ ​ ​ ​ ​ (8) ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ (45) ​ ​
Leasehold improvements
​ ​ ​ ​ 38.71% ​ ​ ​ ​ ​ (35) ​ ​ ​ ​ ​ (0) ​ ​ ​ ​ ​ (7) ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ (42) ​ ​
Hardware
​ ​ ​ ​ 20.00% ​ ​ ​ ​ ​ (847) ​ ​ ​ ​ ​ (72) ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ (919) ​ ​
(-) Accumulated depreciation
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (1,286) ​ ​ ​ ​ ​ (193) ​ ​ ​ ​ ​ (74) ​ ​ ​ ​ ​ 2 ​ ​ ​ ​ ​ (1,551) ​ ​
Total
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 502 ​ ​ ​ ​ ​ 494 ​ ​ ​ ​ ​ 394 ​ ​ ​ ​ ​ (10) ​ ​ ​ ​ ​ 1,380 ​ ​
​ ​ ​
Annual
depreciation
rate
​ ​
January 1, 2019
​ ​
Additions
​ ​
Transfers
​ ​
Write-offs
​ ​
December 31, 2019
​
Furniture and fixtures
​ ​ ​ ​ ​ ​ ​ 236 ​ ​ ​ ​ ​ 30 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 266 ​ ​
Machinery, devices and equipment
​ ​ ​ ​ ​ ​ ​ 133 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ (132) ​ ​ ​ ​ ​ 1 ​ ​
Vehicles
​ ​ ​ ​ ​ ​ ​ 39 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 39 ​ ​
IT equipment
​ ​ ​ ​ ​ ​ ​ 247 ​ ​ ​ ​ ​ 196 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 443 ​ ​
Communications devices
​ ​ ​ ​ ​ ​ ​ 7 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 7 ​ ​
Facilities
​ ​ ​ ​ ​ ​ ​ 76 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 76 ​ ​
Leasehold improvements
​ ​ ​ ​ ​ ​ ​ 35 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 35 ​ ​
 
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Management’s notes to the consolidated financial statements
As at December 31, 2020 and 2019
(In thousands of Brazilian reais)
​ ​ ​
Annual
depreciation
rate
​ ​
January 1, 2019
​ ​
Additions
​ ​
Transfers
​ ​
Write-offs
​ ​
December 31, 2019
​
Hardware
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 921 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 921 ​ ​
Cost
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 1,694 ​ ​ ​ ​ ​ 226 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ (132) ​ ​ ​ ​ ​ 1,788 ​ ​
Furniture and fixtures
​ ​ ​ ​ 10.00% ​ ​ ​ ​ ​ (99) ​ ​ ​ ​ ​ (23) ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ (122) ​ ​
Machinery, devices and equipment
​ ​ ​ ​ 10.00% ​ ​ ​ ​ ​ (46) ​ ​ ​ ​ ​ (0) ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 45 ​ ​ ​ ​ ​ (1) ​ ​
Vehicles
​ ​ ​ ​ 10.00% ​ ​ ​ ​ ​ (39) ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ (39) ​ ​
IT equipment
​ ​ ​ ​ 20.00% ​ ​ ​ ​ ​ (165) ​ ​ ​ ​ ​ (37) ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ (202) ​ ​
Communications devices
​ ​ ​ ​ 10.00% ​ ​ ​ ​ ​ (2) ​ ​ ​ ​ ​ (1) ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ (3) ​ ​
Facilities
​ ​ ​ ​ 10.00% ​ ​ ​ ​ ​ (29) ​ ​ ​ ​ ​ (8) ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ (37) ​ ​
Leasehold improvements
​ ​ ​ ​ 38.71% ​ ​ ​ ​ ​ (35) ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ (35) ​ ​
Hardware
​ ​ ​ ​ 20.00% ​ ​ ​ ​ ​ (662) ​ ​ ​ ​ ​ (185) ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ (847) ​ ​
(-) Accumulated
depreciation
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (1,077) ​ ​ ​ ​ ​ (254) ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 45 ​ ​ ​ ​ ​ (1,286) ​ ​
Total
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 617 ​ ​ ​ ​ ​ (28) ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ (87) ​ ​ ​ ​ ​ 502 ​ ​
​
Impairment
In compliance with IAS 36 — Impairment of fixed assets were tested for impairment as at December 31, 2020 and 2019. No need of recognition of write-off due to impairment of assets was found.
(b) Right-of-use
We demonstrate below the change in Right-of-use of the Company.
​ ​ ​
Annual
amortization
rate
​ ​
December 31,
2019
​ ​
Additions
​ ​
Transfers
​ ​
Write-offs
​ ​
December 31,
2020
​
Right-of-use assets (IFRS 16)
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 425 ​ ​ ​ ​ ​ 2,743 ​ ​ ​ ​ ​ 406 ​ ​ ​ ​ ​ (425) ​ ​ ​ ​ ​ 3,149 ​ ​
Cost ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 425 ​ ​ ​ ​ ​ 2,743 ​ ​ ​ ​ ​ 406 ​ ​ ​ ​ ​ (425) ​ ​ ​ ​ ​ 3,149 ​ ​
Right-of-use assets (IFRS 16)
​ ​ ​ ​ (i) ​ ​ ​ ​ ​ (300) ​ ​ ​ ​ ​ (669) ​ ​ ​ ​ ​ (175) ​ ​ ​ ​ ​ 425 ​ ​ ​ ​ ​ (719) ​ ​
(-) Accumulated amortization
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (300) ​ ​ ​ ​ ​ (669) ​ ​ ​ ​ ​ (175) ​ ​ ​ ​ ​ 425 ​ ​ ​ ​ ​ (719) ​ ​
Total
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 125 ​ ​ ​ ​ ​ 2,074 ​ ​ ​ ​ ​ 231 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 2,430 ​ ​
​ ​ ​
Annual
amortization
rate
​ ​
January 1,
2019
​ ​
Additions
​ ​
Transfers
​ ​
Write-offs
​ ​
December 31,
2019
​
Right-of-use assets (IFRS 16)
​ ​ ​ ​ ​ ​ ​ 425 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 425 ​ ​
Cost ​ ​ ​ ​ ​ ​ ​ 425 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 425 ​ ​
Right-of-use assets (IFRS 16)
​ ​ ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ (300) ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (300) ​ ​
(-) Accumulated amortization
​ ​ ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ (300) ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ (300) ​ ​
Total
​ ​ ​ ​ ​ ​ ​ 425 ​ ​ ​ ​ ​ (300) ​ ​ ​ ​ ​    — ​ ​ ​ ​ ​    — ​ ​ ​ ​ ​ 125 ​ ​
​
(i)
The average amortization rate of right-of-use assets is 22.83%.
​
 
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Management’s notes to the consolidated financial statements
As at December 31, 2020 and 2019
(In thousands of Brazilian reais)
9.
Intangible assets
​
​ ​ ​ ​ ​ ​
December 31, 2020
​ ​
December 31, 2019
​ ​
January 1, 2019
​
Internally developed software
​ ​
Definite useful life
​ ​ ​ ​ 3,223 ​ ​ ​ ​ ​ 4,197 ​ ​ ​ ​ ​ 1,219 ​ ​
Software – Smarkio
​ ​
Definite useful life
​ ​ ​ ​ 25,494 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​
Customer portfolio – Smarkio
​ ​
Definite useful life
​ ​ ​ ​ 5,353 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Non-compete – Smarkio
​ ​
Definite useful life
​ ​ ​ ​ 3,168 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​
​ ​ ​ ​ ​ ​ ​ ​ 37,238 ​ ​ ​ ​ ​ 4,197 ​ ​ ​ ​ ​ 1,219 ​ ​
The table below demonstrates the change in internally developed software of the Company. Such right refers to the software internally developed.
Internally developed software
​ ​
Cost
​ ​
Annual
rate
​ ​
Accumulated
amortization
​ ​
December 31,
2020
​ ​
December 31,
2019
​ ​
January 1,
2019
​
Software 2018
​ ​ ​ ​ 1,327 ​ ​ ​ ​ ​ 20% ​ ​ ​ ​ ​ (639) ​ ​ ​ ​ ​ 688 ​ ​ ​ ​ ​ 954 ​ ​ ​ ​ ​ 1,219 ​ ​
Software 2019
​ ​ ​ ​ 3,541 ​ ​ ​ ​ ​ 20% ​ ​ ​ ​ ​ (1,006) ​ ​ ​ ​ ​ 2,535 ​ ​ ​ ​ ​ 3,243 ​ ​ ​ ​ ​ — ​ ​
​ ​ ​ ​ ​ 4,868 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (1,645) ​ ​ ​ ​ ​ 3,223 ​ ​ ​ ​ ​ 4,197 ​ ​ ​ ​ ​ 1,219 ​ ​
The breakdown of change in intangible assets is as follows:
​ ​ ​
Annual
depreciation
rate
​ ​
December 31,
2019
​ ​
Additions
​ ​
Write-offs
​ ​
December 31,
2020
​
Internally developed software
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 4,868 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 4,868 ​ ​
software – Smarkio
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 25,926 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 25,926 ​ ​
Customer portfolio – Smarkio
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 5,586 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 5,586 ​ ​
Non-competition – Smarkio
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 3,234 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 3,234 ​ ​
Cost
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 4,868 ​ ​ ​ ​ ​ 34,746 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 39,614 ​ ​
Internally developed software
​ ​ ​ ​ 20.00% ​ ​ ​ ​ ​ (671) ​ ​ ​ ​ ​ (974) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (1,645) ​ ​
Software – Smarkio
​ ​ ​ ​ 20.00% ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ (432) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (432) ​ ​
Customer portfolio – Smarkio
​ ​ ​ ​ 50.00% ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ (233) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (233) ​ ​
Non-compete – Smarkio
​ ​ ​ ​ 25.00% ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ (67) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (67) ​ ​
(-) Accumulated amortization
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (671) ​ ​ ​ ​ ​ (1,706) ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ (2,376) ​ ​
Total
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 4,197 ​ ​ ​ ​ ​ 37,238 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 37,238 ​ ​
​ ​ ​
Annual
depreciation
rate
​ ​
January 1,
2019
​ ​
Additions
​ ​
Write-offs
​ ​
December 31,
2019
​
Internally developed software
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 1,327 ​ ​ ​ ​ ​ 3,541 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 4,868 ​ ​
Cost
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 1,327 ​ ​ ​ ​ ​ 3,541 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 4,868 ​ ​
Internally developed software
​ ​ ​ ​ 20.00% ​ ​ ​ ​ ​ (108) ​ ​ ​ ​ ​ (563) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (671) ​ ​
(-) Accumulated amortization
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (108) ​ ​ ​ ​ ​ (563) ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ (671) ​ ​
Total
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 1,219 ​ ​ ​ ​ ​ 2,978 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 4,197 ​ ​
 
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Management’s notes to the consolidated financial statements
As at December 31, 2020 and 2019
(In thousands of Brazilian reais)
Impairment
The Company is required to test, on an annual basis, whether goodwill has suffered any impairment. The recoverable amount is determined based on value in use calculations. The use of this method requires the estimation of future cash flows and the determination of a discount rate in order to calculate the present value of the cash flows. The Company’s goodwill balance related to the Smarkio acquisition which closed on November 30, 2020. Given recently completed acquisition management concluded that there is no impairment of goodwill from November 30 to December 31, 2020.
10.
Loans and financing
​
Type
​ ​
Guarantee
​ ​
Maturity
​ ​
Annual charges
​ ​
December 31,
2020
​ ​
December 31,
2019
​ ​
January 1,
2019
​
Working capital – Banco Itaú (i) and
Banco Safra
​ ​
Credit from short-
term financial
investment
​ ​ ​ ​ 10/23/2023 ​ ​ ​
10% to 13%
​ ​ ​ ​ 11,470 ​ ​ ​ ​ ​ 117 ​ ​ ​ ​ ​ 286 ​ ​
Checking account negative balance
​ ​
—
​ ​ ​ ​ — ​ ​ ​
11% to 15%
​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 47 ​ ​
Overdraft account
​ ​
—
​ ​ ​ ​ — ​ ​ ​
35.42%
​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 699 ​ ​
Overdraft account
​ ​
—
​ ​ ​ ​ — ​ ​ ​
16.76%
​ ​ ​ ​ — ​ ​ ​ ​ ​ 845 ​ ​ ​ ​ ​ — ​ ​
Advanced receivables
​ ​
Advanced
receivable
​ ​ ​ ​ ​ ​ ​ ​
1.4% to 2%
​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 383 ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 11,470 ​ ​ ​ ​ ​ 962 ​ ​ ​ ​ ​ 1,415 ​ ​
Current liability
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 3,179 ​ ​ ​ ​ ​ 962 ​ ​ ​ ​ ​ 1,297 ​ ​
Non-current liability
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 8,291 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 118 ​ ​
The noncurrent portion as at December 31, 2020 had the following maturities and amounts:
Year
​ ​
Amount (R$)
​
2022
​ ​ ​ ​ 4,525 ​ ​
2023
​ ​ ​ ​ 3,766 ​ ​
​ ​ ​ ​ ​ 8,291 ​ ​
​
(i) The contract executed with Banco Itaú may have its early termination in the event any of the following situations occur:
(a)
Lack of performance of any obligations established in the loan contract or any instrument contracted between the Company and Itaú or with any other directly or indirectly controlled company of Itaú Unibanco Holding S.A.;
​
(b)
If the Company files for bankruptcy, proposes a court supervised or independent reorganization, is dissolved or has payables protested;
​
(c)
Death, insolvency or interdiction of any jointly liable debtor, or occurrence of any of the events described in item (b) in relation to any jointly liable debtor, without the presentation of an acceptable substitute within a period of 15 days counted from the occurrence of the event;
​
(d)
If the loan guarantees are not provided or formalized or if such guarantees become inappropriate
​
 
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Management’s notes to the consolidated financial statements
As at December 31, 2020 and 2019
(In thousands of Brazilian reais)
or insufficient to assure the fulfillment of the obligations and they are not replaced in a period of 15 days from notification on the part of Banco Itaú;
(e)
A final and unappealable ruling is rendered against the practice on the part of the Company, debtors, jointly liable parties or managers of the Company or jointly liable debtors of actions that represent racial or gender discrimination, work of minors, slave-like work, moral or sexual harassment or environmental crime;
​
(f)
Any corporate restructuring takes place or any direct or indirect change in control where the Company is involved;
​
(g)
Amendment to the articles or incorporation or to the main activity of the Company or yet disposal of a commercial unit or of a significant portion of its fixed assets;
​
(h)
Request on the part of the Company of closing of the checking account maintained with Banco Itaú;
​
(i)
In the event a superseding standard or regulation that impedes the continuity or validity of the credit operation contracted.
​
At the Company and obligation has been undertaken of communicating Banco Itaú, immediately about the occurrence of any of the events described in letters (a) to (g). To this date, the Company has been in compliance with all the events described above.
11.
Lease liabilities
​
The Company and its subsidiaries have real estate lease agreements of its headquarters, as well as to vehicles offered as benefit to executives. The obligations of the Company in relation to the lease agreements have been recorded according to IFRS 16 and discounted to present value at the weighted average rate of loans, that is 11.08% per year.
​ ​ ​
Maturity
​ ​
Annual
charges
​ ​
December 31,
2020
​ ​
December 31,
2019
​ ​
January 1,
2019
​
Lease liabilities – IFRS 16 – headquarters
​ ​ ​ ​ 2/2/2015 ​ ​ ​ ​ ​ 10.69% ​ ​ ​ ​ ​ 2,673 ​ ​ ​ ​ ​ 130 ​ ​ ​ ​ ​ 425 ​ ​
Lease liabilities – IFRS 16 – vehicles
​ ​ ​ ​ 11/26/2022 ​ ​ ​ ​ ​ 10.69% ​ ​ ​ ​ ​ 227 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​
Lease liabilities – IFRS 16 – Smarkio
​ ​ ​ ​ 9/1/2023 ​ ​ ​ ​ ​ 15.39% ​ ​ ​ ​ ​ 264 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​
3,164
​ ​ ​ ​
​
130
​ ​ ​ ​ ​ 425 ​ ​
Current liability
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 668 ​ ​ ​ ​ ​ 130 ​ ​ ​ ​ ​ 295 ​ ​
Non-current liability
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2,496 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 130 ​ ​
The non-current liability as of December 31, 2020 have the following maturities and amounts:
Year
​ ​
Amount (R$)
​
2022
​ ​ ​ ​ 743 ​ ​
2023
​ ​ ​ ​ 836 ​ ​
2024
​ ​ ​ ​ 773 ​ ​
2025
​ ​ ​ ​ 144 ​ ​
​ ​ ​ ​ ​ 2,496 ​ ​
​
12.
Deferred revenue
​
 
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Management’s notes to the consolidated financial statements
As at December 31, 2020 and 2019
(In thousands of Brazilian reais)
The amounts carried in deferred revenue refer to invoices issued in a period, but whose services will be transferred to the customers in future periods. Therefore, the amounts are recognized in liabilities and as the services are effectively provided to customers according to the performance obligation established in IFRS 15, revenue is booked in the consolidated statement of profit or loss.
13.
Provision for contingencies
​
The Company’s Management, supported by legal counselors recognized a provision for lawsuits (contingencies) at amounts considered adequate to cover probable future payments as a result of the existing labor complaints filed against the Company.
As at December 31, 2020, the sum of labor complaints classified as probable losses was R$507 (R$587 as at December 31, 2019). Those actions were filed against the previously subsidiary Printers United Comunicação Integrada Ltda. and were transferred to the Company after it was merged. There are no actions rated as possible or remote losses.
14.
Consideration transferred or to be transferred to the former shareholders
​
​ ​ ​
December 31, 2020
​ ​
December 31, 2019
​ ​
January 1, 2019
​
Consideration to be transferred – Smarkio Tecnologia S.A.(i)
​ ​ ​ ​ 61,464 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Total Consideration
​ ​ ​ ​ 61,464 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​
​
(i)
The total consideration to be transferred to the selling shareholders of Smarkio is R$62,331, of which:
​
a.
R$867 were paid at closing date;
​
b.
R$4,575 are due in 5 monthly installments of R$915; and
​
c.
The remaining R$56,889 are due in one bullet payment in up to 180 days from closing date
​
These amounts are divided among the selling shareholders according to the percentages presented below. Fernando and Alexandre have continued their tenure at the management team of Smarkio.
Selling Shareholder
​ ​
Percentage
​ ​
Total consideration to be transferred to
​
Smarkio S.A. (Portugal)
​ ​ ​ ​ 60.0% ​ ​ ​ ​ ​ 36,894 ​ ​
Fernando Nigri Wolff
​ ​ ​ ​ 20.0% ​ ​ ​ ​ ​ 12,285 ​ ​
Alexandre Rocha Oliveira
​ ​ ​ ​ 20.0% ​ ​ ​ ​ ​ 12,285 ​ ​
​ ​ ​ ​ ​ 100.0% ​ ​ ​ ​ ​ 61,464 ​ ​
​
15.
Related party transactions
​
Assets
The ending balances of loans granted by the Company to shareholders were:
​ ​ ​
December 31, 2020
​ ​
December 31, 2019
​ ​
January 1, 2019
​
Shareholders’ loans
​ ​ ​ ​ — ​ ​ ​ ​ ​ 57 ​ ​ ​ ​ ​ 501 ​ ​
​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 57 ​ ​ ​ ​ ​ 501 ​ ​
 
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Management’s notes to the consolidated financial statements
As at December 31, 2020 and 2019
(In thousands of Brazilian reais)
Liabilities
​ ​ ​
December 31, 2020
​ ​
December 31, 2019
​ ​
January 1, 2019
​
4TI Participações (loan with a related party)(i)
​ ​ ​ ​ 9,828 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​
​ ​ ​ ​ ​ 9,828 ​ ​ ​ ​ ​    — ​ ​ ​ ​ ​    — ​ ​
Current portion
​ ​ ​ ​ 2,442 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​
Noncurrent one
​ ​ ​ ​ 7,386 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​
​
(i)
The company 4TI Participações is a shareholder of the Company and, for that reason, is considered a related party. In August 2020, 4TI Participações offered a loan of R$9,500 to the Company, which bear interest at a rate of 12.58% p.a., maturing on July 1, 2024.
​
The noncurrent portion as at December 31, 2020 had the following maturities and amounts:
Year
​ ​
Amount (R$)
​
2022
​ ​ ​ ​ 2,664 ​ ​
2023
​ ​ ​ ​ 2,906 ​ ​
2024
​ ​ ​ ​ 1,816 ​ ​
​ ​ ​ ​ ​ 7,386 ​ ​
​
15.1.
Management compensation
​
The Company offers no additional post-employment benefits to employees.
Total gross compensation of management, including bonuses and salaries, totaled R$2,921 as at December 31, 2020 (R$2,411 on December 31, 2019).
16.
Equity
​
16.1.
Capital
​
As at December 31, 2019, the Company’s capital subscribed and paid corresponded to R$6,284 represented by 1,039,762 (one million, thirty nine thousand and seven hundred and sixty two) nominative ordinary shares without face value and 468 (four hundred and sixty eight) preferred class A and nominative shares, without face value and with no voting rights.
As at December 31, 2019, the Company’s capital subscribed and paid corresponded to R$16,634 represented by 1,189,763 (one million, one hundred and eighty nine thousand and seven hundred and sixty three) nominative ordinary shares without face value and 178,429 (one hundred and seventy eight thousand, four hundred and twenty nine) Class A preferred and nominative shares, without face value.
As at December 31, 2020, the Company’s capital subscribed and paid corresponded to R$24,489 represented by 1,274,723 (one million, two hundred and seventy-four thousand and seven hundred and twenty three) shares. From those, 1,011,334 (one million and eleven thousand, three hundred and thirty four) are nominative ordinary shares without face value and 263,389 (two hundred and sixty three thousand, three hundred and eighty nine) are Class A, preferred and nominative shares, without face value.
17.
Net revenue
​
​ ​ ​
December 31, 2020
​ ​
December 31, 2019
​
Software Use Licensing
​ ​ ​ ​ 22,752 ​ ​ ​ ​ ​ 12,411 ​ ​
 
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Management’s notes to the consolidated financial statements
As at December 31, 2020 and 2019
(In thousands of Brazilian reais)
​ ​ ​
December 31, 2020
​ ​
December 31, 2019
​
Professional Services
​ ​ ​ ​ 3,769 ​ ​ ​ ​ ​ 1,145 ​ ​
​ ​ ​ ​ ​ 26,521 ​ ​ ​ ​ ​ 13,556 ​ ​
​
​
18.
Costs and expenses per type
​
​ ​ ​
December 31, 2020
​ ​
December 31, 2019
​
Personnel
​ ​ ​ ​ (14,227) ​ ​ ​ ​ ​ (4,243) ​ ​
Third party services
​ ​ ​ ​ (7,086) ​ ​ ​ ​ ​ (3,694) ​ ​
Infrastructure and data processing
​ ​ ​ ​ (10,713) ​ ​ ​ ​ ​ (5,080) ​ ​
Depreciation and amortization
​ ​ ​ ​ (2,569) ​ ​ ​ ​ ​ (1,116) ​ ​
Building common charges
​ ​ ​ ​ (341) ​ ​ ​ ​ ​ (439) ​ ​
Taxes
​ ​ ​ ​ (680) ​ ​ ​ ​ ​ (501) ​ ​
Utilities and services
​ ​ ​ ​ (115) ​ ​ ​ ​ ​ (112) ​ ​
Other costs and expenses
​ ​ ​ ​ (281) ​ ​ ​ ​ ​ (492) ​ ​
​ ​ ​ ​ ​ (36,012) ​ ​ ​ ​ ​ (15,677) ​ ​
Reconciliation with operating expenses classified per function:
​ ​ ​
December 31, 2020
​ ​
December 31, 2019
​
Cost of services provided
​ ​ ​ ​ (13,603) ​ ​ ​ ​ ​ (7,804) ​ ​
Sales and marketing expenses
​ ​ ​ ​ (6,355) ​ ​ ​ ​ ​ (3,224) ​ ​
General and administrative expenses
​ ​ ​ ​ (16,054) ​ ​ ​ ​ ​ (4,649) ​ ​
​ ​ ​ ​ ​ (36,012) ​ ​ ​ ​ ​ (15,677) ​ ​
​
19.
Net financial income (expenses)
​
Financial revenue
​ ​
December 31, 2020
​ ​
December 31, 2019
​
Discounts obtained
​ ​ ​ ​ 30 ​ ​ ​ ​ ​ 79 ​ ​
Interest gain
​ ​ ​ ​ 53 ​ ​ ​ ​ ​ 7 ​ ​
Yield from financial investment
​ ​ ​ ​ 156 ​ ​ ​ ​ ​ 112 ​ ​
​ ​ ​ ​ ​ 239 ​ ​ ​ ​ ​ 198 ​ ​
Financial expenses
​ ​
December 31, 2020
​ ​
December 31, 2019
​
Discounts granted
​ ​ ​ ​ (7) ​ ​ ​ ​ ​ (32) ​ ​
Bank fees
​ ​ ​ ​ (37) ​ ​ ​ ​ ​ (102) ​ ​
Interest and fines
​ ​ ​ ​ (149) ​ ​ ​ ​ ​ (227) ​ ​
Interest on lease liabilities
​ ​ ​ ​ (256) ​ ​ ​ ​ ​ (31) ​ ​
Interest on loans with related parties
​ ​ ​ ​ (329) ​ ​ ​ ​ ​ — ​ ​
Interest on loans and financing
​ ​ ​ ​ (414) ​ ​ ​ ​ ​ (318) ​ ​
Taxes of financial transactions
​ ​ ​ ​ (77) ​ ​ ​ ​ ​ (75) ​ ​
Losses incurred with investment
​ ​ ​ ​ (12) ​ ​ ​ ​ ​ (9) ​ ​
 
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Management’s notes to the consolidated financial statements
As at December 31, 2020 and 2019
(In thousands of Brazilian reais)
Financial expenses
​ ​
December 31, 2020
​ ​
December 31, 2019
​
Exchange variation losses
​ ​ ​ ​ (137) ​ ​ ​ ​ ​ (102) ​ ​
​ ​ ​ ​ ​ (1,418) ​ ​ ​ ​ ​ (896) ​ ​
Net financial income (expenses)
​ ​ ​ ​ (1,179) ​ ​ ​ ​ ​ (698) ​ ​
​
​
20.
Current income tax
​
​ ​ ​
December 31, 2020
​ ​
December 31, 2019
​
Current income and social contribution taxes
​ ​ ​ ​ 301 ​ ​ ​ ​ ​ — ​ ​
Total income and social contribution taxes
​ ​ ​
​
301
​ ​ ​ ​
​
—
​ ​
​
20.1.
Reconciliation between nominal income and social contribution tax rate and effective rate
​
​ ​ ​
December 31, 2020
​ ​
December 31, 2019
​
Loss before income and social contribution taxes
​ ​ ​ ​ (11,159) ​ ​ ​ ​ ​ (3,383) ​ ​
Basic rate
​ ​ ​ ​ 0% ​ ​ ​ ​ ​ 0% ​ ​
Income and social contribution taxes
​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​
Income and social contribution taxes determined by the deemed income
method in the subsidiary
​ ​ ​ ​ (301) ​ ​ ​ ​ ​ — ​ ​
Tax expenses
​ ​ ​ ​ (301) ​ ​ ​ ​ ​ — ​ ​
Effective rate
​ ​ ​ ​ 2.70% ​ ​ ​ ​ ​ 0% ​ ​
20.2.   Breakdown of income tax and social contribution
​ ​ ​
December 31, 2020
​ ​
December 31, 2019
​
Provision for labor, tax and civil contingencies
​ ​ ​ ​ 148 ​ ​ ​ ​ ​ 176 ​ ​
Allowance for doubtful accounts
​ ​ ​ ​ 121 ​ ​ ​ ​ ​ — ​ ​
Tax loss carryforwards
​ ​ ​ ​ 4,011 ​ ​ ​ ​ ​ 607 ​ ​
​ ​ ​ ​ ​ 4,280 ​ ​ ​ ​ ​ 783 ​ ​
Deferred tax assets are recognized for tax losses to be offset to the extent that it is probable that they will be realized through future taxable income. The deferred taxes demonstrated above were not recognized in the Company’s consolidated financial statements, seeing there was no evidence of future recovery.
 
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Management’s notes to the consolidated financial statements
As at December 31, 2020 and 2019
(In thousands of Brazilian reais)
21.
Risk management and financial instruments
​
21.1.
Classification of financial instruments
​
The classification of the Company’s financial instruments is presented in the table below. According to Management, there are no financial instruments to be classified into other categories besides the ones reported:
​ ​ ​
December 31, 2020
​ ​
December 31, 2019
​ ​
January 1, 2019
​
​ ​ ​
Fair value
through
profit or
loss
​ ​
Amortized
cost
​ ​
Level I
​ ​
Fair value
through
profit or
loss
​ ​
Amortized
cost
​ ​
Level I
​ ​
Fair value
through
profit or
loss
​ ​
Amortized
cost
​ ​
Level I
​
Assets ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Cash and cash equivalents
​ ​ ​ ​ 22,094 ​ ​ ​ ​ ​ 858 ​ ​ ​ ​ ​ 22,094 ​ ​ ​ ​ ​ 3,778 ​ ​ ​ ​ ​ 108 ​ ​ ​ ​ ​ 3,778 ​ ​ ​ ​ ​ 156 ​ ​ ​ ​ ​ 8 ​ ​ ​ ​ ​ 156 ​ ​
Accounts receivable
​ ​ ​ ​ — ​ ​ ​ ​ ​ 12,048 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 2,400 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 1,528 ​ ​ ​ ​ ​ — ​ ​
​ ​ ​ ​ ​ 22,094 ​ ​ ​ ​ ​ 12,906 ​ ​ ​ ​ ​ 22,094 ​ ​ ​ ​ ​ 3,778 ​ ​ ​ ​ ​ 2,508 ​ ​ ​ ​ ​ 3,778 ​ ​ ​ ​ ​ 156 ​ ​ ​ ​ ​ 1,536 ​ ​ ​ ​ ​ 156 ​ ​
Liabilities ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Trade accounts payable
​ ​ ​ ​ — ​ ​ ​ ​ ​ 3,440 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 2,092 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 877 ​ ​ ​ ​ ​ — ​ ​
Loans and financing
​ ​ ​ ​ — ​ ​ ​ ​ ​ 11,470 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 962 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 1,415 ​ ​ ​ ​ ​ — ​ ​
Lease liabilities
​ ​ ​ ​ — ​ ​ ​ ​ ​ 3,164 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 130 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 425 ​ ​ ​ ​ ​ — ​ ​
Consideration to former shareholders
​ ​ ​ ​ — ​ ​ ​ ​ ​ 61,464 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​
Items to be paid in installments
​ ​ ​ ​ — ​ ​ ​ ​ ​ 1,724 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 2,178 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 1,912 ​ ​ ​ ​ ​ — ​ ​
​ ​ ​ ​ ​ — ​ ​ ​ ​
​
81,262
​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​
​
5,362
​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​
​
4,629
​ ​ ​ ​ ​ — ​ ​
​
21.2.
Financial risk management
​
The Company has a financial management area in charge of risk management, which reports directly to the Board of Directors. It is responsible for the definition of policies for management of risks and financial instruments through control systems, which establish limits of exposure to exchange and interest rate variation and definition of investment of funds with financial institutions. Such area monthly evaluates the positions of all financial instruments, as well as the results obtained in comparison to objectives and submits the numbers to the Company’s Board of Directors.
21.3.
Credit risk
​
Is associated with difficulty in collecting the amounts corresponding to services rendered to customers.
The Company and its subsidiary are also subject to credit risk associated with their interest-bearing bank accounts.
The risk related to the rendering of services is minimized by strict control of customers and active management of contract default through clear policies for the provision of services. There is no concentration of transactions with customers and previous default level is very low.
As for the risk of default on the part of financial institutions, dividing the investment of funds into different financial institutions mitigates the exposure.
Exposure to credit risk
 
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Management’s notes to the consolidated financial statements
As at December 31, 2020 and 2019
(In thousands of Brazilian reais)
The book value of financial assets represents the Company’s maximum credit risk exposure. At reporting date, such exposure was the following:
​ ​ ​
December 31, 2020
​ ​
December 31, 2019
​ ​
January 1, 2019
​
Cash and cash equivalents
​ ​ ​ ​ 2 ​ ​ ​ ​ ​ 2 ​ ​ ​ ​ ​ 2 ​ ​
Cash at banks and short-term financial investment
​ ​ ​ ​ 22,950 ​ ​ ​ ​ ​ 3,884 ​ ​ ​ ​ ​ 162 ​ ​
Accounts receivable
​ ​ ​ ​ 12,048 ​ ​ ​ ​ ​ 2,400 ​ ​ ​ ​ ​ 1,528 ​ ​
​ ​ ​ ​ ​ 35,000 ​ ​ ​ ​ ​ 6,286 ​ ​ ​ ​ ​ 1,692 ​ ​
Of total net accounts receivables, Porto Seguro account for 30.8% as at December 31, 2020 and 0.0% as at December 31, 2019 and account for 7.1% and 0.0% of our consolidated net revenues, respectively.
Of total net accounts receivables, Fidelity National Serviços e Contact Center Ltda. account for 14.6% as at December 31, 2020 and 4.3% as at December 31, 2019 and account for 20.2% and 5.2% of our consolidated net revenues, respectively.
Of total net accounts receivables, Portoseg S/A — Credito Financiamento e Investimento account for 14.6% as at December 31, 2020 and 0.0% as at December 31, 2019 and account for 1.6% and 0.0% of our consolidated net revenues, respectively.
The determination of the provision for expected losses to be incurred with receivables is based on the following criteria:
•
Expected losses are estimated by means of a loss rate calculated on actual past losses incurred with sales;
​
Besides, it is considered whether accounts receivable presented a significant increase in credit risk and encompasses:
•
All receivables overdue for more than 6 months;
​
•
Invoices presenting indicators of significant risks of contract violation based on renegotiations in progress, evidence of fail or court supervised reorganization processes in progress and customers with significant evidence of cash deterioration are submitted to additional credit rating analysis.
​
21.4.
Market risk
​
Interest rate and inflation risks: The interest rate risk arises from the portion of debt and interest-bearing bank deposits pegged to the CDI (Interbank Deposit Certificate rate) that can adversely affect revenue or financial expenses in the event there is an unfavorable change in interest rates or inflation.
21.5.
Operations with derivatives
​
No derivatives are used at the Company with speculative purposes.
21.6.
Liquidity risk
​
Liquidity risk refers to the possibility of the Company not having enough funds to settle its financial liabilities.
The treasury area of the Company daily monitors cash flows and liquidity in order to assure that the generation of cash and previous funds raised, when necessary, are enough to maintain the schedule of payments, not generating liquidity risk for the Company or its subsidiaries.
 
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Management’s notes to the consolidated financial statements
As at December 31, 2020 and 2019
(In thousands of Brazilian reais)
The table below presents the due dates established in contracts for financial liabilities, including payment of interest.
Non-derivative financial liabilities
​ ​
Book
value
​ ​
Contract
value
​ ​
Up to 12 
months
​ ​
1-2
years
​ ​
2-3
years
​ ​
>3
years
​
Trade accounts payable and other payables
​ ​ ​ ​ 40,317 ​ ​ ​ ​ ​ 40,317 ​ ​ ​ ​ ​ 37,024 ​ ​ ​ ​ ​ 3,293 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​
Loans and financing
​ ​ ​ ​ 11,470 ​ ​ ​ ​ ​ 13,399 ​ ​ ​ ​ ​ 4,277 ​ ​ ​ ​ ​ 5,186 ​ ​ ​ ​ ​ 3,936 ​ ​ ​ ​ ​ — ​ ​
Lease liabilities
​ ​ ​ ​ 3,164 ​ ​ ​ ​ ​ 3,889 ​ ​ ​ ​ ​ 971 ​ ​ ​ ​ ​ 969 ​ ​ ​ ​ ​ 972 ​ ​ ​ ​ ​ 978 ​ ​
Items to be paid in installments
​ ​ ​ ​ 1,724 ​ ​ ​ ​ ​ 1,724 ​ ​ ​ ​ ​ 532 ​ ​ ​ ​ ​ 495 ​ ​ ​ ​ ​ 297 ​ ​ ​ ​ ​ 401 ​ ​
​ ​ ​ ​ ​ 56,675 ​ ​ ​ ​ ​ 59,329 ​ ​ ​ ​ ​ 42,804 ​ ​ ​ ​ ​ 9,943 ​ ​ ​ ​ ​ 5,205 ​ ​ ​ ​ ​ 1,379 ​ ​
Management does not expect maturities or outflow of cash to be rescheduled for earlier times in relation to the ones presented in the table above.
21.7.
Sensitivity analysis
​
The main risks associated with the Company’s operations are linked to the variation of the Interbank Deposit Certificate rate (CDI) used for short-term financial investment. Loans have been contracted at fixed rates. There are also costs and expenses incurred in dollar, however not recorded in assets or liabilities, seeing there are no long-term contracts with future commitment pegged to the dollar exchange rate.
The Company’s financial instruments are measured at fair value and are classified as cash and cash equivalents, accounts receivable, accounts payable, and loans and financing. The fair value of loans approximated to its carrying value.
At reporting dates, the profile of the interest-bearing instruments at the Company was as follows:
Assets with variable rates
​ ​
2020
​ ​
2019
​
Financial assets
​ ​ ​ ​ 22,094 ​ ​ ​ ​ ​ 3,777 ​ ​
​
21.8.
Sensitivity analysis of instruments with variable rates
​
Investment that yields earnings based on the CDI rate are measured at market value, according to the prices provided by the respective financial institutions. Others refer substantially to bank deposit certificates. Therefore, the amount recorded of those instruments does not differ from market values.
The table below presents three scenarios of risk of reduction in the CDI rate. The base scenario was the rate of December 31, 2020 of 2.75% p.a. Scenario II represents a reduction of 25% and scenario III a reduction of 50.
Operation
​ ​
Balance as
at Dec. 31,
2020
​ ​
Risk
​ ​
Scenario I
(probable)
​ ​
Scenario II
​ ​
Scenario III
​
(In thousands of Brazilian reais)
​ ​ ​ ​ ​ ​
Interest subject to variation
​ ​ ​ ​ 22,094 ​ ​ ​
Decrease in CDI
​ ​
2.75%
​ ​
2.06%
​ ​
1.38%
​
Change in the return of financial investment
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
516 to 638
​ ​
387 to 478
​ ​
258 to 319
​
​
21.9.
Capital management
​
Capital management aims to assure that a strong credit rating is maintained with financial institutions, as well as a strong capital ratio to support the Company’s business and leverage shareholders’ return.
 
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Management’s notes to the consolidated financial statements
As at December 31, 2020 and 2019
(In thousands of Brazilian reais)
The capital structure is controlled by adjusting it to current economic conditions. To maintain an adjusted structure, dividends may be paid, capital returned to shareholders, new loans obtained, promissory notes issued and execution of operations with derivative instruments.
The Company’s net debt structure encompasses: loans and financing, lease liabilities, payments in installments and other obligations, less cash and cash equivalents. Financial leverage ratios as at December 31, 2020 and 2019 are summarized below:
​ ​ ​
December 31, 2020
​ ​
December 31, 2019
​ ​
January 1, 2019
​
Trade accounts payable and other payables
​ ​ ​ ​ 40,318 ​ ​ ​ ​ ​ 2,092 ​ ​ ​ ​ ​ 877 ​ ​
Loans and financing
​ ​ ​ ​ 11,470 ​ ​ ​ ​ ​ 962 ​ ​ ​ ​ ​ 1,415 ​ ​
Lease liabilities
​ ​ ​ ​ 3,163 ​ ​ ​ ​ ​ 130 ​ ​ ​ ​ ​ 425 ​ ​
Items to be paid in installments
​ ​ ​ ​ 1,725 ​ ​ ​ ​ ​ 2,178 ​ ​ ​ ​ ​ 1,912 ​ ​
Financial liabilities
​ ​ ​ ​ 56,676 ​ ​ ​ ​ ​ 5,362 ​ ​ ​ ​ ​ 4,629 ​ ​
Cash and cash equivalents
​ ​ ​ ​ (22,952) ​ ​ ​ ​ ​ (3,886) ​ ​ ​ ​ ​ (164) ​ ​
Net cash
​ ​ ​ ​ 33,724 ​ ​ ​ ​ ​ 1,476 ​ ​ ​ ​ ​ 4,465 ​ ​
Total equity
​ ​ ​ ​ 953 ​ ​ ​ ​ ​ 4,558 ​ ​ ​ ​ ​ (1,470) ​ ​
Net cash to equity ratio (%)
​ ​ ​ ​ 35.39 ​ ​ ​ ​ ​ 0.32 ​ ​ ​ ​ ​ (3.04) ​ ​
​
22.
Additional information to the statement of cash flows
​
The table below introduces additional information on transactions related to the statement of cash flows:
Non-cash items:
​ ​
December 31, 2020
​ ​
December 31, 2019
​
Decrease in property, plant and equipment due to loss
​ ​ ​ ​ — ​ ​ ​ ​ ​ 87 ​ ​
Decrease in property, plant and equipment due to donation
​ ​ ​ ​ 10 ​ ​ ​ ​ ​ — ​ ​
Transfer of property, plant and equipment due to a combination of businesses
​ ​ ​ ​ (394) ​ ​ ​ ​ ​ — ​ ​
Transfer of right-of-use related to the Smarkio acquisition
​ ​ ​ ​ (231) ​ ​ ​ ​ ​ — ​ ​
Increase in property, plant and equipment due to lease rights-of-use established by IFRS 16
​ ​ ​ ​ (2,743) ​ ​ ​ ​ ​ — ​ ​
Transfer of intangible assets due to a combination of businesses
​ ​ ​ ​ (1) ​ ​ ​ ​ ​ — ​ ​
​ ​ ​ ​ ​ (3,359) ​ ​ ​ ​ ​ 87 ​ ​
​
23.
Insurance
​
The Company has insurance coverage compatible with its size and operations, which is contracted at amounts Management considers sufficient to cover possible losses, considering the nature of the Company’s activities and the risks involved in the operations.
The risk assumptions adopted, in view of their nature, do not take part of the scope of an audit of the consolidated financial statements. Therefore, our independent auditors have not audited them.
(a) Insurance contracted for affairs of the Company:
 
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Management’s notes to the consolidated financial statements
As at December 31, 2020 and 2019
(In thousands of Brazilian reais)
Coverage
​ ​
Coverage limit
​
Professional Civil Liability
​ ​ ​ ​ 5,000 ​ ​
Dishonest Acts of Employees
​ ​ ​ ​ 500 ​ ​
Pain and Suffering Damages
​ ​ ​ ​ 5,000 ​ ​
Physical Injure
​ ​ ​ ​ 5,000 ​ ​
Intellectual Property
​ ​ ​ ​ 5,000 ​ ​
Loss or Theft of Documents
​ ​ ​ ​ 5,000 ​ ​
Court Attendance
​ ​ ​ ​ 5,000 ​ ​
Image Recovery Costs
​ ​ ​ ​ 5,000 ​ ​
New Subsidiary Companies
​ ​ ​ ​ 5,000 ​ ​
Saving Expenses
​ ​ ​ ​ 5,000 ​ ​
Material Damage
​ ​ ​ ​ 5,000 ​ ​
Jointly Liability
​ ​ ​ ​ 500 ​ ​
(b) Insurance contracted for damage caused to third parties:
Coverage
​ ​
Coverage limit
​
Emergency Costs
​ ​ ​ ​ 10,000 ​ ​
Investigation Costs
​ ​ ​ ​ 10,000 ​ ​
Forfeiture of Assets
​ ​ ​ ​ 10,000 ​ ​
Deporting, Extradition and Liberty Restriction
​ ​ ​ ​ 10,000 ​ ​
Checking Account Blockage (Online Attachment)
​ ​ ​ ​ 10,000 ​ ​
Unavailability of Assets and Rights
​ ​ ​ ​ 10,000 ​ ​
Pain and Suffering Damages
​ ​ ​ ​ 10,000 ​ ​
Compensation for Material Damage and Physical Injure
​ ​ ​ ​ 10,000 ​ ​
Undue Labor Practices
​ ​ ​ ​ 10,000 ​ ​
Errors and Omission
​ ​ ​ ​ 10,000 ​ ​
Extension of the Complementary Term for Insured Retired Person and Voluntary Resignation
​ ​ ​ ​ 10,000 ​ ​
Subsidiaries and New Subsidiaries
​ ​ ​ ​ 10,000 ​ ​
Coverage for Internal Lawyers
​ ​ ​ ​ 10,000 ​ ​
Coverage for Saving Expenses
​ ​ ​ ​ 10,000 ​ ​
Coverage for Internal Accountants, Risk Manager and Internal Auditors
​ ​ ​ ​ 10,000 ​ ​
Coverage for External Entities
​ ​ ​ ​ 10,000 ​ ​
Coverage for Managers due to Legal Reasons
​ ​ ​ ​ 10,000 ​ ​
Liability for Taxes
​ ​ ​ ​ 10,000 ​ ​
(c) Life insurance of employees:
 
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Management’s notes to the consolidated financial statements
As at December 31, 2020 and 2019
(In thousands of Brazilian reais)
Coverage
​ ​
Coverage limit
​
Additional coverage for accidental death
​ ​ ​ ​ 1,295 ​ ​
Total or partial permanent disability due to accident
​ ​ ​ ​ 1,295 ​ ​
Death
​ ​ ​ ​ 1,295 ​ ​
Permanent and total function disability due to illness
​ ​ ​ ​ 1,295 ​ ​
Death of spouse
​ ​ ​ ​ 388 ​ ​
Death of children
​ ​ ​ ​ 129 ​ ​
Termination amounts
​ ​ ​ ​ 129 ​ ​
Funeral allowance
​ ​ ​ ​ 3 ​ ​
(d) Life insurance of directors:
Coverage
​ ​
Coverage limit
​
Additional coverage for accidental death
​ ​ ​ ​ 271 ​ ​
Total or partial permanent disability due to accident
​ ​ ​ ​ 271 ​ ​
Death
​ ​ ​ ​ 271 ​ ​
Permanent and total function disability due to illness
​ ​ ​ ​ 271 ​ ​
Death of spouse
​ ​ ​ ​ 81 ​ ​
Death of children
​ ​ ​ ​ 27 ​ ​
Termination amounts
​ ​ ​ ​ 27 ​ ​
Funeral allowance
​ ​ ​ ​ 5 ​ ​
​
24.
Subsequent events
​
On February 3, 2021, it was signed an extension of the memorandum of understanding executed on October 9, 2020 with the company Zenvia, which addresses the intension of signing an acquisition agreement100% of the Company´s shares. The Acquisition has not closed to date and its effectiveness is subject to the Zenvia´s IPO and customary contractual closing conditions.
   
​
FERNANDO JORGE WOSNIAK STELER
MANAGING OFFICER
   
​
DIEGO ANDRE DE ALENCAR SOARES
CRC 263282/O-1
 
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​ ​ ​ ​ Tel.: +55 11 3848 5880
Fax: + 55 11 3045 7363
www.bdo.com.br 		​ ​ Rua Major Quedinho 90
Consolação — São Paulo, SP — Brasil
01050-030 		​
INDEPENDENT AUDITORS’ REPORT ON THE FINANCIAL STATEMENTS
To the
Board of Directors of
Smarkio Tecnologia S.A.
São Paulo — SP
We have audited the accompanying financial statements of Smarkio Tecnologia S.A. (“Company”), which comprise the statements of financial position as of 30 November 2020, 31 December 2019 and 1 January 2019, and the related statements of income/(loss) and comprehensive income/(loss), changes in equity, and cash flows for the period of eleven months ended 30 November 2020 and for the year ended 31 December 2019, and the related notes to the financial statements.
Management’s Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in accordance with International Financial Reporting Standards as issued by the International Accounting Standard Board; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.
Auditor’s Responsibility
Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Opinion
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Smarkio Tecnologia S.A. as of 30 November 2020, 31 December 2019 and 1 January 2019, and the results of its operations and its cash flows for the period of eleven months ended 30 November 2020 and for the year ended 31 December 2019 in accordance with International Financial Reporting Standards as issued by the International Accounting Standard Board.
[MISSING IMAGE: TM2039074D4-FTR_BDORCSBW.JPG]
 
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/s/ BDO RCS Auditores Independentes S.S.
​
BDO RCS Auditores Independentes S.S.
São Paulo, Brazil
March 18, 2021
 
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SMARKIO) TECNOLOGIA S.A.
Statement of Financial Position
As at November 30, 2020, December 31, 2019 and January 1, 2019
(In thousands of Brazilian reais)
​ ​ ​
Note
​ ​
November 30,
2020
​ ​
December 31,
2019
​ ​
January 1,
2019
​
Assets ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Current Assets ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Cash and Cash Equivalents
​ ​ ​ ​ 4 ​ ​ ​ ​ ​ 1,958 ​ ​ ​ ​ ​ 2,828 ​ ​ ​ ​ ​ 1,497 ​ ​
Accounts Receivable
​ ​ ​ ​ 5 ​ ​ ​ ​ ​ 9,992 ​ ​ ​ ​ ​ 2,903 ​ ​ ​ ​ ​ 1,134 ​ ​
Advances
​ ​ ​ ​ 6 ​ ​ ​ ​ ​ 134 ​ ​ ​ ​ ​ 10 ​ ​ ​ ​ ​ 1 ​ ​
Prepaid Expenses
​ ​ ​ ​ 6 ​ ​ ​ ​ ​ 26 ​ ​ ​ ​ ​ 93 ​ ​ ​ ​ ​ 98 ​ ​
Total Current Assets ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 12,110 ​ ​ ​ ​ ​ 5,834 ​ ​ ​ ​ ​ 2,730 ​ ​
Noncurrent Assets ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Property, Plant and Equipment
​ ​ ​ ​ 7 ​ ​ ​ ​ ​ 625 ​ ​ ​ ​ ​ 589 ​ ​ ​ ​ ​ 454 ​ ​
Intangible Assets
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 1 ​ ​ ​ ​ ​ 1 ​ ​ ​ ​ ​ 1 ​ ​
Total Noncurrent Assets
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 626 ​ ​ ​ ​ ​ 590 ​ ​ ​ ​ ​ 455 ​ ​
Total Assets
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 12,736 ​ ​ ​ ​ ​ 6,424 ​ ​ ​ ​ ​ 3,185 ​ ​
Liabilities and Equity ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Current Liabilities ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Trade Accounts Payable
​ ​ ​ ​ 8 ​ ​ ​ ​ ​ 908 ​ ​ ​ ​ ​ 306 ​ ​ ​ ​ ​ 59 ​ ​
Leases
​ ​ ​ ​ 9 ​ ​ ​ ​ ​ 108 ​ ​ ​ ​ ​ 85 ​ ​ ​ ​ ​ 51 ​ ​
Employees’ Pay and Related Charges
​ ​ ​ ​ 10 ​ ​ ​ ​ ​ 903 ​ ​ ​ ​ ​ 275 ​ ​ ​ ​ ​ 67 ​ ​
Taxes Payable
​ ​ ​ ​ 11 ​ ​ ​ ​ ​ 361 ​ ​ ​ ​ ​ 57 ​ ​ ​ ​ ​ 26 ​ ​
Income Taxes Payable
​ ​ ​ ​ 11 ​ ​ ​ ​ ​ 1,042 ​ ​ ​ ​ ​ 300 ​ ​ ​ ​ ​ 140 ​ ​
Other Payables
​ ​ ​ ​ 12 ​ ​ ​ ​ ​ 7 ​ ​ ​ ​ ​ 1 ​ ​ ​ ​ ​ 226 ​ ​
Dividends Payable
​ ​ ​ ​ 13 ​ ​ ​ ​ ​ 3,300 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ — ​ ​
Deferred Revenue
​ ​ ​ ​ 14 ​ ​ ​ ​ ​ 85 ​ ​ ​ ​ ​ 7 ​ ​ ​ ​ ​ 3 ​ ​
Total Current Liabilities
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 6,714 ​ ​ ​ ​ ​ 1,031 ​ ​ ​ ​ ​ 572 ​ ​
Noncurrent Liabilities ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Leases
​ ​ ​ ​ 9 ​ ​ ​ ​ ​ 163 ​ ​ ​ ​ ​ 261 ​ ​ ​ ​ ​ 280 ​ ​
Total Noncurrent Liabilities
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 163 ​ ​ ​ ​ ​ 261 ​ ​ ​ ​ ​ 280 ​ ​
Equity
​ ​ ​ ​ 15 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Capital
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 267 ​ ​ ​ ​ ​ 160 ​ ​ ​ ​ ​ 160 ​ ​
Income Reserve
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 5,592 ​ ​ ​ ​ ​ 4,972 ​ ​ ​ ​ ​ 2,173 ​ ​
Equity Attributed to the Controlling Shareholders
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 5,859 ​ ​ ​ ​ ​ 5,132 ​ ​ ​ ​ ​ 2,333 ​ ​
Total Liabilities and Equity
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 12,736 ​ ​ ​ ​ ​ 6,424 ​ ​ ​ ​ ​ 3,185 ​ ​
Management’s Notes are an Integral Part of these Financial Statements.
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SMARKIO TECNOLOGIA S.A.
Statement of Profit or Loss
As at November 30, 2020 and December 31, 2019
(In thousands of Brazilian reais)
​ ​ ​
Note
#
​ ​
November 30,
2020
​ ​
December 31,
2019
​
Net revenue
​ ​ ​ ​ 16 ​ ​ ​ ​ ​ 27,835 ​ ​ ​ ​ ​ 10,152 ​ ​
Cost of services provided
​ ​ ​ ​ 17 ​ ​ ​ ​ ​ (5,079) ​ ​ ​ ​ ​ (2,454) ​ ​
Gross income
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 22,756 ​ ​ ​ ​ ​ 7,698 ​ ​
Operating expenses
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Sales and marketing expenses
​ ​ ​ ​ 18 ​ ​ ​ ​ ​ (1,680) ​ ​ ​ ​ ​ (371) ​ ​
General and administrative expenses
​ ​ ​ ​ 18 ​ ​ ​ ​ ​ (1,884) ​ ​ ​ ​ ​ (1,062) ​ ​
Operating revenue and expenses
​ ​ ​ ​ 18 ​ ​ ​ ​ ​ (2,330) ​ ​ ​ ​ ​ (1,565) ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (5,894) ​ ​ ​ ​ ​ (2,998) ​ ​
Income before financial income (expenses)
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 16,862 ​ ​ ​ ​ ​ 4,700 ​ ​
Financial revenue
​ ​ ​ ​ 19 ​ ​ ​ ​ ​ 87 ​ ​ ​ ​ ​ 74 ​ ​
Financial expenses
​ ​ ​ ​ 19 ​ ​ ​ ​ ​ (96) ​ ​ ​ ​ ​ (66) ​ ​
Income before income and social contribution taxes
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 16,853 ​ ​ ​ ​ ​ 4,708 ​ ​
Current income and social contribution taxes
​ ​ ​ ​ 20 ​ ​ ​ ​ ​ (3,249) ​ ​ ​ ​ ​ (1,109) ​ ​
Income for the year
​ ​ ​ ​ ​ ​ ​ ​ ​
​
13,604
​ ​ ​ ​
​
3,599
​ ​
Management’s Notes are an Integral Part of these Financial Statements.
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SMARKIO TECNOLOGIA S.A.
Statement of comprehensive income
As at November 30, 2020 and December 31, 2019
(In thousands of Brazilian reais)
​ ​ ​
November 30,
2020
​ ​
December 31,
2019
​
Comprehensive income ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Income for the year
​ ​ ​ ​ 13,604 ​ ​ ​ ​ ​ 3,599 ​ ​
Total comprehensive income
​ ​ ​ ​ 13,604 ​ ​ ​ ​ ​ 3,599 ​ ​
Total comprehensive income attributed to: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Controlling shareholders
​ ​ ​ ​ 13,604 ​ ​ ​ ​ ​ 3,599 ​ ​
​ ​ ​ ​ ​ 13,604 ​ ​ ​ ​ ​ 3,599 ​ ​
Management’s Notes are an Integral Part of these Financial Statements.
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SMARKIO TECNOLOGIA S.A.
Statement of change in equity
As at November 30, 2020, December 31, 2019 and January 1, 2019
(In thousands of Brazilian reais)
​ ​ ​
Capital
​ ​
Income
reserve
​ ​
Income for
the year
​ ​
Total
​
Balances as at January 1, 2019
​ ​ ​ ​ 160 ​ ​ ​ ​ ​ 2,173 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 2,333 ​ ​
Income for the year
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 3,599 ​ ​ ​ ​ ​ 3,599 ​ ​
Use of funds: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Recognition of an income reserve
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2,799 ​ ​ ​ ​ ​ (2,799) ​ ​ ​ ​ ​ — ​ ​
Distribution of dividends
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (800) ​ ​ ​ ​ ​ (800) ​ ​
Balances as at December 31, 2019
​ ​ ​ ​ 160 ​ ​ ​ ​ ​ 4,972 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 5,132 ​ ​
Increase in capital
​ ​ ​
​
107
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​
107
​ ​
Income for the year
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 13,604 ​ ​ ​ ​ ​ 13,604 ​ ​
Use of funds: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Recognition of an income reserve
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 620 ​ ​ ​ ​ ​ (620) ​ ​ ​ ​ ​ — ​ ​
Distribution of dividends
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (12,984) ​ ​ ​ ​ ​ (12,984) ​ ​
Balances as at November 30, 2020
​ ​ ​ ​ 267 ​ ​ ​ ​ ​ 5,592 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 5,859 ​ ​
Management’s Notes are an Integral Part of these Financial Statements.
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SMARKIO TECNOLOGIA S.A.
Statement of cash flows
As at November 30, 2020 and December 31, 2019
(In thousands of Brazilian Reais)
​ ​ ​
November 30,
2020
​ ​
December 31,
2019
​
Cash flows from operating activities ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Income before income and social contribution taxes
​ ​ ​ ​ 16,853 ​ ​ ​ ​ ​ 4,708 ​ ​
Adjustment to reconcile income before income and social contribution to net cash used in operating activities:
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Recognition of interest paid on leases
​ ​ ​ ​ 84 ​ ​ ​ ​ ​ 94 ​ ​
Depreciation and amortization
​ ​ ​ ​ 143 ​ ​ ​ ​ ​ 105 ​ ​
Credit overdue and not settled
​ ​ ​ ​ — ​ ​ ​ ​ ​ 77 ​ ​
​ ​ ​ ​ ​ 227 ​ ​ ​ ​ ​ 276 ​ ​
(Decrease)/increase in assets ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Trade accounts receivable
​ ​ ​ ​ (7,089) ​ ​ ​ ​ ​ (1,846) ​ ​
Advances
​ ​ ​ ​ (124) ​ ​ ​ ​ ​ (9) ​ ​
Prepaid expenses
​ ​ ​ ​ 67 ​ ​ ​ ​ ​ 5 ​ ​
Increase/(decrease) in liabilities ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Trade accounts payable
​ ​ ​ ​ 602 ​ ​ ​ ​ ​ 247 ​ ​
Employees’ pay and related charges
​ ​ ​ ​ 628 ​ ​ ​ ​ ​ 208 ​ ​
Taxes payable
​ ​ ​ ​ 304 ​ ​ ​ ​ ​ 31 ​ ​
Anticipated revenue
​ ​ ​ ​ 78 ​ ​ ​ ​ ​ 4 ​ ​
Other payables
​ ​ ​ ​ 6 ​ ​ ​ ​ ​ (225) ​ ​
Cash used in operating activities
​ ​ ​ ​ (5,528) ​ ​ ​ ​ ​ (1,585) ​ ​
Payment of interest
​ ​ ​ ​ (41) ​ ​ ​ ​ ​ (47) ​ ​
Income and social contribution taxes paid
​ ​ ​ ​ (2,507) ​ ​ ​ ​ ​ (949) ​ ​
Net cash provided by (used in) operating activities
​ ​ ​ ​ 9,004 ​ ​ ​ ​ ​ 2,403 ​ ​
Cash flows from investing activities ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Purchase of property, plant and equipment
​ ​ ​ ​ (179) ​ ​ ​ ​ ​ (164) ​ ​
Net funds used in investing activities
​ ​ ​ ​ (179) ​ ​ ​ ​ ​ (164) ​ ​
Cash flows from financing activities
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
From financing activities with third-parties
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Payment of leases
​ ​ ​ ​ (118) ​ ​ ​ ​ ​ (108) ​ ​
Cash provided by financing activities with third-parties
​ ​ ​ ​ (118) ​ ​ ​ ​ ​ (108) ​ ​
From financing activities with shareholders and related parties Increase in capital
​ ​ ​ ​ 107 ​ ​ ​ ​ ​ — ​ ​
Dividends paid
​ ​ ​ ​ (9,684) ​ ​ ​ ​ ​ (800) ​ ​
Cash provided by financing activities with shareholders
​ ​ ​ ​ (9,577) ​ ​ ​ ​ ​ (800) ​ ​
Funds provided by financing activities
​ ​ ​ ​ (9,695) ​ ​ ​ ​ ​ (908) ​ ​
Net increase/(decrease) in cash and cash equivalents
​ ​ ​ ​ (870) ​ ​ ​ ​ ​ 1,331 ​ ​
Cash and cash equivalents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Cash at beginning of year
​ ​ ​ ​ 2,828 ​ ​ ​ ​ ​ 1,497 ​ ​
Cash at end of year
​ ​ ​ ​ 1,958 ​ ​ ​ ​ ​ 2,828 ​ ​
Net increase/(decrease) in cash and cash equivalents
​ ​ ​ ​ (870) ​ ​ ​ ​ ​ 1,331 ​ ​
Management’s Notes are an Integral Part of these Financial Statements.
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SMARKIO TECNOLOGIA S.A.
Management’s notes to the financial statements
As at November 30, 2020 and December 31, 2019
(In thousands of Brazilian reais)
1.
Operations
​
Smarkio Tecnologia S.A. (the “Company”) is a closely held corporation governed by articles of incorporation since October 13, 2020, and, in compliance with prevailing regulations, it is established to run for an undetermined period of time. It is headquartered at Rua Sergipe, 475, cj 501 a 506, in the city of São Paulo.
It is engaged in the development, licensing, sale and support of software, in addition to providing processing, maintenance and update of databases and direct marketing campaigns through various medias. It also holds ownership interest in other companies as a member or shareholder.
The Company works in the development and licensing of virtual assistant software (“chatbots”). In addition to the software licensing, consulting in information technology is also part of the services provided,with the specific purpose of implementing and deploying the software that is being licensed.
Its customers work in three main industries: financial services, insurance and retail and are distributed all through the Brazilian territory.
Impacts of the Covid-19 pandemic
The Covid-19 pandemic had a positive effect to the Company’s net revenue, seeing it increased the adoption of the software solutions that it offers, since digitalization and automation of services and a reduction in the dependence on human services (including printing and mailing) became part of the strategy of customers and potential customers.
There are no other significant impacts brought by the pandemic, and: i. 100% of the employees started working from home, however the Company already adopted remote work previously; ii. there were no dismissals; iii. there was no reduction in working hours.
1.1.   Approval of the financial statements
The Board of Directors approved these financial statements during a meeting held on March 15, 2021.
1.2.   Purpose of these financial statements
These financial statements have been prepared as of November 30, 2020, which is the date when the Company One to One Engine Desenvolvimento e Licenciamento de Sistemas de Informática S.A., executed a contract purchasing Smarkio Tecnologia S.A.
1.3.   Declaration of compliance
Previously, the Company’s financial statements had been prepared based on Brazilian accounting practices and Brazilian standard NBC TG 1000 — Accounting for small and medium size companies, approved by the Federal Accounting Council (CFC) and pronouncements issued by the Committed of Accounting Pronouncements (CPCs).
These financial statements have been prepared under the responsibility of the Company’s Management and in compliance with International Financial Reporting Standards (“IFRS”) issued by the International Accounting Standards Board (“IASB”) (please refer to note 3 for more details on the first time adoption).
The financial statements have been prepared based on historical cost, except for certain financial instruments measured at fair value. They include all significant information, which is consistent with the data Management used in running the Company.
The preparation of the financial statements requires the use of certain critical accounting estimates. It also requires Management to make use of judgment in applying the Company’s accounting policies. The
 
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areas that involve a larger degree of judgment or complexity, or areas where the assumptions and estimates are significant for the financial statements are described in item 1.6 below.
The financial statements are presented in thousands of Brazilian reais (“R$”), the Company’s functional currency.
The statement of financial position is presented according to the order of realization or settlement of assets and liabilities. The moment of their realization or settlement depends not only on liquidity, but also on judgment on the part of Management about the expected changes in market prices and other significant aspects.
1.4.   First time adoption of IFRS
International Financial Reporting Standards (“IFRS”) were adopted for the first time in the Company’s financial statements as at January 1, 2019. IFRS 1 “First time adoption of IFRS” requires an entity that is adopting IFRS for the first time to prepare a complete set of financial statements covering its first IFRS reporting period. IFRS 1 also demands the entity to use the same accounting practices to the preceding year and throughout all periods presented in its first IFRS financial statements (that is, January 1, 2019).
Before the first time adoption of IFRS, the Company presented statements prepared according to Brazilian Generally Accepted Accounting Principles (“BR GAAP”), based on Brazilian standard NBC TG 1000 — Accounting for small and mid-size companies, approved by the Federal Accounting Council (CFC) and also based on pronouncements issued by the Committee of Accounting Pronouncements (CPC) for small and mid-size companies (“CPC PME”).
These financial statements are the first ones prepared in accordance with IFRS and are consistent with the accounting practices mentioned in note 2. As established in accounting standards, the Company’s financial statements have been prepared according to IFRS applicable as at November 30, 2020, together with comparative period data for the year ended December 31, 2019. In preparing these financial statements, the date adopted as transition to IFRS was the one of the statements of financial position prepared on January 1, 2019.
1.5.   Sale of the Company
As described in item 1.4, on November 30, 2020, Smarkio Tecnologia S.A was sold to One to One Engine Desenvolvimento e Licenciamento de Sistemas de Informática S.A.
1.6.   Estimates
In preparing these financial statements, management has made judgements and estimates that affect the application of the Company’s accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to estimates are recognized prospectively.
1.6.1.    Judgments
Information about judgments referring to the adoption of accounting policies which impact significantly the amounts recognized in the financial statements are included in the following notes:
Note 7 — Impairment.
1.6.2.   Uncertainties on assumptions and estimates
Information on uncertainties as to assumptions and estimates that pose a high risk of resulting in a material adjustment within the next fiscal year are included in the following notes:
Note 5 — Allowance for expected losses: main assumptions in the determination of loss rate.
Measurement of fair value
The Company’s accounting policies and disclosures requires the measurement of fair value, for financial and non-financial assets and liabilities.
 
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The Company established a control structure related to measurement of fair value. It includes the review process of all significant fair value measurements, reporting directly to the Controller.
Evaluation process includes the regular review of significant non-observable data and valuation adjustments. If third-party information, such as brokerage firms’ quotes or pricing services, is used to measure fair value, then the evaluation process analyzes the evidence obtained from the third parties to support the conclusion that such valuations meet the IFRS requirements, including the level in the fair value hierarchy in which such valuations should be classified. Significant assessment matters are reported to the Board of Directors.
When measuring fair value of an asset or liability, the Company uses observable data as much as possible. Fair values are classified at different levels according to hierarchy based on information (inputs) used in valuation techniques, as follows:
Level 1: Prices quoted (not adjusted) in active markets for identical assets and liabilities.
Level 2: Inputs, except for quoted prices, included in Level 1 which are observable for assets or liabilities, directly (prices) or indirectly (derived from prices).
Level 3: Inputs, for assets or liabilities, which are not based on observable market data (non-observable inputs).
Additional information on the assumptions adopted in the measurement of fair values is included in the following notes:
Note 21 — Risk management and financial instruments;
2.   Summary of significant accounting practices
The main accounting practices adopted in the preparation of the financial statements are the following:
2.1.   Revenue recognition
Revenue is invoiced and recognized as services are provided, or in other words, at the moment the services agreement are delivered to the customer.
IFRS15 — Revenue from agreement with customers establishes a new and comprehensive model in five steps that must be applied to revenue obtained from customers. According to such standard, revenue is recognized at an amount that reflects the consideration expected to be received in exchange for the transfer of goods or services to a customer. It was published in December 2016, coming into effect starting January 2018. The changes brought by the standard have not significantly impacted the Company’s financial statements, seeing revenue is recognized according to the accrual basis when the control over the service is transferred, creating the consideration that the Company will receive.
Revenue comes mainly from the software development and licensing. It automates services and processes relating the relationship with customers and virtual assistance, including workflows of contact with customers through digital channels and management of the operation and services to customers, as well as by the number of interactions of the Company’s customers with other customers. Revenue also comes from the professional services of implantation and maintenance of software.
​ ​ ​
December 31, 2020
​ ​
December 31, 2019
​
Net revenues ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Software use licensing
​ ​ ​ ​ 15,482 ​ ​ ​ ​ ​ 6,937 ​ ​
Professional services
​ ​ ​ ​ 12,353 ​ ​ ​ ​ ​ 3,215 ​ ​
​ ​ ​ ​ ​ 27,835 ​ ​ ​ ​ ​ 10,152 ​ ​
2.1.1.   Performance obligations and revenue recognition practices
The table below supplies information on the types and moment of fulfillment of performance obligations established in sales agreements with customers, including significant payment terms and related revenue recognition policies. All services provided are considered, for billing purposes, as software development.
 
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Type of Service
​ ​ Moment of the fulfillment of performance
obligations, including significant payment
terms 		​ ​
Revenue recognition policy
​
Software use licensing
​ ​ Such revenue is based mainly on a variable amount charged for the use of the platform (SAAS) according to the sales agreements executed with customers. It is monthly recognized starting the moment the access to the platform is made available until cancellation. There are also additional services, such as triggering of messages, user licenses and third party SAAS services. The use of those services is measured according to the individual volume consumed. Revenue is based on those volumes and on the unit values established in sales agreement, monthly recognized according to the use. The issuance of invoices is made at the beginning of the month following the use. There are some cases where customers validate the amounts before the issuance of invoices. Receivables are collected from 15 to 90 days after billing. ​ ​ Revenue is recognized when the services are transferred to the customer at an amount that reflects the consideration expected to be received in exchange for those products or services. Revenue is recognized at gross value, considering the taxation to be paid to governmental authorities. The amounts billed are recorded in accounts receivable or advances from customers depending on certain recognition criteria. The agreements of the Company with customers do not establish the right of items being returned nor grant them ownership rights to the licensed software. ​
Professional services
​ ​ Revenue from professional services is based on the provision of information technology related services, focused on the integration and maintenance of the platform (software). The amounts billed are usually based on the hour/labor price established in the sales agreement, multiplied by the number of hours worked. Revenue recognition takes place according to the delivery of the services or adjusted by the percentage of completion. However, the issuance of invoices is previously made at the moment of execution of the contract or sales proposal. Receivables are collected from 15 to 90 days after billing. ​ ​ Revenue is recognized when the services are transferred to customers at an amount that reflects the consideration expected to be received in exchange for those services. Revenue is recognized at gross value, considering the taxation to be paid later to governmental authorities. The amounts billed are recorded in accounts receivable or advances from customers, depending on certain recognition criteria. ​
2.2.   Cash and cash equivalents
Include petty cash, positive balances in bank accounts, as well as short-term financial investment maturing within up to three months and with insignificant risk of change in value. Short-term financial investment included in cash equivalents is measured as a financial asset at fair value through profit or loss.
 
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2.3.   Financial instruments
A financial instrument is only recognized when the Company becomes a party to the contractual provisions of the instrument. Financial instruments are initially recognized at fair value plus transaction costs directly attributable to their acquisition or issuance, except for financial assets and financial liabilities stated at fair value through profit or loss, where such costs are carried directly into the statement of profit or loss. Subsequent measurements take place at the dates where statements of financial position are prepared, according to rules established for each type of financial asset and liability.
As at November 30, 2020, there were no operations with derivative financial instruments, or hedging operations.
IFRS9 — Financial instruments addresses the classification, measurement and recognition of financial assets and liabilities. IFRS 9 was adopted by the Company on January 1, 2019 and did not have material impact on the Company’s financial statements.
2.3.1.   Recognition and initial measurement
Trade accounts receivable are initially recognized on the date they were originated. All other financial assets and liabilities are initially recognized at the date where the Company becomes a party to a contract.
A financial liability, or a financial asset (unless it is a receivable without a significant financing component) is initially measured at fair value. Measurement includes transaction costs directly attributable to the acquisition or issuance of items not measured at fair value through profit or loss. A trade account receivable without a significant financing component is initially measured at transaction price.
2.3.2.   Subsequent classification and measurement
During initial recognition, a financial asset is classified at amortized cost or FVTPL.
Financial assets held for trading or managed based on fair value performance are measured at FVTPL.
Financial assets — evaluation of whether contractual cash flows are only payments of principal and interest
​
Financial assets measured at FVTPL
​ ​ After initial measurement, they are carried at fair value. Net revenue, including interest or dividends, is recognized in the statement of income. ​
​
Financial assets recognized at amortized cost
​ ​ After initial measurement, they are measured at amortized cost according to the effective interest rate method and impairment is deducted from amortized cost. Revenue from interest received, foreign exchange gains and impairment losses is recognized in the statement of income. Any earnings or losses determined in reversals are also carried in the statement of income. ​
2.4.   Trade accounts receivable
Trade accounts receivable correspond to the amounts to be received from customers for the rendering of services along the ordinary course of business. They are initially recognized at fair value and, subsequently, recognized at amortized cost under the effective interest method, less estimated impairment, if any.
2.5.   Property, plant and equipment
Property, plant and equipment is stated at depreciated cost. Depreciation is provided over the estimated useful lives of the assets using the straight-line method. The Company capitalizes expenditures for major nonrecurring projects that increase the square footage, extend the useful life of, or enhance the value of the property and have a useful life that exceeds the current period. These assets are depreciated over the lesser of the remaining life of the property or the estimated useful life of the asset.
 
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​ ​ ​
Annual depreciation
rate
​ ​
Useful lives of
assets
​
Furniture and fixtures
​ ​ ​ ​ 10.00% ​ ​ ​
10 years
​
Computers and peripherals
​ ​ ​ ​ 20.00% ​ ​ ​
5 years
​
Leasehold improvements
​ ​ ​ ​ 10.00% ​ ​ ​
10 years
​
Rights obtained on assets destined for the maintenance of the activities of the Company involving financial lease operations are recorded as if they were finance leases. At the beginning of each operation, a fixed asset and a financing liability are recognized, and, when there is no purchase option, the assets are submitted to depreciation along the term of the contract.
Gains and losses from the disposal of items are determined by comparison of sales values with residual book amounts and they are recognized in the statement of income.
2.6.   Intangible assets
Intangible assets result from contractual rights or other legally established rights. That account includes the costs related to the activation of the Company’s trademarks. In other words, the intangible values of trademarks and assets are not measured, but only the amount actually paid for the acquisition of the trademark.
2.7.   Impairment test
The Company assesses whether there has been an impairment in the value of its long-lived assets whenever events or changes in circumstances indicate the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount to the future cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets.
If an indication of impairment exists, the recoverable amount is established to measure the loss. If it is not possible to determine the recoverable amount for the individual asset, then the recoverable amount of the cash-generating unit of the asset must be determined. Assets are allocated to cash-generating units or smallest group of cash-generating units for which a reasonable and consistent allocation base can be identified.
The recoverable amount is the higher of an asset’s fair value and carrying amount, less its costs of disposal or value in use. In evaluating the value in use, the estimated future cash flows are discounted to present value at a discount rate before taxes that reflects the current market time value of money and the specific risks the asset is exposed to for which the estimate of future cash flows was not adjusted.
If the recoverable amount (or cash-generating unit) determined is lower than its carrying amount, such carrying amount (or cash-generating unit) is reduced to its recoverable value and the impairment immediately recognized in the statement of income.
2.8.   Discount to present value of assets and liabilities
Monetary assets and liabilities are discounted to present value during initial recognition of a transaction, considering contractual cash flows, as well as explicit, and in certain cases, implicit interest rates of the assets and liabilities, in addition to the rates charged in the market for similar transactions. Subsequently, such interest is transferred to financial revenue and expense accounts in the statement of income under the effective interest rate method.
2.9.   Provisions
A provision is recognized in the statement of financial position when the Company has a legal or constructive obligation as a result of a past event, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are recognized based on the best estimates of the risk involved.
 
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The Company records provisions to cover future disbursements that might arise from tax, labor and civil lawsuits in progress. Provisions are recorded based on an analysis of the lawsuits in progress and of the prospects of an unfavorable result implying future disbursement.
Provisions are reviewed on the dates of the financial statements and adjusted to reflect the current best estimate. If it is no longer probable that a cash outflow is required to settle the obligation, the provision is reversed.
As at November 30, 2020 and December 31, 2019, no provisions for risks were constituted by the Company.
2.10.   Other current and noncurrent assets and liabilities
An asset is recognized in the balance sheet when it is probable that future economic benefits will flow to the Company and its cost or value can be reliably measured. A liability is recognized in the balance sheet when the Company has a legal or construed obligation as a result of a past event and it is probable that an outflow of funds will be required to settle it. Where applicable, the corresponding charges and monetary variation incurred are added to it. Provisions are recorded when:
(i)   A present obligation (legal or constructive) has arisen as a result of a past event;
(ii)   Its settlement is expected to result in an outflow of resources;
(iii)   The amount can be estimated reliably.
Assets and liabilities are classified as current when their realization or settlement will probably take place within the following 12 months. Otherwise, they are stated as noncurrent ones.
2.11.   Income Taxes
The Company follows guidance in IAS 12 — Income Taxes, with respect to accounting for uncertainty in income taxes. The Company must determine whether a tax position meets the more-likely-than-not threshold based on the technical merits of the position. Once a position meets the recognition threshold, measurement of the position reported in the financial statements is determined. The Company has determined that no material unrecognized tax benefits or liabilities exist as at November 30, 2020 and December 31, 2019.
The rates and laws that base the determination of taxes are those enacted or substantially enacted at reporting date. Management periodically evaluates the numbers as for situations where the applicable tax regulations are subject the interpretation and establishes provisions when appropriate.
According to Brazilian regulations, Corporate Income Tax (IRPJ) is based on taxable income. At the Company, such tax is determined based on the deemed income method (“lucro presumido”) at a rate of 15% applied to deemed income, plus surtax of 10% on amounts exceeding R$20 per month.
Social Contribution Tax (CSLL) is also calculated on taxable income according to the deemed income method at a rate of 9% applied on the portion of deemed income.
3.   Impacts from the first time adoption of IFRS
International Financial Reporting Standards (“IFRS”) were adopted for the first time in the Company’s financial statements as at January 1, 2019. IFRS 1 “First time adoption of IFRS” requires an entity that is adopting IFRS for the first time to prepare a complete set of the financial statements covering its first IFRS reporting period. IFRS 1 also demands the entity to use the same accounting practices to the preceding year and throughout all periods presented in its first IFRS in the financial statements (that is, January 1, 2019).
Before the first time adoption of IFRS, the Company presented statements prepared according to Brazilian Generally Accepted Accounting Principles (“BR GAAP”), based on Brazilian standard NBC TG 1000 — Accounting for small and mid-size companies, approved by the Federal Accounting
 
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Council (CFC) and also based on pronouncements issued by the Committee of Accounting Pronouncements (CPC) for small and mid-size companies (“CPC PME”).
The estimates as at January 1, 2019 and as at December 31, 2019 are consistent with those made for the same dates in accordance with BR GAAP (after adjustments to reflect any differences in accounting policies), apart from the following items where application of BR GAAP did not require estimation:
•
Pensions and other postemployment benefits;
​
•
Share-based payment transactions; and
​
•
Investments in equity instruments — unquoted equity shares.
​
The estimates used by the Company to present these amounts in accordance with IFRS reflect conditions as at January 1, 2019 (the date of transition to IFRS) and as at December 31, 2019.
Reconciliation between BR GAAP and IFRS on the transition date — January 1, 2019:
Statement of Financial Position
​ ​ ​
Note #
​ ​
Opening Balance
​ ​
IFRS 16 Remeasurement
​ ​
IFRS
​
Assets ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Total current assets
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2,730 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 2,730 ​ ​
Property, plant and equipment
​ ​ ​ ​ (i) ​ ​ ​ ​ ​ 123 ​ ​ ​ ​ ​ 331 ​ ​ ​ ​ ​ 454 ​ ​
Other Non-current assets
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 1 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 1 ​ ​
Total non-current assets
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 124 ​ ​ ​ ​ ​ 331 ​ ​ ​ ​ ​ 455 ​ ​
Total assets
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2,854 ​ ​ ​ ​ ​ 331 ​ ​ ​ ​ ​ 3,185 ​ ​
​ ​ ​
Note #
​ ​
Opening Balance
​ ​
IFRS 16 Remeasurement
​ ​
IFRS
​
Current liabilities
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Lease liabilities — IFRS 16
​ ​ ​ ​ (ii) ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 51 ​ ​ ​ ​ ​ 51 ​ ​
Other current liabilities
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 521 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 521 ​ ​
Total current liabilities
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 521 ​ ​ ​ ​ ​ 51 ​ ​ ​ ​ ​ 572 ​ ​
Noncurrent liabilities ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Lease liabilities — IFRS 16
​ ​ ​ ​ (ii) ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 280 ​ ​ ​ ​ ​ 280 ​ ​
Total noncurrent liabilities
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 280 ​ ​ ​ ​ ​ 280 ​ ​
Equity ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Equity attributed to controlling shareholders
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2,333 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 2,333 ​ ​
Total liabilities and equity
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2,854 ​ ​ ​ ​ ​ 331 ​ ​ ​ ​ ​ 3,185 ​ ​
​
(i)
Increase of R$331 in property, plant and equipment referring the use rights required by IFRS 16;
​
(ii)
The adjustment made to lease liabilities was R$51 in current liabilities and R$280 in noncurrent liabilities.
​
 
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Reconciliation between BR GAAP and IFRS on the transition date — December 31, 2019:
Statement of Financial Position
​ ​ ​
Note #
​ ​
Opening Balance
​ ​
IFRS 16 Remeasurement
​ ​
IFRS
​
Assets ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Total current assets
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 5,834 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 5,834 ​ ​
Noncurrent assets ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Property, plant and equipment
​ ​ ​ ​ (i) ​ ​ ​ ​ ​ 263 ​ ​ ​ ​ ​ 326 ​ ​ ​ ​ ​ 589 ​ ​
Other Non-current assets
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 1 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 1 ​ ​
Total noncurrent assets
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 264 ​ ​ ​ ​ ​ 326 ​ ​ ​ ​ ​ 590 ​ ​
Total assets
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 6,098 ​ ​ ​ ​ ​ 326 ​ ​ ​ ​ ​ 6,424 ​ ​
​ ​ ​
Note #
​ ​
Opening Balance
​ ​
IFRS 16 Remeasurement
​ ​
IFRS
​
Liabilities ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Current liabilities ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Lease liabilities
​ ​ ​ ​ (ii) ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 85 ​ ​ ​ ​ ​ 85 ​ ​
Other current liabilities
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 946 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 946 ​ ​
Total current liabilities
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 946 ​ ​ ​ ​ ​ 85 ​ ​ ​ ​ ​ 1,031 ​ ​
Noncurrent liabilities ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Lease liabilities
​ ​ ​ ​ (ii) ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 261 ​ ​ ​ ​ ​ 261 ​ ​
Total noncurrent liabilities
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 261 ​ ​ ​ ​ ​ 261 ​ ​
Equity ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Equity attributed to controlling shareholders
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 5,153 ​ ​ ​ ​ ​ (21) ​ ​ ​ ​ ​ 5,132 ​ ​
Total liabilities and equity
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 6,098 ​ ​ ​ ​ ​ 326 ​ ​ ​ ​ ​ 6,424 ​ ​
​
(i)
An amount of R$326 was added as right-of-use regarding the adoption of IFRS 16;
​
(ii)
Adjustment made to lease liabilities referring the adoption of IFRS 16;
​
Statement of Profit or Loss for the year ended December 31, 2019:
​ ​ ​
Note #
​ ​
Opening Balance
​ ​
IFRS 16 Remeasurement
​ ​
IFRS
​
Net operating revenue
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 10,152 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 10,152 ​ ​
Cost of services provided
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (2,454) ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ (2,454) ​ ​
Gross income
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 7,698 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 7,698 ​ ​
General and administrative expenses
​ ​ ​ ​ (i) ​ ​ ​ ​ ​ (1,089) ​ ​ ​ ​ ​ 27 ​ ​ ​ ​ ​ (1,062) ​ ​
Other operating expenses
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (1,936) ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ (1,936) ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (3,024) ​ ​ ​ ​ ​ 27 ​ ​ ​ ​ ​ (2,998) ​ ​
Net financial result
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 57 ​ ​ ​ ​ ​ (48) ​ ​ ​ ​ ​ 8 ​ ​
Net (loss)/income of the year
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 3,620 ​ ​ ​ ​ ​ (21) ​ ​ ​ ​ ​ 3,599 ​ ​
​
(i)
As a result of the adoption of IFRS 16, there was an increase of R$27 regarding expenses with rent and amortization of use rights, in addition to expenses incurred with interest (R$ 48).
​
3.1.
IFRS 16 — Lease liabilities
​
In effect commencing January 1, 2019, IFRS 16 establishes the principles for recognition, measurement, presentation and disclosure of lease liabilities. It demands lessees to account for all lease liabilities according to a single model in the statement of financial position. IFRS 16 includes some practical guidelines on:
 
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(a) Leases for which the underlying asset is “low value;”
(b) Short-term leases (or in other words, leases with a terms of 12 months or less).
During the commencement of a lease agreement, the lessee must recognize a lease liability, measured at the present value of the contractual payments due to the lessor over the lease term and an asset that represents the right of using the underlying asset during the lease term and is required to separately recognize the expense of interest paid on the lease liability and the depreciation expense on the right-of-use asset.
Lessees must also revalue the lease liability after certain events (for example, a change in the lease term, an adjustment in future lease payments as a result of a change in an index or rate used to determine those payments).
When the Company revises its estimate of the term of any lease (because, for example, a reassessment of the probability of a lessee extension or termination option being exercised), it should adjust the carrying amount of the lease liability to reflect the payments to make over the revised term, which are discounted using a revised discount rate. The carrying value of lease liabilities is similarly revised when the variable element of future lease payments dependent on a rate or index is revised, except the discount rate remains unchanged. In both cases, an equivalent adjustment is made to the carrying value of the right-of-use asset, with the revised carrying amount being amortized over the remaining (revised) lease term. If the carrying amount of the right-of-use asset is adjusted to zero, any further reduction is recognized in profit or loss.
IFRS 16 also requires lessees and lessors to make more comprehensive disclosures than the ones established in IAS 17.
Lease payments were discounted at an incremental borrowing rate as at January 1, 2019. The weighted average rate applied for discount purpose was 15.39% per year.
Right-of-use assets
At the commencement of a lease agreement (or in other words, when the underlying asset is available for use), a lessee must recognize a right-of-use asset, which is initially measured at the amount of the lease liability, reduced for any lease incentives received, and increased for:
•
lease payments made at or before commencement of the lease agreement;
​
•
initial direct costs incurred; and
​
•
the amount of any provision recognized where the group is contractually required to dismantle, remove or restore the leased asset.
​
The recognized right-of-use assets are depreciated on a straight-line basis along the shorter period between its estimated useful life and the lease term.
3.2.   New standards not yet in effect:
Amendment to IFRS 16 — Covid-19-Related Rent Concessions:   Clarifies aspects as for the practical treatment and disclosure of concessions in lease agreements as a result of the Covid-19 pandemic. Such amendment is effect for years commencing on/after June 1, 2020 and may be applied in advance. Therefore, the standard has already been adopted by the Company and no significant effects have arisen from its adoption.
New IFRS and interpretations of the IFRIC (IFRS Interpretations Committee of IASB) —   The amendments of IFRS made by IASB effective for the year 2020 did not have impact to the Company’s financial statements. IASB reviewed some IFRS, which will be effective beginning 2021 and the Company’s Management is in the process of evaluating its effects to the Company’s financial statements.
Amendment to Standard IAS 1 — Classification of liabilities as current or noncurrent. Clarifies aspects to be considered in the classification of liabilities as current or noncurrent. Such amendment is effective for years starting on/or after January 1, 2023. No significant effects are expected to the Company’s financial statements.
 
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Amendment to IFRS 3 — Reference to the Conceptual Framework:   Clarifies the conceptual framework of IFRS. This amendment is effective for years started on/after January 1, 2022. No significant impacts are expected to the Company’s financial statements.
Amendment to IFRS 4 — Deferral of temporary exemptions of IFRS 9:   Clarifies aspects referring insurance contracts and temporary exemption in the application of IFRS 9 for insurance companies. Such amendment is effective for years commencing on/after January 1, 2023. No significant impacts are expected to the Company’s financial statements.
4.
Cash and cash equivalents
​
​ ​ ​
November
30, 2020
​ ​
December
31, 2019
​ ​
January
1, 2019
​
Cash
​ ​ ​ ​ 1 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 1 ​ ​
Cash at banks
​ ​ ​ ​ 1,860 ​ ​ ​ ​ ​ 399 ​ ​ ​ ​ ​ 123 ​ ​
Short-term financial investment(i)
​ ​ ​ ​ 97 ​ ​ ​ ​ ​ 2,429 ​ ​ ​ ​ ​ 1,373 ​ ​
​ ​ ​ ​ ​ 1,958 ​ ​ ​ ​ ​ 2,828 ​ ​ ​ ​ ​ 1,497 ​ ​
​
(i)
Short-term financial investment included:
​
a.
Certificates of deposit and instruments issued and guaranteed by top-rated financial institutions, whose yield is pegged to the variation of the Interbank Deposit Certificate rate (CDI);
​
b.
Investment funds;
​
​ ​ ​
November
30, 2020
​ ​
December
31, 2019
​ ​
January
1, 2019
​
Investments with Bradesco Invest Facil
​ ​
5% of CDI
​ ​
5% of CDI
​ ​
5% of CDI
​
Investment with Santander
​ ​
5% of CDI
​ ​
5% of CDI
​ ​
—
​
Investment Bradesco FI CFI
​ ​
94% of CDI
​ ​
94% of CDI
​ ​
—
​
Investment with Itaú Premium DI FICFI
​ ​
—
​ ​
—
​ ​
100% of CDI
​
​
5.
Accounts receivable
​
​ ​ ​
November
30, 2020
​ ​
December
31, 2019
​ ​
January
1, 2019
​
Trade accounts receivables
​ ​ ​ ​ 10,162 ​ ​ ​ ​ ​ 3,073 ​ ​ ​ ​ ​ 1,227 ​ ​
(-) Estimated credit losses(i)
​ ​ ​ ​ (170) ​ ​ ​ ​ ​ (170) ​ ​ ​ ​ ​ (93) ​ ​
​ ​ ​ ​ ​ 9,992 ​ ​ ​ ​ ​ 2,903 ​ ​ ​ ​ ​ 1,134 ​ ​
​
(i)
The estimated credit losses refers to customers with high probability of default. Those amounts are projected at the Company, seeing the loss has not yet been incurred.
​
The change in estimated credit losses is as follows:
​
As at January 1, 2019
​ ​ ​ ​ 93 ​ ​
​
Additions
​ ​ ​ ​ 77 ​ ​
​
Amounts reversed — Write-offs
​ ​ ​ ​ — ​ ​
​
As at December 31, 2019
​ ​ ​ ​ 170 ​ ​
​
Additions
​ ​ ​ ​ — ​ ​
​
Amounts reversed — Write-offs
​ ​ ​ ​ — ​ ​
​
As at November 30, 2020
​ ​ ​ ​ 170 ​ ​
 
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6.   Advances and prepaid expenses
​ ​ ​
November
30, 2020
​ ​
December
31, 2019
​ ​
January
1, 2019
​
Advances to employees
​ ​ ​ ​ 87 ​ ​ ​ ​ ​ 6 ​ ​ ​ ​ ​ — ​ ​
Advances to suppliers
​ ​ ​ ​ 47 ​ ​ ​ ​ ​ 4 ​ ​ ​ ​ ​ 1 ​ ​
​ ​ ​ ​ ​ 134 ​ ​ ​ ​ ​ 10 ​ ​ ​ ​ ​ 1 ​ ​
​ ​ ​
November
30, 2020
​ ​
December
31, 2019
​ ​
January
1, 2019
​
Prepaid expenses (a)
​ ​ ​ ​ 26 ​ ​ ​ ​ ​ 93 ​ ​ ​ ​ ​ 98 ​ ​
​
(a)
Amounts spent in order to guarantee the lease agreements executed.
​
7.
Property, plant and equipment
​
​ ​ ​
November
30, 2020
​ ​
December
31, 2019
​ ​
January
1, 2019
​
Property, plant and equipment (a)
​ ​ ​ ​ 394 ​ ​ ​ ​ ​ 263 ​ ​ ​ ​ ​ 123 ​ ​
Right-of-use assets (IFRS 16) (b)
​ ​ ​ ​ 231 ​ ​ ​ ​ ​ 326 ​ ​ ​ ​ ​ 331 ​ ​
​ ​ ​ ​ ​ 625 ​ ​ ​ ​ ​ 589 ​ ​ ​ ​ ​ 454 ​ ​
(a)   Property, plant and equipment
As a result of the appraisal report prepared in 2020, it was confirmed that the useful lives of assets match prevailing accounting standards.
A large part of assets was purchased less than 24 months ago and, so, there is still no historical base to apply a different depreciation rate.
Description
​ ​
Annual
depreciation
rate
​ ​
Cost
​ ​
Accumulated
depreciation
​ ​
November
30, 2020
​ ​
December
31, 2019
​ ​
January
1, 2019
​
Furniture and fixtures
​ ​ ​ ​ 10.00% ​ ​ ​ ​ ​ 47 ​ ​ ​ ​ ​ (7) ​ ​ ​ ​ ​ 40 ​ ​ ​ ​ ​ 39 ​ ​ ​ ​ ​ 18 ​ ​
Computers and peripherals
​ ​ ​ ​ 20.00% ​ ​ ​ ​ ​ 325 ​ ​ ​ ​ ​ (60) ​ ​ ​ ​ ​ 266 ​ ​ ​ ​ ​ 132 ​ ​ ​ ​ ​ 12 ​ ​
Leasehold improvements
​ ​ ​ ​ 10.00% ​ ​ ​ ​ ​ 96 ​ ​ ​ ​ ​ (7) ​ ​ ​ ​ ​ 88 ​ ​ ​ ​ ​ 92 ​ ​ ​ ​ ​ 93 ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 468 ​ ​ ​ ​ ​ (74) ​ ​ ​ ​ ​ 394 ​ ​ ​ ​ ​ 263 ​ ​ ​ ​ ​ 123 ​ ​
In the technical evaluation executed, no damaged assets were found or with useful lives lower than the ones established for the assets and all equipment is in perfect conditions of conservation.
The following table presents amounts of the change in assets of the Company.
​ ​ ​
Annual
depreciation
rate (%)
​ ​
December
31, 2019
​ ​
Additions
​ ​
Write-
offs
​ ​
November
30, 2020
​
Furniture and fixtures
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 41 ​ ​ ​ ​ ​ 6 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 47 ​ ​
Computers and peripherals
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 152 ​ ​ ​ ​ ​ 173 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 325 ​ ​
Leasehold improvements
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 96 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 96 ​ ​
Cost ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 289 ​ ​ ​ ​ ​ 179 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 468 ​ ​
Furniture and fixtures
​ ​ ​ ​ 10.00% ​ ​ ​ ​ ​ (2) ​ ​ ​ ​ ​ (5) ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ (7) ​ ​
Computers and peripherals
​ ​ ​ ​ 20.00% ​ ​ ​ ​ ​ (20) ​ ​ ​ ​ ​ (40) ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ (60) ​ ​
Leasehold improvements
​ ​ ​ ​ 10.00% ​ ​ ​ ​ ​ (4) ​ ​ ​ ​ ​ (3) ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ (7) ​ ​
(-) Accumulated depreciation
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (26) ​ ​ ​ ​ ​ (48) ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ (74) ​ ​
Total ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 263 ​ ​ ​ ​ ​ 131 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 394 ​ ​
 
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​ ​ ​
Annual
depreciation
rate (%)
​ ​
January
1, 2019
​ ​
Additions
​ ​
Write-offs
​ ​
December
31, 2019
​
Furniture and fixtures
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 18 ​ ​ ​ ​ ​ 23 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 41 ​ ​
Computers and peripherals
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 12 ​ ​ ​ ​ ​ 140 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 152 ​ ​
Leasehold improvements
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 95 ​ ​ ​ ​ ​ 1 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 96 ​ ​
Cost ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 125 ​ ​ ​ ​ ​ 164 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 289 ​ ​
Furniture and fixtures
​ ​ ​ ​ 10.00% ​ ​ ​ ​ ​ (0) ​ ​ ​ ​ ​ (2) ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ (2) ​ ​
Computers and peripherals
​ ​ ​ ​ 20.00% ​ ​ ​ ​ ​ (2) ​ ​ ​ ​ ​ (18) ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ (20) ​ ​
Leasehold improvements
​ ​ ​ ​ 10.00% ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ (4) ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ (4) ​ ​
(-) Accumulated depreciation
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (2) ​ ​ ​ ​ ​ (24) ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ (26) ​ ​
Total ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 123 ​ ​ ​ ​ ​ 140 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 263 ​ ​
Impairment
In compliance with IAS 36 — Impairment of fixed assets were tested for impairment as at November 30, 2020 and December 31, 2019. No need of recognition of write-off due to impairment of assets was found.
(b)   Right-of-use
​ ​ ​
November 
30, 2020
​ ​
December 31,
2019
​ ​
January 1,
2019
​
Right-of-use assets (IFRS 16)
​ ​ ​ ​ 231 ​ ​ ​ ​ ​ 326 ​ ​ ​ ​ ​ 331 ​ ​
We demonstrate below the change in Right-of-use of the Company.
​ ​ ​
Annual
amortization
rate
​ ​
December
31, 2019
​ ​
Additions
​ ​
Write-offs
​ ​
November
30, 2020
​
Right-of-use assets — São Paulo
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 346 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 346 ​ ​
Right-of-use assets — Itajubá
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 76 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 76 ​ ​ ​ ​ ​ ​ ​ ​
Cost ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 422 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 422 ​ ​
Right-of-use assets — São Paulo
​ ​ ​ ​ (i) ​ ​ ​ ​ ​ (85) ​ ​ ​ ​ ​ (64) ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ (149) ​ ​
Right-of-use assets — Itajubá
​ ​ ​ ​ (i) ​ ​ ​ ​ ​ (11) ​ ​ ​ ​ ​ (31) ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ (42) ​ ​
(-) Accumulated amortization
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (81) ​ ​ ​ ​ ​ (95) ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ (191) ​ ​
Total ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 326 ​ ​ ​ ​ ​ (95) ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 231 ​ ​
​ ​ ​
Annual
amortization
rate
​ ​
January 1,
2019
​ ​
Additions
​ ​
Write-offs
​ ​
November
30, 2019
​
Right-of-use assets — São Paulo
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 346 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​       346 ​ ​
Right-of-use assets — Itajubá
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 76 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 76 ​ ​
Cost
​ ​ ​ ​ ​ ​ ​ ​ ​
​
      346
​ ​ ​ ​
​
      76
​ ​ ​ ​
​
—
​ ​ ​ ​
​
      422
​ ​
Right-of-use assets — São Paulo
​ ​ ​ ​ (i) ​ ​ ​ ​ ​ (15) ​ ​ ​ ​ ​       (70) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​       (85) ​ ​
Right-of-use assets — Itajubá
​ ​ ​ ​ (i) ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ (11) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (11) ​ ​
(-) Accumulated amortization
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ (81) ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ (96) ​ ​
Total ​ ​ ​ ​ ​ ​ ​ ​ ​ ​       331 ​ ​ ​ ​ ​ 326 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 326 ​ ​
​
(i)
The average amortization rate of Right-of-use assets is 21.05%.
​
 
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8.
Trade accounts payable
​
Represent amounts payable for goods or services acquired in the ordinary course of business. Initially, they are recognized at fair value. In practice they are recognized at the value of the corresponding invoice.
​ ​ ​
November 30,
2020
​ ​
December 31,
2019
​ ​
January 1,
2019
​
Domestic trade accounts payable
​ ​ ​ ​ 908 ​ ​ ​ ​ ​ 306 ​ ​ ​ ​ ​ 59 ​ ​
​ ​ ​ ​ ​ 908 ​ ​ ​ ​ ​ 306 ​ ​ ​ ​ ​ 59 ​ ​
​
9.
Lease liabilities
​
The Company has real estate lease agreements of its headquarters in São Paulo and its subsidiary in Itajubá. The obligations of the Company in relation to the lease agreements have been recorded according to IFRS 16 and discounted to present value at the weighted average rate of loans, that is 15.39% per year.
​ ​ ​
Maturity
​ ​
Annual
charges
​ ​
November
30, 2020
​ ​
December
31, 2019
​ ​
January
1, 2019
​
Lease liabilities IFRS 16 — Smarkio São Paulo
​ ​ ​ ​ 01/09/2023 ​ ​ ​ ​ ​ 15.39% ​ ​ ​ ​ ​ 233 ​ ​ ​ ​ ​ 281 ​ ​ ​ ​ ​ 331 ​ ​
Lease liabilities IFRS 16 — Smarkio Itajubá
​ ​ ​ ​ 01/11/2021 ​ ​ ​ ​ ​ 15.39% ​ ​ ​ ​ ​ 38 ​ ​ ​ ​ ​ 66 ​ ​ ​ ​ ​ — ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 271 ​ ​ ​ ​ ​ 347 ​ ​ ​ ​ ​ 331 ​ ​
Current liability
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 108 ​ ​ ​ ​ ​ 85 ​ ​ ​ ​ ​ 51 ​ ​
Noncurrent liability
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 163 ​ ​ ​ ​ ​ 261 ​ ​ ​ ​ ​ 280 ​ ​
Change in lease liabilities:
​ ​ ​
November 30,
2020
​ ​
December 31,
2019
​
Balances as at January 1
​ ​ ​ ​ 346 ​ ​ ​ ​ ​ 331 ​ ​
New lease liabilities
​ ​ ​ ​       - ​ ​ ​ ​ ​ 76 ​ ​
Payment of principal
​ ​ ​ ​       (118) ​ ​ ​ ​ ​       (108) ​ ​
Payment of interest
​ ​ ​ ​ (41) ​ ​ ​ ​ ​ (47) ​ ​
Interest accrued for
​ ​ ​ ​ 84 ​ ​ ​ ​ ​ 94 ​ ​
Balances as at December 31
​ ​ ​ ​ 271 ​ ​ ​ ​ ​ 346 ​ ​
The noncurrent liability as at November 30, 2020 have the following maturities and amounts:
Year
​ ​
Amount
​
2021
​ ​ ​ ​ 6 ​ ​
2022
​ ​ ​ ​ 83 ​ ​
2023
​ ​ ​ ​ 74 ​ ​
​ ​ ​ ​ ​ 163 ​ ​
​
10.
Employees’ pay and related charges
​
​ ​ ​
November 30,
2020
​ ​
December 31,
2019
​ ​
January 1,
2019
​
Employees’ pay and related charges
​ ​ ​ ​ 341 ​ ​ ​ ​ ​ 148 ​ ​ ​ ​ ​ 38 ​ ​
Provision for vacations and 13th salaries
​ ​ ​ ​ 562 ​ ​ ​ ​ ​ 127 ​ ​ ​ ​ ​ 29 ​ ​
​ ​ ​ ​ ​ 903 ​ ​ ​ ​ ​ 275 ​ ​ ​ ​ ​ 67 ​ ​
 
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11.   Taxes payable
They relate to services provided in the ordinary course of operations. Taxes are booked according to the accrual periods of the year where the services are provided, although payments may vary according to the year/month where the taxes are due.
(a)    Taxes
Includes withholding of third party taxes, regarding suppliers, where the Company is responsible for making the payment of the tax (service user).
​ ​ ​
November
30, 2020
​ ​
December
31, 2019
​ ​
January
1, 2019
​
Contribution for the Social Integration Program (PIS)
​ ​ ​ ​ 27 ​ ​ ​ ​ ​ 1 ​ ​ ​ ​ ​ 1 ​ ​
Contribution for Social Security Funding (COFINS)
​ ​ ​ ​ 124 ​ ​ ​ ​ ​ 3 ​ ​ ​ ​ ​ 3 ​ ​
Services Tax (ISS)
​ ​ ​ ​ 107 ​ ​ ​ ​ ​ 39 ​ ​ ​ ​ ​ 19 ​ ​
Other
​ ​ ​ ​ 103 ​ ​ ​ ​ ​ 14 ​ ​ ​ ​ ​ 3 ​ ​
​ ​ ​ ​ ​ 361 ​ ​ ​ ​ ​ 57 ​ ​ ​ ​ ​ 26 ​ ​
(b)   Income Taxes
​ ​ ​
November
30, 2020
​ ​
December
31, 2019
​ ​
January
1, 2019
​
Corporate Income Tax (IRPJ)
​ ​ ​ ​ 783 ​ ​ ​ ​ ​ 228 ​ ​ ​ ​ ​ 104 ​ ​
Social Contribution Tax (CSLL)
​ ​ ​ ​ 259 ​ ​ ​ ​ ​ 72 ​ ​ ​ ​ ​ 36 ​ ​
​ ​ ​ ​ ​ 1,042 ​ ​ ​ ​ ​ 300 ​ ​ ​ ​ ​ 140 ​ ​
12.   Other payables
​ ​ ​
November
30, 2020
​ ​
December
31, 2019
​ ​
January
1, 2019
​
Other payables(a)
​ ​ ​ ​ 7 ​ ​ ​ ​ ​ 1 ​ ​ ​ ​ ​ 226 ​ ​
​
(a)
The balance as at Nov. 30, 2020 refers to the provision for payment of rent of the Company’s headquarters, and later to the accounting reversal in the month of December 2020.
​
13.   Dividends payable
​ ​ ​
November
30, 2020
​ ​
December
31, 2019
​ ​
January
1, 2019
​
Dividends payable(a)
​ ​ ​ ​ 3,300 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​
​
(a)
A provision of R$3,300 was recognized for accrued dividends at November 30, 2020.
​
14.      Deferred revenue
The amounts carried in deferred revenue refer to advances from customers to assist with the beginning of the services, as well as amounts received without the due withholding of the tax of the service user, where the refunds were gradually made according to negotiation with customers. The amounts carried in deferred revenue refer to invoices issued in a period, but whose services will be transferred to the customers in future periods. Therefore, the amounts are recognized in liabilities and as the services are effectively provided to customers according to the performance obligation established in IFRS 15, revenue is booked in the statement of profit or loss.
​ ​ ​
November 30,
2020
​ ​
December 31,
2019
​ ​
January 1,
2019
​
Deferred revenue
​ ​ ​ ​ 85 ​ ​ ​ ​ ​ 7 ​ ​ ​ ​ ​ 3 ​ ​
 
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15.
Equity
​
15.1.   Capital
The Company’s activities started in 2016 with a totally paid in capital of R$160 (one hundred and sixty thousand Brazilian reais). It remained the same until the beginning of 2020.
On September 8, 2020, capital was increased by R$107 (one hundred and seven thousand Brazilian reais), totaling R$267, divided into 266,600 (two hundred and sixty-six thousand and six hundred) units of interest.
On October 13, 2020 the Company was turned from a limited liability entity to a corporation. Its capital remained the same and the units of interest became 266,597 (two hundred and sixty six thousand, five hundred and ninety seven) nominative ordinary shares without face value and 3 (three) nominative preferred shares without face value.
​ ​ ​
November 30,
2020
​ ​
December 31,
2019
​ ​
January 1,
2019
​
Capital stock
​ ​ ​ ​ 266,600 ​ ​ ​ ​ ​ 160,000 ​ ​ ​ ​ ​ 160,000 ​ ​
15.2.   Dividends
Profit was shared with shareholders in 2020. Until October 13, 2020, or before the conversion to Corporation, the dividend distribution was not proportional.
From January 1 to November 30, 2020, the Company accrued dividends of R$12,984 (R$800 for the year ended December 31, 2019) to its equity shareholders. As the distribution of dividends by Smarkio requires approval at the shareholders’ meeting. Through November 30, 2020, the Company paid R$9,684 of accrued dividends. A liability in the total amount of R$3,300 is recognized as Dividends Payable as at November 30, 2020.
16.
Net revenue
​
Net revenue represents invoices issued and services measured in the period according to the accrual basis, deducted from taxes.
​ ​ ​
November 30, 2020
​ ​
December 31, 2019
​
Software Development and Licensing
​ ​ ​ ​ 15,482 ​ ​ ​ ​ ​ 6,937 ​ ​
Professional Services
​ ​ ​ ​ 12,353 ​ ​ ​ ​ ​ 3,215 ​ ​
​ ​ ​ ​ ​ 27,835 ​ ​ ​ ​ ​ 10,152 ​ ​
​
17.
Cost of services
​
Includes variable selling costs, encompassing third party technologies, as well as costs with employees directly connected with the sale of the services or yet third party services when the Company outsources certain services from customers.
Employees who executed services in 2019 and 2020 are not accounted for as cost of services provided, but classified as operating expenses.
Costs per type
In 2020, costs were re-classified into new accounts to separate each one. That aimed a better overview of operating costs arising from the rendering of services and the costs relating infrastructure and technology.
​ ​ ​
November
30, 2020
​ ​
December
31, 2019
​
Costs of cloud infrastructure
​ ​ ​ ​ (732) ​ ​ ​ ​ ​ (454) ​ ​
Licensing costs(a)
​ ​ ​ ​ (1,054) ​ ​ ​ ​ ​ (615) ​ ​
 
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​ ​ ​
November
30, 2020
​ ​
December
31, 2019
​
Costs of other technologies
​ ​ ​ ​ (283) ​ ​ ​ ​ ​ (77) ​ ​
Costs of AI cloud services
​ ​ ​ ​ (139) ​ ​ ​ ​ ​ — ​ ​
Personnel(b) ​ ​ ​ ​ (2,871) ​ ​ ​ ​ ​ (1,308) ​ ​
​ ​ ​ ​ ​ (5,079) ​ ​ ​ ​ ​ (2,454) ​ ​
​
​
(a)
Costs associated with software suppliers that provide licenses for messaging, user licenses and third party SaaS services;
​
(b)
Costs directly associated with payroll of personnel dedicated to providing professional services, focused on the implantation and maintenance of the platform;
​
18.
Operating expenses
​
​ ​ ​
November 30,
2020
​ ​
December 31,
2019
​
Sales and marketing expenses(a)
​ ​ ​ ​ (1,680) ​ ​ ​ ​ ​ (371) ​ ​
General and administrative expenses(b)
​ ​ ​ ​ (1,884) ​ ​ ​ ​ ​ (1,062) ​ ​
Operating revenue and expenses(c)
​ ​ ​ ​ (2,330) ​ ​ ​ ​ ​ (1,565) ​ ​
​ ​ ​ ​ ​ (5,894) ​ ​ ​ ​ ​ (2,998) ​ ​
​
(a)
Expenses directly associated with sales/advertising, sales commissions, commercial representation and marketing;
​
(b)
Fixed expenses of the Company such as personnel and administrative expenses;
​
(c)
The breakdown of other operating revenue and expenses is provided below:
​
18.1.   Operating revenues and expenses
​ ​ ​
November
30, 2020
​ ​
December
31, 2019
​
Other revenue
​ ​ ​ ​ 58 ​ ​ ​ ​ ​ 1 ​ ​
Services provided by other parties(a)
​ ​ ​ ​ (2,364) ​ ​ ​ ​ ​ (1,480) ​ ​
Taxes and fees
​ ​ ​ ​ (8) ​ ​ ​ ​ ​ (9) ​ ​
Other expenses
​ ​ ​ ​ (16) ​ ​ ​ ​ ​ (77) ​ ​
​ ​ ​ ​ ​ (2,330) ​ ​ ​ ​ ​ (1,565) ​ ​
​
(a)
Accounting services, legal assistance, special advising services, IT services, services of other legal entities and individuals, mailing services, copy services and document certification services.
​
19.
Net financial income (expenses)
​
Financial revenue
​ ​
November
30, 2020
​ ​
December
31, 2019
​
Financial investment yield
​ ​ ​ ​ 37 ​ ​ ​ ​ ​ 74 ​ ​
Discounts obtained
​ ​ ​ ​ 50 ​ ​ ​ ​ ​ 1 ​ ​
​ ​ ​ ​ ​ 87 ​ ​ ​ ​ ​ 74 ​ ​
 
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Financial expenses
​ ​
November
30, 2020
​ ​
December
31, 2019
​
Discounts granted
​ ​ ​ ​ (6) ​ ​ ​ ​ ​ (3) ​ ​
Bank fees
​ ​ ​ ​ (44) ​ ​ ​ ​ ​ (14) ​ ​
Interest paid and fines
​ ​ ​ ​ (46) ​ ​ ​ ​ ​ (49) ​ ​
​ ​ ​ ​ ​ (96) ​ ​ ​ ​ ​ (66) ​ ​
Net financial revenue (expenses)
​ ​ ​ ​ (9) ​ ​ ​ ​ ​ 8 ​ ​
​
20.
Income and social contribution taxes
​
​ ​ ​
November
30, 2020
​ ​
December
31, 2019
​
Current income and social contribution taxes
​ ​ ​ ​ (3,249) ​ ​ ​ ​ ​ (1,109) ​ ​
20.1.   Reconciliation between nominal income and social contribution tax rate and effective rate
​ ​ ​
November 30,
2020
​ ​
December 31,
2019
​
Current income and social contribution taxes
​ ​ ​ ​ (3,249) ​ ​ ​ ​ ​ (1,109) ​ ​
Net revenues
​ ​ ​ ​ 27,835 ​ ​ ​ ​ ​ 10,152 ​ ​
Tax base — Deemed income (32%)
​ ​ ​ ​ 9,554 ​ ​ ​ ​ ​ 3,262 ​ ​
Income Tax — 15%
​ ​ ​ ​ (1,433) ​ ​ ​ ​ ​ (490) ​ ​
Surtax — 10%
​ ​ ​ ​ (956) ​ ​ ​ ​ ​ (326) ​ ​
Social Contribution Tax — 9%
​ ​ ​ ​ (860) ​ ​ ​ ​ ​ (293) ​ ​
Tax expenses
​ ​ ​ ​ (3,249) ​ ​ ​ ​ ​ (1,109) ​ ​
Effective rate
​ ​ ​ ​ (11.67)% ​ ​ ​ ​ ​ (10.92)% ​ ​
​
21.
Risk management and financial instruments
​
21.1.   Classification of financial instruments
The classification of the Company’s financial instruments is presented in the table below. According to Management, there are no financial instruments to be classified into other categories besides the ones reported:
​ ​ ​
November 30, 2020
​ ​
December 31, 2019
​ ​
January 1, 2019
​
Assets
​ ​
Fair value
through
profit or
loss
​ ​
Amortized
cost
​ ​
Level I
​ ​
Fair value
through
profit or
loss
​ ​
Amortized
cost
​ ​
Level I
​ ​
Fair value
through
profit or
loss
​ ​
Amortized
cost
​ ​
Level I
​
Cash and cash equivalents
​ ​ ​ ​ 97 ​ ​ ​ ​ ​ 1,861 ​ ​ ​ ​ ​ 97 ​ ​ ​ ​ ​ 2,429 ​ ​ ​ ​ ​ 399 ​ ​ ​ ​ ​ 2,429 ​ ​ ​ ​ ​ 1,373 ​ ​ ​ ​ ​ 124 ​ ​ ​ ​ ​ 1,373 ​ ​
Accounts receivable
​ ​ ​ ​ — ​ ​ ​ ​ ​ 9,992 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 2,903 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 1,134 ​ ​ ​ ​ ​ — ​ ​
​ ​ ​ ​ ​ 97 ​ ​ ​ ​ ​ 11,853 ​ ​ ​ ​ ​ 97 ​ ​ ​ ​ ​ 2,429 ​ ​ ​ ​ ​ 3,302 ​ ​ ​ ​ ​ 2,429 ​ ​ ​ ​ ​ 1,373 ​ ​ ​ ​ ​ 1,258 ​ ​ ​ ​ ​ 1,373 ​ ​
Liabilities ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Trade
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
accounts payable
​ ​ ​ ​ — ​ ​ ​ ​ ​ 908 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 306 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 59 ​ ​ ​ ​ ​ — ​ ​
Lease liabilities
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 271 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 346 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 331 ​ ​ ​ ​ ​ — ​ ​
​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 1,179 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 652 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 390 ​ ​ ​ ​ ​ — ​ ​
 
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21.2.   Financial risk management
The Company has a financial management area in charge of risk management, which reports directly to the CEO. It is responsible for the definition of policies for management of risks and financial instruments through control systems, which establish limits of exposure to exchange and interest rate variation and definition of investment of funds with financial institutions. Such are monthly evaluates the positions of all financial instruments, as well as the results obtained in comparison to objectives and submits the numbers to the Company’s Board of Directors.
21.3.   Credit risk
Is associated with difficulty in collecting the amounts corresponding to services rendered to customers.
The Company is also subject to credit risk associated with their interest-bearing bank accounts.
The risk related to the rendering of services is minimized by strict control of customers and active management of contract default through clear policies for the provision of services. There is no concentration of transactions with customers and previous default level is very low.
As for the risk of default on the part of financial institutions, the exposure is mitigated by dividing the investment of funds into different financial institutions.
21.3.1.   Exposure to credit risk
The book value of financial assets represents the Company’s maximum credit risk exposure. At reporting date, such exposure was the following:
​ ​ ​
November
30, 2020
​ ​
December
31, 2019
​ ​
January
1, 2019
​
Cash and cash equivalents
​ ​ ​ ​ 1 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 1 ​ ​
Cash at banks and short-term financial investment
​ ​ ​ ​ 1,957 ​ ​ ​ ​ ​ 2,828 ​ ​ ​ ​ ​ 1,496 ​ ​
Accounts receivable
​ ​ ​ ​ 9,992 ​ ​ ​ ​ ​ 2,903 ​ ​ ​ ​ ​ 1,134 ​ ​
Short-term financial investment
​ ​ ​
​
11,950
​ ​ ​ ​
​
5,731
​ ​ ​ ​
​
2,631
​ ​
Of total net accounts receivables, Porto Seguro Companhia de Seguros Gerais account for 41.2% as at November 30, 2020 and 52.9% as at December 31, 2019 and account for 31.1% and 22.5% of net revenues, respectively.
Of total net accounts receivables, Portoseg S/A — Credito Financiamento e Investimento account for 31.4% as at November 30, 2020 and 9.3% as at December 31, 2019 and account for 19.9% and 23.8% of net revenues, respectively.
The determination of the provision for expected losses to be incurred with receivables is based on the following criteria:
•
Expected losses are estimated by means of a loss rate calculated on actual past losses incurred with sales;
​
Besides, it is considered whether accounts receivable presented a significant increase in credit risk and encompasses:
•
All receivables overdue for more than 6 months;
​
Invoices presenting indicators of significant risks of contract violation based on renegotiations in progress, evidence of fail or court supervised reorganization processes in progress and customers with significant evidence of cash deterioration are submitted to additional credit rating analysis.
21.4.   Market risk
Interest rate and inflation risks: Arises from the portion of debt and interest-bearing bank deposits pegged to the CDI (Interbank Deposit Certificate rate) that can adversely affect revenue or financial expenses
 
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in the event there is an unfavorable change in interest rates or inflation. No derivatives are used at the Company to mitigate such risk.
21.5.   Operations with derivatives
No derivatives are used at the Company with speculative purposes.
21.6.   Liquidity risk
Liquidity risk refers to the possibility of the Company not having enough funds to settle its financial liabilities.
The treasury area of the Company daily monitors cash flows and liquidity in order to assure that the generation of cash and previous funds borrowed, when necessary, are enough to maintain the schedule of payments, not generating liquidity risk for the Company or its subsidiaries.
The table below presents the due dates established in contracts for financial liabilities, including payment of interest.
Non-derivative financial liabilities
​ ​
Book value
​ ​
Contract
value
​ ​
Up to 12
months
​ ​
1-2 years
​ ​
2-3 years
​
Trade accounts payable and other payables
​ ​ ​ ​ 908 ​ ​ ​ ​ ​ 908 ​ ​ ​ ​ ​ 908 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ ​ ​ ​
Lease liabilities
​ ​ ​ ​ 271 ​ ​ ​ ​ ​ 325 ​ ​ ​ ​ ​ 141 ​ ​ ​ ​ ​ 100 ​ ​ ​ ​ ​ 83 ​ ​
​ ​ ​ ​ ​ 1,179 ​ ​ ​ ​ ​ 1,233 ​ ​ ​ ​ ​ 1,049 ​ ​ ​ ​ ​ 100 ​ ​ ​ ​ ​ 83 ​ ​
21.7.   Foreign currency exchange risk
Refers to the impact that foreign currency exchange rate variation may have on the financial statements.
The Company is exposed to exchange rate risk, seeing that part of its costs is denominated in dollar. The group is studying the acquisition of derivatives to compensate for exchange rate variations.
The fluctuation in exchange is carried in financial gains and losses on a monthly basis.
21.8.   Sensitivity analysis
The main risks associated with the Company’s operations are linked to the variation of the Interbank Deposit Certificate rate (CDI) used for short-term financial investment. Loans have been contracted at fixed rates. There are also costs and expenses incurred in dollar, however not recorded in assets or liabilities, seeing there are no long-term contracts with future commitment pegged to the dollar exchange rate.
The Company’s financial instruments are measured at fair value and are classified as cash and cash equivalents, accounts receivable, accounts payable and loans and financing. They are measured at amortized cost, plus interest incurred. At reporting dates, the profile of the interest-bearing instruments at the Company was as follows:
Assets with variable rates
​ ​
2020
​ ​
2019
​
Financial assets
​ ​ ​ ​ 97 ​ ​ ​ ​ ​ 2,429 ​ ​
21.9.   Sensitivity analysis of instruments with variable rates
Investment that yields earnings based on the CDI rate are measured at market value, according to the prices provided by the respective financial institutions. Others refer substantially to bank deposit certificates. Therefore, the amount recorded of those instruments does not differ from market values.
The table below presents three scenarios of risk of reduction in the CDI rate. The base scenario was the rate of November 30, 2020 of 2.75% p.a. Scenario II represents a reduction of 25% and scenario III a reduction of 50%.
 
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Operation
​ ​
Balance as at
Nov. 30,
2020
​ ​
Risk
​ ​
Scenario I
(probable)
​ ​
Scenario II
​ ​
Scenario III
​
Interest subject to variation
​ ​ ​ ​ 97 ​ ​ ​
Decrease in CDI
​ ​ ​ ​ 2.75% ​ ​ ​ ​ ​ 2.06% ​ ​ ​ ​ ​ 1.38% ​ ​
Change in the return of financial investment
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 3 ​ ​ ​ ​ ​ 2 ​ ​ ​ ​ ​ 1 ​ ​
21.10.   Capital management
Capital management aims to assure that a strong credit rating is maintained with financial institutions, as well as a strong capital ratio to support the Company’s business and leverage shareholders’ return.
The capital structure is controlled by adjusting it to current economic conditions. To maintain an adjusted structure, dividends may be paid, capital returned to shareholders, new loans obtained, promissory notes issued and execution of operations with derivative instruments.
The Company’s net debt structure encompasses: loans and financing, lease liabilities, payments in installments and other obligations, less cash and cash equivalents. Financial leverage ratios as at December 31, 2020 and 2019 are summarized below:
​ ​ ​
November
30, 2020
​ ​
December
31, 2019
​ ​
January
1, 2019
​
Trade accounts payable and other payables
​ ​ ​ ​ 4,215 ​ ​ ​ ​ ​ 307 ​ ​ ​ ​ ​ 285 ​ ​
Lease liabilities
​ ​ ​ ​ 271 ​ ​ ​ ​ ​ 346 ​ ​ ​ ​ ​ 331 ​ ​
​ ​ ​ ​ ​ 4,486 ​ ​ ​ ​ ​ 653 ​ ​ ​ ​ ​ 616 ​ ​
Cash and cash equivalents
​ ​ ​ ​ (1,958) ​ ​ ​ ​ ​ (2,828) ​ ​ ​ ​ ​ (1,497) ​ ​
Net cash
​ ​ ​ ​ 2,528 ​ ​ ​ ​ ​ (2,175) ​ ​ ​ ​ ​ (881) ​ ​
Total equity
​ ​ ​ ​ 5,859 ​ ​ ​ ​ ​ 5,132 ​ ​ ​ ​ ​ 2,333 ​ ​
Net cash to equity ratio (%)
​ ​ ​ ​ 43.15% ​ ​ ​ ​ ​ (42.38)% ​ ​ ​ ​ ​ (37.76)% ​ ​
​
22.
Additional information to the statement of cash flows
​
The table below introduces additional information on transactions related to the statement of cash flows:
Non-cash items:
​ ​
November 30,
2020
​ ​
December 31,
2019
​
Increase in property, plant and equipment due to lease use rights established by IFRS 16
​ ​ ​ ​ — ​ ​ ​ ​ ​ 76 ​ ​
​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 76 ​ ​
​
​
Fernando Nigri Wolff
Managing Officer
​ ​
​
Francisco Luciano Merege FLM
Assessoria Contábil LTDA
​
 
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         CLASS A COMMON SHARES
[MISSING IMAGE: LG_ZENVIANEW-BW.JPG]
Zenvia Inc.
PROSPECTUS
​
Global Coordinators
​
Goldman Sachs & Co. LLC
​ ​
Morgan Stanley
​ ​
Itau BBA
​
Joint Bookrunners
​
UBS Investment Bank
​ ​
Bradesco BBI
​ ​
XP Investimentos
​
                 , 2021
Through and including           , 2021 (25 days after the date of this prospectus), all dealers that buy, sell or trade our Class A common shares, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to the dealers’ obligation to deliver a prospectus when acting as underwriters and with respect to their unsold allotments or subscriptions.
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 6. Indemnification of Directors and Officers.
Cayman Islands law does not limit the extent to which a company’s articles of association may provide indemnification of officers and directors, except to the extent that it may be held by the Cayman Islands courts to be contrary to public policy, such as providing indemnification against civil fraud or the consequences of committing a crime.
The registrant’s Articles of Association provide that each director or officer of the registrant shall be indemnified out of the assets of the registrant against all actions, proceedings, costs, charges, expenses, losses, damages, or liabilities, judgments, fines, settlements and other amounts (including reasonable attorneys’ fees and expenses and amounts paid in settlement and costs of investigation (collectively “Losses”) incurred or sustained by such directors or officers, other than by reason of such person’s dishonesty, willful default or fraud, in or about the conduct of our business or affairs (including as a result of any mistake of judgment) or in the execution or discharge of such person’s duties, powers, authorities or discretions, including without prejudice to the generality of the foregoing, any Losses incurred by such director or officer in defending or investigating (whether successfully or otherwise) any civil, criminal, investigative and administrative proceedings concerning or in any way related to us or our affairs in any court whether in the Cayman Islands or elsewhere.
Also, the registrant expects to maintain director’s and officer’s liability insurance covering its directors and officers with respect to general civil liability, including liabilities under the Securities Act, which he or she may incur in his or her capacity as such.
The form of underwriting agreement to be filed as Exhibit 1.1 to this registration statement will also provide for indemnification by the underwriters of the registrant and its directors and officers for certain liabilities, including liabilities arising under the Securities Act, but only to the extent that these liabilities are caused by information relating to the underwriters that was furnished to us by the underwriters in writing expressly for use in this registration statement and certain other disclosure documents.
Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers or persons controlling us under the foregoing provisions, we have been informed that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable.
Item 7. Recent Sales of Unregistered Securities.
During the past three years, we have not issued any securities exempt from registration under the Securities Act.
Item 8. Exhibits and Financial Statement Schedules.
(a)
Exhibits: See Exhibit Index beginning on page II-5 of this Registration Statement.
​
The agreements included as exhibits to this registration statement contain representations and warranties by each of the parties to the applicable agreement. These representations and warranties were made for the benefit of the other parties to the applicable agreement and (1) were not intended to be treated as categorical statements of fact, but rather as a way of allocating the risk to one of the parties if those statements prove to be inaccurate; (2) may have been qualified in such agreement by disclosures that were made to the other party in connection with the negotiation of the applicable agreement; (3) may apply contract standards of “materiality” that are different from “materiality” under the applicable securities laws; and (4) were made only as of the date of the applicable agreement or such other date or dates as may be specified in the agreement. We acknowledge that, notwithstanding the inclusion of the foregoing cautionary statements, we are responsible for considering whether additional specific disclosures of material information regarding material contractual provisions are required to make the statements in this registration statement not misleading.
 
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(b)
Financial Statement Schedules: All schedules have been omitted because they are not required, are not applicable or the required information is otherwise set forth in the consolidated financial statements or related notes thereto.
​
Item 9. Undertakings.
(a)
The undersigned registrant hereby undertakes to provide to the underwriters at the closing specified in the underwriting agreement, certificates in such denominations and registered in such names as required by the underwriters to permit prompt delivery to each purchaser.
​
(b)
Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.
​
(c)
The undersigned registrant hereby undertakes that:
​
(1)
For purposes of determining any liability under the Securities Act of 1933, the information omitted from the form of prospectus filed as part of this Registration Statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this Registration Statement as of the time it was declared effective; and
​
(2)
For the purpose of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a form of prospectus shall be deemed to be a new Registration Statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
​
 
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form F-1 and has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City and State of São Paulo, Brazil, on April 15, 2021.
​ ​ ​ ​ Zenvia Inc. ​
​ ​ ​ ​ By: ​ ​
/s/ Cassio Bobsin
​
​
​ ​ ​ ​ ​ ​ ​ Name: ​ ​ Cassio Bobsin ​
​ ​ ​ ​ ​ ​ ​ Title: ​ ​
Chief Executive Officer
​
​ ​ ​ ​ By: ​ ​
/s/ Renato Friedrich
​
​
​ ​ ​ ​ ​ ​ ​ Name: ​ ​ Renato Friedrich ​
​ ​ ​ ​ ​ ​ ​ Title: ​ ​
Chief Financial Officer
​
 
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POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints each of Cassio Bobsin and Renato Friedrich as attorneys-in-fact, and each of them with full power of substitution, for them in any and all capacities, to do any and all acts and all things and to execute any and all instruments which said attorney and agent may deem necessary or desirable to enable the registrant to comply with the Securities Act of 1933, as amended, or the Securities Act, and any rules, regulations and requirements of the Securities and Exchange Commission thereunder, in connection with the registration under the Securities Act of Class A common shares of the registrant, or the Shares, including, without limitation, the power and authority to sign the name of each of the undersigned in the capacities indicated below to the registration statement on Form F-1, or the Registration Statement, to be filed with the Securities and Exchange Commission with respect to such Shares, to any and all amendments or supplements to such Registration Statement, whether such amendments or supplements are filed before or after the effective date of such Registration Statement, to any related Registration Statement filed pursuant to Rule 462(b) under the Securities Act, and to any and all instruments or documents filed as part of or in connection with such Registration Statement or any and all amendments thereto, whether such amendments are filed before or after the effective date of such Registration Statement; and each of the undersigned hereby ratifies and confirms all that such attorney and agent shall do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act, this registration statement has been signed by the following persons in the capacities indicated on April 15, 2021.
​ ​ ​
Name
​ ​
Title
​
By: ​ ​
/s/ Cassio Bobsin
​
Name: Cassio Bobsin
​ ​ Chief Executive Officer (principal executive officer) and Director ​
​ ​ ​ ​
By: ​ ​
/s/ Renato Friedrich
​
Name: Renato Friedrich
​ ​ Chief Financial Officer (principal financial officer and principal accounting officer) ​
​ ​ ​ ​
By: ​ ​
/s/ Jorge Steffens
​
Name: Jorge Steffens
​ ​ Director (Chairman) ​
​ ​ ​ ​
By: ​ ​
/s/ Carlos Henrique Testolini
​
Name: Carlos Henrique Testolini
​ ​ Director ​
​ ​ ​ ​
By: ​ ​
/s/ Eduardo Aspesi
​
Name: Eduardo Aspesi
​ ​ Director ​
​ ​ ​ ​
By: ​ ​
/s/ Colleen A. De Vries
​
On behalf of Cogency Global Inc.
Name: Colleen A. De Vries
Title: Senior Vice President
​ ​ Authorized Representative in the United States ​
 
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EXHIBIT INDEX
Exhibit No.
​ ​
Description
​
1.01* ​ ​ Form of Underwriting Agreement ​
3.01* ​ ​ Form of Memorandum and Articles of Association of Zenvia Inc., effective upon completion of the offering ​
4.01* ​ ​ Form of Registration Rights Agreement between               , effective upon completion of the offering ​
5.01* ​ ​ Opinion of Maples and Calder, Cayman Islands counsel to Zenvia Inc., as to the validity of the Class A common shares ​
10.01 ​ ​ Facebook Terms for WhatsApp Business Solution Providers between MKMB Soluções Tecnológicas Ltda and Facebook, Inc., dated as of September 17, 2019 ​
10.02† ​ ​ English translation of Temporary Short Number Availability Agreement between Zenvia Mobile Serviços Digitais S.A. and Claro S.A., dated as of November 23, 2017 ​
10.03†# ​ ​ English translation of Agreement for Provision of Services for Sending SMS Messages between Zenvia Mobile Serviços Digitais S.A. and Oi Móvel S.A., dated as of November 14, 2019 ​
10.04† ​ ​ English translation of Amendment No. 01/2020 to the Service Agreement of SMS Messaging Services and Technical Management between Zenvia Mobile Serviços Digitais S.A. and Oi Móvel S.A., dated as of January 7, 2020 ​
10.05† ​ ​ English translation of Standard Form Agreement Technical Service Management between Zenvia Mobile Serviços Digitais S.A. and Oi Móvel S.A., dated as of January 7, 2020 ​
10.06† ​ ​ English translation of Torpedo Enterprises Agreement between Zenvia Mobile Serviços Digitais S.A. and Telefonica Brasil S.A., dated as of April 1, 2020 ​
10.07†# ​ ​ English translation of Service Provision Agreement between Zenvia Mobile Serviços Digitais S.A. and TIM S.A., dated as of July 21, 2020 ​
10.08†# ​ ​ Share Purchase and Sale Agreement among Miguel Ángel Morkin, Julián Bender, Ezequiel Sculli, Lautaro Schiaffino, Remaining Shareholders and Employees with Equity, and Zenvia Mobile Serviços Digitais S.A. and Miguel Ángel Morkin, as Shareholder Representative, with Rodati Motors Corporation, Rodati Motors Central de Informações de Veículos Automotores Ltda., Rodati Services S.A. and Rodati Servicios, S.A. de C.V., as Intervening Party, dated as of July 24, 2020 ​
10.09†# ​ ​ English translation of Agreement for the Purchase and Sale of Equity Interest and Other Covenants between Zenvia Mobile Serviços Digitais S.A. and Fernando Jorge Wosniak Steler, Fundo de Investimento em Participações Multiestratégia Inovabra I - Investimento no Exterior, Raul Marcelo Wosniak Steler, Wagner Gomes Carvalho, Luiz Carlos Capelati, Gustavo Gonçalves Candian, Cristhiano Stephani Faé, Leandro Piga, Maria Carolina Sanzovo De Oliveira, João Carlos Ribas Pereira, Fernando Mingrone Artuzzi, Star4 Participações e Consultoria em Gestão Empresarial Eireli and One to One Engine Desenvolvimento e Licenciamento de Sistemas de Informática S.A. and, as a Consenting Intervening Parties: 4 Ti Participações Ltda., Vanderlei Arcanjo Carnielo Calejon, Heitor Sakoda and Cleber Augusto Calejon, dated as of March 19, 2021 ​
10.10†# ​ ​ English translation of Agreement for the Purchase and Sale of Equity Interest and Other Covenants between Zenvia Mobile Serviços Digitais S.A. and Vanderlei Archangel Carnielo Calejon, Heitor Sakoda and Cleber Augusto Calejon and, as a Consenting Intervening Parties: 4 Ti Participações Ltda, One to One Engine Desenvolvimento e Licenciamento de Sistemas de Informática S.A. — Direct One and Fernando Jorge Wosniak Steler, dated as of March 18, 2021 ​
14.01 ​ ​ Code of Ethics and Conduct ​
21.01 ​ ​ List of subsidiaries ​
23.01 ​ ​ Consent of KPMG Auditores Independentes ​
 
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Exhibit No.
​ ​
Description
​
23.02 ​ ​ ​
23.03 ​ ​ Consent of BDO RCS Auditores Independentes S.S., independent accountant ​
23.04 ​ ​ ​
23.05* ​ ​ Consent of Maples and Calder, Cayman Islands counsel to Zenvia Inc. (included in Exhibit 5.01) ​
24.01 ​ ​ ​
99.01 ​ ​ ​
​
*
To be filed by amendment.
​
†
Portions of this exhibit have been omitted in accordance with the rules of the Securities and Exchange Commission.
​
#
Certain personal information contained in this exhibit has been omitted.
​
 
II-6

Exhibit 10.1

 

Facebook Confidential

 

Facebook Terms for WhatsApp Business Solution Providers

 

Last Modified: December 4, 2018

 

1. Introduction

 

1.1                The WhatsApp Business Solution enables businesses to communicate with consumer users on the WhatsApp network (WhatsApp Business Solution”). These Facebook Terms for WhatsApp Business Solution Providers and all other applicable terms and policies that are incorporated by reference as described below (collectively, “Agreement”) establishes the terms and conditions upon which Facebook, Inc. or Facebook Ireland Limited, as applicable (“Facebook”, “us”, “we” or “our”), distributes the WhatsApp Business Solution developed and operated by WhatsApp Inc., an Affiliate of Facebook, (“WhatsApp”) to you, a qualified solution provider who in turn may offer the WhatsApp Business Solution to your business customers (“Customers”). Facebook Ireland Limited is the contracting entity offering you access to the WhatsApp Business Solution, unless you are located in the United States, Canada, or Brazil, in which case, Facebook, Inc. is the contracting entity offering you access to the WhatsApp Business Solution. This Agreement is entered into by and between Facebook and the party specified on the signature page below, including any Affiliates (“you”, “your”, or “Company”) and is effective as of the later of the dates set forth on the signature page below (the “Effective Date”). “Affiliate” means any entity which, directly or indirectly, owns or controls, is owned or controlled by, or is under common ownership or control with the applicable Party. “Control” means the power to direct the management of an entity, and “ownership” means the beneficial ownership of 50% or more of the voting equity securities or equivalent voting interests of the entity. Facebook and Company are individually referred to herein as a “Party,” and collectively as the “Parties”. Capitalized terms are defined contextually in this Agreement, and otherwise in any additional, applicable terms that are incorporated into this Agreement by reference.

 

1.2                In order to use the WhatsApp Business Solution you also agree to WhatsApp’s terms set forth in the WhatsApp Business Solution Terms and the WhatsApp Business Terms for Solution Providers. You agree to use the WhatsApp Business Solution in compliance with (a) WhatsApp’s technical and product documentation and any other related documentation provided by Facebook or WhatsApp (collectively “Documentation”); and (b) the WhatsApp Business Solution Policy. To the extent of any conflict between this Agreement, the Facebook Terms, Facebook Commercial Terms, and any other additional Facebook terms that govern Facebook-provided services, this Agreement will control with respect to Facebook’s distribution of, and your access to and use of, the WhatsApp Business Solution. To the extent of any conflict between this Agreement and the WhatsApp Business Solution Terms, this Agreement governs.

 

1.3                The individual signing below on behalf of the Company or other legal entity (including any Affiliates) represents and warrants that he or she has full authority to bind the Company to this Agreement. You may be represented in your dealings with us through any of the people you authorize to have access to your account(s) with us (e.g., your Facebook Developer account or Business Manager account discussed below). We can rely upon the representations of these authorized users. By granting them authorized access, you appoint them as your representatives, including in connection with receipt of notice and/or execution of any supplements, modifications or amendments to this Agreement.

 

2. WhatsApp Business Accounts

 

2.1                The WhatsApp Business Solution is comprised of a software client (“WhatsApp Business Client”) which you use (on your own behalf or on behalf of your business customers for which you are a solution provider) to interact with messaging and other APIs (“WhatsApp Business APIs”), in order to send messages or use other available features to interact with other WhatsApp consumer users on the WhatsApp Business Solution. To use the WhatsApp Business Solution, you must create one or more WhatsApp business accounts (each, a “WABA”). To access the WhatsApp Business APIs, you must have a Facebook Business Manager account to link to your WABA.

 

 

 

 

2.2                Administrator. During the setup of your WABA(s), you will appoint a system administrator(s) of your account who is responsible for managing your WhatsApp Business Client instance. You must ensure you have an active administrator at all times.

 

3. Facebook Accounts

 

3.1                Facebook is a distributor of the WhatsApp Business Solution, and WhatsApp works with Facebook to provide you various tools and features required to access the WhatsApp Business Solution, including:

 

Facebook Business Manager (management of fees, payment, business insights, analytics, message template creation, technical support)

 

Facebook for Developers (technical documentation)

 

3.2                When you link your Facebook Business Manager account(s) and Facebook for Developers account with your WABA, WhatsApp will provide to Facebook your data, metrics, and other information related to your use of the WhatsApp Business Solution, in order for Facebook to bill your account, invoice you, receive payments from you, and provide you with business insights, analytics, technical documentation, and product and technical support. Facebook provides you with support for the WhatsApp Business Solution and endeavors to provide you initial acknowledgment no more than 4 hours following receipt of your request. The Facebook Terms and the Facebook Commercial Terms applicable to Facebook Business Manager and Facebook for Developers, and any other additional Facebook terms relevant for any other Facebook-provided services, govern your use of those services.

 

4. Your Obligations to Your Customers and Customers’ User Data.

 

4.1                When you use the WhatsApp Business Solution on behalf of your Customers or in connection with any user’s content or information (whether personally identifiable or anonymous) that you access(ed) directly or indirectly on or after the Effective Date (“User Data”), you represent and warrant that you will only process User Data from the WhatsApp Business Solution pursuant to your Customers’ instructions and authorization, for the sole purpose of enabling you or your Customers to access and use the WhatsApp Business Solution and for no other purpose (including for your own purposes). You must enter into a written agreement with your Customer that obligates your Customer to comply with this Agreement, all additional terms and policies incorporated by reference into this Agreement, and all agreements you enter into with WhatsApp in order to access and use the WhatsApp Business Solution on your Customers’ behalf. You acknowledge and agree that you or your Customers’ breach of any WhatsApp Business Solution terms, policies and related agreements is deemed a breach of this Agreement.

 

4.2                As between you and Facebook or WhatsApp, you are solely and fully liable for all acts and omissions by your Customers (e.g., each of your Customer’s acts and omissions will be deemed your acts or omissions hereunder). We or WhatsApp may at any time prohibit any of your Customers’ use of the WhatsApp Business Solution, effective upon notice to you, and you must immediately comply with any such prohibition. You will maintain an up-to-date list of each of your Customers and the types of User Data such Customers shared with you and will provide us such information upon our request.

 

5. Your Conduct

 

5.1                Generally. Company, on behalf of itself and its Customers: (i) will not hold itself out as an agent, legal representative or employee of Facebook (including any Affiliates), and will not otherwise suggest any affiliation with Facebook other than as an authorized distributor of the WhatsApp Business Solution; and (ii) will not make any legal representations, guarantees or warranties of any type on behalf of Facebook or WhatsApp with respect to the WhatsApp Business Solution, or describe the WhatsApp Business Solution in a manner inconsistent with any descriptions or specifications communicated by Facebook or WhatsApp to Company.

 

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5.2                Restrictions. With respect to any data you obtain from using the WhatsApp Business Solution, you must not directly or indirectly (a) with the exception of the content of message threads, use such data to track, build, or augment profiles on individual consumer users; (b) share, transfer, sell, license, or distribute such data, including any anonymous, aggregate, or derived forms of such data, to any third parties; or (c) retarget on or off of WhatsApp and the Facebook Companies’ services, use piggybacking or redirects, or combine that data with any other third-party sources of data. We may terminate your account and revoke your access immediately if we reasonably determine that you have breached these restrictions. This Section survives termination of this Agreement.

 

5.3                Compliance with Laws. Company, on behalf of itself and its Affiliates, represents and warrants that it and they have complied, and covenants that it and they will comply, with all applicable local, state, provincial, territorial, federal and international laws, regulations, rules and conventions, including those related to data privacy and data transfer, international communications, public procurement requirements, and the exportation of technical or personal data (“Laws”) and that they have used and will use only legitimate and ethical business practices in connection with the negotiation and performance of its and their duties pursuant to this Agreement.

 

5.4                Anti-Corruption and Trade Compliance. Company, on behalf of itself and its Affiliates, represents and warrants that it and they have not engaged in, and covenants that it and they will refrain from, offering, promising, paying, giving, authorizing the paying or giving of, soliciting, or accepting money or anything of value, including cash or a cash equivalent (including “grease, “expediting” or facilitation payments), discounts, rebates, gifts, meals, entertainment, hospitality, use of materials, facilities or equipment, transportation, lodging, or promise of future employment (“Anything of Value”), directly or indirectly, to or from: (i) (1) any official or employee of any multinational, national, regional, territorial, provincial or local government in any country, including any official or employee of any government department, agency, commission, or division; (2) any official or employee of any government-owned or controlled enterprise; (3) any official or employee of any public educational, scientific, or research institution; (4) any political party or official or employee of a political party; (5) any candidate for public office; (6) any official or employee of a public international organization; or (7) any person acting on behalf of or any relatives, family, or household members of any of those listed above (collectively, “Government Official”) to (a) influence any act or decision of a Government Official in his or her official capacity, (b) induce a Government Official to use his or her influence with a government or instrumentality thereof, or (c) otherwise secure any improper advantage; or (ii) any person in any manner that would constitute bribery or an illegal kickback, or would otherwise violate applicable anti-corruption Law, in each case, in connection with the negotiation of, and performance of it and their duties pursuant to this Agreement. Company represents and warrants that it has not made a voluntary or other disclosure to, or received any notice, subpoena, request for information, or citation from, or is aware of any past or present investigation of Company by a U.S. or non-U.S. multinational, national, regional, federal, state, municipal, local, territorial, provincial or other governmental department, regulatory authority, commission, board, bureau, agency, ministry, self-regulatory organization or legislative, judicial or administrative body, including any other entities funded in whole or in part by any of the foregoing (“Governmental Authority”) related to alleged violations of any anti-corruption Law. Company acknowledges that U.S. and EU trade sanction Laws are applicable to Facebook and the WhatsApp Business Solution and, as such, Company represents and warrants that it is not subject to any U.S. or EU trade sanctions or economic restrictions and that it will not seek to provide WhatsApp Business Solution to Customers who are subject to EU or U.S. trade sanctions or economic restrictions. Upon request, Company must provide Facebook with reasonable information necessary to validate that Customers are not subject to U.S. or EU trade sanctions Laws. Company will ensure that any subcontractors retained by Company in connection with its performance under this Agreement expressly agree to anti-corruption and trade compliance undertakings, representations, and warranties substantially similar to the provisions set forth in this Section 5.4. Notwithstanding any other provision of this Agreement or any applicable non-disclosure agreement, Facebook may disclose the existence and terms of this Agreement, as well as information relating to any probable violation of this section 5.4 (Anti-Corruption and Trade Compliance), to any Governmental Authority whenever Facebook considers it necessary or prudent to do so.

 

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5.5                Data Security. When using or providing the WhatsApp Business Solution, you will always have in effect and maintain administrative, physical and technical safeguards that: (i) meet or exceed industry standards given sensitivity of User Data, (ii) are compliant with applicable Law (including data security and privacy laws, rules and regulations), and (iii) are designed to prevent any unauthorized access, use (including any use in violation of this Agreement), processing, storage, destruction, loss, alteration or disclosure of User Data (each, an “Unauthorized Data Use”). Following the discovery of any suspected or actual Unauthorized Data Use, you will: immediately notify us of such incident, and promptly take appropriate actions in compliance with applicable Laws to address and remedy such incident (including notifying the affected users in compliance with applicable Laws and taking any other actions reasonably requested by us). Such notice to us must describe the nature of the Unauthorized Data Use, when the Unauthorized Data Use occurred, the effect on us and/or our users, and your corrective action to respond to the Unauthorized Data Use.

 

5.6                Notice of Violation. If Company becomes aware that it or its Affiliate has violated, or an Affiliate (or a Facebook employee or representative) has requested that Company violate, any of the terms of this Section 5, Company must provide prompt notice to Facebook of the facts and circumstances associated with such violation or request.

 

6. Fees, Taxes, Invoicing, and Payment

 

6.1                Fees. You agree to pay Facebook for access to the WhatsApp Business APIs according to the list prices and pricing rules set forth in our Rate Card, and we will invoice you under each of your Facebook Business Manager accounts associated with your WABAs. WhatsApp and Facebook data will be the sole basis for invoices that we issue to you. We have the right to update the Rate Card on a monthly basis, and changes to list prices and pricing rules will take effect the first day of the calendar month following such changes to the Rate Card. Fees under this Agreement may be invoiced and must be paid in USD, unless we support invoicing and receiving payment in your local currency. Fees will be settled in full in accordance with your payment method as set forth below. Any late payments are subject to a service charge equal to 1.5% per month of the amount due or the maximum amount allowed by Law, whichever is less.

 

6.2                Billing and Payment. We will bill and invoice you for your Customer’s access and usage of the WhatsApp Business APIs, including for all fees associated with the WABAs under each of your Business Manager accounts, and you will be solely responsible for payment of such fees to Facebook.

 

6.3                Taxes. The amounts we charge you may be subject to and include applicable taxes and levies, including withholding taxes. You are responsible for bearing and remitting any taxes that apply to your transactions. You will indemnify and hold us harmless from and against any claim arising out your failure to do so.

 

6.4                Payment Method. When you enter into this Agreement, you agree to settle fees as either an invoiced or non-invoiced customer. Invoiced customers are those to which Facebook extends a credit line for the WhatsApp Business Solution and issues invoices on a periodic basis for payment in accordance with the applicable invoicing terms. Non-invoiced customers will have their funding instrument charged for usage. In its sole discretion, Facebook may classify you as an invoiced customer or non-invoiced customer, based upon a variety of factors. Unless Facebook notifies you otherwise, we will endeavor to classify you as an invoiced customer, and if your credit line application is successful, then the Section below titled “Invoiced Customers” applies to you. However, in our sole discretion, we may decide to classify you as a non-invoiced customer, in which case the Section titled “Non-invoiced Customers” will apply to you.

 

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6.5                Invoiced Customers. Facebook will extend a line of credit to you and will issue you invoices on a monthly basis. You will pay all fees due under this Agreement, in full and cleared funds as directed by us. All fees are due within 30 days following the invoice date.

 

6.6                Non-Invoiced Customers. Non-invoiced customers must provide a funding instrument and confirm that you are permitted to use that funding instrument. When you fund a transaction, you authorize us (and our designated payment processor) to charge the full amount to the funding instrument you designate for the transaction. You also authorize us to collect and store that funding instrument along with other related transaction information.

 

6.6.1            Authorization. If you pay by credit or debit card, we may obtain a pre-approval from the issuer of the card for an amount, which may be as high as the full price of your payment. Your card will be charged at the time you initiate a payment or shortly thereafter. If you cancel a transaction before completion, this pre-approval may result in those funds not otherwise being immediately available to you.

 

6.6.2            Failed Payments. If you pay by debit card and your load transaction results in an overdraft or other fee from your bank, you alone are responsible for that fee.

 

6.7                Credit Report. You agree that we may obtain your business credit report from a credit bureau during the term of this Agreement.

 

6.8                Suspension. Without affecting our other rights under this Agreement, if you do not pay any fees by the due date, we may suspend all or part of your access to the WhatsApp Business APIs until you make payment in full. We will endeavor to provide you with notice prior to suspension.

 

7. Reporting, Records, and Audit

 

7.1                Reports. You agree to provide us reports related to your or your Customers’ usage of the WhatsApp Business Solution, as we may reasonably request from time to time, no later than 30 days following the date of our request.

 

7.2                Books and Records. Company will: (i) maintain accurate books and records in order to ensure that fees, taxes, receipts and expenses in connection with Company’s performance under this Agreement are accurately recorded with reasonable detail and are based on accurate and sufficient supporting documentation; and (ii) maintain practices and internal controls to ensure that no “off the books” accounts are created or maintained in connection with Company’s performance under this Agreement. Unless otherwise required by applicable Laws, all such books and records will be maintained by Company for a period of five (5) years after the termination or expiration of this Agreement. You will retain written records relating to your access to and use of User Data for as long as required under applicable Laws, and in all cases for a period of at least one (1) year after any termination or expiration of this Agreement .

 

7.3                Audits. Upon reasonable prior notice to Company, Company will provide Facebook and its auditors with access to, and assistance and information that they may reasonably require with respect to, Company’s books and records for purposes of auditing Company’s compliance with this Agreement. If an audit identifies that Company is not in compliance with this Agreement, Company (i) will correct such noncompliance no later than 72 hours after notice of noncompliance (ii) will reimburse us for all reasonable costs and expenses of such audit and all re-reviews (if the noncompliance was material), and (iii) upon completion of such remediation, have your authorized officer certify in writing to us that you have addressed the non-compliance, and that you are now in compliance.

 

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8. Term and Termination

 

8.1                Term. This Agreement is effective from the Effective Date and will continue until terminated as permitted herein.

 

8.2                Termination for Convenience. Facebook may terminate this Agreement at any time, for any or no reason, upon 30 days advance written notice to you, subject to a wind-down period of up to 3 months following the effective date of the termination, during which time you will still be responsible for payment of all fees incurred and all other obligations under this Agreement during the wind-down period for use of the WhatsApp Business APIs. You may also terminate this Agreement at any time, for any or no reason, upon 30 days’ advance written notice to Facebook, subject to you providing all reasonable assistance to transfer your Customers’ WABAs and all related data pursuant to your Customer’s instructions, to: (a) the Customer’s chosen new solution provider; or (b) systems under the Customer’s control. If you exercise your right to terminate for convenience, there will be no wind-down period.

 

8.3                Suspension and Termination. Facebook may immediately suspend your access to the WhatsApp Business APIs or terminate this Agreement if you breach this Agreement (including any terms or policies incorporated by reference), or if we deem such action necessary to comply with applicable Laws or to prevent harm to the security, stability, availability, or integrity of Facebook, WhatsApp, and the other Facebook Companies. Termination of this Agreement will result in termination of your access to the WhatsApp Business APIs. Upon termination, we will remove your access to the WhatsApp Business APIs, and you also agree to delete promptly the WhatsApp Business Client and any related software code.

 

8.4                Deletion of Your Data. Upon termination of this Agreement, except for data that we retain for a limited amount of time as required by Law or best practices related to financial, tax, operational record-keeping, or audits, Facebook will delete any data related to the WhatsApp Business Solution from your WABA, Facebook Business Manager account and your Facebook for Developers account; however, you understand that deleted content may persist in backup copies for a reasonable period of time while deletion is carried out.

 

8.5                Effect of Termination. Upon any termination or expiration of this Agreement: (a) you must immediately cease using the WhatsApp Business Solution, except during a wind-down period; (b) at the disclosing party’s request, the receiving party will promptly return or delete any of the disclosing party’s confidential information in its possession; and (c) you will promptly pay Facebook any unpaid fees incurred prior to termination (unless Facebook has otherwise provided you a written statement waiving such payment). Except as may be specified in this Agreement, either party’s exercise of any remedy, including termination, is without prejudice to any other remedies it may have under this Agreement, by Law or otherwise. Termination of this Agreement does not automatically terminate any other terms of service that are incorporated by reference into this Agreement (except WhatsApp Business Solution Terms) which govern other Facebook-provided services that you may use without relation to the WhatsApp Business Solution (e.g., the Facebook Terms and Facebook Commercial Terms may still continue in effect so that you may use Facebook Business Manager for other Facebook-provided products and services); such terms of service may continue in effect until otherwise terminated in accordance with the terms therein. The following provisions of this Agreement will survive termination: Section 5 (Your Conduct), Section 6 (Fees, Taxes, Invoicing, and Payment) to the extent there are outstanding fees due, Section 7.2 (Books and Records), this Section 8.5 (Effect of Termination), Section 9 (Indemnification and Limitation of Liability), Section 10 (Confidentiality) and Section 11 (General).

 

9. Indemnification and Limitation of Liability

 

9.1                Indemnification. Company agrees to defend, indemnify, and hold harmless Facebook, its Affiliates and its and their officers, directors, employees and agents from and against all liabilities, damages, losses, and expenses of any kind (including reasonable legal fees and costs) relating to, arising out of, or in any way in connection with any of the following (“Claim”): (a) Company’s or Company’s Customers’ access to or use of the WhatsApp Business Solution, including information provided in connection therewith; (b) Company’s or Company’s Customers’ breach or alleged breach of this Agreement or applicable Law; and (c) any misrepresentation made by Company. We have the right to solely control, and Company will cooperate as fully as required by us in, the defense or settlement of any Claim.

 

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9.2                Limitation on Liability. IN NO EVENT WILL FACEBOOK, ITS AFFILIATES, OR ITS SUPPLIERS BE LIABLE FOR ANY INDIRECT, INCIDENTAL, SPECIAL, RELIANCE, EXEMPLARY OR CONSEQUENTIAL DAMAGES OF ANY KIND, OR FOR DAMAGES RELATED TO LOST PROFITS, REGARDLESS OF THE FORM OF ACTION, EVEN IF FACEBOOK (INCLUDING ANY AFFILIATE) HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. IN NO EVENT WILL FACEBOOK OR ITS AFFILIATE OR SUPPLIERS BE LIABLE FOR ANY DAMAGES HEREUNDER IN THE AGGREGATE IN EXCESS OF THE TOTAL FEES PAID BY COMPANY TO FACEBOOK UNDER THIS AGREEMENT DURING THE CONSECUTIVE TWELVE MONTH PERIOD IMMEDIATELY PRECEDING THE FIRST APPLICABLE EVENT, ACT OR OMISSION GIVING RISE TO SUCH DAMAGES.

 

10. Confidentiality

 

10.1              Confidential Information. Company agrees to hold in confidence and not disclose to any third-party nor use for any purpose except as necessary to perform its obligations under this Agreement any and all technology, know-how, business information and other material of any type, which is either marked confidential at the time of disclosure or which from the context of its disclosure or the nature of the information itself should reasonably be understood to be confidential information, including the terms and conditions of this Agreement (collectively, “Confidential Information”) received from Facebook. Company must return or certify its destruction of all Confidential Information (including all copies and extracts thereof) upon the earlier to occur of termination or expiration of this Agreement or written request by Facebook. Company acknowledges that any disclosure of Confidential Information would cause substantial harm for which damages alone would not be a sufficient remedy, and therefore upon any such disclosure Facebook will be entitled to seek appropriate equitable relief in addition to whatever other remedies it might have at law or under this Agreement. Notwithstanding any other provision of this Agreement, or any non-disclosure agreement between the Parties, Facebook may freely disclose the existence and terms of this Agreement to any third party whenever Facebook considers it necessary or prudent to disclose the terms of this Agreement, including to any Governmental Authority in connection with a violation or potential violation of Section 11.10 by Company or Company’s Customers.

 

11. General

 

11.1              Changes. Facebook may update this Agreement, including any of the additional terms, policies, or documentation incorporated into this Agreement by reference (“Change”). Unless otherwise required by Law, we will notify you before we make a Change. By continuing to use the WhatsApp Business Solution after notice of a Change, you consent to such Change.

 

11.2              Governing Law. This Agreement, as well as any claim that might arise between you and us, are governed by and construed in accordance with the laws of the United States and the State of California, as applicable, without giving effect to their principles of conflicts of law. Any claim or cause of action arising out of or relating to this Agreement must be commenced exclusively in the U.S. District Court for the Northern District of California or a state court located in San Mateo County, and each party hereby consents to the personal jurisdiction of such courts.

 

11.3              Entire Agreement. This Agreement, and any additional terms agreed upon between you and Facebook or WhatsApp, comprise the entire agreement between the Parties regarding the WhatsApp Business Solution, and unless expressly agreed upon otherwise between the Parties, supersedes any prior representations or agreements. Headings are for convenience only, and terms such as ‘including” are to be construed without limitation. This Agreement is written in English (US). We may provide you with translated versions of this Agreement for your convenience, but the English (US) version of this Agreement is the version that governs.

 

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11.4              Amendment, Waiver, and Severability. This Agreement may not be modified except in a writing duly executed by the Parties. Failure to enforce a provision will not be deemed a waiver; waivers must be in writing and signed by the waiving party. Any terms or conditions in any customer purchase order or business form will not modify this Agreement and are hereby expressly rejected, and any such document will be for administrative purposes only. If any provision of this Agreement is adjudged by a court of competent jurisdiction to be unenforceable, invalid, or otherwise contrary to Law, such provision will be interpreted so as to best accomplish its intended objectives and the remaining provisions of this Agreement will remain in full force and effect.

 

11.5              Publicity. Any press release, publicity, or public announcement about the Parties’ relationship requires the prior written approval of both Parties.

 

11.6              Assignment. Neither party may assign this Agreement or its rights or obligations under this Agreement without the prior written consent of the other Party, except that Facebook may assign this Agreement without consent to another member of the Facebook Companies or in connection with a merger, reorganization, acquisition, or other transfer of all or substantially all of its assets or voting securities. Subject to the foregoing, this Agreement will bind and inure to the benefit of each party’s permitted successors and assigns. Non-permitted assignments are void and will create no obligations on Facebook.

 

11.7              Independent Contractor. The Parties are independent contractors. No agency, partnership, joint venture, or employment is created as a result of this Agreement and neither Party has authority to bind the other.

 

11.8              Notices. Any notice under this Agreement must be in writing. You must send any notices to Facebook at the following address (as applicable): in the case of Facebook Ireland Limited, to 4 Grand Canal Square, Grand Canal Harbour, Dublin 2, Ireland, Attn: Legal and; in the case of Facebook, Inc., to 1 Hacker Way, Menlo Park, CA 94025 USA, Attn: Legal. Facebook may send notices to the email address that you provided in your Facebook Business Manager account. Facebook may also provide operational or other business-related notices regarding the WhatsApp Business Solution via messages or conspicuous posting within Facebook Business Manager.

 

11.9              Force Maieure. Neither party will be liable to the other for any delay or failure to perform any obligation under this Agreement (except for a failure to pay fees) if the delay or failure is due to unforeseen events that occur after the signing of this Agreement and that are beyond the reasonable control of such party, such as a strike, blockade, war, act of terrorism, riot, natural disaster, failure or diminishment of power, telecommunications, data networks, or services, or refusal of a license or authorization by a government agency or entity.

 

11.10            Conditions on Governmental Authority Use. If you or your Customer are a Governmental Authority, you represent that: (a) no applicable Law, policy, or principle restricts you or your Customer from agreeing and performing, or accepting performance of, any term or condition of this Agreement; (b) no applicable Law, policy, or principle renders any term or condition of the Agreement unenforceable against you or your Customer; (c) you are authorized to, and have the legal capacity under applicable Laws, policies, and principles to represent and bind any applicable Governmental Authority to the terms and conditions of the Agreement; (d) you and your Customer enter into the Agreement based upon an impartial decision concerning the value of the WhatsApp Business Solution to you and your Customers, and no improper conduct or conflict of interest has influenced your or your Customer’s decision to enter into the Agreement and (e) you have followed all legally required government procurement processes to enter into the Agreement or any agreement between you and the Governmental Authority for use of the WhatsApp Business Solution (“Government Agreement”). In the event you or your Affiliates participate in a bid, respond to a request for proposal, or similar competition for a contract with Governmental Authorities for the WhatsApp Business Solution (each, a “Bid”), you must ensure you and your Affiliates do not compete amongst each other in the same Bid. You must enter into a Government Agreement with each Governmental Authority, and such Government Agreement must set forth any information or rights that the Governmental Authority may need for billing purposes. If a Governmental Authority enters into the Agreement in violation of this Section, Facebook may elect to (w) terminate all or a portion of the Agreement; (x) terminate access to the WhatsApp Business Solution, (y) enter into a separate mutually agreeable and enforceable agreement between the Parties, or (z) modify the Agreement and execute such a modification as mutually agreed by the Parties.

 

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11.11            Reserved Rights. Notwithstanding anything to the contrary, we also reserve the right to and may without liability to you, your Customers or your authorized users immediately limit, suspend, or terminate your access to the WhatsApp Business Solution and/or any or all User Data (or any portion thereof) (including access via any or all associated WABAs), if we believe (in our sole discretion) that it is desirable to: (i) protect the integrity, security, or privacy of any Facebook Company products, systems, or data and/or any users, (ii) protect any Facebook Companies from regulatory, financial, or legal liability and/or to comply with any Law, rule or regulation, or (iii) prevent or limit risk of harm or damage (including reputational harm or damage) to any Facebook Companies and/or any Facebook Company products, systems, or data.

 

ACKNOWLEDGED AND AGREED:

 

Company:

MKMB Soluções Tecnológicas LTDA

Av. Dr. Nib Pecanha 2900 13 andar,
Chacara das Pedras Porto Alegre,
RS 91330-001, Brazil

 

Facebook:

Facebook, Inc.

1601 Willow Rd, Menlo Park, CA 94025, United States

     
Signature: /s/ Cassio Bobsin Machado   Signature: /s/ Marc Shedroff

 

Date: Sep 17, 2019   Date: Sep 17, 2019
Title: CEO   Title: VP BD

 

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Exhibit 10.02

 

CERTAIN INFORMATION IN THIS EXHIBIT, MARKED BY [****], HAS BEEN EXCLUDED. SUCH EXCLUDED INFORMATION IS NOT MATERIAL AND IS THE TYPE THAT THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL.

 

TEMPORARY SHORT NUMBER AVAILABILITY AGREEMENT

 

By this Short Number Temporary Availability Agreement (“Agreement”) to which they are parties, on the one hand:

 

(I)            Claro S/A and Zenvia Mobile Serviços Digitais S/A, a company headquartered at Av Doutor Nilo Pecanha, 2,900 - Floor 13 and Floor 14 registered under the CNPJ 14.096.190 /0001-05, hereby represented in the form of its constitutive acts, hereinafter referred to as CONTRACTING PARTY; and

 

(II)           CLARO SA, a company headquartered in the City of São Paulo - SP, at Rua Henri Dunant 780, registered under the CNPJ number 40.432.544 /0001-47, hereinafter referred to as CLARO or OPERATOR.

 

Whereas:

 

(i)    CLARO, as the authorizing company of the Personal Mobile Service in the Brazilian territory, has equipment and systems that allow, in the form regulated by the National Telecommunications Agency - ANATEL, in addition to other services, the sending and receiving of SMS;

 

(ii)   The CONTRACTING PARTY has an interest in selling to the INTERESTED PARTIES part of the SHORT NUMBERS capacity acquired from CLARO; and

 

(iii)  CLARO agrees with the aforementioned commercialization and, for that purpose, it will make available to the CONTRACTING PARTY a SHORT NUMBER so that the INTERESTED PARTIES can send and / or receive SMS with the content defined by the INTERESTED PARTIES.

 

The above described Parties decide to enter into this Agreement, subject to the following clauses and conditions:

 

FIRST CLAUSE - DEFINITIONS

 

1.1 The terms described below, when used in this Agreement, have the following meanings:

 

CONFIDENTIAL INFORMATION: (I) all information exchanged between the Parties, either verbally or in writing; (ii) Information regarding each Party's business, as well as technical information, including, but not limited to, information related to each Party's product plans, customers, designs, costs, prices and product names, finances, marketing plans, business opportunities, personnel, research, development or technical knowledge, product performance indicators; and (III) the clauses, terms and conditions of this Agreement.

 

INTERESTED PARTIES: legal entity interested in the temporary availability of SHORT NUMBER to carry out communication actions directed at a specific group of people (“RECIPIENTS”).

 

LA: stands for Large Account. It is the exclusive digital channel, identified by a numeric code, now made available by CLARO to the CONTRACTING PARTY, allowing the INTERESTED PARTIES to carry out communication actions to the RECIPIENTS by sending and / or receiving SMS;

 

MT SMS (“Mobile Terminated Short Messages”): name of all messages sent from the CONTRACTING PARTY to the CLIENTS.

 

MO SMS (“Mobile Originated Short Messages”): name of all messages sent from the CLIENTS to the CONTRACTING PARTY.

 

SHORT NUMBER (S): numeric code used to identify a Large Account.

 

SMS: short for Short Message Service. It is a value-added service provided by CLARO that consists of sending short text messages with limited text / characters.

 

CLAUSE TWO - OBJECT

 

2.1 The purpose of this Instrument is to establish the commercial and technical conditions for CLARO to temporarily make available to the CONTRACTING PARTY, for the period and amount contracted, without any exclusivity, the band(s) of LA(s) that allow the INTERESTED PARTIES to carry out targeted communication actions to the RECIPIENTS, which do not have content offering products and services, through the transmission of SMS (MO SMS and / or MT SMS), which fulfill the requirements set forth below.

 

Short Number Temporary Availability Agreement signed between Claro S/A and Zenvia Mobile Serviços Digitais S/A

 

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2.1.1. Once the CONTRACTING PARTY will commercialize the bands of LAs to the INTERESTED PARTIES, being able to sign specific contracts with them, the CONTRACTING PARTY will be the liaison between CLARO and the INTERESTED PARTIES and RECIPIENTS, remaining responsible before CLARO for the procedures of said INTERESTED PARTIES and RECIPIENTS.

 

THIRD CLAUSE - CHARACTERISTICS OF THE SERVICE

 

3.1 The CONTRACTING PARTY must inform the INTERESTED PARTIES that the SMS to be sent from the INTERESTED PARTIES to the RECIPIENTS must have a maximum of [*****] characters, with [*****] of these characters being reserved as a label (identification of the SMS issuer). On the other hand, messages sent from the RECIPIENTS to the INTERESTED PARTIES may have a maximum of [*****] characters.

 

3.2 The CONTRACTING PARTY must inform the INTERESTED PARTIES that the RECIPIENTS who have their cell phone (i) turned off, (II) outside the CLARO authorized area and / or (iii) outside the coverage area, may not receive the SMS with the communication actions sent by the INTERESTED PARTIES.

 

3.2.1 In these cases, the SMS will be stored in CLARO system for a period of, no more than, [*****] after the first transmission attempt, with a minimum of [*****] attempts to retransmit the SMS within this period.

 

3.2.2 During this period, if the RECIPIENTS' cell phone becomes available within the CLARO authorized and coverage area, the SMS can be retransmitted and, consequently, viewed by the RECIPIENTS.

 

3.2.3 If, for any reason, the SMS cannot be delivered within [*****] hours from the first transmission attempt, CLARO cannot guarantee that the RECIPIENTS will receive it, and no imputation of responsibility will be applicable.

 

Clause Four - Price and Payment Method

 

4.1 As a result of the temporary availability of the LA(s) bands, the CONTRACTING PARTY will pay CLARO, from the date of signature of this instrument, the amounts described below, which will vary according to the message plan chosen by the CONTRACTING PARTY, as indicated in the following item.

 

4.1.1 For the contracting of a monthly volume of [*****] messages, the CONTRACTING PARTY will pay CLARO, monthly, the amount of [*****] and [*****] for additional sent message.

 

4.2 The taxes that are due as a direct or indirect consequence of this Agreement, or of its execution, constitute the responsibility of the taxpayer, as defined in the current tax legislation.

 

4.3 CLARO will charge the CONTRACTING PARTY by issuing and presenting the service invoice, as well as the invoice for payment, with the corresponding statement of the SMS sent and received, which must be paid by the due date, described in the invoice, under penalty of late payment interest of [*****] or fraction thereof, plus a non-compensatory fine of [*****] on the updated amount of the debt. In payment delays exceeding 30 (thirty) days, the debt will be monetarily restated, based on the variation of the IGP-M / FGV, or any other index that may replace it during the period, in addition to the penalties mentioned above.

 

4.4 In the event of a payment delay of more than 30 (thirty) days, the availability of the LA may be suspended, at the sole discretion of CLARO, regardless of any prior notice or communication, until all and any debts under the responsibility of the CONTRACTING PARTY are settled.

 

4.5 The amounts provided for in item 4.1.1 above will be updated from the date of signing this Agreement, in accordance with the index chosen by the Parties at the time of the adjustment.

 

4.6 The amounts set out in this Agreement will be invoiced by [*****], according to their exclusive criteria, and different ratios may occur in the payment of each of the installments due. It may also be decided that certain payment(s) will be made to [*****], with which the CONTRACTING PARTY already agrees.

 

Short Number Temporary Availability Agreement signed between Claro S/A and Zenvia Mobile Serviços Digitais S/A

 

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FIFTH CLAUSE - CLARO'S OBLIGATIONS

 

5.1 In addition to the obligations defined in other clauses of this Agreement, CLARO will have the following obligations:

 

5.1.1 To be solely and exclusively responsible for the improper access or modifications of the files sent by the INTERESTED PARTY from the moment they enter their systems and up to the moment they are sent to the RECIPIENTS;

 

5.1.2 Provide security for the content of the SMS sent by the INTERESTED PARTIES while they are waiting for the re-transmission period, as defined in item 3.2 above;

 

5.1.3 Store the record that identifies the sending of the SMS without, however, storing the content of the same, for 03 (three) months;

 

5.1.4 Provide a representative to act as the CONTRACTING PARTY's initial contact in solving problems; and

 

5.1.5 Consider, at its sole discretion, the CONTRACTING PARTY’s request to increase the volume of contracted messages, provided that the CONTRACTING PARTY makes such request to CLARO, at least three (3) months in advance.

 

5.2 The CONTRACTING PARTY hereby acknowledges and declares to give knowledge to the INTERESTED PARTY that CLARO is only a channel for sending SMS, and that CLARO has no responsibility with regard to its content or even the possibility of altering them.

 

5.3 The CONTRACTING PARTY acknowledges that CLARO will not be responsible for any fraud or acts of piracy that may occur on the CLARO network through the Air Interface. Likewise, CLARO will not be responsible for guaranteeing confidentiality, as well as for the interception of SMS when they are traveling outside the CLARO mobile phone network, as well as in the case of the RECIPIENT neglecting to protect their mobile device.

 

5.4 CLARO must inform the CONTRACTING PARTY about the RECIPIENT who has expressed to CLARO the desire to no longer receive the communication actions of the INTERESTED PARTIES, observed the obligation of the CONTRACTING PARTY set out in Item 6.1.7 below.

 

CLAUSE SIX - OBLIGATIONS OF THE CONTRACTING PARTY

 

6.1 The CONTRACTING PARTY has the following obligations, among others provided for in this instrument:

 

6.1.1 Carry out periodic maintenance on the platform in which SHORT NUMBERS will be stored, as well as ensuring the efficiency in the technical application that will be used in their management;

 

6.1.2 Make SHORT NUMBERS available to INTERESTED PARTIES only after carrying out a prior analysis of the content that will be sent via SMS, basing their analysis on the rules of the "Regulation for the Availability of Short Number" issued by CLARO;

 

6.1.3 Keep the data of the INTERESTED PARTIES that are made available for the acquisition of SHORT NUMBERS under the strictest confidentiality, not supplying them to third parties or using them for any other purpose. The CONTRACTING PARTY is fully responsible for the damages that it may cause in case of failure or omission in the fulfillment of this obligation, or, still, in cases of failure or omission in the disclosure to the INTERESTED PARTIES of the procedures and diligences that must be conducted in the treatment of their personal information, in order to avoid its misuse by third parties;

 

6.1.4 Forward to CLARO, through its own system, data containing the cell phone number of each of the INTERESTED PARTIES, as well as the contents of the SMS sent, observing the confidentiality obligations for the confidential data of the INTERESTED PARTIES and RECIPIENTS;

 

6.1.5 Carry out, together with CLARO, all necessary tests for the implementation of the SMS transmission services from the CONTRACTING PARTY to the INTERESTED PARTIES and from the INTERESTED PARTIES to the CONTRACTING PARTY;

 

6.1.6 Be responsible for the disclosure of the characteristics of the service provided by CLARO to the INTERESTED PARTIES, through the means that it considers appropriate, observing the relevant legislation and the regulations;

 

6.1.7 Do not send SMS to the RECIPIENT who has expressed to CLARO the desire to no longer receive the communication actions of the INTERESTED PARTIES, subject to the obligation of CLARO contained in item 5.4 above;

 

Short Number Temporary Availability Agreement signed between Claro S/A and Zenvia Mobile Serviços Digitais S/A

 

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6.1.7.1. Breached the obligation set forth in sub-item 6.1.7 above, CLARO will block the messages sent by the CONTRACTING PARTY, and this action will not be restricted to a specific RECIPIENT, but will apply to all RECIPIENTS.

 

6.1.8 Interrupt, up to 24 (twenty four) hours, the provision of services to the INTERESTED PARTIES that request their cancellation and inform CLARO of the cancellation under consideration;

 

6.1.9 Inform the INTERESTED PARTIES and CLARO, at least 72 (seventy-two) hours in advance, of any technological updates or changes in their systems that may impact the service;

 

6.1.10 Provide the INTERESTED PARTIES with all the necessary assistance and information in case of problems, complaints or changes regarding the conditions of the service, through the CONTRACTING PARTY's Customer Service (SAC);

 

6.1.11 Store the record that identifies the sending of SMS for 3 (three) months;

 

6.1.12 Bear the necessary investment for the contracting of software use licenses, to be installed on machines of the CONTRACTING PARTY and of CLARO, which allows the sending of SMS, in case the solution adopted by the CONTRACTING PARTY is different from the one provided by CLARO;

 

6.1.13 Provide a representative to act as an initial contact for CLARO in solving problems arising from the services provided by the CONTRACTING PARTY;

 

6.1.14 To remedy, within no more than 05 (five) days, any problems that may cause unavailability of the service to the INTERESTED PARTIES, counted from the notification sent by CLARO, by the INTERESTED PARTIES or by the CONTRACTING PARTY's monitoring systems, as well as communicating to the INTERESTED PARTIES the impossibility to provide service while repairs are being made;

 

6.1.15 Inform the INTERESTED PARTIES of any failures or impediments that render the service unfeasible or cause their interruption for a period exceeding 2 (two) consecutive days, which must be previously submitted to CLARO's appreciation and written approval;

 

6.1.16 Solve, at your expense, the problems or issues resulting from the performance of the services provided by the CONTRACTING PARTY;

 

6.1.17 Be responsible for the amount, accuracy, validity and verification of the data inserted in the files transmitted to CLARO. Be aware that any doubts or complaints arising from the SMS transmitted by CLARO to the INTERESTED PARTIES and / or the RECIPIENTS will be the sole and exclusive responsibility of the CONTRACTING PARTY;

 

6.1.18 Replace the cell phone number of the INTERESTED PARTIES and / or RECIPIENTS to receive the SMS, whenever requested, or in the event of theft, misplacement or loss of the registered cell phone, acknowledging that CLARO does not have any obligation or responsibility in this regard;

 

6.1.19 Take responsibility for any illicit use of the network by its employees and agents or service providers; and

 

6.1.20 Take responsibility, at any time, solely and exclusively, for the fulfillment of all labor, social security, insurance, tax and social legislation applicable to the employment contracts that it maintains with the professionals who are part of its technical team, regardless of any proof of these facts before CLARO. Thus, the CONTRACTING PARTY assumes that it regularly collects all the mentioned charges, not communicating or confusing any kind of bond, especially labor related, between the employees of the CONTRACTING PARTY and CLARO, the latter being exempt from any liability to that respect.

 

6.2 It is strictly forbidden to the CONTRACTING PARTY:

 

6.2.1 Create or transmit any SMS with messages whose contents (I) are false or lead to dubious interpretations; (ii) invade the privacy of third parties or harm them in any way; (iii) promote, in some form, racism against minority groups, or any form of political or religious fanaticism, discriminating against groups of people or ethnicities; (iv) are obscene; (v) violate third parties rights, including, but not limited to, intellectual property rights and / or the creation and sending of unsolicited (SPAM) or unsubstantiated ("hoax") messages;

 

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6.2.2 Send or allow INTERESTED PARTIES to send SMS with advertising, informational content or that in any way that allows the presentation of: (i) telephone companies competing with CLARO, (II) companies whose social activity is similar to that exercised by CLARO, including any advertisement or offer of products and / or services from these companies or, (iii) any content that induces the migration of CLARO's customer to another competing operator;

 

6.2.3 The use of the object of this contract to carry out advertising, invitations / incentives for the purchase / commercial transaction of any product or services and the like ("SMS Marketing"), such as, but not limited to, actions to stimulate the purchase, use or enjoyment of a product and / or service or companies that subcontract it, actions to disseminate any type of political, religious motivations, torrents of thought and the like, and actions with messages that have any advertising, promotional or advertising connotations, or that shows preference for any company or brand, even if requested or authorized in advance by the INTERESTED PARTIES;

 

6.2.4 The sending of SMS that implies any charges from the RECIPIENTS, except in cases where the CONTRACTING PARTY asks the RECIPIENTS for a response and they send it to the CONTRACTING PARTY, in which case the RECIPIENTS will normally be charged by CLARO, due to the sending of the SMS to the CONTRACTING PARTY;

 

6.2.5 The sending of SMS to one or more INTERESTED PARTIES and / or RECIPIENTS without their formal authorization, whether or not they are characterized as SPAM or make SPAM possible;

 

6.2.6 Subcontracting in order to provide SMS connections and / or interconnections, such as, but not limited to, Personal Mobile Service operators, SMS Integrators and the like;

 

6.2.7 Use this Agreement to provide services other than those expressly authorized, such as, but not limited to, sending ring tones and / or images, using wap push technology for any and all services, subscribing to news and / or information, interactivity services in media with customers, directly or indirectly, such as conversation systems, chats, voting, meeting place, information contests, etc.; and

 

6.2.8 Use this Contract to carry out sweepstakes of any kind, cultural contests of any kind, discounts of any kind, including promotional values, gratuity or special values, among others.

 

6.3 If the CONTRACTING PARTY needs to increase the number of contracted messages, it must make such request to CLARO at least three (3) months in advance, and CLARO must, at its sole discretion, approve or not such request.

 

6.3.1 If the CONTRACTING PARTY does not give the necessary advance notice to increase the number of contracted messages, CLARO is not obliged to send the SMS that exceed the initially contracted capacity, and the CONTRACTING PARTY, in this case, is fully responsible before CLARO and before the INTERESTED PARTIES.

 

6.4 The CONTRACTING PARTY hereby acknowledges that the SMS sent to the INTERESTED PARTIES and / or RECIPIENTS will not be automatically deleted from the display of the INTERESTED PARTIES and / or RECIPIENTS mobile devices, undertaking to inform them of this fact.

 

6.5 In addition, the CONTRACTING PARTY shall be responsible for obtaining the "receiving authorization" of the RECIPIENTS who will receive the SMS, ensuring that such authorization has in fact departed from the RECIPIENTS, through an unequivocal acceptance procedure. When registering, the RECIPIENTS must be informed of all the main information and specifications of the service, such as the preferred time for receiving the SMS, receiving frequency (daily, weekly, monthly or alerts), mobile phone number and procedure for sending SMS. In this "receiving authorization", the recipients must be aware of the technical conditions necessary for receiving and sending the SMS - coverage area, connected terminal, responsibility of the recipients regarding the safekeeping of information as soon as it is received on the cell phone and, finally how to proceed in case of theft or loss of the device, in the form of clause 6.1.18 above.

 

6.5.1 At any time, CLARO may request from the CONTRACTING PARTY the proof of authorization of RECIPIENTS who receive, have received, or will receive the SMS.

 

Short Number Temporary Availability Agreement signed between Claro S/A and Zenvia Mobile Serviços Digitais S/A

 

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6.6 In this act, the CONTRACTING PARTY acknowledges that CLARO is and will always be the sole holder of SHORT NUMBERS that will be used for sending and receiving SMS, and that CLARO is and will be the only and exclusive responsible for the billing and collection of INTERESTED PARTIES and / or RECIPIENTS, if applicable.

 

SEVENTH CLAUSE – BREACH OF CONTRACT

 

7.1 The proven violation of any clause of this Agreement will cause the CONTRACTING PARTY to apply the non-compensatory fine, in the amount equivalent to [*****] times the average amount of the last [*****] invoices paid by the CONTRACTING PARTY to CLARO, in addition to the correction by the IGP-M (General Market Price Index) of FGV (Fundação Getúlio Vargas), from the date of the infraction until the date of payment, without prejudice to the payment of losses and damages that such termination may cause.

 

CLAUSE EIGHT - THE RESPONSIBILITY OF THE PARTIES

 

8.1 The CONTRACTING PARTY is responsible for indemnifying and reimbursing CLARO, third parties, especially the INTERESTED PARTIES and RECIPIENTS, for any kind of direct and indirect damages and loss of profit, arising from failures, errors or fraud in the execution of the object of this Agreement, or, still, with respect to actions or omissions of the CONTRACTING PARTY that violate the provisions set forth by the applicable legislation and / or regulation, including, but not limited to, the eventual fines and / or other penalties, administrative or otherwise, that may be applied, without reducing CLARO's supervision, monitoring or approval duties.

 

8.2 It is expressly agreed that, in the event that CLARO is cited, notified, summoned or sentenced, as responsible or co-responsible, for any obligation attributable to the CONTRACTING PARTY, or if the obligations of the CONTRACTING PARTY, at the discretion of the competent authorities, are imputed to CLARO, whether of a fiscal, labor, social security, civil or criminal nature, even after the end of the Agreement, the CONTRACTING PARTY will request CLARO’s exclusion from the proceedings. In addition, CLARO may, without prejudice to the other rights resulting or arising from this Agreement, retain from the payments due (I) the amount corresponding to the amount of the contingency or even the amount of the loss attributed by the administrative or judicial authority, until the CONTRACTING PARTY satisfies the respective obligation, releasing CLARO from the notice of infraction, subpoena or condemnation when decreed by the competent authority; and (ii) the amounts related to the payment of legal costs and legal fees paid. The above provision is also fully applicable in cases where there is any kind of fraud in the operation of CLARO.

 

8.3 If the CONTRACTING PARTY causes damage to CLARO, by action or omission in the performance of its functions, or by not observing the conditions provided for in this Agreement, it will be obliged to pay CLARO an indemnity corresponding to the damage and / or loss caused, as provided Article 927 of the Civil Code. The CONTRACTING PARTY is fully responsible for reimbursing CLARO for any damages or losses caused by the actions or omissions of its employees, agents and / or subcontractors in the performance of the services now contracted or due to them, under the terms of article 932, item III, of Civil Code, being exclusively responsible for their respective obligations, as well as for any and all losses, damages, costs or expenses that they cause to third parties.

 

CLAUSE NINE - TERM AND RENEWAL

 

9.1 This Agreement will enter into force on the date of its signature and will remain in effect for a period of 12 (twelve) months, automatically renewable for equal and successive periods, in the event that there is no written declaration by either Party against its extension, in the 30 (thirty) days prior to the expiration or renewal term.

 

CLAUSE TEN - TERMINATION

 

10.1 CLARO may terminate this Agreement at any time, with prior written notice to the CONTRACTING PARTY, at least 30 (thirty) days in advance, without incurring CLARO, in this case, in any expenses, whether as indemnity, fine or in any other way, with the payment of the amount corresponding to the pending amounts only, including those included during the period of notice.

 

10.2 Failure by the CONTRACTING PARTY to comply with any of the conditions established in this Agreement will give CLARO the right to terminate this agreement for default, provided that the CONTRACTING PARTY has been notified and does not remedy the default within 72 (seventy-two) hours from the receipt of the notification sent by CLARO.

 

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10.2.1 In cases of recurrence, CLARO will have the right to terminate this Agreement immediately, without the need to send any judicial or extrajudicial notification to the CONTRACTING PARTY.

 

10.3 Notwithstanding the foregoing, CLARO may terminate this Agreement immediately, regardless of notification, in the event of one of the following:

 

a) Bankruptcy or request for judicial or extrajudicial recovery of the CONTRACTING PARTY;

b) Declared insolvency of the CONTRACTING PARTY or any of its partners;

c) Filing of protests or executions of values higher than the value of the CONTRACTING PARTY's capital stock;

d) Termination of any license issued by an official organization, which is mandatory for the provision or continuity of the services now contracted;

e) Negligence or poor provision of services by the CONTRACTING PARTY, causing a proven drop in the quality established by the Parties, including, but not limited to, a high incidence of technical problems and a high level of complaint from INTERESTED PARTIES, without prejudice to any losses and damages;

f) Assignment or transfer of this Instrument without prior consent from CLARO; and

g) Impossibility of commercializing SHORT NUMBERS by the CONTRACTING PARTY, for any reason.

 

10.4 The CONTRACTED PARTY declares that the term and the termination clauses are compatible with the investments made in order to provide the Services now contracted.

 

10.5 Any rights and obligations assumed under this Agreement that, by their nature, extend after the end of this Agreement, will remain in force until they are fulfilled, as well as the clauses of this Agreement necessary for the understanding of these directives and obligations.

 

CLAUSE ELEVEN - INTELLECTUAL PROPERTY RIGHTS

 

11.1 The CONTRACTING PARTY guarantees to be the holder or licensee of all rights over the methods and software it uses in connection with this Agreement, shall observe all legal provisions, and hold, in any event, CLARO harmless and exempt from any liability, related to the CONTRACTING PARTY or any third parties, in connection to the intellectual property rights used for the development of the object of this Agreement, as well as being responsible for the care, protection and payment of the same rights for all rights holders mentioned here. In this sense, the CONTRACTING PARTY further guarantees to CLARO that the provisions of this Agreement do not constitute an infringement of any legal device or violation of copyright and related rights of third parties, in any country where such third parties are established, trademarks, trade secrets or other industrial property of third parties. It will also keep CLARO up to date and safe from any future dispute with respect to what is provided for in this provision, so that its liability is excluded, be it joint or subsidiary, and may be denounced in any action that is proposed to indemnify its authors, applying the provisions of article 70, item III, of the Brazilian Civil Procedure Code to this Agreement.

 

CLAUSE TWELVE - USE OF TRADEMARKS

 

12.1. Nothing in this Agreement shall be understood or interpreted as a license to use any of the trademarks owned by the Parties. The use by either Party of any trademarks of the other Party as well as the manner of its use and disclosure, whether in advertising, promotional material, or any other means of delivery, including the Internet, regardless of the purpose, shall be preceded by written consent of the Party intending to make use of the trademark of the other Party.

 

CLAUSE THIRTEEN - CONFIDENTIALITY

 

13.1 Each Party shall maintain and ensure that it as well as its consultants, agents, employees and each of its successors and assignees will keep all documents, material, specifications, registration data, data and other information, whether technical or commercial, provided to it by the other Party or on its behalf, whether or not related to the services, or obtained by it during the term of this Agreement ("Confidential Information") confidential. It will not publish or otherwise disclose or use them for purposes other than to fulfill its obligations under this Agreement, for a period of 5 (five) years after the termination of this Agreement. Failure to comply with the terms of this clause shall subject the infringing Party to compensation for the damage caused to the innocent Party.

 

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13.1.1 As part of the commitment to maintain the confidentiality of the information received, the CONTRACTING PARTY shall enter into an agreement with its managers, employees and / or collaborators, requiring the maintenance of strict secrecy and confidentiality of the information and technical knowledge that they may receive or make known as a result of entering into this Agreement, during and after the end of the employment or commercial link with the CONTRACTING PARTY. This agreement must be performed via a clause in the employment agreement or service provision agreement.

 

13.2. The Party receiving the Confidential Information shall inform the transmitting Party, as soon as it is aware of any request for such information by any competent public authorities or through any judicial proceeding, so that the transmitting Party is able to take any legal action it deems appropriate.

 

CLAUSE FOURTEEN - GENERAL PROVISIONS

 

14.1 This Agreement will bind each of the Parties and their respective authorized successors and assigns. The CONTRACTING PARTY may not assign this Agreement without CLARO's prior written consent.

 

14.1.1. The Parties hereby agree that CLARO may assign, in whole or in part, the rights and obligations under this Agreement to any other company that is its parent company, controlled or related to it, in accordance with the applicable corporate law.

 

14.2 All notices required under this Agreement will be delivered in person, or sent by registered mail or transmitted by fax (with a confirmation copy also sent by registered letter) to the Parties at the addresses specified in the Parties' details, or other addresses that either Party may inform to the other in writing.

 

14.3 Tolerance by either Party to exercise any of its rights under this Agreement shall not be considered a waiver or novation, and will not affect the subsequent exercise of such right. Any waiver will take effect only if it is specifically granted in writing through their respective legal representatives.

 

14.4. This Agreement contains the entire agreement between the Parties with respect to its subject matter, canceling any prior contract or agreement on the same subject matter, and may only be amended by a written instrument signed by both Parties.

 

14.5 In the event that any terms or provisions of this contract are declared void or not applicable, such nullity or unenforceability will not affect the remainder of the Agreement, which will remain in full force and effectiveness, as if such provisions had never been incorporated into it.

 

14.6 This Agreement does not create any employment, corporate, associative, representation, agencying, consortium, joint-venture or similar link between the Parties, bearing each of its respective obligations under the terms of the legal system in force.

 

14.7 The taxes that are due in direct or indirect result of this Agreement or its execution, constitute a liability of the taxpayer or tax- responsible person as defined in the tax legislation in force, unless this Agreement has provided otherwise.

 

14.8 The Parties shall not be liable for failure to comply with any obligation of this Agreement, as a result of fortuitous events and of force majeure, specifically judicial decisions and expressly prohibitive laws or regulations. In such cases, non-compliance with the obligations assumed herein will not be considered breach of contract and, therefore, does not constitute grounds for termination of this Agreement, to the extent that the impending event is temporary, according to the provisions of article 393 of the Civil Code.

 

14.9 The Parties sign this Agreement without exclusivity, so that CLARO has the freedom to make available its capacity to any third parties directly, as well as the CONTRACTING PARTY has the freedom to enter into similar contracts with other mobile phone service providers.

 

14.10 The Parties, as well as their representatives who sign this Agreement, declare that they are duly authorized to sign and execute the Agreement, in the form of their respective social instruments.

 

14.11 The CONTRACTING PARTY declares and warrants that it has the technical knowledge (know-how), experience and technical competence necessary for the execution of the contract. The CONTRACTING PARTY further declares and warrants that it is in good financial condition, in addition to being properly organized and equipped for the execution of this Agreement.

 

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14.12 The Parties agree to amend this Agreement to comply with ANATEL's edition of regulations or any legislation regarding the services provided by the CONTRACTING PARTY, to which CLARO is obliged to comply, and also, if legislation is enacted that prohibits CLARO from executing this Agreement to CLIENTS.

 

14.13 CLARO and the CONTRACTING PARTY will adjust, by means of information exchanges, the procedures and operational routines essential to the implementation of this Agreement.

 

14.14 Any and all changes in the system or routine of the services covered by this Agreement must be processed by mutual agreement between the Parties, and made official through the corresponding Addendum, committing the CONTRACTING PARTY to pass on all the changes to the interested third parties, as well as to the INTERESTED PARTIES.

 

14.15 Each party will bear the burden of its responsibility to third parties, without any solidarity between them.

 

14.16 The CONTRACTING PARTY must keep a complete record of the services performed by it and are object of this Agreement. The CONTRACTED PARTY undertakes to give access to CLARO, to its duly identified representatives, as well as to its external auditors that are designated in writing, upon 24 (twenty-four) hours prior notice, to any facility or part of a facility in which the CONTRACTED PARTY or any of its subcontractors (where applicable), are providing Services to CLARO, and to data and records exclusively related to the Services contracted herein for control and follow-up of CLARO.

 

CLAUSE FIFTEEN - ANTI-CORRUPTION AND ANTI-BRIBERY

 

15.1 The CONTRACTING PARTY declares that it is aware of the terms of the Brazilian anti-corruption and anti-bribery laws, including, but not limited to, Law 12.846 / 2013 and that:

 

(i)            it takes all necessary measures, in accordance with good business practices in an ethical manner and in accordance with applicable legal requirements, to prevent any fraudulent activity by the CONTRACTING PARTY (including its shareholders, directors, officers and employees) and / or by any suppliers, agents, contractors, subcontractors and / or their employees with respect to the receipt of any resources from their suppliers and service providers, being certain that if any situation is identified that may affect its relationship with CLARO, will immediatly notify CLARO and take all necessary measures;

 

(ii)           it declares that it has not carried out or promised to carry out, in connection with the operations provided for in the Agreement, or with any other commercial operations involving the CONTRACTING PARTY, any payment or transfer of values, directly or indirectly, to any governmental authority or public official; any political party, party authority or candidate for official office; to any director, counselor, employee or representative of any actual or potential customer of the CONTRACTING PARTY; to any shareholder, counselor, director and employee of the CONTRACTING PARTY; or to any other person or organization, if such payment or transfer represents a violation of the laws of the country in which it is made;

 

(iii)          it declares that it does not offer or agree to give any employee, agent, or representative any gratuity, commission or other value whatsoever as inducement or reward for practicing, failing to practicing, having performed any act to promote business by fraudulent or unlawful means and formalize contracts with suppliers and service providers;

 

(iv)          it undertakes to implement continuous improvements of effective controls in the prevention and detection of non-compliance with the Anti-Corruption Rules and the requirements established in this instrument; and

 

(v)           it declares having knowledge of the content of the CLARO Code of Ethics, available at the link http://www.claro.com.br/claropar/governanca-corporativa/codigo-de-etica/, to guide its activity, as well as its partners and suppliers, in accordance with the best commercial practices, controls and processes, technical and operational requirements, as well as forecasts of civil and criminal penalties, being subject to periodic internal and external audits.

 

Short Number Temporary Availability Agreement signed between Claro S/A and Zenvia Mobile Serviços Digitais S/A

 

Page 9 of 11

 

 

CLAUSE SIXTEEN - JURISDICTION VENUE

 

16.1 The Central Forum of the District of the Capital of São Paulo is the only competent body to settle any disputes arising from this Agreement, with waiver of any other, however privileged it may be or may be.

 

IN WITNESS WHEREOF, the Parties execute this Instrument, in two counterparts of equal content, together with two (2) witnesses.

 

São Paulo, 23/11/2017.

 

Short Number Temporary Availability Agreement signed between Claro S/A and Zenvia Mobile Serviços Digitais S/A

 

Page 10 of 11

 

 

/s/ Fabio Matias de Souza  
CONTRACTING PARTY
Name: Fabio Matias de Souza
Title: Chief Commercial Officer 		 
   
/s/ Silvana Razeira de Lima  
CONTRACTING PARTY
Name: Silvana Razeira de Lima
Title: Business Manager 		 
   
/s/ André Neckel  
CLARO S.A  
Name: André Neckel
Title: Executive Manager of Sales 		 
   
/s/ Vânia Lago  
CLARO S.A  
Name: Vânia Lago
Title: Director of Southern Sales 		 
   
Witnesses:  
   
/s/ Marcos Bravo  
Name: Marcos Bravo  

 

Short Number Temporary Availability Agreement signed between Claro S/A and Zenvia Mobile Serviços Digitais S/A

 

Page 11 of 11

 

Exhibit 10.03

 

CERTAIN INFORMATION IN THIS EXHIBIT, MARKED BY [****], HAS BEEN EXCLUDED. SUCH EXCLUDED INFORMATION IS NOT MATERIAL AND IS THE TYPE THAT THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL.

 

CERTAIN PERSONAL INFORMATION IN THIS EXHIBIT, MARKED BY [XXXXX] HAS BEEN EXCLUDED.

 

  AGREEMENT FOR PROVISION OF SERVICES FOR SENDING SMS MESSAGES ENTERED INTO BY OI MÓVEL AND THE CONTRACTING PARTY

 

ZENVIA MOBILE SERVIÇOS DIGITAIS SA, headquartered in Porto Alegre / RS, at Avenida Dr. Nilo Peçanha, nº 2.900, 14º andar, bairro Chácara das Pedras, CEP 91.330-001, registered under the CNPJ No. 14.096.190 / 0001-05, hereby represented in the form of its articles of incorporation, hereinafter referred to simply as CONTRACTING PARTY; and

 

OI MÓVEL SA undergoing judicial recovery, headquartered in Setor Comercial Norte, quadra 03, Bloco A, Ed. Estação Telefônica – Térreo – Parte 2, Brasília, registered under the CNPJ No. 05.423.963 / 0001-11, hereby represented in the form of its Bylaws, by its legal representatives, hereinafter referred to simply as PROVIDER or CONTRACTOR.

 

When referred to together, hereinafter referred to as “Parties” and, separately, “Party”;

 

CONSIDERING THAT:

 

(i) The PROVIDER holds the Authorization granted by the Granting Authority, for the Provision of the Personal Mobile Service (“PMS”) digital technology, Band D, in the Authorization Areas in Regions I, II and III, and is the owner of equipment and systems (hereinafter called “SYSTEM”) which makes it possible, as regulated by ANATEL (National Telecommunications Agency), to send and receive short text messages in accordance with the Short Message Service standard ("SMS Messages");

 

(ii) The CONTRACTING PARTY is interested in sending SMS messages to the PROVIDER' s subscribers with information and content produced and / or licensed by the CONTRACTING PARTY;

 

Decide to enter into this Agreement for the Provision of Services for Sending SMS Messages ("Agreement"), subject to the following clauses and conditions:

 

FIRST CLAUSE – DEFINITIONS

 

1.1. Without prejudice to the other definitions stipulated by the parties to this Agreement, the following words and expressions will have the following meanings, when used in this Agreement:

 

Page 1 of 13

 

 

1.1.1 “User(s)” or “Subscribers”: individual(s) who make use of the Personal Mobile Service provided by the PROVIDER;

 

1.1.2 “SMS messages”: short text messages according to the Short Message Service standard;

 

1.1.3 “SYSTEM”: the equipment and systems owned by the PROVIDER, which makes it possible to send and receive short text messages.

 

SECOND CLAUSE - DOCUMENTS OF THE AGREEMENT

 

2.1 The following Annexes, duly initialed by the Parties, are part of this Agreement, as if they were transcribed, whose full content they declare to know:

 

2.1.1 ANNEX A - Term of use for the [*****].

 

2.1.2 ANNEX B - Fees for the use of the [*****]service.

 

2.1.3 ANNEX C - Term of use of the [*****]

 

2.1.4 ANNEX D - Term of Use of the [*****]

 

2.1.5 ANNEX E - List of [*****]

 

2.2 In compliance with the provisions of Clause 2.3, all the ANNEXES to the Agreement are intended to be correlative and complementary. The Agreement, its clauses and the ANNEXES to the Agreement shall be interpreted as a whole.

 

2.3 In the event of any conflict or ambiguity of meaning between the terms of this Agreement and the ANNEXES to the Agreement, the terms and meaning established in the Agreement shall always prevail.

 

Clause Three - THE OBJECT

 

3.1. Under this Agreement, the PROVIDER shall provide the CONTRACTING PARTY, without exclusivity, with the service of sending SMS Messages to its Users, previously agreed between the Parties, containing only information and content produced or licensed by the CONTRACTING PARTY, under the conditions provided for in the terms of use described in ANNEX A.

 

3.2. The Parties agree that the PROVIDER's User whose personal mobile device is turned off at the time of sending, outside the coverage area or outside the PROVIDER's authorization area will not be able to access SMS Messages. These messages will be available to the User in stand by only for a period of up to [*****] after being sent by the PROVIDER, in which case, if not received by the PROVIDER's User within this period, they will not be forwarded again.

 

3.3. The PROVIDER’s schedule for sending SMS messages will have full priority over the communications that the CONTRACTING PARTY intends to send, without any right to contest or claim, including financial and commercial aspects.

 

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CLAUSE FOUR - OBLIGATIONS OF THE CONTRACTING PARTY

 

4.1. The CONTRACTING PARTY's obligations, among others provided for in this Agreement, are:

 

4.1.1. Prepare the content of SMS messages to be sent by the PROVIDER to its Users, only with information and / or content produced or licensed by the CONTRACTING PARTY, under the conditions set forth in ANNEX A.

 

4.1.2. Transmit to the PROVIDER, through a secure communication channel, the electronic parameters with the content of the SMS messages,containing the mobile code number and the national telephone code of the User (s) that will receive it.

 

4.1.3. Format the parameters mentioned above based on criteria defined by the PROVIDER.

 

4.1.4. Take full responsibility for the content of the SMS messages sent to the PROVIDER's Users, provided they have been perfectly and fully transmitted by the PROVIDER.

 

4.1.5. The CONTRACTING PARTY is now aware and agrees that data not formatted or formatted in disagreement with the criteria defined by the PROVIDER will make it impossible to send SMS messages to the PROVIDER's Users.

 

4.1.6. Provide Users with information on the SMS Message sending service now contracted, mainly with regard to the amount, frequency and nature of the SMS Messages to be transmitted, obtaining their respective consents for receiving the SMS Messages, as provided in the ANNEX A.

 

4.1.6.1 The body of the SMS message must contain the explicit identification of the client company of the CONTRACTING PARTY responsible for sending the SMS.

 

4.1.7. Pay the PROVIDER the amounts agreed in this Agreement.

 

4.1.8. Do not create or forward any INFORMATION that (I) violates public order and good customs or represents a violation of any legal or regulatory provisions; (II) promote, in any form, racism against minority groups, or any form of political or religious fanaticism, discriminating against groups of people or ethnicities; (III) violates the rights of third parties, including, but not limited to, intellectual property rights, and / or the creation and sending of unfounded messages ("hoax"); (IV) has advertising or commercial content, albeit for information purposes only, related to services provided by companies that compete with the PROVIDER.

 

4.1.9. The CONTRACTING PARTY is fully responsible for damages and / or losses caused due to the improper use of the SMS message sending service.

 

4.1.10. The CONTRACTING PARTY will always be solely responsible for the accuracy, validity and correctness of the Information and Content developed by it or third parties and supplied to the PROVIDER, including, but not limited to, copyright and industrial property. The Parties agree that any doubts or complaints arising from this information and / or content will be the sole and exclusive responsibility of the CONTRACTING PARTY, which shall also reimburse the PROVIDER of any amount that the latter may be compelled to pay, judicially or extra judicially, subject to the provisions of Clause Six of this Agreement.

 

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4.1.11. Communicate the PROVIDER, in writing, for prior approval and within 30 (thirty) days in advance, any preventive or scheduled change in the mode of transmission and / or update schedule of the information to be sent to the Subscribers.

 

4.1.12. Carry out, together with the PROVIDER, all the necessary tests for the perfect sending of SMS messages.

 

CLAUSE FIVE - PROVIDER'S OBLIGATIONS

 

5.1. The obligations of the PROVIDER, among others provided for in this Agreement, are:

 

5.1.1. Forward to the Users indicated by the CONTRACTING PARTY the SMS Messages previously agreed between the Parties;

 

5.1.2. Send the Users indicated by the CONTRACTING PARTY the SMS Messages within the timeframe and under the conditions determined in this Agreement.

 

5.1.3 Carry out, together with the CONTRACTING PARTY, all the necessary tests for the perfect sending of SMS messages.

 

5.1.4. Observe the quality standards usually required for services of the same nature as those now hired;

 

5.1.5. Provide the CONTRACTING PARTY with all the information it deems necessary for the perfect development of the Agreement now signed.

 

5.1.6. Present to the CONTRACTING PARTY, upon signing this Agreement, the necessary criteria for formatting the parameters mentioned in item 4.1.3 above.

 

5.1.7 Communicate to the CONTRACTING PARTY, in advance of 30 (thirty) days, any changes regarding the formatting of the parameters provided for in this Agreement.

 

CLAUSE SIX - RESPONSIBILITIES OF THE PARTIES

 

6.1. The PROVIDER, in any case, will not be responsible before the Users and / or third parties, for the information contained in the SMS Messages sent pursuant to this Agreement.

 

6.1.1 If the PROVIDER is notified, summoned, served or sentenced, at the administrative and / or judicial level, due to the information contained in the SMS Messages sent, or the lack of authorization to forward the messages to the Subscribers or due to the CONTRACTING PARTY non-compliance with the provisions of this Agreement, the CONTRACTING PARTY will be obliged to accept its complaint to the dispute and to request its admission as a party to the deed whatever the jurisdiction in which it is being sued, and shall reimburse the PROVIDER, regardless of the outcome of the judicial or administrative proceedings, the amount of hours spent by their lawyers and agents, in addition to the judicial and administrative expenses and costs incurred. The reimbursement agreed here shall be based on the remuneration of the PROVIDER's lawyers and agents.

 

6.2. The PROVIDER will not be responsible for delivering SMS Messages to its Users, if: (i) the respective lines are not activated; (ii) the personal mobile devices are not connected and within the PROVIDER's service area within the 24 (twenty four) hour period in which automatic retries for sending SMS messages will be carried out;

 

Page 4 of 13

 

 

6.3. The Parties shall agree on the maximum amount of SMS messages to be sent in a certain period of time and within a certain time.

 

6.4. In the event of messages being transmitted by the CONTRACTING PARTY above the agreed number, the PROVIDER will send a written notification to the CONTRACTING PARTY demanding the immediate adequacy of the amount of messages transmitted, and not being responsible for sending such SMS messages.

 

CLAUSE SEVEN - BRANDS AND ADVERTISING

 

7.1. The use, under any pretext, of advertising involving brands and respective logos owned by the Parties will depend on the prior and express agreement of the respective owner, including with regard to the production of advertising material.

 

7.1.1. The advertising materials referred to above must be submitted in writing for prior approval by the other Party.

 

7.1.2. The CONTRACTING PARTY is hereby authorized to use the PROVIDER's logo available in this Agreement, exclusively, at the electronic address http://www.zenvia.com, within the specific place intended for the insertion of the logos of the companies with which it has partnerships. Any change in the referred email address, including the insertion of new texts or links, must be communicated to the PROVIDER for approval.

 

7.1.2.1. The CONTRACTING PARTY is forbidden to insert any text about the PROVIDER in said electronic address, which does not have the exclusive purpose of identifying it as its partner, as well as making any changes to the PROVIDER logo;

 

7.1.2.2. The use of the logo of the PROVIDER, by the CONTRACTING PARTY, in disagreement with the purpose and conditions provided for in Clauses 7.1.1. and 7.1.2. above, the CONTRACTING PARTY, regardless of any notification, will be subject to the payment to the PROVIDER of a non-compensatory fine in the amount of [*****] per day, until the infraction is corrected, without prejudice to the indemnity due for the damages and losses caused to the PROVIDER.

 

7.1.2.3. The authorization to use the logo referred to in this Clause may be terminated at any time, unilaterally and at the discretion of the PROVIDER, even for its mere convenience;

 

7.1.2.4. The authorization now granted is in connection with this Agreement, so that, without prejudice to the provisions of item 7.1.2.2 above, it will be automatically terminated, in any event of termination of this Agreement.

 

7.1.2.5. In any case of termination of the authorization now granted, the CONTRACTING PARTY must remove on the same date the logo of the PROVIDER from its electronic address, under penalty of paying a non-compensatory fine in the amount of [*****] per day of delay in the fulfillment of this obligation, without prejudice to the adoption of the appropriate legal measures by the PROVIDER, in order to ensure the interruption of the use of its logo by the CONTRACTING PARTY and to be compensated for any damages caused.

 

7.1.2.6 This authorization does not empower the CONTRACTING PARTY to assume or create any obligation, express or implied, on behalf of the PROVIDER, nor to represent it as an agent, employee, representative or in any other function; as well as, under no circumstances, creates a partnership or commercial representation relationship between the Parties, each being entirely responsible for its acts and obligations.

 

Page 5 of 13

 

 

7.2. The CONTRACTING PARTY recognizes that the PROVIDER is the sole and exclusive owner of the logo and the intangible benefits associated with it and agrees that it will not, either during or after the term of this contract, compete or dispute the title or rights of the PROVIDER.

 

7.3 Each Party shall be solely and exclusively responsible, at no cost or liability to the other Party, for obtaining the licenses relating to the intellectual and / or industrial property of third parties used for the performance of its respective obligations and rights in this Agreement.

 

CLAUSE EIGHT - PRICE AND PAYMENT METHOD

 

8.1. For the provision of the service now contracted, the CONTRACTING PARTY shall pay to the PROVIDER, for each SMS Message delivered to its Subscribers, the amounts described in Annex B of this Agreement.

 

8.2 All prices of the Service described in Annex B of the Agreement will be adjusted every 12 (twelve) months or less, provided that there is no legal impediment, counting from the date of signing this Agreement, limited to the variation of the General Price Index - Internal Availability (IGPDI) of Fundação Getúlio Vargas or another reference index that will replace it.

 

8.3 Payment of the Service price must be made to the PROVIDER by the due date indicated in the respective Debit receipt / Invoices (DR / I), which will be issued and sent to the CONTRACTING PARTY up to 10 (ten) days before this date, together with a report containing the number of SMS messages sent to Users.

 

8.4 Any objections to the figures presented in the DR /I must be communicated and justified by the CONTRACTING PARTY, in writing, or through an electronic system made available to the CONTRACTING PARTY by the PROVIDER, within 2 (two) business days before the respective due date.

 

8.4.1 In the event of any dispute, the CONTRACTING PARTY will pay the undisputed amount of the DR / I presented by the PROVIDER, deducting the amount related to the dispute.

 

8.4.1.1. The PROVIDER will have a maximum period of 60 (sixty) days, counted from the presentation of the objection, to carry out the necessary investigations and communicate to the CONTRACTING PARTY the result with the due justifications. If the PROVIDER does not respond within this period, the objection presented by the CONTRACTING PARTY will be considered valid.

 

8.4.1.2. In case the objection is considered unfounded by the PROVIDER, the CONTRACTING PARTY will pay in the following DR /I the amount equivalent to the disputed amount, plus a fine of [*****], [*****] default interest per month and monetary correction by the IGP-DI of the Getúlio Vargas Foundation, or by another index that may replace it.

 

8.4.1.3. For all disputes considered valid, the value of which has not been previously deducted by the CONTRACTING PARTY in the payment of the DR / I, the latter will be given, when the next DR / I is issued, a credit equivalent to the amount disputed, plus a fine of [*****], [*****] default interest per month and monetary correction by the IGP-DI of the Getúlio Vargas Foundation, or by another index that may replace it.

 

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8.5 If the CONTRACTING PARTY, every 6 (six) months, presents more than 2 (two) disputes considered unfounded, the PROVIDER may charge the CONTRACTING PARTY the percentage corresponding to [*****] on the amount of the dispute presented, as reimbursement for cost determination.

 

8.6 Failure to pay the DR / I, on the date of their respective maturities, will subject the CONTRACTING PARTY, regardless of notice, to the following penalties:

 

8.6.1 Application of a [*****] late payment penalty on the amount of the DR / I in arrears, due only once, the day after the due date, without prejudice to the full amount of the DR / I.

 

8.6.2 Payment of default interest on the overdue amount, of [*****] per month, pro rata die, due from the day after the due date until the date of the effective settlement of the debt.

 

8.6.3 Monetary update of the overdue amount calculated by the variation of the General Price Index - Internal Availability (IGPDI), or any other official index that will replace it, due from the day after the maturity until the date of the effective settlement of the debt.

 

8.6.4 Suspension of the provision of the service object of the default after 30 (thirty) days of maturity, without prejudice to the contractual charges. The service will be reestablished upon the payment of the full amount of the debt, plus the respective penalties established in the previous items.

 

8.6.4.1 The CONTRACTING PARTY shall notify the PROVIDER of the suspension of the service referred to in item 8.6.4 above at least 15 (fifteen) days in advance of the date of the effective suspension.

 

8.7. The CONTRACTING PARTY will calculate and store monthly, concurrently with the PROVIDER, the amount of SMS messages transmitted to the Users through the SYSTEM, for checking the amounts informed by the PROVIDER in the report provided for in item 8.3 above.

 

8.8. The prices set forth in Annex B are gross, and all applicable taxes are already included in them.

 

8.8.1. In the event of a change in the legislation in force, including the creation of new levies, or changes in the rules of incidence (be it the change in the calculation basis or rates), which imply changes in the tax charges of the services now contracted, respective prices will be automatically increased to reflect the said change in legislation. The payments made by the CONTRACTING PARTY to the PROVIDER will be made without any retention, except those required by law, under the responsibility of the CONTRACTING PARTY.

 

CLAUSE NINE - VALIDITY

 

9.1 This Agreement will enter into force on the date of its signature and will remain in effect until 12/31/2020, being automatically renewed, for consecutive 12-months periods, unless otherwise notified by any of the Parties, in writing, up to 30 (thirty) days before the end of the respective contractual term.

 

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9.2 This Agreement may be terminated at any time by the parties, if:

 

9.2.1 Termination by the CONTRACTING PARTY, the CONTRACTING PARTY must notify the PROVIDER, in writing, at least 60 (sixty) days in advance, including the application of the provisions of item 10.3 below.

 

9.2.2 Termination by the PROVIDER, the latter must notify the CONTRACTING PARTY with at least 60 (sixty) days in advance.

 

CLAUSE TEN - TERMINATION

 

10.1 This Agreement may be terminated in its entirety by written notification to the other Party in the following cases:

 

10.1.1 By mutual dissolution, resulting from an agreement between the Parties, or by the imposition of legal or regulatory provisions.

 

10.1.2 Declaration of bankruptcy or liquidation by either Party.

 

10.1.3 CONTRACTING PARTY's default for a period of more than 60 (sixty) days, counting from the due date of the DR / I regarding the outstanding amount, except for amounts that are in invoice dispute.

 

10.1.4 Determination of suspension or interruption, by the competent authorities, of the provision of the service now contracted;

 

10.1.5 Fortuitous event or force majeure, which have been properly proven, which prevents the performance of the Agreement. When only partial execution of the contract is possible, the PROVIDER may decide between partial compliance and termination of the Agreement.

 

10.1.6 Loss or extinction by the PROVIDER of the Authorization granted by the Granting Authority for the provision of the PMS, pursuant to the current regulations.

 

10.1.7 the CONTRACTING PARTY performs acts in the use of the service object of this Agreement that, at the sole discretion of the PROVIDER, imply damage to the PROVIDER's reputation.

 

10.1.8 In the event the CONTRACTING PARTY fails to comply with the conditions set out in Annex A of this Agreement for 3 (three) consecutive days, counted from the date of the first non-compliance event.

 

10.2. This Agreement may also be terminated by either Party for contractual default of the obligations herein contracted, attributable to the other Party, which is not remedied within 60 (sixty) days from the receipt of the notification of the respective contractual default, except as provided in item 10.1.8 above.

 

10.3 The termination of the Agreement by the CONTRACTING PARTY or if it gives rise, by default, to the termination of the Agreement before the end of the contracted term, it will subject to the payment of a compensatory fine, as follows:

 

[*****]

 

10.4. The termination of this Agreement will not exempt the CONTRACTING PARTY from the payment of the amounts due to the PROVIDER for the services actually provided until the date of termination.

 

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10.5. In case the agreement is terminated for any reason, the PROVIDER will submit to the CONTRACTING PARTY, a complete report of the services performed from the date of the last cut prior to the termination date, up to the date of the effective termination.

 

CLAUSE ELEVEN- SUB-CONTRACTING, ASSIGNMENT OR TRANSFER OF CONTRACT

 

11.1. Neither Party may assign and, in any way, transfer, in whole or in part, this Agreement, or any rights arising therefrom, without the written consent of the other Party, except in cases of transfer resulting from corporate restructuring and other forms of merger, spinoff or incorporation of the Parties.

 

11.2. The eventual assignment or partial or total transfer of this Agreement or any rights and obligations arising therefrom, shall not exempt the assigning Party from any of its responsibilities or obligations arising from this Agreement.

 

CLAUSE TWELVE- CONFIDENTIALITY

 

12.1. Because of the access they had and will have to the other Party's Confidential Information, the Parties mutually undertake to:

 

a) Not allow access to Confidential Information of the other Party to third parties other than their managers, employees, representatives, agents or consultants, and to such other parties only to the extent necessary to enable the object, purpose of this Agreement;

 

b) Do not use any of the Confidential Information, except for the purposes set out in this Agreement and / or other agreements entered into between the Parties; maintain the highest possible confidentiality in relation to the Confidential Information received, also strictly ensuring, that there is no circulation of copies, emails, faxes or other forms of private or public communication of the Confidential Information, in addition to what is strictly necessary for compliance with this Agreement.

 

12.2. The Parties acknowledge that the following events, provided for in the clause 12.1, do not constitute an infringement of this Agreement if:

 

a) Information becomes available to the general public by means not resulting from its disclosure by the Parties or their respective shareholders/members, controlled companies, controlling companies of their respective shareholders/members, representatives, employees or consultants;

 

b) Disclosure is required by a governmental authority, under penalty of non-performance or any other penalty. In such cases, the material to be disclosed shall be subject to all applicable governmental or judicial protection, and the Party which is obliged to disclose such information shall notify the other Party prior to its disclosure;

 

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c) Disclosure is previously approved in writing by the other Party.

 

12.3 The Parties shall instruct all those to whom they provide access to the Confidential Information of the other Party on the obligation of confidentiality and non-disclosure assumed herein.

 

12.4. The Parties will continue to be obliged to maintain the strictest confidentiality in relation to Confidential or privileged Information, obtained by virtue of the execution of this Agreement, for a period of 3 (three) years as from its termination and any eventual extensions.

 

12.5. The violation of the duties established in this item or the non-compliance with the confidentiality duties established in this Agreement, will subject the offending Party to reimburse the Party harmed for all losses incurred by such violation. This obligation of indemnity shall be limited exclusively to the direct damages duly proven that such harmed Party may suffer due to non-compliance with the confidentiality duties agreed herein.

 

CLAUSE THIRTEEN - COMMUNICATION BETWEEN THE PARTIES

 

13.1. All notifications, reports and other communications related to this Agreement must be made in writing and sent in person, or sent through postal services, in attention to those responsible for the Agreement, with proof of receipt, being considered received on the date of delivery to the recipient.

 

13.2. In order to expedite the above communication, the Parties will accept documents sent by email, from the date of receipt of the email, to calculate the timeframe established in this Agreement. However, each of the Parties must subsequently send the original signed documents within 5 (five) working days of their initial submission.

 

13.3 The Parties hereby indicate the persons responsible for the Agreement and their respective addresses for notifications and delivery of correspondence, which shall be the liaison between the Parties:

 

For the CONTRACTING PARTY: [*****]

 

Address: [Avenida Paulista 2.300 18° andar, CEP: 01310-300 - São Paulo / SP]

 

For the OPERATOR: [*****]

 

Address: [Rua Arquiteto Olavo Redig de Campos, nº 105 - Cond. EZ Towers - Tower A - 18° andar. - Vila São Francisco (South Zone) - CEP: 04.711-904]

 

13.3.1. Contract Managers may, at their discretion, delegate some of their responsibilities to other agents. This delegation must be notified, in writing, at least 3 (three) working days in advance, to the person responsible for the Agreement of the other Party.

 

13.3.2. Each Party, through its legal representatives, may, upon written notice to the other Party, designate new addresses and new persons responsible for the Agreement to replace those designated in item 13.3 above.

 

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CLAUSE FOURTEEN - GENERAL CONDITIONS

 

14.1. Any and all changes to this Agreement must be made in writing, by means of the respective Addendum duly signed between the Parties, which will become an integral part of this Agreement.

 

14.2. Neither Party will be liable for indirect losses and damages, lost profits or commercial failures of the other Party, nor will it indemnify losses claimed by its customers, subscribers or users, as a result of failures in its operation, provided that it did not occur with the intention of harm the other Party.

 

14.3. The invalidity or ineffectiveness of any of the provisions of this Agreement will not imply the invalidity or ineffectiveness of the others. Whenever possible, the provisions considered invalid or ineffective should be rewritten, by means of an Addendum, in order to reflect the real and original intention of the Parties, in accordance with the applicable legislation.

 

14.4. The terms and conditions of this Agreement oblige the contracting parties and their respective successors in any capacity.

 

14.5. This Agreement is not exclusive.

 

14.6. The failure or tolerance of the Parties in claiming faithful compliance with the terms and conditions of this Agreement and its amendments or in the exercise of the prerogatives arising therefrom, shall not constitute novation or waiver, nor shall it affect the right of the Party to exercise them at any time.

 

14.7. This Agreement does not create any corporate, associative, representation, agency, consortium or similar link between the Parties, each bearing its respective obligations under the terms of the legal system in force.

 

14.8. None of the terms of this Agreement shall be construed as a means of forming a company, a "joint venture", a partnership or commercial representation relationship between the Parties, nor an employment relationship between the employees, agents, contractors and / or subcontractors of the CONTRACTING PARTY and the PROVIDER, each being solely, fully and exclusively responsible for its acts and obligations.

 

14.9 The Parties will not be liable for noncompliance with any obligations assumed in this Agreement in the event of Force Majeure or by Act of God that falls under article 393 of the Brazilian Civil Code. The allegation of unforeseeable circumstances or force majeure will only be admitted if informed and duly justified and proven to the other Party within a maximum of 72 (seventy-two) hours after the occurrence of the act or fact.

 

14.10 The signing parties below declare under the penalties of civil and criminal law that they have all the necessary authorizations to represent the contracting Parties and sign this Agreement on their behalf.

 

14.11 The provisions and obligations set out in this Agreement include specific execution under the Civil Procedure Code.

 

14.12 When processing personal data, the Parties are obliged to fully comply with the legislation in force on data protection, above all, but not exclusively, Law 13.709 / 2018 and the European General Data Protection Regulation (EU GDPR), this when applicable, each responding, to the extent of their guilt, for possible penalties and convictions.

 

Page 11 of 13

 

 

CLAUSE FIFTEEN- ANTI-CORRUPTION DECLARATIONS AND GUARANTEES

 

15.1 Each Party hereby declares that it is aware of, knows and understands the terms of Brazilian anti-corruption laws or any other applicable provisions on the subject matter of this Agreement, in particular the Foreign Corrupt Practices Act, - Act, 15 USC §§ 78dd-1 et seq. - ("FCPA") of the United States of America ("Anti-Corruption Laws"), and undertakes to refrain from any activity that violates the provisions of these Anti-Corruption Laws.

 

15.2 Each Party, for itself and its directors, officers, employees and agents, as well as the partners who act on its behalf, undertakes to conduct its business practices, during the performance of this Agreement, in an ethical manner and in accordance with the applicable legal precepts. In the performance of this Agreement, neither Party, nor any of its directors, employees, agents or partners acting on its behalf, shall give, offer, pay, promise to pay, or authorize payment of, directly or indirectly, any money or any object of value, to any governmental authority, consultants, representatives, partners, or any third party, for the purpose of influencing an act or decision of the agent or government, or to assure any undue advantage, or direct business to, any person, thus violating the Anti-Corruption Laws ("Prohibited Payment"). A Prohibited payment does not cover the payment of reasonable and bona fide expenses, such as, for example, travel and accommodation expenses, which are directly related to the promotion, explanation, demonstration of products or services, or execution of a contract with a government or its agencies, provided payment is permitted by applicable law.

 

15.3 Each Party that, at present, does not have a Code of Ethics and Conduct of its own, hereby declares for itself and for its directors, officers, employees, agents, owners and any partners acting on its behalf or engaged in the day-to-day of its operations, that it is fully aware of and agrees with the terms of the Oi Code of Ethics, which becomes an integral part of this Agreement and will not be involved in any act or omission in the fulfillment of the responsibilities established in the Oi Code of Ethics.

 

15.4 In the case of third parties hired by OI or any of its affiliates, the Third Party Code of Conduct, available at http://ri.oi.com.br/conteudo_en.asp?idioma=0&conta=28&tipo=43314 , shall become an integral part of this Agreement.

 

15.5 For the purposes of this Clause, each Party hereby declares that:

 

(a) it does not violate, has not violated, and will not violate any of the Anti-Corruption Laws;

 

(b) has already implemented or is under the obligation to implement during the term of this Agreement, a program of compliance and training reasonably effective in preventing and detecting violations of the Anti-Corruption Laws and the requirements established in this Clause;

 

(c) is aware that any activity that violates the Anti-Corruption Laws is prohibited and understands the possible consequences of such violation.

 

15.6 Any proven noncompliance with the Anti-Corruption Laws by the infringing Party, in any of its aspects, may give rise to immediate termination of this Agreement, regardless of notification, subject to the penalties provided in this Agreement.

 

Page 12 of 13

 

 

CLAUSE SIXTEEN- JURISDICTION

 

16.1 The Parties elect, by mutual agreement, the District Court of the City of Rio de Janeiro, as competent to settle any doubts arising from this Agreement, with express waiver of any other, present or future, however privileged it may be.

 

IN WITNESS WHEREOF the Parties sign this instrument in two (2) counterparts of equal content and form, for a single legal effect, in the presence of the two (2) undersigned witnesses.

 

São Paulo, November 14, 2019.

 

By Oi Móvel SA undergoing judicial recovery

 

/s/ Fernando de Sá e Silva   /s/ Ideval Munhoz
Name: Fernando de Sá e Silva   Name: Ideval Munhoz
Position: Pre-sale   Position: Corporate Executive Director

 

By the CONTRACTING PARTY

 

/s/ Fábio Matias de Souza   /s/ Renato Friedrich
Name: Fábio Matias de Souza   Name: Renato Friedrich
Position: VP of Sales   Position: CFO

 

WITNESSES:

 

1.  /s/ Michele Acco Barp  

Name: Michele Acco Barp

 

Page 13 of 13

 

 

Exhibit 10.04

 

CERTAIN INFORMATION IN THIS EXHIBIT, MARKED BY [****], HAS BEEN EXCLUDED. SUCH EXCLUDED INFORMATION IS NOT MATERIAL AND IS THE TYPE THAT THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL.

 

 

AMENDMENT No.01/2020 TO THE SERVICE AGREEMENT OF SMS MESSAGING SERVICES AND TECHNICAL MANAGEMENT BETWEEN OI MÓVEL SA and CONTRACTING PARTY

 

ZENVIA MOBILE SERVIÇOS DIGITAIS SA, headquartered in Porto Alegre / RS, at Avenida Dr. Nilo Peçanha, No 2.900, 14th floor, bairro Chácara das Pedras, CEP: 91.330-001, registered under the CNPJ (National Taxpayer Identification Number) No 14.096.190/0001-05, hereby represented as provided for in its articles of incorporation, hereinafter referred to simply as CONTRACTING PARTY; and

 

OI MÓVEL S.A., under judicial recovery, a company that provides personal mobile service, headquartered in the Setor Comercial Norte, quadra 03, bloco A, Ed. Estação Telefônica, Térreo - Parte 2, Brasilia, registered under the CNPJ number 05.423.963/0001-11, hereby represented in the form of its Bylaws, by its legal representatives, hereinafter referred to simply as "PROVIDER or CONTRACTOR”.

 

When referred to together, hereinafter referred to as “Parties” and, separately, “Party”;

 

CONSIDERING THAT:

 

(i) The Parties have signed, among themselves, the Contract for the Provision of Services for Sending SMS Messages and the Technical Management Service Contract, dated of 11/14/2019 (“Contract”), which allows, as regulated by ANATEL - Agência Nacional de Telecomunicações (National Telecommunications Agency), thesending and receiving short text messages according to the Short Message Service standard ("SMS Messages");

and

 

(ii) The Parties wish to apply the new commercial conditions of the Agreement.

 

ANNEX - (RATES FOR THE USE OF THE OI TORPEDO CORPORATE SEGMENT SERVICE)

 

1.1 THE AMOUNT CHARGED FOR THE PROVISION OF THE SERVICE TO WHICH THIS AGREEMENT IS INTENDED IS THE FOLLOWING (amounts valid until 07/31/2020):

 

SMS Price List – Oi Torpedo

 

Deductible

Monthly

Cost per SMS SMS
subscription 		Cost per
additional SMS
[*****] [*****] [*****] [*****]
[*****] [*****] [*****] [*****]
[*****] [*****] [*****] [*****]
[*****] [*****] [*****] [*****]
[*****] [*****] [*****] [*****]
[*****] [*****] [*****] [*****]
[*****] [*****] [*****] [*****]
[*****] [*****] [*****] [*****]
[*****] [*****] [*****] [*****]
[*****] [*****] [*****] [*****]
[*****] [*****] [*****] [*****]
[*****] [*****] [*****] [*****]
[*****] [*****] [*****] [*****]
[*****] [*****] [*****] [*****]
[*****] [*****] [*****] [*****]
[*****] [*****] [*****] [*****]
[*****] [*****] [*****] [*****]
[*****] [*****] [*****] [*****]
[*****] [*****] [*****] [*****]

 

 

 

 

1.1.2 THE AMOUNT CHARGED FOR THE PROVISION OF THE SERVICE OBJECT OF THIS AGREEMENT IS THE FOLLOWING (values valid from 08/01/2020 to 12/31/2020):

 

SMS Price List - Oi Torpedo
Monthly
Allowance 		Cost per SMS SMS
subscription

Cost per
additional SMS

[*****] [*****] [*****] [*****]
[*****] [*****] [*****] [*****]
[*****] [*****] [*****] [*****]
[*****] [*****] [*****] [*****]
[*****] [*****] [*****] [*****]
[*****] [*****] [*****] [*****]
[*****] [*****] [*****] [*****]
[*****] [*****] [*****] [*****]
[*****] [*****] [*****] [*****]
[*****] [*****] [*****] [*****]
[*****] [*****] [*****] [*****]
[*****] [*****] [*****] [*****]
[*****] [*****] [*****] [*****]

 

SECOND CLAUSE – GENERAL PROVISIONS

 

2.1 The Contract, in all its Clauses, items and sub-items, and Attachments, which have not been object of express alteration by this instrument, remains unchanged and in full force, being ratified in this act for all legal purposes.

 

IN WITNESS WHEREOF the Parties sign this instrument in two (2) counterparts of equal content and form, for a single effect, in the presence of the two (2) undersigned witnesses.

 

São Paulo, January 7, 2020.

 

By Oi Móvel S.A. undergoing judicial recovery    
     
/s/ Michele Fernandes Borges   /s/ Daniel de Souza  
Name: Michele Fernandes Borges   Name: Daniel de Souza  
     
By CONTRACTING PARTY    
     
/s/ Renato Ferri Soares Pinto   /s/ Fabio Matias de Souza
Name: Renato Ferri Soares Pinto   Name: Fabio Matias de Souza

 

 

 

 

WITNESSES:

 

1.  /s/ Tercio Hartmann Konig  

Name: Tercio Hartmann Konig

 

 

 

 

Exhibit 10.05

 

CERTAIN INFORMATION IN THIS EXHIBIT, MARKED BY [****], HAS BEEN EXCLUDED. SUCH EXCLUDED INFORMATION IS NOT MATERIAL AND IS THE TYPE THAT THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL.

 

STANDARD FORM AGREEMENT 001/2020

 

 

 

STANDARD FORM AGREEMENT

TECHNICAL SERVICE MANAGEMENT

 

CONTRACTED PARTY:

 

x  OI MÓVEL SA, under judicial recovery, CNPJ / MF No 05.423.963 / 0001-11 (“CONTRACTED PARTY”)

 

The Contracting Party, described below, through its undersigned legal representative(s), hereby declares, for due legal purposes, to have full knowledge that the present is the legal instrument by which it adheres to the terms of the General Contracting Conditions of the TECHNICAL MANAGEMENT management service, called CONTRACT, thus ensuring that it is fully aware and fully responsible for compliance with all the terms and obligations of said CONTRACT.

 

Contracting Party Information

 

Company name ZENVIA MOBILE SERVIÇOS DIGITAIS SA
CNPJ 14.096.190/0001-05
Email address
for collection 		Avenida Nilo Peçanha, Chácara das Pedras

 

Number

 

2900

Complement 14o  andar CEP 91.330-001 City Porto Alegre State RS

 

Monthly Services (Values with taxes up to 07/31/2020):

 

Oi Torpedo Management Price List
Monthly SMS Allowance Cost per SMS Management Subscription Cost per additional SMS
[*****]     [*****] [*****] [*****]
[*****]     [*****] [*****] [*****]
[*****]     [*****] [*****] [*****]
[*****]     [*****] [*****] [*****]
[*****]     [*****] [*****] [*****]
[*****]     [*****] [*****] [*****]
[*****]     [*****] [*****] [*****]
[*****]     [*****] [*****] [*****]
[*****]     [*****] [*****] [*****]
[*****]     [*****] [*****] [*****]
[*****]     [*****] [*****] [*****]
[*****]     [*****] [*****] [*****]
[*****]     [*****] [*****] [*****]
[*****]     [*****] [*****] [*****]
[*****]     [*****] [*****] [*****]
[*****]     [*****] [*****] [*****]
[*****]     [*****] [*****] [*****]
[*****]     [*****] [*****] [*****]
[*****]     [*****] [*****] [*****]

 

 

 

 

Monthly Services (Values with taxes from 08/01/2020 to 31/12/2020):

 

    Oi Torpedo Management Price List    
    Monthly SMS Allowance   Management
Subscription 		     
      Cost per SMS   Cost per additional
SMS 		   
    [*****]   [*****]   [*****] [*****]    
    [*****]   [*****]   [*****] [*****]    
    [*****]   [*****]   [*****] [*****]    
    [*****]   [*****]   [*****] [*****]    
    [*****]   [*****]   [*****] [*****]    
    [*****]   [*****]   [*****] [*****]    
    [*****]   [*****]   [*****] [*****]    
    [*****]   [*****]   [*****] [*****]    
    [*****]   [*****]   [*****] [*****]    
    [*****]   [*****]   [*****] [*****]    
    [*****]   [*****]   [*****] [*****]    
    [*****]   [*****]   [*****] [*****]    
    [*****]   [*****]   [*****] [*****]    

 

1. Price

 

1.1. The amounts reported in this Standard Form Agreement are gross, with taxes included and can be altered and readjusted according to the current legislation.

1.2. The CONTRACTING PARTY, hereby, expressly authorizes that the amounts charged for taxes, which are improperly paid to the States or Municipalities, are recovered by the CONTRACTED PARTY, before the competent States and Municipalities, and that the CONTRACTED PARTY must inform the CONTRACTING PARTY of any measure it takes in this regard, notably those that affect, in any way, the scope of rights of the CONTRACTING PARTY.

1.3. The respective prices will be automatically adjusted, annually, from the date of signature of this Agreement, [*****], or another that may be applicable specifically to the Telecommunications Sector.

1.4. The PARTIES agree that the termination of this instrument at the initiative of the CONTRACTING PARTY, or if it gives rise, by default, to the termination of the contract, before the end of the contracted term, it will be subject to the payment of a compensatory fine, as shown below.

 

[*****]

 

2. TERM: 12/31/2020

 

 

 

 

3. General Conditions

 

3.1 Activation is subject to availability and technical feasibility.

 

3.2 The payment of the first uncontested invoice characterizes adhesion to the service.

 

3.3 The CONTRACTING PARTY declares that the information contained above is true and correct, undertaking to report any changes.

 

3.4 Changes to the number of accesses and optional services may change the               agreed value.  

 

Contract Issue Date: 01/07/2020    
     
By the CONTRACTING PARTY    
    /s/ Fabio Matias de Souza
/s/ Renato Ferri Soares Pinto  
    Name: Fabio Matias de Souza
Name: Renato Ferri Soares Pinto  
     
By the CONTRACTED PARTY:    
     
/s/ Michele Fernandes Borges   /s/ Daniel de Souza
Name: Michele Fernandes Borges   Name: Daniel de Souza
     
WITNESSES    
     
/s/ Tercio Hartmann Konig    
Name: Tercio Hartmann Konig    

 

 

 

 

Exhibit 10.06

 

CERTAIN INFORMATION IN THIS EXHIBIT, MARKED BY [****], HAS BEEN EXCLUDED. SUCH EXCLUDED
INFORMATION IS NOT MATERIAL AND IS THE TYPE THAT THE REGISTRANT TREATS AS PRIVATE OR
CONFIDENTIAL.

 

TORPEDO ENTERPRISES AGREEMENT

 

The PARTIES in this private agreement are:

 

TELEFONICA BRASIL S / A, registered under CNPJ / MF number 02.558.157 / 0001-62, headquartered at Av. Engineer Luiz Carlos Berrini, 1376, Cidade Monções, São Paulo - SP, for its branches, hereinafter simply called “VIVO”.

 

And ZENVIA MOBILE SERVIÇOS DIGITAIS S.A., registered under CNPJ / MF number14.096.190 / 0001-05, headquartered at Av. Carlos Gomes, 300, 7º andar Boa Vista, Porto Alegre / RS, hereinafter referred to simply as “INTEGRATOR” or “COMPANY”, represented by its legal representatives who signed it. “VIVO” and “COMPANY” hereinafter are referred to as “PARTIES”;

 

They have agreed to execute, as they do, this Agreement, in accordance with the following clauses and conditions:

 

1. APPLICABLE ANNEXES AND DOCUMENTS

 

1.1. The documents described below are an integral part of this Agreement, and their terms and conditions are valid for all legal purposes, unless they contradict the provisions of this instrument, in which case the terms of this Agreement shall prevail:

 

1.1.1. Attached Documents:

 

● Annex I - Commercial Model

 

● Annex I A - Exceptions to the Business Model

 

● Annex II - Description of the Opt-in / out Process and Database

 

● Annex III - Service Integration Manual

 

● Annex IV - Anti-Corruption Certificate for Telefônica Suppliers and Business Partners

 

2. DEFINITIONS AND TERMINOLOGIES

 

2.1. ADVERTISER: legal entity that will contract the services that the COMPANY will make available, as provided in this Agreement. COVERAGE AREA: geographical area where a MOBILE DEVICE can be serviced by the radio equipment of a PMS Base Station;

 

2.2. FORMAL AUTHORIZATION (OPT-IN): confidential authentication process by which the CLIENTS' formal authorization to send TEXT MESSAGES, especially SMS MARKETING, is obtained;

 

2.3. COMPANY CLIENTS DATABASE: company database in which to store FORMAL AUTHORIZATIONS (OPT-IN) for sending TEXT MESSAGES, as well as its FORMAL CANCELLATIONS (OPT-OUT), according to Annex II;

 

2.4. VIVO CLIENTS DATABASE: VIVO's proprietary database, of a confidential nature, containing the data (MSISDNs only) of its Clients

 

 

 

 

2.5. FORMAL CANCELLATION (OPT-OUT): confidential process by which the client requests the cancellation and / or non-sending of TEXT MESSAGES from the ADVERTISERS and / or VIVO;

 

2.6. CHARACTERS: any data, numeric digit, letter of the alphabet or special symbol;

 

2.7. SMS SENDER NAME (ALPHA TAG): Send notifications with an Alpha tag, that is, “sender's name” instead of sending the message from an anonymous number.

 

2.8. GATEWAYS GSM: are devices that allow direct routing between digital and analog IP networks to GSM mobile phone networks. Through this connection it is possible to send illegal bulk SMS to clients without any release / agreement with the operator;

 

2.9. CLIENT: individuals or companies with MOBILE DEVICES capable of receiving and / or sending TEXT MESSAGES, that have provided FORMAL AUTHORIZATIONS (OPT-IN) to VIVO and the ADVERTISER;

 

2.10. INTERNATIONAL CONNECTION: this is the direct routing between international IP networks with national IP networks allowing the massive sending of SMS originating from other countries and terminating in the SMS Clients of the local operator;

 

2.11. MOBILE DEVICE: means a product used to establish a wireless connection between a Client and an operator, including cell phones, "palm tops" with a cell phone line and others compatible with the MEE system and capable of sending and receiving TEXT MESSAGES.

 

2.12. APPROVED COMPANY (COMPANY): is the company responsible for supplying and managing the TEXT MESSAGES to be delivered to the CLIENTS, using their own equipment and software, properly integrated into VIVO systems;

 

2.13. TECHNICAL MANAGEMENT: this is a value-added service that includes planning, management and technical and commercial support, such as, but not limited to the coordination of bases and LAs (short codes), platform configuration, configuration and release of TPS (transaction per second), follow-up of delivery attempts for TEXT MESSAGES, consolidation and sending of reports, etc.;

 

2.14. LARGE ACCOUNT (LA) or SHORT CODE: numbers made available by VIVO to the COMPANY for receiving and sending TEXT MESSAGES solely and exclusively for the execution of the object of this Agreement, Annexes and / or applicable documents;

 

2.15. MECHANISM FOR THE TECHNOLOGICAL INTEGRATION OF THE MESSAGE SERVICE: this is the mechanism for technical integration between the Parties.

 

2.16. TEXT MESSAGE or SMS (SHORT MESSAGE SERVICE): service modality provided by VIVO that allows the forwarding of TEXT MESSAGES to / by MOBILE DEVICE, sent from an application, platform or typed directly on the MOBILE DEVICE;

 

2.16.1. MO MESSAGE: refers to transmitted TEXT MESSAGES originating from the CLIENT'S MOBILE DEVICE

 

2.16.2. MT MESSAGE: refers to transmitted TEXT MESSAGES destined to the CLIENT'S MOBILE DEVICE (read or not by the client).

 

2.17. TEXT MESSAGE TRANSMITTED: TEXT MESSAGES transmitted on the Torpedo Enterprises platform,

 

2.17.1.1. TEXT MESSAGE EFFECTIVELY DELIVERED: TEXT MESSAGES effectively delivered / successfully completed on the CLIENT'S MOBILE DEVICE, which includes MO MESSAGES and MT MESSAGES effectively delivered.

 

2.17.1.2. TEXT MESSAGE NOT DELIVERED: TEXT MESSAGES not successfully delivered to the CLIENT'S MOBILE DEVICE for different reasons, not limited to: blocked cell, disconnected cell, stolen line, barred status line, etc.

 

 

 

 

2.18. AWARDS VIA SMS

 

2.18.1 Draws of any kind, free or not, approved under the terms and in accordance with the applicable legislation, in Brazil or abroad;

 

2.18.2 Cultural competitions of any kind, free or not, under the terms and in accordance with the applicable legislation, held in Brazil and or abroad;

 

2.18.3 Discounts of any kind, including, but not limited to, promotional values for messages, gratuity and / or special values for the service, linked or not to one of the aforementioned forms of promotional actions.

 

2.19. COMPANY FORMAL AUTHORIZATION PROCESS: process described in Annex II by which the COMPANY will obtain the FORMAL AUTHORIZATION (OPT-IN) for sending TEXT MESSAGES to CLIENTS, as well as their CANCELLATION (OPT-OUT).

 

2.20. VALUE ADDED SERVICE: refers to the products and / or services and / or content that add, to a telecommunications service that supports it and should not be confused with it, new utilities related to access, storage, presentation, movement or information retrieval, which are created by third parties to be marketed, provided, and / or distributed by VIVO to users of value-added services using data or voice transmission;

 

2.21. PERSONAL MOBILE SERVICE (PMS): terrestrial mobile telecommunications service of collective interest that enables communication between mobile stations and from mobile stations to other stations;

 

2.22. SITE: logical place available on the Internet, accessible through an electronic address;

 

2.23. SMPP (SHORT MESSAGE PEER TO PEER): open protocol, developed to provide an interface for flexible data communication, for the transfer of an SMS between an SMS Center (SMSC), GSM USSD (Unstructured Supplementary Services Data) or any other type of message center and SMS applications, such as a voice mail platform, email server, WAP proxy server or any other messaging gateway;

 

2.24. SMS LINK: regular SMS that has in its content a URL that allows access to a specific WEB address or internal VIVO services through the MOBILE DEVICE;

 

2.25. SMS MARKETING: use of TEXT MESSAGES services for the dissemination, invitations, incentives for purchase or commercial transaction of any product or service, such as, but not limited to: (i) the act of encouraging the purchase / use of a product / service of the company or ADVERTISERS that subcontract it; (ii) TEXT MESSAGES that have advertising, promotional or marketing connotations, or that show preference for any company or brand. They must be previously and expressly requested and authorized, in writing by the CLIENTS with FORMAL AUTHORIZATION (OPT IN); and (iv) TEXT MESSAGE that is not characterized as merely informative messages from a service provision contracted by the CLIENT, such as, but not limited to: (a) informational messages about medical consultations; (b) informational bank transaction messages (TORPEDO FINANÇAS) etc.

 

2.26. SPAM: the sending of messages to one or more clients without their FORMAL AUTHORIZATION (OPT IN);

 

2.27. LEVEL 1 SUPPORT: remote support (phone, email or web) aiming to solve the problems detected by VIVO or the solution through appropriate guidance to the CLIENT;

 

2.28. TORPEDO ENTERPRISES: telecommunications service (messaging) provided by VIVO, which allows the forwarding of TEXT or SMS MESSAGES (SHORT MESSAGE SERVICE) in a massive way and approved by VIVO to MOBILE DEVICES. They are sent from an application, platform, delivered to the MOBILE DEVICE of the client, not limited to: sending of informative SMSs, media and marketing destined to employees, suppliers, partners, clients, investors, service providers to ADVERTISERS, among others.

 

 

 

 

3. OBJECT

 

3.1. The purpose of this Agreement is:

 

3.1.1. The hiring of VIVO by the COMPANY to:

 

3.1.1.1. Provide technological and commercial solutions, through specific projects, using TEXT MESSAGES and for CLIENTS, always respecting the rules set forth in this Agreement, its Annexes and applicable documents;

 

3.1.1.2. Implement, under the terms and conditions now contracted, the company's projects, previously approved by VIVO;

 

3.1.1.3. Provide services for sending TEXT MESSAGES, under the terms and conditions contracted in this Agreement, respective Annexes and / or applicable documents.

 

3.1.2. The approval and granting, by VIVO, of the title of APPROVED COMPANY given to the COMPANY, granting it:

 

3.1.2.1. Use of the logo that identifies it as such;

 

3.1.2.2. Presence in VIVO's marketing materials;

 

3.1.2.3. The possibility of disclosing VIVO in its communication and advertising materials provided they are previously and expressly approved by VIVO.

 

3.1.2.4. The exchange of information between VIVO and the COMPANY for the delivery of TEXT MESSAGES will be carried out through technical integration detailed in Annex III.

 

3.1.3. The provision of services for sending TEXT MESSAGES, by VIVO to the COMPANY, so that it can provide technological and commercial solutions through specific projects that use TEXT MESSAGES, such as:

 

3.1.3.1. Informational messages or messages with internal procedures for employees, suppliers, investors, and service providers of the COMPANY or the ADVERTISER that subcontracts the COMPANY;

 

3.1.3.2. Informational messages or messages with internal procedures for direct Clients of the COMPANY or ADVERTISING Clients that subcontract the COMPANY, provided they have expressly given the FORMAL AUTHORIZATION (OPT IN);

 

3.1.3.3. Sending SMS MARKETING.

 

4. VALIDITY

 

4.1. This Agreement is valid from 4/1/2020 to 3/31/2022, and the Parties can extend it by signing an addendum.

 

5. DISCLAIMERS

 

5.1. The COMPANY declares, in this Agreement, to have full knowledge of the conditions of access, use and enjoyment of the TEXT MESSAGE service delivered to VIVO clients, as well as that TEXT MESSAGES can be delivered late, or even not be delivered, if the CLIENT'S MOBILE DEVICE is disconnected or out of VIVO's digital coverage area due to any and all blocking of the mobile service, because the user of prepaid service is “inactive”, or any other technical or operational impossibility.

 

 

 

 

5.1.1. VIVO cannot be held responsible for losses and damages resulting from activities that have not been carried out or activities that may be considered untimely or inadequately developed, due to the non-receipt of TEXT MESSAGES.

 

5.2. The COMPANY declares to be aware and agrees that, due to any of the events mentioned in clause 5.1 above, the delivery time of the TEXT MESSAGES may exceed a few minutes, except in the event of the impossibility, in some cases, of delivering the TEXT MESSAGE.

 

5.3. VIVO is not liable for claims, complaints, representations and legal actions of any kind or nature regarding the content and nature of the use of TEXT MESSAGES in applications or any services developed by the COMPANY.

 

5.3.1. It is the sole responsibility of the COMPANY, which now assumes, in this Agreement, in an irrevocable, irrefutable, unrestricted and unconditional manner, any responsibility arising from the contents transmitted and the nature of the TEXT MESSAGES by the COMPANY.

 

5.4. TEXT MESSAGES containing a maximum of 160 (one hundred and sixty) alphanumeric characters will be sent to the CLIENTS, including the header.

 

5.4.1. The COMPANY declares, in this act, to be aware that TEXT MESSAGES containing more than 160 (one hundred and sixty) characters may be discarded by VIVO, not being DELIVERED to CLIENTS.

 

5.5. TEXT MESSAGES sent to CLIENTS containing special characters may be delivered to CLIENTS in an unformatted way.

 

5.6. It is prohibited to use any MOBILE DEVICE as a means of sending multiple TEXT MESSAGES, regardless of the recipient (including, but not limited to CLIENTS, VIVO's clients, ADVERTISER's employees or any other group), under penalty of immediate termination of this Agreement and the sanctions provided for in clause 9.4. below.

 

5.6.1. To this end, the COMPANY must comply with all VIVO specifications and determinations, contained in Annex III (Service Integration Manual).

 

5.7. VIVO may change the delivery parameters of MT MESSAGES, such as, delay of processing which were originally immediate, volume of messages per second in seasonal periods, periods of silence of the system CLIENTS, but not limited to: MT MESSAGE expiration time. The changes described above will take place whenever VIVO assumes that the company's requirements may, in some way, reduce the performance of its infrastructure, as well as its platforms.

 

5.8. The COMPANY is strictly forbidden to forward a TEXT MESSAGE to VIVO clients, regardless of its content form or means, who have not given FORMAL AUTHORIZATION (OPT-IN) for that purpose or who have requested FORMAL CANCELLATION (OPT- OUT).

 

6. VIVO'S OBLIGATIONS

 

6.1. The following are VIVO's obligations, without prejudice to the other provisions of this Agreement:

 

6.1.1. Strictly comply with the terms described in this Agreement and its Annexes.

 

6.1.2. Do not make cuts or changes in the content of TEXT MESSAGES, unless caused by excessive characters or use of special characters.

 

6.1.3. Install firewalls and security devices in its connectivity network, in the technical standards mostly adopted by the market, in order to avoid undue access by any third party to the network or systems involved in the provision of the services covered by this Agreement.

 

 

 

 

6.1.3.1. Notwithstanding the provisions of the clause above, VIVO will not be responsible for the transmission or interception of TEXT MESSAGES that may have been modified and transmitted through the use of ADDED VALUE SERVICES, when they are traveling inside or outside VIVO's networks.

 

6.1.4. Provide, define or indicate to the COMPANY the MECHANICAL INTEGRATION MECHANISM OF THE MESSAGE SERVICES (Torpedo Enterprises), for identification and authentication of the COMPANY's access, as the case may be, to the VIVO TEXT MESSAGES sending / receiving platform.

 

6.1.5. Establish, designate and maintain, if applicable, LA's or Alphatags for interaction with CLIENTS, to which the latter will send their messages in order to interact with the COMPANY, in addition to providing logical access to this resource for integration between the systems of both Parties.

 

6.1.6. VIVO is not responsible for not receiving TEXT MESSAGES due to the occurrence of any fact or situation that prevents such activity, such as: (i) absence or degradation of coverage, permanent or temporary; (ii) equipment failure; (iii) power or transmission failure, or as a result of (iv) blockages of the mobile service, in the condition of inactive user of the Prepaid System, (v) suspension at the Client's request (not originating or receiving calls), (vi) recipient in an analog coverage area, (vii) recipient with a Mobile Device turned off or recipient outside VIVO's coverage area, (viii) recipient with an analog mobile station or any other technical impossibility.

 

6.1.7. VIVO cannot be held responsible for losses and damages resulting from activities not carried out or not performed due to the non-receipt of TEXT MESSAGES.

 

7. OBLIGATIONS OF THE COMPANY

 

7.1. The following are the COMPANY’S obligations, without prejudice to the other provisions of this Agreement:

 

7.1.1. Strictly comply with the terms described in this Agreement and its Annexes.

 

7.1.2. Be responsible for obtaining prior FORMAL AUTHORIZATION (OPT IN) from the ADVERTISERS 'CLIENTS to send and receive TEXT MESSAGES, the object of this Agreement. It must keep a copy of the referred FORMAL AUTHORIZATION (OPT IN) from the CLIENTS receiving the TEXT MESSAGES, as well as FORMAL CANCELLATIONS (OPT-OUT), fully exempting VIVO from any responsibilities, be it joint or subsidiary, regarding the lack of FORMAL AUTHORIZATION (OPT IN) or fraud of this nature.

 

7.1.2.1. THE FORMAL AUTHORIZATION (OPT-IN), in addition to the text itself containing the express authorization, must also contain, when possible, the following information: (i) full name of the person responsible; (ii) telephone number; (iii) specific purposes for which this information will be used, including the guarantee of such information not passed on to any third parties; and (iv) time period for using the register.

 

7.1.3. Not send TEXT MESSAGES to CLIENTS using the infrastructure or computer systems of operators competing with VIVO.

 

7.2. The COMPANY is strictly prohibited from:

 

7.2.1. Sending TEXT MESSAGES to CLIENTS who have not given FORMAL AUTHORIZATION (OPT-IN).

 

7.2.2. Sending TEXT MESSAGES to CLIENTS who have requested FORMAL CANCELLATION (OPT-OUT) of sending TEXT MESSAGES

 

 

 

 

7.2.3. Sending TEXT MESSAGES by any means other than an LA (or short code) or Alphatag.

 

7.2.4. Sending TEXT MESSAGES to CLIENTS, through any network other than the VIVO network, such as international signaling networks (INTERNATIONAL CONNECTION).

 

7.2.5. Sending TEXT MESSAGES through GATEWAYS, or perform any type of service related to this purpose.

 

7.2.6.

 

 

7.2.7. Sending messages using technologies that represent variations of SMS. The COMPANY can only send simple SMS, such as SMS Flash, SMARTMESSAGE and similar technologies.

 

7.3. Failure to comply with clause 7.2 will subject the COMPANY to the payment of a non-compensatory fine in the amount of [*****], per TEXT MESSAGE sent, regardless of the content, without prejudice to the losses and damages arising from it. It may also result, at Vivo's discretion, in the unilateral termination of this Agreement without prior notice.

 

7.4. VIVO may at any time carry out the analysis of the messages sent by the COMPANY in order to check if the COMPANY is correctly complying with the conditions established in this Agreement.

 

7.5. The COMPANY undertakes not to send TEXT MESSAGES to CLIENTS, ADVERTISERS or third parties that VIVO so formally indicates to the COMPANY.

 

7.6. The COMPANY is fully responsible for the content of the TEXT MESSAGES delivered to VIVO, typed and /or created by it or by third parties, including ADVERTISERS, responding for its content in court or out of it, for which it exempts VIVO, unconditionally, from any responsibility, whether solidary or subsidiary, for any and all claims, complaints, representations and lawsuits of any kind or nature, referring to the services whose supply is the responsibility of the COMPANY, including claims from CLIENTS or third parties, in the event of disclosure of their information that is of confidential nature.

 

7.7. Take full responsibility for the content of the TEXT MESSAGES sent to CLIENTS, guaranteeing VIVO that the texts or contents of the TEXT MESSAGES do not violate the intellectual property rights of third parties, regardless of the country, as well as trademarks, trade secrets or other third-party rights, including issues related to the development and application of computer systems used. It declares that the referred texts or contents do not constitute infringement of any legal device, keeping VIVO up to date and safe from any doubt or future challenge with respect to the provisions of the previous clause, excluding Vivo from any liability, whether of a joint or subsidiary nature. The COMPANY is responsible in court or out of it for any and all claims, complaints, representations and lawsuits of any kind or nature, referring to questions related to this clause.

 

7.8. Identify itself in VIVO's systems through the specific MECHANISM FOR THE TECHNOLOGICAL INTEGRATION OF THE MESSAGE SERVICE, subject to the provisions of this Agreement, its Annexes and applicable documents.

 

7.9. At the request of VIVO, inform the IP address to which the TEXT MESSAGES forwarded to and from CLIENTS should be sent.

 

7.9.1. Inform VIVO, at least 48 (forty-eight) hours in advance, about any type of scheduled service interruptions, including, but not limited to: updates, maintenance or changes.

 

 

 

 

7.9.2. Inform VIVO, at least 30 (thirty) business days in advance, of changes in topology or any element that implies the performance of any type of activities by VIVO.

 

7.10. Be responsible for the confidentiality and secrecy of the data and information related to the MECHANISM FOR THE TECHNOLOGICAL INTEGRATION OF THE MESSAGE SERVICE provided in accordance with the Annexes of this Agreement, exempting VIVO from any responsibility arising from any fraud that may occur due to the leak or unauthorized access to these data and information. The COMPANY is committed, from now on, to bear all the damages and costs that it has caused, inherent to the improper use of the MECHANISM FOR THE TECHNOLOGICAL INTEGRATION OF THE MESSAGE SERVICE until the date of opening of a call at VIVO so that this identification and authentication data can be modified, as appropriate.

 

7.11. As far as the COMPANY is concerned, take responsibility for fines and penalties imposed by the inspection of the Ministry of Labor and Social Security or other federal, state or municipal public bodies due to this Agreement or its execution.

 

7.12. Maintain, for the entire term of this Agreement, a complete file of all information and documentation regarding the services covered by this Agreement, including, but not limited to FORMAL AUTHORIZATIONS (OPT-IN) and FORMAL CANCELLATIONS (OPT-OUT), with due care, security and confidentiality, as well as providing reports when requested.

 

7.13. Return, upon the termination of this Agreement, all documents received from VIVO or that contain information obtained during the term of this Agreement.

 

7.14. Comply, in the execution of this Agreement, to the Federal, State and Municipal Laws, related to traffic, insurance, labor and social security obligations, accidents at work, occupational safety and health and other applicable laws (also providing personal protective equipment, when necessary). It assumes all responsibility, including all fiscal or para-fiscal obligations, arising therefrom, exempting VIVO from any charges and responsibilities.

 

7.15. Respect the confidentiality and secrecy of the data and information that VIVO conveys or facilitates for the fulfillment of this Agreement, as well as everything related to the project now contracted or its execution. It is prohibited, therefore, to provide or reproduce in any way any information to third parties, including VIVO suppliers, without VIVO's prior authorization.

 

7.16. Assume, on an exclusive basis, the conditions of employer, boss or entrepreneur, with regard to the people hired for the fulfillment of this Agreement by the COMPANY, guaranteeing VIVO the compensation for any damages caused by these people, as well as the payment of any and all indemnities arising from the liability attributed to it as a result of the execution of this Agreement. This includes cases where the COMPANY subcontracts or contracts outsourced labor for the execution of this Agreement, which may occur only with VIVO's prior and express authorization.

 

7.17. Immediately exclude VIVO from any and all judicial or administrative proceedings that are filed / instituted by an employee of the COMPANY, third parties or governmental agency due to this Agreement, its Annexes and applicable documents and / or its execution, exempting VIVO from any burden or responsibility.

 

7.18. Comply with and enforce the contractual responsibilities assumed by its employees, agents and contractors.

 

7.19. Bear all commute, travel, transportation, meals, lodging, daily expenses, insurance for its employees / agents, necessary for the performance of the services included in this Agreement.

 

 

 

 

7.20. Be responsible for the payment of all taxes that are levied or will be levied on the activities inherent to the execution of the contractual object. Therefore, VIVO does not have any obligation in relation to them.

 

7.20.1. The COMPANY will be responsible for any insufficient or undue tax collection and for any tax violations committed resulting from the execution of the contractual object.

 

7.21. Provide, as needed and requested by VIVO, all security and protection mechanisms, such as firewall, virtual private networks (VPN), data encryption through the use of certifying entities, public and private keys (PKI).

 

7.22. Be responsible for the content of services created by third parties that have a business relationship with the COMPANY, in order to provide TEXT MESSAGE SERVICES, always observing legal restrictions, especially the right of possession and ownership, ethics and applicable customs, as well as any commercial operations or other services contracted by the CLIENTS, responding in isolation, as long as proven guilty or willfulness, for all the damages it causes to VIVO or third parties, including reimbursing VIVO for the amount of indemnities demanded in court or outside it.

 

7.23. Be the owner or licensee of all copyrights of the TEXT MESSAGE SERVICES that are the object of this Agreement, observing all legal provisions and maintaining, in any event, VIVO always indemnified and exempt from any responsibility before it or any third parties, with respect to rights, licensing or copyright and intellectual property with reference to the TEXT MESSAGE SERVICES provided by the COMPANY.

 

7.24. Exempt VIVO from any liability to CLIENTS or third parties for improper access to TEXT MESSAGE SERVICES transmitted during the provision of services by third parties. Undue access is understood to be that performed by means other than those agreed by the Parties and contemplated in this Agreement, provided that it is carried out outside the operating environment of VIVO. The COMPANY is fully responsible for the disclosure regarding the steps that must be taken by employees, subcontractors or agents responsible for updating and sending the TEXT MESSAGE SERVICES to VIVO or for any illicit use of the network by the company's employees, subcontractors or agents.

 

7.25. Guarantee, under the penalties of the law and especially of the Consumer Protection Code, the availability of a support channel to the CLIENTS, to provide clarifications on the services provided by the COMPANY, insofar as contracts between the COMPANY and the ADVERTISERS are executed, disclosing this channel in a clear and visible way, in the various available media, and authorizing, from now on, VIVO to disseminate it as well.

 

7.25.1. This channel must be included in all the communication used in the dissemination of the services provided by the COMPANY, being the COMPANY responsible for making all the necessary updates.

 

7.26. Ensure the operation of the necessary infrastructure for the provision of TEXT MESSAGE SERVICES.

 

7.27. The COMPANY shall properly guide and inform VIVO and the CLIENTS, throughout the duration of this Agreement, about the necessary resources, features and the way to use the TEXT MESSAGE SERVICES.

 

7.28. The COMPANY will be fully responsible for any and all damages or losses caused to VIVO or third parties.

 

7.29. The COMPANY will be fully liable for any amounts charged to VIVO, to which it has given cause, by virtue of its subsidiary or solitary judicial or administrative sentence, arising, directly or indirectly, from the performance of the object of this Agreement, assuming any and all amounts pecuniary damages resulting from the conviction, as well as procedural costs, expenses, attorneys' fees, succumbence fees, etc.

 

 

 

 

7.30. The COMPANY is prohibited from using, referring to or citing the name or logo of VIVO in any advertising or publicity, for whatever purpose, without its prior and express consent.

 

7.31. The Parties agree that, for all purposes, the COMPANY will be considered the sole and exclusive employer of its employees and agents appointed for any activities that are part of the object of this Agreement, and the COMPANY should designate for the execution of this only personnel regularly employed, in perfect compliance with current labor legislation.

 

7.32. The COMPANY assumes full responsibility, whether present, past or future, for labor, social security and tax charges arising from the relationship maintained with its employees, exempting VIVO from any obligations, formally and promptly committing to reimburse VIVO, all and any expenses or costs that it has provenly disbursed under this heading.

 

7.33. The COMPANY will be solely and exclusively responsible for the full execution of this Agreement, before VIVO, and all parallel or subrogated contractual obligations between the COMPANY and its outsourced contractors / suppliers will be the COMPANY’s sole responsibility.

 

7.34. The COMPANY will not create or transmit any information to VIVO or to Clients that:

 

(i) Is false or lead to dubious interpretations;

 

(ii) Invade the privacy of third parties or harm them in any way;

 

(iii) Somehow promote racism against minority groups, or any form of political or religious fanaticism, discriminating against groups of people or ethnicities;

 

(iv) Is obscene;

 

(v) Violates the rights of third parties, including, but not limited to, intellectual property rights, and / or the creation and sending of unsolicited or unfounded TEXT MESSAGES (SPAM);

 

(vi) Is in any way prohibited or not recommended for a certain age group.

 

(vii) Is prohibited or violates any law or regulation.

 

7.35. The COMPANY undertakes to keep confidential any and all information pertaining to VIVO's business and activities, regardless of the form in which such information is or has been obtained.

 

7.36. The COMPANY agrees not to use any of the aforementioned information except for the purposes permitted herein, as well as not to disclose any of such information except as permitted, in writing, by VIVO.

 

7.37. The COMPANY shall provide LEVEL 1 SUPPORT to ADVERTISERS.

 

7.38. The COMPANY shall be responsible for describing, in writing, to VIVO the process by which it will obtain the FORMAL AUTHORIZATION (OPT IN), as well as the FORMAL CANCELLATION (OPT-OUT), as provided in Annex II

 

7.38.1. If the Client changes the line number of their MOBILE DEVICE, the COMPANY will be entirely responsible for updating the new number, and must clearly communicate to the CLIENT that they must keep this information up to date.

 

7.38.2. The database containing all the information provided by the CLIENTS must be protected by the COMPANY itself, or by a company hired for this purpose. In both cases the COMPANY must protect VIVO against:

 

 

 

 

(i) Theft or destruction of the information contained in this register;

 

(ii) The use by third parties (authorized or not) of this register for any other purposes.

 

7.39. The COMPANY is responsible for obtaining and managing the FORMAL CANCELLATION (OPT-OUT), ensuring that this CLIENT will not receive any more TEXT MESSAGES.

 

7.39.1. The opt-out option by the CLIENT must be included in all SMS MARKETING TEXT MESSAGES managed by the COMPANY.

 

7.40. The COMPANY is strictly forbidden to:

 

7.40.1. Use the object of this Agreement to carry out AWARDS VIA SMS.

 

7.40.2. Use the object of this Agreement to perform SPAM.

 

7.40.3. Send TEXT MESSAGES with advertising, informational content or that in any way allows the presentation of: (i) telephone companies competing with VIVO, and (ii) companies whose social activity is similar to that exercised by VIVO, including any advertisement or offer of products and / or services of these companies, (iii) or any content that induces the CLIENT's migration to another competing operator.

 

7.40.4. Subcontract companies in order to provide SMS connections and / or interconnections, such as, but not limited to PMS operators, SMS COMPANIES and the like.

 

7.40.5. The resale of TEXT MESSAGES to ADVERTISERS, according to the current legislation.

 

7.41. VIVO may block the sending of TEXT MESSAGES, in cases that they do not fall within the clauses covered in this Agreement. In such cases VIVO is not responsible for the costs incurred by the COMPANY

 

7.42. In dispute scenarios, the COMPANY must provide the information and data, including detailed information from CDRs that prove this request.

 

7.43. The COMPANY is prohibited from delegating, assigning or transferring, in whole or in part, the rights and duties of this Agreement, without the prior and express authorization of VIVO.

 

8 BUSINESS MODEL AND PAYMENT METHOD

 

8.1. For the purpose of this Agreement, the COMPANY will pay VIVO the value of the TEXT MESSAGES, as provided for in Annex I of this Agreement.

 

8.2. The taxes that may be levied are already included in the values set out in Annexes I

 

8.3. The COMPANY will pay value of the service object of this Agreement together with the other services charged in the telecommunications services invoice or in a specific invoice for this purpose.

 

8.4. Such invoice must be paid in full, and partial payment is prohibited.

 

8.5. In any event, all the conditions and provisions related to the provision of the PMS will be applied to define penalties, monetary restatement, fine, interest and other late payment charges and other issues and provisions related to late payment.

 

8.6. In the event of default of the regular payment obligations, the services now contracted may be suspended at VIVO's sole discretion, regardless of any prior notices or communications, until all and any debts under the company's responsibility are settled.

 

 

 

 

8.7. In case of service blockage due to company default, the service object of this Agreement will be reestablished within 3 (three) business days after the settlement of the debt is proven.

 

8.8. A payment delay of more than 90 (ninety) days will result, in addition to the penalty provided for in the above clauses, the immediate and irrevocable termination of this Agreement, as per clause 10.1.1, without prejudice to the losses and damages to be determined.

 

9. BREACH OF OBLIGATIONS

 

9.1. Non-compliance with the obligations provided for in this Agreement, by any of the Parties, will be communicated by the aggrieved party, by means of written notification, so that it can be regularized within 10 (ten) working days.

 

9.1.1 Failure to settle obligations within the period stipulated above may give rise to the application of the fine described in clause 9.4. below, as well as the termination of this Agreement under clause 10 of this Agreement.

 

9.2. The application of fines will occur cumulatively, as each obligation is no longer fulfilled.

 

9.3. The fines, possibly applied, will be considered as net and certain debts, based on this Agreement, or VIVO may collect them in court, serving, for this purpose, this Agreement, as an extrajudicial enforcement order.

 

9.4. The amount stipulated for the non-compensatory fine is [*****] times the average amount of the last [*****] invoices.

 

10. TERMINATION

 

10.1. This Agreement may be terminated unilaterally, at any time, by any of the Parties, and without incurring any burden or penalty, subject to at least 30 (thirty) days prior written notice.

 

10.1.1. The COMPANY declares and acknowledges, for all legal purposes, in an irrevocable, unrestricted and complete manner, that the cessation of the provision of this service by VIVO will not constitute any burden for VIVO vis-à-vis the COMPANY.

 

10.1.2. In the event the COMPANY terminates this Agreement, it must, within a maximum period of 30 (thirty) days after notification of termination, make the payment to VIVO of the debit balance set out in Annex I.

 

10.2. This Agreement may also, at the innocent party's option, be considered terminated in its own right, by means of judicial or extrajudicial notice or notification, in the following cases:

 

10.2.1. If, in the event of total or partial non-compliance with any of the provisions of this Agreement and/or its annexes, the defaulting Party fails to remedy said breach within 10 (ten) days from the date of receipt of written notice issued by the Other part; or

 

10.2.2. In the event of bankruptcy or judicial or extrajudicial recovery of either Party; or

 

10.2.3. Failure to settle obligations under clause 9.1.;

 

10.2.4. The recurrence of non-compliance with the obligations provided for in this Agreement.

 

 

 

 

10.3. In the event of termination for any reason attributable to the COMPANY, in accordance with the terms of this Agreement, the COMPANY will be responsible for the payment of losses and damages to be determined, in accordance with current legislation.

 

10.4. The Agreement may also be terminated by VIVO, without any burden or penalty, in the event of any of the following events involving the structure of the COMPANY and / or any of its affiliated, controlled or controlling companies, direct or indirect: (i) subrogation of another entity in the rights and obligations derived from this Agreement when the dissolution, liquidation, merger, absorption, spin-off or any corporate reorganization occurs with a company that did not have any previous corporate relationship with the COMPANY; (ii) substantial change in the ownership of shares or corporate interests, considering, for this purpose, as a substantial change, any change that changes the control of the COMPANY.

 

10.4.1. In any of these events, the COMPANY is obliged to inform VIVO, in writing, any of the events within up to 5 (five) business days, under penalty of characterization of contractual non-compliance.

 

11. CONFIDENTIALITY

 

11.1. The receiving party, its administrators, agents and employees shall keep absolute confidentiality regarding all data and information provided by the disclosing party for the fulfillment of this Agreement, until 5 (five) years after its termination.

 

11.2. The Parties are responsible for any unauthorized disclosure made by any of their employees, agents, contractors, agents, representatives who have received information and will take administrative and judicial measures to prevent them from disclosing or using, in a prohibited or not authorized way, the referred information.

 

11.3. The receiving party undertakes to keep any and all information regarding the business and activities of the disclosing party confidential, regardless of the form in which such information was obtained. The COMPANY agrees not to use any of the aforementioned information except for the purposes permitted herein, as well as not to disclose any such information except as permitted, in writing, by VIVO.

 

11.4. The use or access by the parties of systems and/or software required to perform the services contracted herein does not imply the right of reproduction, sale, licensing, lease or otherwise transfer of the software and documents that may be provided or that they have access in any way.

 

11.5. The receiving party immediately recognizes that the information provided to them by the disclosing party, regarding any of their data and information, is the exclusive property of the disclosing party, and the receiving party is not allowed to keep copies or dispose of them in any way, at any time, and for any purpose, except for the performance of this Agreement, undertaking to give confidential treatment to such information or data, under penalty of incurring a contractual breach.

 

11.6. The Parties undertake to maintain the most complete and absolute confidentiality regarding any data, materials, details, information, documents, technical or commercial specifications, innovations and improvements, whether created or developed, jointly or individually, by the other party or third parties, even if they result from the contracted services, and which they may have knowledge or access to, or which are entrusted to them under this Agreement, and cannot, under any pretext, disclose, reveal, reproduce, use, or inform third parties strangers to this contract, under the penalties of the law.

 

11.7. If there is a need to destroy documents and data that contain information related to the disclosing party, its contractors, its clients and/or third parties, the receiving party undertakes to do so only in a location made available and/or indicated by the disclosing party, obliging itself, also, to allow the disclosing party to completely destroy the memory files of the machines and other equipment that the receiving party uses in the execution of the Agreement.

 

 

 

 

11.8. All provisions of this clause also bind the parties for acts of their successors, employees, agents, suppliers and/or subcontractors.

 

11.9. Upon rescission or termination of this Agreement, the parties undertake to return all documents delivered to them, and which contain information received or obtained during the term of this Agreement, except for those that, by nature, must be, exclusively and mandatorily, kept by the parties as proof of their obligations, including to third parties.

 

11.10. The receiving party is expressly prohibited from accessing the disclosing party's systems for purposes other than the object of this Agreement and/or using any equipment of the disclosing party to access or attempt to access third-party environments.

 

11.11. The confidentiality obligations provided for in this clause shall not apply to the following cases: (i) the information that, at any time, fall in the public domain or are or have been taken publicly, without contractual infraction being configured; (ii) the information that is known to the receiving party prior to its disclosure by the disclosing party, or has been independently developed by the representatives of the receiving party, without them having access to such information; (iii) the information is disclosed, in good faith, by a legally legitimate and/or entitled third party, and (iv) the disclosure of the information is required by law, court order and/or government agency order.

 

12. COMPLIANCE WITH ANTI-CORRUPTION LAWS

 

12.1. The COMPANY undertakes, recognizes and warrants that:

 

a) Both the COMPANY, as well as any of the companies or persons that control it, its subsidiaries, partners, legal representatives, administrators, employees and agents related in any way to the Relevant Commitment1, will comply at all times during the Relevant Commitment (including, if applicable, the acquisition of products and / or content that are related to the supply of goods and / or provision of services covered by this agreement) with all applicable anti-corruption laws, statutes, regulations and codes, including, without limitation, the U.S. Foreign Corrupt Practices Act - FCPA (collectively, "Anti-Corruption Policy").

 

b) In relation to the Relevant Commitment, the COMPANY, the companies or persons that control it, its subsidiaries, partners, legal representatives, administrators, employees and agents, will not offer, promise or deliver, or, before signing this contract, have already offered, promised or delivered, directly or indirectly, money or objects of value to (i) "Public Officer"2 in order to influence their actions or of a specific public agency or, in some way, to obtain an undue advantage; (ii) any other person, if they are aware that all or part of the money or of the object of value will be offered or delivered to a Public Officer in order to influence their actions or with a certain public agency or, in some way, to obtain a undue advantage; or (iii) any other person in order to induce them to act in an unfair or in any way inappropriate manner;

 

c) The COMPANY will keep and maintain accurate and reasonably detailed books and financial records in relation to this Agreement and the Relevant Commitment;

 

d) The COMPANY has, and will maintain in force during the term of this agreement, its own policies and / or procedures to ensure compliance with the Anti-Corruption Laws, and to reasonably ensure that violations of the Anti-Corruption Laws are prevented, detected and deterred;

 

 

1 Relevant Commitment is the object of this Agreement.

22. “Public Employee”: includes anyone working for or on behalf of a federal, state, municipal or district government agency, offices, agencies, direct or indirect administration (including government owned or controlled companies) or any international public organization. This expression also includes political parties, party employees and candidates for public office.

 

 

 

 

 

e) The COMPANY will immediately report to VIVO any breach of any of the obligations described in letters (a), (b) and (c) of this Clause. In the event of such non-compliance, VIVO reserves the right to demand from the COMPANY the immediate adoption of appropriate corrective measures;

 

f) The COMPANY'S manifestations, warranties and commitments contained in this Clause shall apply in their entirety to any third party subject to the control and influence of the COMPANY, or acting on its behalf, with respect to the Relevant Commitment; so that the COMPANY declares that it has taken all reasonable steps to ensure the fulfillment of obligations, guarantees and commitments by such third parties. Further, no right or obligation, nor any service to be provided by the COMPANY with respect to the Relevant Commitment, shall be assigned, transferred or subcontracted to any third party without VIVO's prior written consent;

 

g) The COMPANY will periodically certify that it complies with this Clause whenever requested by VIVO.

 

12.2. Noncompliance.

 

a) Noncompliance with this "Compliance with Anti-Corruption Laws" Clause will be considered a serious breach of contract. In the event of such non-compliance, unless if it is corrected as provided for in letter (e) of the previous Clause, this agreement may be immediately suspended or terminated by VIVO without having to pay any amount due to the COMPANY.

 

b) To the extent permitted by applicable law, the COMPANY will indemnify and exempt VIVO from any and all claims, damages, losses, penalties and costs (including, but not limited to, attorney's fees) and any expenses arising from or related to non-compliance by the COMPANY of its obligations contained in this Clause of "Compliance with Anti- Corruption Laws".

 

12.3. VIVO will have the right to audit the COMPANY's compliance with its obligations and manifestations contained in the Clause of "Compliance with the Anti-Corruption Law". The COMPANY will fully cooperate with any audit, review or investigation carried out by or on behalf of VIVO.

 

13 FORUM

 

13.1 The Parties elect the District Court of the City of São Paulo / SP, excluding any other, however special it may be, to investigate and judge any action or settle issues arising from or related to this Agreement.

 

In witness whereof, the Parties sign 2 (two) counterparts of equal content, in the presence of the 02 (two) undersigned witnesses, for all legal purposes and effects.

 

São Paulo, April 1, 2020.

 

/s/ Authorized Representative   /s/ Authorized Representative

TELEFONICA BRASIL S.A.

 

  /s/ Fábio Matias de Souza           /s/ Renato Friedrich  

ZENVIA MOBILE SERVIÇOS DIGITAIS SA

 

 

 

 

 

Exhibit 10.07

 

CERTAIN INFORMATION IN THIS EXHIBIT, MARKED BY [****], HAS BEEN EXCLUDED. SUCH EXCLUDED INFORMATION IS NOT MATERIAL AND IS THE TYPE THAT THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL.

 

CERTAIN PERSONAL INFORMATION IN THIS EXHIBIT, MARKED BY [XXXXX] HAS BEEN EXCLUDED.

 

SERVICE PROVISION AGREEMENT

 

I. ZENVIA MOBILE SERVICOS DIGITAIS SA, headquartered at Avenida Dr. Nilo Peçanha, No. 2.900 - 14th floor, Bairro Chácara das Pedras, city of Porto Alegre, State of Rio Grande do Sul CEP: 9130-001, registered under the CNPJ / MF No. 14.096.190 / 0001-05, in this act represented in the form of its Bylaws, hereinafter referred to as "CONTRACTING PARTY"; and,

 

on the other hand,

 

II. TIM SA, headquartered at Avenida João Cabral de Mello Neto, 850, block 01, room 1212, Barra da Tijuca, in the City of Rio de Janeiro, State of Rio de Janeiro, registered under the CNPJ / MF No. 02.421.421 / 0001-11, hereby represented in the form of its Bylaws, hereinafter referred to as “TIM”.

 

CONTRACTING PARTY and TIM jointly referred to as “Parties” and individually referred to as “Party”.

 

CONSIDERING THAT:

 

i. TIM is the company that provides Personal Mobile Service (PMS) and that has specific network technology and computer systems for sending and receiving Short Text Messages (“SMS”);

 

ii The CONTRACTING PARTY is interested in providing services to its respective Direct Clients, providing informational material, by sending SMS, using, for that purpose, TIM's communication service platform. The SMS A2P is a form of communication where the SMS is sent or terminated from an application, and not between cell phones; as in the case of SMS P2P.

 

THE PARTIES decide to enter into this Agreement for the Provision of Services (“Agreement”), which will be governed by the following clauses:

 

FIRST CLAUSE: DEFINITIONS

 

1.1 As used in this Agreement, the following terms have the meaning indicated below. The other terms referred to in capital letters and not defined herein will have the meanings assigned in the body of this Agreement:

 

a) Application: is the CONTRACTING PARTY's property system, described in Annex I (INFOTIM Service Request Form) of this Agreement, which will be connected to TIM 's communication network for the execution of this Agreement;

 

b) Provision Area: is the geographic area in which TIM holds authorization to operate the PMS;

  

c) PMS TIM client (s): natural and / or legal users of TIM 's SMP and who have Mobile Stats able to send and / or receive SMS;

 

(1 / 16)

 

 

d) CONTRACTING PARTY: Legal entity that will hire TIM services, object of this Agreement, according to the information contained in the INFOTIM Service Request Form - Annex I.

 

e) Direct Client(s): legal person who will hire the services of the CONTRACTING PARTY, as provided in this Agreement and in accordance with the information contained in the INFOTIM Service Request Form - Annex I.

 

f) Mobile Station: means the cell phone already enabled;

 

g) Confidential Information: (i) information regarding each Party's business, including, but not limited to, each Party's product plans, list and number of customers, access codes and other customer information, business model and values agreed in this Agreement and in any additive terms, designs, personnel, research, development or technical knowledge, product performance indicators; (ii) any information identified by either Party as “confidential”;

 

h) Large Account: number provided by TIM to the CONTRACTING PARTY, through which the user sending and / or receiving the SMS can identify the CONTRACTING PARTY. This same number will also allow TIM to identify the CONTRACTING PARTY;

 

i) Dedicated Link: it is a private link between two different points that allows the transmission of data between TIM and the CONTRACTING PARTY's "Datacenter";

 

j) Short Text Messages or SMS: they are text messages of up to 160 (one hundred and sixty) characters, transported through a network of communication services, which are originated or destined to a specific Mobile Station;

 

k) SMS P2P messages: SMS messages sent from one person to another person;

 

I) SMS A2P messages: SMS messages sent by an application to a person;

 

m) SMS Binary messages - messages that allow the sending of various types of content, such as transferring ringtones, configurations of the telephone system and WAP-Push via text messages;

 

n) Mobile Marketing - Marketing actions through the sending of messages (SMS), to users who are not from the CONTRACTING PARTY and / or Direct Client base. Such actions can only be performed for Users with the opt in of the CONTRACTING PARTY and / or the Direct Client.

 

o) Fraudulent SMS messages: sending SMS which were unsolicited or unauthorized by the user or that may contain information or links that may harm the user in any way, be they Span, Spoofing, Phishing or any other category of SMS that may be developed;

 

p) Users: individuals and / or legal entities using the Personal Mobile Service (PMS), who have a direct commercial relationship with the CONTRACTING PARTY and / or with the Direct Client and who have given the opt in to receive A2P SMS;

 

q) VPN (Virtual Private Networking): is the virtual tunnel built through the Internet Network, connecting the GPRS Data Network to the CONTRACTING PARTY's "Datacenter";

 

(2 / 16)

 

 

SECOND CLAUSE: OBJECT

 

2.1 The purpose of this Agreement is the provision of services by TIM to the CONTRACTING PARTY, consisting of:

 

a) Sending and receiving SMS A2P, only and exclusively for the purposes defined in item 2.2 of the Agreement, between CONTRACTING PARTY, Direct Customers and Users.

 

b) Sending and receiving SMS A2P, carried out for national and / or international companies inside and / or outside the national territory, as the case may be. The CONTRACTING PARTY is allowed to provide services, on an unlimited basis, to national and international companies, according to the conditions provided for in this instrument.

 

c) InfoTIM Technical Management, by (I) making available its PMS network structure and TIM's communication systems, to which the CONTRACTING PARTY must connect its Application, according to the information contained in the INFOTIM Service Request Form, described in Annex I of the Agreement, (II) programming of the technical parameters of message flow (TPS - transactions per second), according to the volume expected by the CONTRACTING PARTY, (III) programming of the technical parameters of SMS forwarding

 

2.1.1 The provision of the service, by InfoTIM Technical Management, mentioned in item (b) above, will be performed at TIM's technical facilities.

 

2.2 The Text Messages to be sent have as only and exclusive purpose the sending of SMS that is characterized as "SMS A2P", and may contain the following type of information:

 

a) financial information (balances, statements, debit and credit card usage alerts, investment positions or any other transactions relating to the commercial relationship between the end customer and the financial institution providing the information);

 

b) information of different content, applicable to the communication of the Direct Client to its collaborators, partners, suppliers, among others;

 

c) monitoring information, applicable to the transport sector, to control of vehicle location;

 

d) telemetry information, applicable to the control and use of industry alarms and public services;

 

e) access information and personal data, for public utility services, among others;

 

f) inventory information, order control, sales control, among others, applicable to sales force automation;

 

g) information regarding the commercial relationship between the User and the CONTRACTING PARTY or the Direct Client, provider of the information;

 

h) authentication information or application maintenance.

 

i) advertising material of the CONTRACTING PARTY to PMS TIM Customers by means of the lease of virtual space through telecommunication services for sending SMS, provided by TIM through this Agreement. TIM will, in this case, make the CONTRACTING PARTY 's content directly available to PMS TIM Customers.

 

2.2.1 Any other purposes other than those mentioned above are strictly prohibited.

 

2.3 Depending on the CONTRACTING PARTY's Application, SMSs may be sent from the CONTRACTING PARTY to its Direct Customers and from Direct Customers to CONTRACTING PARTY (“two way”), or only from the CONTRACTING PARTY to its Direct Customers or Direct Customers to CONTRACTING PARTY (“one way”). SMSs may also be sent by the CONTRACTING PARTY on behalf of its Direct Customers.

 

2.4 In order for SMSs to be sent in any of the circumstances of Clause 2.2, they must follow the standards established by TIM, as described in the Annexes.

 

(3 / 16)

 

 

2.5 The following annexes (“Annexes”) are part of this Agreement for the purposes of law:

 

Annex I - INFOTIM Service Request Form
Annex II - INFOTIM Operations Manual
Annex III - INFOTIM Commercial Table

 

THIRD CLAUSE: TERM

 

3.1 This Agreement will remain in force for a period of 12 (twelve) months retroactively from June 14, 2020.

 

3.2 At the sole discretion of the Parties, after the end of the above period, the term of the Agreement may be extended by signing an Addendum.

 

CLAUSE FOUR: TIM'S OBLIGATIONS

 

4.1 The following are TIM's obligations:

 

4.1.1 Make its communication network available, only and exclusively to enable the sending of SMS between the CONTRACTING PARTY, its Direct Clients and Users and / or vice versa, when the “ two way” application for the purposes of executing the object of this Agreement is used.

 

4.1.2 Make its communication network available for the CONTRACTING PARTY to connect the Application through Dedicated Link or VPN, at the option of the CONTRACTING PARTY which will bear the development, installation, cost and management of the means necessary to connect its network or server infrastructure to TIM network, as well as the configuration of its equipment.

 

4.1.3 Install firewalls and security devices on its network to detect and block possible SMS A2P Messages that are not in accordance with this Agreement or that can be categorized as Fraudulent SMS messages or SMS Messages that are not object of this Agreement.

 

4.1.4 Provide the CONTRACTING PARTY with technical assistance, 24 (twenty four) hours per day, 07 (seven) days a week. The technical service may be activated by the CONTRACTING PARTY via phone or email, according to the information indicated below and specifications in Annex I.

 

[XXXXX]
Phone: [XXXXX]
e-mail: [XXXXX]

 

4.2 TIM is not responsible for failure to receive SMS due to the occurrence of any fact or situation that prevents such activity, such as, but not limited to: absence or degradation of coverage, permanent or temporary, due to equipment failure, failure of power or transmission, or due to blocking of the mobile service, on the condition of inactive, suspension at the request of the SMP TIM Customer (not originating or receiving calls), recipient with mobile equipment disconnected or recipient outside TIM coverage area or any other technical impossibility.

 

4.2.1 Any failure to receive SMS by PMS TIM Customers or the Direct Customer, for any reason that is not a proven failure of TIM communication network, will not result in any liability for losses and damages to TIM in connection with activity (ies) not completed or not performed due to failure to receive SMS, and will not exempt them from paying for the SMS sent.

 

(4 / 16)

 

 

4.3 The Service subject to this Agreement may be temporarily interrupted in the following situations:

 

a) scheduled stops for preventive or corrective maintenance, when the CONTRACTING PARTY will be notified at least 48 (forty-eight) hours in advance, by email;

 

b) emergency maintenance or repairs (not scheduled) of the system, the telecommunications network and / or the electrical network; and

 

c) fortuitous cases and major force, including, but not limited to, theft of physical parts of the network, strike by employees, strike by third parties contracted to maintain the network, fire and nature events.

 

4.4 TIM is not responsible for the content, origin or nature of the SMS sent, nor for its use thereof, being this exclusive responsibility of the CONTRACTING PARTY and the Direct Customers.

 

4.5 TIM will not forward registration information of PMS TIM Customers. The CONTRACTING PARTY is solely responsible for obtaining the registration of its Users, as well as their consent for receiving the SMS subject to this contract. The information from the CONTRACTING PARTY, Direct Customers, PMS TIM Customers and / or Users will only be forwarded in the event of a court order or in the event of a request from any public administrative or regulatory body, under the terms of the law.

 

4.6 The CONTRACTING PARTY hereby acknowledges and accepts that there is no guarantee that the recipient will actually receive the SMS, nor of the deadline for its sending.

 

CLAUSE FIVE: CONTRACTING PARTY'S OBLIGATIONS

 

5.1 The CONTRACTING PARTY has the following obligations, without prejudice to the other obligations provided for in this Agreement:

 

5.1.1 Obtain from PMS TIM Customers and Users, prior and express authorization (OPT-IN) to send and receive Text Messages, object of this Agreement. It is obliged to keep a copy of the authorization of PMS TIM Customers and Users, recipients of the SMS, fully exempting TIM from any responsibility, be it joint or subsidiary, regarding the lack of authorization or fraud of any nature.

 

5.1.1.1 The CONTRACTING PARTY undertakes not to use the Services, object of this Agreement for sending Fraudulent SMS or for sending SMS that are characterized as “SMS A2P”. In this sense, SMSs can only be sent to recipients who have granted prior authorization. The CONTRACTING PARTY is liable to them, to TIM and to third parties, in any way and at any time, even after the end of the term of this Agreement, for not requesting express authorization.

 

5.1.1.2 Copies of the previous authorizations, filed by the CONTRACTING PARTY, under the terms of Clause 5.1.1 above, shall be made available to TIM, if requested, respecting the maximum term of 05 (five) Business Days from the request by TIM.

 

5.1.1.3 It is up to the CONTRACTING PARTY to offer a solution to the recipient so that they can express, at any time and without any impediment, their intention to no longer receive SMS. The sending of SMS to the recipient after they have expressed that they no longer wish to receive it constitutes non-compliance with the obligations established in this Agreement, and, at TIM 's discretion, may also result in the possible unilateral termination of this Agreement, upon prior notice.

 

5.1.1.4 If TIM is sued in court, in an administrative forum of consumer protection agency or by the National Telecommunications Agency - ANATEL, for sending SMS within the scope of this Agreement to PMS TIM Customers or Users who have not previously and expressly authorized they want to receive it, the CONTRACTING PARTY shall exempt TIM from any liability, including pecuniary, assuming all expenses and related costs for TIM 's defense and payment of fines, with TIM being entitled to reimbursement if it incurs any disbursement.

 

(5 / 16)

 

 

5.1.2 Pay due remuneration to TIM, in the form and term established in the Clause Nine of this Agreement.

 

5.1.3 Not send Text Message to Customers of PMS TIM, using the infrastructure and / or computer systems of telecommunications service providers competing with the companies of the TIM Group.

 

5.1.4 Define the content of the SMSs to be sent, ensuring the accuracy, correctness and veracity of the information sent and being responsible for the consequences arising therefrom, including to third parties.

 

5.1.5 Prevent the sending of messages and content that:

 

a) Are false or give rise to doubtful interpretations, or offer content that is not those that the User and / or Direct Client will hire, trying in some way to deceive them;

 

b) Invade the privacy of third parties or harm them in any way;

 

c) Promote in some way racism against minority groups, or any other form of religious, political fanaticism or discrimination against groups of people or ethnic groups;

 

d) Are obscene, such as pedophilia and other crimes of a sexual nature;

 

e) Violate the rights of third parties, including, but not limited to copyright, and / or the creation and sending of unauthorized messages;

 

f) Mention any type of advertising by providers of telecommunications services;

 

g) Defend or condone drugs and drug trafficking, narcotics, cigarettes, alcoholic beverages or illegal games;

 

h) Offend the law, morals or commercial ethics;

 

i) Are in any way prohibited or not recommended to a certain age group, except if they are posted on an information channel in which they are disclosed differently;

 

j) Offer illegal and / or pirated content, infringing the rights of authorship and property of third parties;

 

k) Are considered fraudulent SMS.

 

5.1.6 Be fully responsible for the content of the SMS texts delivered, typed and / or created by it or by third parties, being responsible for their content in or out of court, exempting TIM from any liability, joint or several, for any and all claims, complaints, representations and legal actions of any nature, relating to the Services, including complaints from PMS TIM Users or Customers, in the event of disclosure of their information that is of a confidential nature.

 

5.1.7 Take responsibility for faithful compliance with the laws, and, so that messages that are mainly, defamatory, slanderous, fraudulent and / or affecting any legal device are not sent.

 

5.1.8 Keep TIM up to date and safe from any complaint regarding the content of the SMS sent, defending TIM, whenever it requesteds, administratively or judicially, in any instance or court, in the event that TIM is sued by any of PMS TIM Users or Customers due to SMS sent by instruction of the CONTRACTING PARTY.

 

(6 / 16)

 

 

5.1.9 Reimburse all amounts resulting from court decisions, losses or damages of any nature that impact TIM, which have, as a result, mediate or immediate, the breach of obligations of the CONTRACTING PARTY under this Agreement.

 

5.1.10 Be responsible for contracting the necessary means to connect the Application to TIM's communication network.

 

5.1.11 Provide in writing the information and clarifications that may be requested by TIM representatives, as long as it is necessary to achieve the contractual object.

 

5.1.12 Keep Users informed of the conditions of use and prices of the service that constitute the object of this Agreement.

 

5.1.13 Give TIM previous information, according to the Flow established in Annex II (INFOTIM Operational Manual) of this Agreement, of any interruption and / or failures in the system, which makes the Service unavailable, even if momentarily. The system is understood here as the entire structure for the provision of the service, and, in addition, it must indicate, in this act, the name of the person responsible for any clarifications arising from any unavailability.

 

5.1.14 Take responsibility for notifying Users and Direct Customers about the unavailability of the system.

 

5.1.15 Assume full responsibility for the security necessary to prevent SMS interference in its systems. The Contracting Party acknowledges that it is its responsibility to take all precautions to avoid any fraud, diversion or damage arising from the misuse of SMS or its contents by Users, Direct customers and third parties.

 

5.1.16 Be responsible for the solution items under its responsibility, including all hardware resources (firewall, switch, router, server, etc.), software (connection application with INFOTIM), network services necessary for the solution to function properly (DNS, DHCP, VPN, etc.)

 

5.1.17 The CONTRACTING PARTY agrees that it cannot accept requests for the transfer of Large Accounts from Direct Customers from TIM's base, unless expressly agreed by TIM.

 

5.1.18 Any restriction and limitation of liability agreements that the CONTRACTING PARTY has with its Direct Customers will not limit the CONTRACTING PARTY 's liability to TIM for the fulfillment of the obligations assumed, including for the acts and actions of its Direct Customers.

 

5.2 The CONTRACTING PARTY declares that it is aware and is in accordance with the information, requirements and obligations contained in the INFOTIM Operations Manual - Annex II of this instrument.

 

5.3 The CONTRACTING PARTY is prohibited from using the TIM brand without TIM's prior authorization. Proved its unauthorized use, the CONTRACTING PARTY is subject to a penalty for improper use of the trademark and possible termination of this Agreement.

 

5.4 The CONTRACTING PARTY shall act and respond to TIM for the full compliance with all obligations, guarantees, penalties, responsibilities and, in general, any other obligations arising from the Agreement.

 

5.5 The CONTRACTING PARTY is prohibited from using alternative routes for sending SMS A2P (InfoTIM), other than those specifically contracted in this Agreement. These authorized routes are identified by the use of Large Accounts. If SMS A2P is proven to have been sent by unauthorized routes (long numbers or chip cards), this Agreement may be canceled unilaterally and immediately by TIM, with the CONTRACTING PARTY incurring the penalties described in clauses 11.1.1 and 5.1.9.

 

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5.6 In order to avoid the occurrence of any type of fraud or misuse of SMS, the CONTRACTING PARTY shall be responsible for managing the sending of its own SMS and that of its Direct Customers.

 

5.7 The CONTRACTING PARTY shall, whenever requested by TIM, prove the proper management of the SMS that it and its Direct Customers sent, demonstrating the non-occurrence of fraud or misuse of SMS.

 

CLAUSE SIX: PRICE

 

6.1 For each SMS sent by the CONTRACTING PARTY, we will charge a price with two components:

 

a) [*****];

 

b) [*****].

 

6.1.1 The sum of the two components above constitutes [*****].

 

6.1.2 The referred Minimum Allowance must be paid to TIM by the CONTRACTING PARTY, regardless of the use of the total number of SMS transmitted in the offer chosen by the CONTRACTING PARTY.

 

6.2 TIM reserves the right to set a limit on the volume of additional messages, in the case of technical impacts caused to its systems. In the case such limit is applied, TIM will formally inform the CONTRACTING PARTY, upon notification, with 30 (thirty) days in advance.

 

6.3 For the purposes of collection, any and all SMSs delivered between the CONTRACTING PARTY, Direct Customers and Users will included.

 

6.4 For the execution of the services, object of this Agreement, TIM will be paid the amounts as described in Annex III of this instrument. The amounts described in Appendix III include all direct and indirect costs and expenses of TIM, as well as all municipal, state and federal charges and taxes, labor charges, travel expenses and any other necessary for the successful and complete provision of the Service ("Price").

 

CLAUSE SEVEN - THE PAYMENT METHOD

 

7.1 TIM will send the CONTRACTING PARTY the invoice for the service provided to the address indicated in the preamble of this Agreement. The invoice will inform the number of SMSs carried in the billing cycle prior to the invoice being issued and the total amount to be paid by the CONTRACTING PARTY. Payments will be made within 30 (thirty) days as of the issue of the respective invoice.

 

For the Collection Invoice for InfoTIM Technical Management Service the credit payment will be made by deposit in the current account informed below:

 

TIM SA: CNPJ - 02.421.421 / 0001-11
Banco [XXXXX]
Branch No [XXXXX]
Current Account: [XXXXX]

 

7.1.1 TIM may issue a bank slip of the banking institution of its choice to send with the Sale Invoice for payment by the CONTRACTING PARTY.

 

7.1.1 The first charge of the minimum monthly amount specified in clause 7.1 above will be prorated, according to the charge start date, which will occur after the testing period of the Service.

 

(8 / 16)

 

 

7.2 If applicable, TIM must indicate the amounts in the Sale Invoice, and the CONTRACTING PARTY will withhold the amount equivalent to [*****] of the invoice for the services, providing its collection with the INSS - Instituto Nacional do Social Security, under the terms of the current legislation.

 

7.3 In case ISS, PIS, COFINS, CSSL and IR taxes are withheld at the source, TIM must indicate the amounts in the invoice, and the CONTRACTING PARTY will withhold the amounts equivalent to the respective taxes, providing, under the terms of Law No. 10.833 / 2003, Law No. 10.637 / 03 and Complementary Law No. 116/03, the payment before the competent agency.

 

7.4 TIM is the sole responsible for the calculation of taxes and fees for prices practiced in this Agreement. The CONTRACTING PARTY shall not be liable in case of mistakes in these calculations.

 

7.5 If, during the term of this Agreement, new taxes, charges and tax contributions are created, or the rates used are modified, or in any way the charges on the prices now contracted are increased or decreased, the values of the respective contract may be revised, increased or decreased, in order to reflect such changes, which will be applied from the effective date of the law or resolution that implements such changes.

 

7.6 A fine of [*****] will be charged on any late payment, in addition to monetary update calculated according to the [*****] and default interest of [*****] per month on the total of the updated debt.

 

7.6.1 In this case, the charges will be billed on the next invoice thereafter.

 

7.7 In the event that TIM's invoice is in disagreement with the number of SMS that the CONTRACTING PARTY claims to have used, the CONTRACTING PARTY will use the invoice contestation procedures made available by TIM to its corporate customers at Tim Customer Relationship Center (CRC).

 

7.8 Tributes (taxes, fees, emoluments, tax contributions) due as a direct or indirect consequence of this Agreement, or of its execution, as defined in the tax rules, shall be the responsibility of TIM, without the right to reimbursement, and considered as already included in the price.

 

7.8.1 If the CONTRACTING PARTY is required to pay any taxes on behalf of TIM or as a result of this provision of the Service, TIM must reimburse the CONTRACTING PARTY within a maximum period of 5 (five) days.

 

7.9 The CONTRACTING PARTY, as a retaining source, will discount and collect, in accordance with the provisions of the applicable tax legislation, the payments it makes and the taxes to which it is bound by the respective legislation.

 

CLAUSE EIGHT: RESTRICTIONS

 

8.1 Notwithstanding the provision contained in item 5.1.4 of this Agreement, the CONTRACTING PARTY is prohibited from sending messages that contain content similar to that of the sample list in Clause 5.1.5, as well as any message or content that is in violation of the current legislation, which is untrue, fraudulent, defamatory or libelous, that violates any type of third party right, or that generates any type of civil or criminal offense.

 

8.2 The CONTRACTING PARTY may not use the Services to send messages with advertising content, promotion and / or sending binary SMS or WAP Push, without TIM prior and express authorization.

 

8.3 The CONTRACTING PARTY is prohibited from reselling telecommunication services or operations similar to those described in Clause 8.2 above, to third parties, for any reason or purpose.

 

(9 / 16)

 

 

8.4 The CONTRACTING PARTY is responsible for the payment of losses and damages, including legal fees, costs and procedural expenses, as well as any other expenses resulting from judicial and / or extrajudicial demands proposed by third parties due to non-compliance with the contracted object. The Parties also agree that if TIM is part of any lawsuit filed because of non-compliance of the CONTRACTING PARTY, the CONTRACTING PARTY shall make all reasonable efforts to substitute TIM in the dispute.

 

8.5 The CONTRACTING PARTY undertakes to respect national and international legislation with regard to the Protection of User Information, including the provisions of Law No. 12.965 / 2014 (Marco Civil Law).

 

CLAUSE NINE: CONFIDENTIALITY

 

9.1 The Parties, their employees and their subcontractors shall not disclose any documents or information to which they have access, in connection to the object of this Agreement. The disclosure and / or reproduction, whether total or partial, of any Information in connection to this Agreement or any details about its development, must be made only with the prior written consent of the other Party, always respecting the legal limits, the best practices and normative documents of the SUPPLIER PARTY regarding security and privacy.

 

9.2 Each Party (hereinafter “Receiving Party”) shall keep all information provided by the other Party (hereinafter “Supplying Party”) in the strictest secrecy and may not disclose it to third parties without the prior written consent of the Supplying Party. The Receiving Party may not use the Information for any purpose other than the performance of this Agreement. The obligations described above will not apply to any Information that:

 

(i)          is already in the public domain at the time of its disclosure;

 

(ii)         becomes public domain after its disclosure, without the disclosure being made in violation of the provisions of this Agreement;

 

(iii)        is legally disclosed to any of the Parties, their Affiliates or their Representatives by third parties who, as far as the Receiving Party, its Affiliates or Representatives are aware, are not in breach, in relation to the information provided, of any obligation of confidentiality;

 

(iv)        must be disclosed by the Receiving Party, in accordance with an order issued by an administrative or judicial body with jurisdiction over said Party, only to the extent of such order; or

 

(v)         is independently obtained or developed by either Party without any breach of the obligations set forth in this Agreement, except when such information is developed on the basis of Confidential Information.

 

9.3 The Receiving Party of Confidential Information shall communicate to the Supplying Party as soon as it is aware of it, any request for such information by any competent public authorities or through any judicial process, so that the Supplying Party is able to take the legal measures it deems necessary.

 

9.4 The Parties are aware that each of them is part of an organization of several legal entities in different jurisdictions ("Associated" companies), and that it may be necessary or appropriate to provide Information to Associated companies. For this reason, each Party (both on the condition of a Supplying Party and a Receiving Party under this Agreement) agrees that:

 

(i) The Receiving Party may provide Information to an Associated company, but only due to the need for the latter to become aware of this information in order to carry out the purposes provided for in this Agreement, respecting the legal guidelines in force and within the limits of the consent provided by the holder of the data; and

 

(ii) Each Party guarantees compliance and adequate confidentiality, by its Associated companies, with the terms and conditions of this Clause.

 

(10 / 16)

 

 

9.5 Each Party shall limit access to Information to those employees, representatives, contractors or advisors to whom such access is reasonably necessary or appropriate for the proper performance of obligations under this Agreement.

 

9.6 The duty of Confidentiality covers the Information received by the Parties, either orally or in writing, through various communication procedures, such as telephone and digital media, once one Party was made aware by the other Party of this confidentiality, by any means.

 

9.7 The non-observance of any of the provisions established in this Clause will subject the offending Party to the competent judicial and administrative procedures, of civil and criminal order, including early protection, preliminary injunctions and indemnification for losses and damages that may come to another Party.

 

9.8 The obligation of confidentiality is irrevocable and irreversible, and must be observed even after the termination of this Agreement.

 

9.9 All Confidential Information transmitted or disclosed to the Receiving Party must be returned to the Supplying Party or otherwise destroyed by the Receiving Party irretrievably, as soon as the need for its use by the Receiving Party has ended or as soon as requested by the Supplying Party and, in any case, in the event of termination of this Agreement. At the request of the Supplying Party, the Receiving Party shall be responsible for transporting the requested information and promptly issue a declaration to be signed by its legal representative, confirming that all Information not returned to the Supplying Party has been completely destroyed.

 

9.10 Failure to comply with this clause will result in immediate termination of this Agreement, regardless of prior notification.

 

CLAUSE TEN: TERMINATION

 

10.1 The Parties agree that this Agreement may be terminated unilaterally, by either Party, at any time, without reason, and without incurring any fine or penalty, upon prior notice sent in writing, at least 60 (sixty) days in advance, in the exact terms of article 473 of the Civil Code. The Parties are fully aware that they will not be able to oppose any termination, under any circumstances.

 

10.2 Without prejudice to the applicable fines and indemnities, under the terms of this instrument, the Parties may terminate this Agreement by means of a simple judicial or extrajudicial notification, without observing any term, in any of the following circumstances:

 

a)        Immediately and without any burden to TIM, if the provision of Service object of this Agreement is prohibited by the National Telecommunications Agency - ANATEL or any state agency that has competence for such, as well as the advent of Brazilian legislation at any level that prevents the Service;

 

b)        By either Party, in the event of total or partial failure to fulfill the obligations assumed in this Agreement;

 

c)        By TIM, in the case of late payment, as provided in clause 5.1.2;.

 

d)        In the event of bankruptcy, bankruptcy filing, judicial or extrajudicial recovery, or insolvency of either Party;

 

e)        A fact that, due to its nature and severity, affects the CONTRACTING PARTY 's reliability and morality or that is likely to cause damage or compromise, even if indirectly, TIM's reputation; and

 

f)        In case of violation of any of the declarations and guarantees contained in the Ethics Clause in the Deals of this Agreement.

 

(11 / 16)

 

 

10.3 If TIM fails to use the right to terminate the Agreement under the terms described in the previous items, it may, at its sole criteria, suspend the execution of the same, until the CONTRACTING PARTY fully complies with the breached contractual obligation. Any payments, refunds or adjustments will be suspended during this period (without prejudice to the application of penalties to which the CONTRACTING PARTY is subject).

 

CLAUSE ELEVEN: PENALTIES

 

11.1 If any of the Parties breach any of the obligations established in this Agreement, such breach will be communicated by the aggrieved Party, by means of a written notice, delivered directly, via email or by post, so that it can be remedied within ten (10) business days.

 

11.1.1 The non-regularization of the breach will, at the discretion of the aggrieved Party, give cause to the termination of the Agreement, as well as the application of a compensatory fine in the amount of [*****] of the amount of the last invoice, without prejudice to the losses and damages arising therefrom.

 

11.2 In the event of termination for any reason attributable to the CONTRACTING PARTY, in accordance with the terms of this Agreement, the latter responds for the payment of losses and damages to be determined.

 

11.3 Based on this Agreement, the fines that may be applied will be considered payable or TIM may collect them in court and this Agreement shall be considered as extrajudicial executive title under the terms of article 784, III of the Civil Procedure Code.

 

11.4 In cases in which the CONTRACTING PARTY breaches any of the rules set forth in this Agreement, TIM may, at its sole criteria, suspend the services, or even cancel the services, by means of prior communication to the CONTRACTING PARTY.

 

11.5 The termination for non-payment by the CONTRACTING PARTY does not affect the enforceability of the charges arising from the Agreement, when applicable.

 

11.6 If TIM finds that the use of the aforementioned services, by the CONTRACTING PARTY and by their respective Direct Customers is disrespecting the rules that regulate the contracted object, TIM may terminate this Agreement.

 

11.7 If there has been proven misuse of the service(s), fraud, or failure to comply with obligations set forth in clause nine of this Agreement and in the applicable legislation, TIM may, by means of prior notice, suspend or immediately terminate the Agreement, to its criteria, without prejudice to the collection of the penalty described in item 11.1.1.

 

CLAUSE TWELVE: ETHICS IN BUSINESS

 

12.1 In this act, the PARTIES declare to have (i) their own codes of conduct that follow the guidelines and principles of ethical, equitable and transparent behavior to which their administrators, employees and collaborators are subject, and (ii) compliance programs that aim to ensure (a) compliance with the legislation, codes, regulations, rules, policies and anti-corruption procedures of any government or competent authority, considering the jurisdiction where business and services will be conducted or carried out under this Agreement - in particular, Law No 12.846 / 2013, Decree No. 8.420 / 2015 and the Law of the United States of America against corrupt practices abroad (“FCPA”) -, and (b) the identification of misconduct by its managers, employees and others employees, directly or indirectly related to them.

 

12.2 Accordingly, the CONTRACTING PARTY declares and warrants that:

 

12.3 It recognizes that TIM business and performance is oriented towards the observance of ethics and sustainable development and growth and respect for and protection of human rights, labor law, the principles of environmental protection and the fight against all forms of corruption, in the light of the principles of the Global Compact of United Nations Organizations;

 

(12 / 16)

 

 

12.4 It acknowledges that the terms of its Code of Ethics and Conduct, Anti-Corruption Policy and Conflict of Interest are available at TIM website at http://www.tim.com.br/ri - Governança, Codigo de Etica, whose guidelines are widely disseminated in the company's environment, the market and society;

 

12.5 It complies with and ensure that all of its employees, subcontractors, consultants, agents and / or representatives in connection to this Agreement, even if indirectly, comply with TIM's Code of Ethics and Conduct and Anti-Corruption and Conflict of Interests Policy, mentioned in item 12.4;

 

12.6 It is aware that TIM repudiates and condemns acts of corruption in all its forms, including extortion and bribery, especially those provided for in Law No. 12.846 / 2013 and in the “FCPA”, the financing of terrorism, child labor, illegal, forced and / or analogous to slavery, as well as all forms of exploitation of children and adolescents and any and all acts of harassment or discrimination in their work relationships, including in the definition of remuneration, access to training, promotions, dismissals or pensions, whether regarding race, ethnic origin, nationality, religion, sex, gender identity, sexual orientation, age, physical or mental disability, union affiliation or that violates (i) human rights and / or implies or results in physical or mental torture; (ii) health and personal safety and / or the work environment; (iii) the right of free association of employees, (iv) environmental and sustainability rights, and (v) the appreciation of diversity; and

 

12.7 It has not been sentenced for any act detrimental to public administration, nor has it been or is listed by any government or public agency (such as United Nations or World Bank) as excluded, suspended or indicated for exclusion and / or suspension or ineligible for government bidding programs

 

12.8 According to the responsibility under article 2 of Law No. 12,846 / 2013, the CONTRACTING PARTY will not conduct any harmful act foreseen in such law - in particular, it did not offer to pay, nor paid, will not pay, offered, promised or give, directly or indirectly, any amount or item of value, including any eventual amounts paid to it by TIM, to any employee or official of a government, company or society controlled by the government or owned by it, political party, candidate for office politician, or anyone else being aware of or believing that such a value or item of value will be passed on to someone to influence any action, omission or decision by such person or by any government agency for the purpose of obtaining, retaining or conducting business for the Contracting Party and / or TIM - as well as in violation of the provisions contained in the “FCPA”, in the exclusive interest and / or benefit or not, of TIM.

 

12.8.1 In addition, the CONTRACTING PARTY declares, in this act, to be aware of TIM Participações Complaint Channel, available at http://www.tim.com.br/canal-denuncia/?origin=RI, and commits itself to submit any and all attempts and / or practices to which it is submitted, becomes aware, or against which it is invested that fits the conducts described in Law No. 12.846 / 2013 and / or violate TIM's internal regulations, in particular, but not limited to the Code of Ethics and Conduct, the Anti-Corruption and Conflict of Interest Policy and / or current legislation.

 

12.9 TIM may, regardless of any contrary provision contained in this Agreement and upon sending prior notification, or not, suspend and / or terminate this Agreement in case of breach of any declaration and / or warranty established in this Clause.

 

12.9.1 The CONTRACTING PARTY shall indemnify and exempt TIM and / or its representatives from and against any loss, claim, cost or expense incurred by TIM and / or its representatives, based on or arising from any violation of the declarations and guarantees set forth in this Clause or due to any violation of the provisions of the aforementioned legislation resulting from any act, active or omissive, of the CONTRACTING PARTY and / or its counselors, directors, employees and / or representatives.

 

(13 / 16)

 

 

12.10 Finally, TIM declares that the provisions of this Agreement were negotiated in light and in strict compliance with its Code of Ethics and Conduct and the legislation for the protection of the environment, demonstrating its commitment to sustainable development and maintaining the balance of ecosystems, according to the Environmental Policy available at http://ri.tim.com.br/ - Sobre a TIM - Sustentabilidade. Furthermore, with regard to the provisions contained in this Clause, the CONTRACTING PARTY, as supplier and / or commercial partner, undertakes to observe and disseminate the aforementioned ethical and social principles and values, as well as that of the competition.

 

CLAUSE THIRTEEN- DATA PROTECTION

 

13.1 The CONTRACTING PARTY shall ensure that it will process the data of PMS TIM Customers only and exclusively for the purpose of this Agreement, for the legitimate interest and execution of this Agreement, observing the principles of adequacy and need for data treatment. The CONTRACTING PARTY is full and exclusively responsible for any breach and / or misuse of data and for the losses that it may cause to PMS TIM Customers and TIM itself.

 

13.2 The CONTRACTING PARTY further undertakes to implement technical and administrative security measures to protect personal data against accidental or unlawful destruction, accidental loss, alteration, diffusion or unauthorized access, as well as any other form of inadequate or unlawful data treatment, subject to the provisions of Decree No. 8.771 / 2016.

 

13.2.1 The systems used by the CONTRACTING PARTY for the processing of personal data must be structured in order to meet the security requirements, the standards of good practices and governance and the general principles provided for in the current legislation and the other regulatory rules, guaranteeing the inviolability of intimacy, honor and reputation of the information holders.

 

13.3 The CONTRACTING PARTY will inform TIM immediately, and must provide all necessary support to any investigation that may be carried out, in case there is any breach of security and / or suspicion thereof, regardless of whether or not it jeopardizes the security and integrity of personal data.

 

13.4 The CONTRACTING PARTY shall ensure that the collaborators and / or external service providers it hired that have access to personal data in connection with this Agreement, comply with the legal provisions applicable in the matter of protection of personal data, not giving or disclosing such personal data to third parties, nor making use of them for any purposes other than those strictly permitted by TIM under the terms of this Agreement.

 

13.5 This Agreement does not authorize the CONTRACTING PARTY to subcontract another company, in whole or in part, for the exercise of any personal data processing activity related to the object of the contract, except for any infrastructure and / or auxiliary services that are strictly necessary for the regular conduct of the CONTRACTING PARTY's operations, and provided that the providers of such infrastructure and / or auxiliary services are identified by the CONTRACTING PARTY before signing this Agreement.

 

13.6 For all purposes, the subcontracted party will be considered OPERATOR, being obliged, at least, to comply with the obligations established in this Agreement. The CONTRACTING PARTY is responsible for ensuring that the subcontracted party is subject to the same obligations of this Agreement. The CONTRACTING PARTY is fully responsible, before TIM, for the data processing activities carried out by the subcontracted party, as well as for any incidents occurred in the context of the processing of personal data by such subcontracted party, as provided for in this Agreement.

 

13.7 Whenever possible, especially in the event that the transfer of personal data to third parties is necessary, such treatment will take place anonymously, preserving the identity of the holders of personal data and without allowing their identification.

 

(14 / 16)

 

 

13.8 After fulfilling the purpose of data treatment for the due fulfillment of this Agreement by the CONTRACTING PARTY, it must make sure that the personal data are irreversibly and immediately deleted from all bases managed, administered and / or in any way controlled by the CONTRACTING PARTY, guaranteeing its confidentiality.

 

13.9 If the CONTRACTING PARTY processes data on an international territory and / or deals with information from residents outside the Brazilian territory, it must obtain prior approval from TIM and follow its instructions in this regard, as well as the guidelines of the regulations and applicable privacy and protection laws of personal data.

 

CLAUSE FOURTEEN: GENERAL PROVISIONS

 

14.1 Any communications between the Parties relating to this Agreement will only take effect, as provided in this Agreement, if made in writing and (a) delivered by hand or (b) sent by mail with Notification of Receipt (NR), or sent during business hours of business days by email with confirmation of receipt of the recipient of the email. For the purposes of communications relating to this Agreement, the following information and addresses of the Parties must be considered:

 

For the CONTRACTING PARTY:
Address: [XXXXX]
Att.: [XXXXX]
Email: [XXXXX]

 

For TIM:
Address: [XXXXX]
Att.: [XXXXX]
Email: [XXXXX]

 

14.2 This Agreement does not create any type of company, association, joint venture or any other relationship of a similar nature between the Parties, and neither Party is permitted to act on behalf of the other.

 

14.3 This Agreement contains the full commitment between the Parties with respect to its object and replaces any previous contractual instrument or agreement, written or oral, with respect to all matters covered by or mentioned in this Agreement.

 

14.4 This Agreement binds the Parties and any of their successors, and shall automatically transferred to the supervening entity, and any authorized assignees. Any alteration or modification of this Agreement will only be valid upon a written ammendment, which shall be signed by the legal representatives of the Parties.

 

14.5 The Parties expressly acknowledge that all provisions of this Agreement have been fully negotiated and accepted with the support of their legal advisors, thus reflecting the subjective good faith of the Parties to this Agreement.

 

14.6 Failure or delay, by either Party, in exercising any right arising from this Agreement will not imply in a waiver or novation, and shall be construed as mere liberality, and the right may be exercised at any time, unless the Parties expressly provide otherwise.

 

14.7 Neither Party will be liable to the other for any delay or failure to enforce any provision of this Agreement as a result of acts of God and force majeure, under the terms of the Civil Code.

 

14.8 In case of doubt or contradiction between this Agreement and its annexes, the provisions of this Agreement will always prevail.

 

(15 / 16)

 

 

14.9 Taxes that are due directly or indirectly in connection with this Agreement or its execution are the responsibility of the Party that causes such tax obligation, as defined in the applicable law.

 

14.10 The Parties declare, under the penalties of law that the attorneys-in-fact and / or legal representatives undersigned are duly constituted in the form of the respective constitutive acts, with powers to assume the obligations now contracted.

 

CLAUSE FIFTEEN: JURISDICTION AND APPLICABLE LAW

 

15.1 This Agreement is governed by Brazilian law.

 

15.2 The Central Forum of the City of Sao Paulo is elected, with express resignation to any other, however privileged it may be, to settle any doubts or litigation arising from this Agreement.

 

IN WITNESS WHEREOF, the Parties sign this instrument in two (2) counterparts of equal content and form, in the presence of two (2) witnesses indicated below.

 

  São Paulo, July 21, 2020

 

  /s/ Andre Brandolise Foresto
  TIM SA
   
  /s/ Fabio Matias de Souza /s/ Renato Friedrich
  ZENVIA MOBILE SERVIÇOS DIGITAIS SA

 

/s/ Renato Ferri Soares Pinto  
WITNESS  

 

(16 / 16)

Exhibit 10.08

 

CERTAIN INFORMATION IN THIS EXHIBIT, MARKED BY [****], HAS BEEN EXCLUDED. SUCH EXCLUDED INFORMATION IS NOT MATERIAL AND IS THE TYPE THAT THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL.

 

CERTAIN PERSONAL INFORMATION IN THIS EXHIBIT, MARKED BY [XXXXX] HAS BEEN EXCLUDED.

 

SHARE PURCHASE AND SALE AGREEMENT

 

among

 

MIGUEL ÁNGEL MORKIN

 

JULIÁN BENDER

 

EZEQUIEL SCULLI

 

LAUTARO SCHIAFFINO

 

REMAINING SHAREHOLDERS

 

and

 

EMPLOYEES WITH EQUITY

 

(“Sellers”)

 

and

 

ZENVIA MOBILE SERVIÇOS DIGITAIS S.A.

 

(“Buyer”)

 

and

 

MIGUEL ÁNGEL MORKIN, as Shareholder Representative

 

(“Shareholder Representative”)

 

with

 

RODATI MOTORS CORPORATION

 

RODATI MOTORS CENTRAL DE INFORMAÇÕES DE VEÍCULOS AUTOMOTORES LTDA.

 

RODATI SERVICES S.A.

 

RODATI SERVICIOS, S.A. DE C.V.

 

(“Companies”)

 

as intervening party

 

Dated as of July 24, 2020

 

 

 

 

This Share Purchase and Sale Agreement entered into this July 24, 2020, by and among:

 

On the one side, as sellers (jointly designated as “Sellers”):

 

1. MIGUEL ÁNGEL MORKIN, an Argentinean citizen, single, industrial engineer, bearer of the Argentinean Passport No. [XXXXX], resident and domiciled in [XXXXX] (“Miguel”);

 

2. JULIÁN BENDER, an Argentinean citizen, single, lawyer, bearer of the Argentinean Passport No. [XXXXX], resident and domiciled in [XXXXX] (“Julián”);

 

3. EZEQUIEL SCULLI, an Argentinean citizen, single, systems engineer, bearer of the Argentinean Passport No. [XXXXX], resident and domiciled in [XXXXX] (“Ezequiel”);

 

4. LAUTARO SCHIAFFINO, an Argentinean citizen, single, industrial engineer, bearer of the Argentinean Passport No. [XXXXX], resident and domiciled in [XXXXX] (“Lautaro” and, jointly with Miguel, Julián and Ezequiel, the “Managing Shareholders”);

 

5. REMAINING SHAREHOLDERS, shareholders of the Company, as defined below, who/which are identified in Exhibit A and are parties of this Agreement, assuming all obligations and rights provided hereunder, herein represented by its authorized legal representatives (jointly the “Remaining Shareholders”); and

 

6. EMPLOYEES WITH EQUITY, shareholders of the Company, as defined below, who are identified in Exhibit B and are parties of this Agreement, assuming all obligations and rights provided hereunder (jointly the “Other Employees”),

 

and, on the other side, as buyer (“Buyer” or “Zenvia”):

 

7. ZENVIA MOBILE SERVIÇOS DIGITAIS S.A., a corporation with head offices in the city of Porto Alegre, State of Rio Grande do Sul, Brazil, at Avenida Dr. Nilo Peçanha, 2900, 14º andar, Chácara das Pedras, CEP 91330-001, enrolled with the Federal Taxpayer Registration under CNPJ/ME No. 14.096.190/0001-05, herein represented by its duly authorized legal representatives, according to its Bylaws,

 

and, also:

 

8. MIGUEL (as defined above), solely in his capacity as the Shareholder Representative (defined below);

 

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9. RODATI MOTORS CORPORATION, a corporation incorporated and existing according to the laws of the State of Delaware, with registered offices at 3500 South Dupont Highway, Dover, County of Kent, Delaware, United States of America, Delaware registration number 5472663, herein represented by its duly authorized legal representatives according to its Bylaws (“Company” or “Rodati US”);

 

10. RODATI MOTORS CENTRAL DE INFORMAÇÕES DE VEÍCULOS AUTOMOTORES LTDA., a limited liability company with head offices in the city of São Paulo, State of São Paulo, Brazil, at Avenida das Nações Unidas, 14.261, Vila Gertrudes, enrolled with the Federal Taxpayer Registration under CNPJ/ME No. 20.393.119/0001-89, herein represented by its duly authorized legal representatives according to its Articles of Association (“Rodati Brazil”);

 

11. RODATI SERVICES S.A., a corporation incorporated and existing according to the laws of Argentina, with head offices at Superí 1456, Buenos Aires, Argentina, enrolled with the CUIT 30714474681, herein represented by its duly authorized legal representatives according to its Bylaws (“Rodati Argentina”); and

 

12. RODATI SERVICIOS, S.A. DE C.V., a corporation incorporated and existing according to the laws of Mexico, with head offices at Calle Paseo de Anahuac #85, Colonia Paseo de las Palmas, Municipio Huixquilucan, Mexico City, Mexico, enrolled with the RFC:  RSE1712128C9, herein represented by its duly authorized legal representatives according to its Bylaws (“Rodati Mexico” and, jointly with Rodati Brazil and Rodati Argentina, the “Subsidiaries”),

 

Rodati US and Subsidiaries are jointly referred to as the “Companies”.

 

Sellers, Buyer and Companies are hereinafter jointly referred to as “Parties” and, individually, as “Party”.

 

W I T N E S S E T H:

 

A. WHEREAS the Sellers, on the date hereof, jointly hold the totality of one hundred per cent (100%) of the issued and outstanding shares of capital stock of the Company and in such classes, series and amounts provided in Exhibit C (the “Rodati US Shares”);

 

B. WHEREAS the Company holds the majority equity interest of the capital of the Subsidiaries and the Managing Shareholders hold the minority equity interest of the capital of the Subsidiaries, according to the proportions provided in Exhibit D;

 

C. WHEREAS the Parties have executed a Binding Offer on June 25, 2020 (“Binding Offer”), through which the Parties have agreed on certain conditions for the proposed acquisition of the Shares from the Sellers and from the Managing Shareholders, as applicable, which conditions shall be superseded and replaced in their entirely by the terms of this Agreement;

 

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D. WHEREAS, on the one side, subject to the terms of this Agreement, the Sellers desire to sell, assign and transfer the Shares to the Buyer and, on the other side, the Buyer desires to acquire directly the Rodati US Shares;

 

E. WHEREAS, on the one side, subject to the terms of this Agreement, the Managing Shareholders agree to assign and transfer the totality of the minority participation that they own of the capital of the Subsidiaries to the Buyer and, on the other side, the Buyer desires to acquire the minority shares of the capital of the Subsidiaries (“Minority Shares” and, jointly with Rodati US Shares, are hereinafter referred to as “Shares”); and

 

F. WHEREAS, Buyer and Sellers wish to establish the terms and conditions under which the Shares will be sold by Sellers and purchased by Buyer,

 

NOW, THEREFORE, the Parties decide to enter into this Share Purchase and Sale Agreement (“Agreement”), in accordance with the following sections, representations, warranties, covenants, agreements and conditions:

 

1. Definitions.

 

1.1      When used in this Agreement, including in the preamble above, the following terms, when capitalized, shall have the respective meanings ascribed to them in this Section 1.1, which shall be equally applicable to both the singular and plural forms:

 

“Accounting Rules” shall mean International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB) and contained in the Applicable Law that are applicable to the circumstances of the date of determination, consistently applied.

 

“Adjustment Date Balance Sheet” shall mean the consolidated balance sheet of the Company dated as of June 30, 2020.

 

“Affiliate” shall mean, as to any Person, any other Person that, directly or indirectly, controls, is controlled by or is under common control with such Person, whether through ownership of voting securities or otherwise. For this purpose, and without limiting the foregoing, (a) any Person or group of Persons owning more than fifty percent (50%) of the outstanding voting securities of any other Person, and (b) any Person having the right to direct the management and policies of any other Person, shall be deemed to control such other Person.

 

“Agreement” shall mean this Share Purchase and Sale Agreement.

 

“Aggregate Holdback Amount” shall mean shall mean the sum of (i) the Ezequiel Holdback Amount, plus (ii) the Lautaro Holdback Amount, plus (iii) the Julian Holdback Amount, plus (iv) the Miguel Holdback Amount, plus (v) the Final Installment, in each case as expressed in United States Dollars (USD $).

 

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“Annual Interest Rate” shall have the meaning ascribed to it in Section 2.5.2.

 

“Annualized Adjusted Gross Margin” shall mean gross revenue originated from the Companies’ platform minus applicable sales taxes, minus applicable sales cancellations minus Variable Costs of the Companies’ platform of the previous 6 months multiplied by 2.

 

“Annualized Gross Margin Dispute Items” shall have the meaning ascribed to it in Section 2.7.3.2.

 

“Annualized Gross Margin Dispute Notice” shall have the meaning ascribed to it in Section 2.7.3.1.

 

“Applicable Law” shall mean all laws, decrees, rules, regulations and other legal dispositions (including, without limitation, regulatory rules applicable to the Business), as well as all judicial or administrative orders, judgments and decrees, applicable, as the circumstances indicate, to the Companies and the Business, to one or more of the Parties, or to a particular Person or Persons.

 

“Appraiser” shall have the meaning ascribed to it in Section 3.2.2(b).

 

“Arbitration Center” shall have the meaning ascribed to it in Section 12.1.

 

“Assets” shall mean all assets of the Companies used to conduct the Business, including, without limitation (a) the Sirena app; (b) all agreements with clients of the Business; (c) all Intellectual Property Rights used by the Companies in the conduction of the Business; (d) all permits and authorization necessary for the conduction of the Business; (e) all books and records relating to the Business; and (f) all Employee and Companies’ consultants and service providers contracts and agreements to which one of the Companies is a party.

 

“Balance Sheet Report” shall have the meaning ascribed to it in Section 3.2.

 

“Basket Threshold” shall have the meaning ascribed to it in Section 9.1.1.3.

 

“Binding Offer” shall have the meaning set forth in the preamble of this Agreement.

 

“Business” shall mean the (a) management of Sirena app through the use of WhatsApp Inc.’s platform; and (b) any industry-agnostic software development company whose main features are to help organize, distribute, and simplify messaging communication between the company and its contacts, and which the main market is organizations of Latin America, in each case as conducted by the Companies as of the Closing Date.

 

“Business Day” shall mean a day on which banks are open for business in (a) São Paulo-SP, Brazil; (b) Delaware, United States of America, (c) Buenos Aires, Argentina; and (d) Mexico City, Mexico.

 

“Buyer” shall have the meaning set forth in the preamble of this Agreement.

 

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“Buyer Losses” shall mean any loss, liability, deficiency, direct or indirect damage, disbursement, expense or cost (including reasonable and documented legal and audit expenses) which Buyer may suffer or may be indirectly affected as shareholder of the Companies, sustain or become subject to: (a) as a result of: (i) any breach (including any misrepresentation) of the representations and warranties of the Companies and Sellers contained in Sections 6 and 7, respectively, of this Agreement, (ii) any breach of, or failure to perform, any covenant of the Sellers contained in this Agreement, (iii) any Liabilities of the Companies, not included in the Final Working Capital, occurred on or before the Closing Date, regardless of any disclosure by the Sellers or by the Companies in this Agreement, in its Exhibits, in the Disclosure Schedules, in the Data Room, in the Financial Statements, in the due diligence documents or otherwise, but in each of the foregoing cases only in the event and to the extent that any such Liabilities are initiated and directly result from a Third Party Claim, and not only from any internal review, investigation, audit or other evaluation or action by Buyer or its Affiliates, representatives or advisors (which Liabilities not associated with a Third Party Claim shall not be included in this part (a)(iii) of “Buyer Losses”), or (iv) any Other Companies’ Liabilities (with Buyer Losses described in the foregoing clauses (iii) and / or (iv), “Specified Buyer Losses”); or (b) any Third Party Claims resulting from (i) any event mentioned in (a) above, or (ii) any other event related to the Companies or to the Business, in this last case, which triggering event has occurred until (and including) the Closing Date, regardless of the date that the Loss effectively materializes (that is, Losses materialized after the Closing Date, relating to triggering events attributed to the Companies and/or to the Sellers prior to the Closing Date, shall be considered as Buyer Losses) and which events result in any breach (including any misrepresentation) of the representations and warranties of the Companies and Sellers in Sections 6 and 7, respectively, of this Agreement. For the avoidance of doubt, any Specified Buyer Losses arising from any Liabilities of the Companies not included in the Final Working Capital, as provided for in part (a)(iii) of “Buyer Losses”, shall be fully considered as Buyer Losses for purposes of this Agreement, which means that if the Final Working Capital provides for a provisioned amount of any Specified Buyer Loss and the amount of the Specified Buyer Loss becomes higher than the provisioned amount of the Final Working Capital once such Specified Buyer Loss is finally resolved, as long as there are no procedures or claims pending final decision (“Exceeded Amount”), the Exceeded Amount shall be considered a Buyer Loss for all purposes of this Agreement.

 

“Buyer’s Fundamental Representation and Warranties” shall have the meaning ascribed to it in Section 9.2.1.

 

“Calculation Period” shall mean the period beginning on the Closing Date and ending on the twenty-four (24) month anniversary of the Closing Date.

 

“Cash” shall mean cash, available cash, cash equivalents (bank deposits and/or investments) and marketable securities.

 

“Cash-in Investment for Ordinary Course of Business” shall mean any necessary cash investment necessary in the Companies to be made by the Buyer within ninety (90) days after the Closing Date to cover any insufficiency of funds of Cash necessary to conduct the Companies’ Business in the ordinary course within such 90-day period, which investment will be considered a Cash-in Investment for all purposes of this Agreement.

 

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“Cash Balance” shall have the meaning ascribed to it in Section 2.3.3.

 

“Cash-in Investment” shall have the meaning set forth in Section 2.7 of this Agreement.

 

“Cash-out Payment of the Other Employees” shall have the meaning ascribed to it in Section 2.6.

 

“Cash-out Valuation” shall mean [****].

 

“Cause” shall mean: (a) the refusal or material failure of the applicable Managing Shareholder to comply with their main duties and responsibilities as a service provider of the Buyer or the Companies and in the event such failure or refusal is not remedied within twenty (20) days after a written notice regarding the matter is sent by the Buyer with reasonable ways to remedy such problem(s); (b) the embezzlement by the applicable Managing Shareholder of any resources or assets of the Companies and the Buyer; (c) the excessive use by the applicable Managing Shareholder of alcohol or illegal substances that materially interferes in the performance of such Managing Shareholder’s duties and obligations in relation to the Buyer and the Companies and in the event such interference is not remedied within twenty (20) days after a written notice regarding the matter is sent by the Buyer with reasonable ways to remedy such interference; (d) the conviction of the applicable Managing Shareholders by any court, or the guilty confession by the applicable Managing Shareholder, regarding crimes involving moral turpitude, fraud, misappropriation, dishonesty, robbery or theft; (e) the material non-compliance by the applicable Managing Shareholder of the internal policies of the Buyer and the Companies, as well as the policies against discrimination or sexual or racial harassment, in the event such non-compliance is not remedied (if possible) within twenty (20) days after a written notice regarding the matter is sent by the Buyer or the Companies to such Managing Shareholder; (f) the practice, by the applicable Managing Shareholder, of any gross negligence or willful and serious misconduct, that is, or would reasonably be expected to be, materially injurious to the financial condition, business reputation, operations or commercial relations of the Buyer, the Companies or its Affiliates; or (g) any material breach of this Agreement by the applicable Managing Shareholder or of such Managing Shareholder’s Services Agreement, in each case if such breach is not cured within twenty (20) days after written notice thereof to such Managing Shareholder is sent by the Buyer or the Companies.

 

“Change of Control” shall mean the transfer of control of Buyer to a Third Party, including without limitation the sale or transfer of shares or other securities representing more than fifty percent (50%) of the Buyer’s then outstanding voting securities.

 

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“Closing” means the conclusion of the purchase of the Shares by the Buyer.

 

“Closing Balance Sheet” shall mean the consolidated estimated balance sheet of the Company reflecting the Company’s good faith estimates of its financials as of June 30, 2020 (the “Closing Balance Sheet Date”).

 

“Closing Date” shall mean the date that the Closing occurs, which shall be the date of execution of this Agreement, as provided in Section 5.1.

 

“Closing Date Price Per Share” shall mean an amount expressed in United States Dollars (USD $) and equal to the quotient of (i) the Closing Date Purchase Price, divided by (ii) the Fully Diluted Rodati US Shares.

 

“Closing Date Purchase Price” shall mean an amount expressed in United States Dollars (USD $), and with respect to payments thereof after the Closing Date, and equal to (i) the Cash-out Valuation, and (ii) (A) plus the amount of the Working Capital Overage as set forth on the Closing Balance Sheet (and so assuming the Closing were to occur on the Closing Balance Sheet Date) (the “Closing Date Working Capital Overage”), or (B) minus the amount of the Working Capital Underage as set forth on the Closing Balance Sheet (and so assuming the Closing were to occur on the Closing Balance Sheet Date) (the “Closing Date Working Capital Underage”).

 

“Confidential Information” shall have the meaning set forth in Section 11.1 of this Agreement.

 

“Companies” shall have the meaning set forth in the preamble of this Agreement.

 

“Company” shall have the meaning set forth in the preamble of this Agreement.

 

“Contingencies Costs” shall have the meaning ascribed to it in Section 4.3.

 

“Converted Outstanding Payment” shall have the meaning ascribed to it in Section 2.3.2.

 

“Data Room” shall mean the electronic data room maintained by the Companies prior to the Closing for purposes of sharing due diligence materials on the Companies to Buyer and Buyer’s representatives, a copy of which shall be delivered to Buyer by the Shareholder Representative for record keeping purposes promptly following the Closing.

 

“Date of the Financial Statements” shall mean June 30, 2020.

 

“Debts” shall mean all of the indebtedness of the Companies for money borrowed, including all obligations owing to financial institutions or other Persons for loans, letters of credit, or guaranties, Simple Agreement for Future Equity (SAFEs), including the debts listed in Exhibit 5.1(i), in each case other than any intercompany debt between the Companies, and current liabilities included in the definition of Working Capital below..

 

8

 

 

“Earn-out Notice” shall have the meaning ascribed to it in Section 2.8.3.

 

“Earn-out Payment” shall have the meaning ascribed to it in Section 2.7.

 

“Earn-out Period” shall mean the period of time beginning on the Closing Date and ending on and including the twenty-four (24) month anniversary date of the Closing Date.

 

“Earn-out Shareholders” shall mean the Managing Shareholders and the Other Employees.

 

“Employees” shall mean all current employees of the Companies.

 

“Encumbrances” shall mean all security interests, judgments, liens, pledges, adverse claims, charges, escrows, options, warrants, rights of first refusal, rights of first offer, mortgages, indentures, security interests, or other agreements, arrangements conditioning or restricting transfer, or encumbrances.

 

“Escrow Account” shall have the meaning ascribed to it in Section 4.4.

 

“Escrow Account Trigger Amount” shall have the meaning ascribed to it in Section 9.1.1.4.

 

“Escrow Amount” shall have the meaning ascribed to it in Section 4.4.

 

“Escrow Period” shall have the meaning ascribed to it in Section 4.4.

 

“Expense Fund Amount” shall mean an amount as expressed in United States Dollars (USD $) and equal to [*****].

 

“Expense Fund Pro-Rata Share” shall mean, as applied to any Indemnifying Shareholder, an amount equal to the product of (i) the Expense Fund Amount, multiplied by (ii) such Indemnifying Shareholder’s Indemnification Pro-Rata Share.

 

“Ezequiel” shall have the meaning set forth in the preamble of this Agreement.

 

“Ezequiel’s Cash-out Payment” shall have the meaning ascribed to it in Section 2.3(c).

 

“Ezequiel’s Final Cash-out Payment in Cash” shall have the meaning ascribed to it in Section 2.3(c).

 

“Ezequiel’s Outstanding Cash-out Payment” shall have the meaning ascribed to it in Section 2.3(c).

 

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“Ezequiel’s Share Subscription Grant” shall have the meaning ascribed to it in Section 2.3(c).

 

“Ezequiel’s Upfront Cash-out Payment” shall have the meaning ascribed to it in Section 2.3(c).

 

“Executive Bonuses” shall have the meaning ascribed to it in Section 2.3.7.

 

“Final Installment” shall have the meaning ascribed to it in Section 2.5(d).

 

“Final Cash-out Payment in Cash” shall have the meaning ascribed to it in Section 2.3.1.

 

“Final Working Capital” shall have the meaning ascribed to it in Section 3.1.

 

“Financial Statements” shall mean the balance sheet, the income statement, the statement of cash flows and the equity statement of the Companies dated as of June 30, 2020.

 

“First Adjusted Earn-out Payment” shall have the meaning ascribed to it in Section 2.7.

 

“First Annualized Gross Margin” shall have the meaning ascribed to it in Section 2.7.

 

“First Earn-out Payment” shall have the meaning ascribed to it in Section 2.7.1.

 

“First Earn-out Period” shall have the meaning ascribed to it in Section 2.7.

 

“Fully Diluted Rodati US Shares” means 37,206,961 shares of Common Stock and Preferred Stock of Rodati US.

 

“Gross Debt” shall have the meaning ascribed to it in Section 2.3.3.

 

“Holdback Amount” shall mean, with respect to (i) Ezequiel, the Ezequiel Holdback Amount, (ii) Lautaro, the Lautaro Holdback Amount, (iii) Julian, the Julian Holdback Amount, and (iv) Miguel, the Miguel Holdback Amount.

 

“Indemnifying Shareholders” shall mean the Managing Shareholders and the Remaining Shareholders.

 

“Intellectual Property Rights” shall mean all intellectual property rights, including, without limitation, rights in trademarks, patents, trade names, domain names, copyrights, trade secrets, know how, information, proprietary rights and processes.

 

“Indemnification Pro-Rata Share” shall mean, as applied to any Indemnifying Shareholder, but subject to the terms hereof which require a Managing Shareholder’s indemnification obligations to be joint and several with the indemnification obligations of the other Managing Shareholders in connection with Unpaid Obligations, the quotient of (i) the number of Fully Diluted Rodati US Shares owned by such Indemnifying Shareholder as of immediately prior to the effective time of the Closing, divided by (ii) the Fully Diluted Rodati US Shares, and with the Indemnification Pro-Rata Share of each Indemnifying Shareholder described on Exhibit 1.1B attached hereto.

 

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“Indemnified Party” shall mean any Party which is entitled to receive indemnification for Losses from any other Party, as provided in Sections 9 and 10.

 

“Indemnifying Party” shall mean any Party which is required to pay indemnification for Losses incurred by any other Party, as provided in Sections 9 and 10.

 

“IPO” shall mean the Buyer’s conversion into a public held company by an initial public offer of equity securities of the Buyer on an securities exchange and authorized by the applicable exchange’s securities commission.

 

“Joint Determination” shall have the meaning ascribed to it in Section 3.2.2(a).

 

“Joint Determination Period” shall have the meaning ascribed to it in Section 3.2.2(a).

 

“Julian” shall have the meaning set forth in the preamble of this Agreement.

 

“Julian’s Cash-out Payment” shall have the meaning ascribed to it in Section 2.3(b).

 

“Julian’s Final Cash-out Payment in Cash” shall have the meaning ascribed to it in Section 2.3(b).

 

“Julian’s Outstanding Cash-out Payment” shall have the meaning ascribed to it in Section 2.3(b).

 

“Julian’s Share Subscription Grant” shall have the meaning ascribed to it in Section 2.3(b).

 

“Julian’s Upfront Cash-out Payment” shall have the meaning ascribed to it in Section 2.3(b).

 

“Key Employees” shall mean all employees of the Companies that are essential for the Companies to continue operating their respective Businesses and operations in the ordinary course of business as of the Closing Date.

 

“Lautaro” shall have the meaning set forth in the preamble of this Agreement.

 

“Lautaro’s Cash-out Payment” shall have the meaning ascribed to it in Section 2.3(d).

 

“Lautaro’s Final Cash-out Payment in Cash” shall have the meaning ascribed to it in Section 2.3(d).

 

“Lautaro’s Outstanding Cash-out Payment” shall have the meaning ascribed to it in Section 2.3(d).

 

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“Lautaro’s Share Subscription Grant” shall have the meaning ascribed to it in Section 2.3(d).

 

“Lautaro’s Upfront Cash-out Payment” shall have the meaning ascribed to it in Section 2.3(d).

 

“Liabilities” shall mean all debts, liabilities or other form of obligations (whether accrued, absolute, contingent or unliquidated) collectable by Third Parties owed by the Companies. The definition includes, without limitation, debts originated from loans, accounts payable, Taxes payable, expenses and provisions for the payment of vacations and other benefits to Employees or former Employees.

 

“Liquidation Event” shall mean Buyer’s Change of Control, IPO, merger, amalgamation of the Buyer or the substantial transfer or disposition of all or substantially all of its assets.

 

“Lock-up” shall have the meaning ascribed to it in Section 2.4.

 

“Lock-up Fine” shall have the meaning ascribed to it in Section 2.4.1.

 

“Losses” shall mean, as the circumstances indicate, the Sellers Losses and/or Buyer Losses.

 

“Managing Shareholders” shall have the meaning set forth in the preamble of this Agreement.

 

“Miguel” shall have the meaning set forth in the preamble of this Agreement.

 

“Miguel’s Cash-out Payment” shall have the meaning ascribed to it in Section 2.3(a).

 

“Miguel’s Final Cash-out Payment in Cash” shall have the meaning ascribed to it in Section 2.3(a).

 

“Miguel’s Outstanding Cash-Out Payment” shall have the meaning ascribed to it in Section 2.3(a).

 

“Miguel’s Share Subscription Grant” shall have the meaning ascribed to it in Section 2.3(a).

 

“Miguel’s Upfront Cash-out Payment” shall have the meaning ascribed to it in Section 2.3(a).

 

“Minimum Earn-out Amount” shall have the meaning ascribed to it in Section 2.7.

 

“Minority Shares” shall have the meaning set forth in the preamble of this Agreement.

 

“Monetary Correction Index” shall have the meaning ascribed to it in Section 1.4.3.

 

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“Notice of Liquidation Event” shall have the meaning ascribed to it in Section 1.4.10.

 

“Option Shares” shall have the meaning ascribed to it in Section 1.4.7.

 

“Other Companies’ Liabilities” shall mean any Brazil-based Liabilities of any Brazilian Affiliates of, or other Brazilian companies owned by, the Sellers (other than the Companies), occurred on, before or after the Closing Date, regardless of any disclosure by the Sellers in this Agreement, in its Exhibits, in the Disclosure Schedules, in the Financial Statements, in the due diligence documents or otherwise, and shall not mean any Liabilities originating outside of Brazil for purposes exclusively of this concept of Other Companies’ Liabilities.

 

“Other Employees” shall have the meaning set forth in the preamble of this Agreement and shall mean the Sellers who are as indicated in Exhibit E.

 

“Outstanding Cash-out Payment” shall have the meaning ascribed to it in Section 2.3.1.

 

“Parties” shall have the meaning set forth in the preamble of this Agreement.

 

“Person” shall mean any individual or legal entity, government, association, governmental entity or any other body corporate with legal capacity recognized by any Applicable Law.

 

“Proprietary Information and Inventions Agreement” shall have the meaning ascribed to it in Section 6.11.

 

“Pro-Rata Closing Date Purchase Price” shall mean, as applied to any Seller, the product of (i) the Closing Date Price Per Share, multiplied by (ii) the aggregate Fully Diluted Rodati US Shares owned by such Seller as of immediately prior to the effective time of the Closing.

 

“Purchase and Sale Transaction” shall have the meaning set forth in Section 2.2 of this Agreement.

 

“Purchase Price” shall mean the Closing Date Purchase Price, subject to adjustment in accordance with the terms of this Agreement.

 

“Purchase Price Adjustment” shall have the meaning set forth in Section 3.1 of this Agreement.

 

“Purchase Price Adjustment Date” shall have the meaning set forth in Section 3.2.

 

“Purchase Price Payment Date” shall have the meaning set forth in Section 3.2.3 of this Agreement.

 

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“Reasonable Cause” shall mean with respect to a Managing Shareholder, (i) the relocation of the principal office of the Buyer, Company or Subsidiary where such Managing Shareholder works such that such Managing Shareholder’s daily commute is increased by at least thirty (30) miles each way without the written consent of such Managing Shareholder; (ii) the material reduction of such Managing Shareholder’s annual base salary or employee benefits without the prior consent of such Managing Shareholder; or (iii) the material diminution in such Managing Shareholder’s duties, authority or responsibilities without the prior consent of such Managing Shareholder, other than changes in duties, authority or responsibilities resulting from the Founder’s gross misconduct; or (iv) a proven illness or serious injury resulting in permanent impairment of a body function or permanent damage to body structure or mental disability of such Managing Shareholder.

 

“Related Party” shall have the meaning ascribed to it in Section 6.23.

 

“Release of the Earnings Amounts” shall have the meaning set forth in Section 4.6 of this Agreement.

 

“Remaining Shareholders” shall have the meaning set forth in the preamble of this Agreement.

 

“Restrictive Covenants Fine” shall have the meaning ascribed to it in Section 11.5.

 

“Rodati Argentina” shall have the meaning set forth in the preamble of this Agreement.

 

“Rodati Brazil” shall have the meaning set forth in the preamble of this Agreement.

 

“Rodati Mexico” shall have the meaning set forth in the preamble of this Agreement.

 

“Rodati US” shall have the meaning set forth in the preamble of this Agreement.

 

“Second Adjusted Earn-out Payment” shall have the meaning ascribed to it in Section 2.7.

 

“Second Annualized Gross Margin” shall have the meaning ascribed to it in Section 2.7.

 

“Second Earn-out Payment” shall have the meaning ascribed to it in Section 2.7.2.

 

“Second Earn-out Period” shall have the meaning ascribed to it in Section 2.7.

 

“Second Installment” shall have the meaning ascribed to it in Section 2.5(c).

 

“Sellers” shall have the meaning set forth in the preamble of this Agreement.

 

“Share Subscription Grant” shall have the meaning ascribed to it in Section 2.3.1.

 

“Shares” shall have the meaning set forth in the preamble of this Agreement.

 

“Shareholder Representative” shall have the meaning set forth in the ascribed to it in Section 11.8.

 

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“Seller Pro-Rata Share” shall mean, as applied to any Seller, the quotient of (i) the number of Fully Diluted Rodati US Shares owned by such Seller as of immediately prior to the effective time of the Closing, divided by (ii) the Fully Diluted Rodati US Shares, and with the Seller Pro-Rata Share of each Seller described on Exhibit 1.1C attached hereto.

 

“Sellers’ Fundamental Representation and Warranties” shall mean the representations and warranties in Sections 6.1, 6.2, 6.3, Section 6.5, Section 6.13, and Section 7.1.

 

“Sellers Losses” shall mean any loss, liability, deficiency, direct or indirect damage, expense or cost (including reasonable legal expenses) which Sellers may suffer, sustain or become subject to: (a) as a result of: (i) any breach (including any misrepresentation) of the representations and warranties of the Buyer contained in Section 8 of this Agreement; (ii) any breach of, or failure to perform, any covenant of the Buyer contained in this Agreement; (iii) any Liabilities of the Companies, occurred after the Closing Date and which the triggering event also occurred after the Closing Date, or (iv) any Brazil-based Liabilities of any Brazilian Affiliates of the Buyer or other Brazilian companies owned by the Buyer, and shall not mean any Liabilities originating outside of Brazil; or (b) any Third Party Claims resulting from any event mentioned in (a) above.

 

“Services Agreement” shall have the meaning ascribed to it in Section 4.1(d).

 

“Subsidiaries” shall have the meaning set forth in the preamble of this Agreement.

 

“Target Working Capital on the Closing Date” shall mean zero US dollars (USD $0.00).

 

“Taxes” shall mean all taxes including National, Federal, State, local or other income tax returns in addition to charges, fees, levies or other assessments, including, without limitation, withholding, payroll, employment, social security, property or other taxes, duties, fees, assessments, contributions, including, without limitation, contributions to the Unemployment Compensation Fund (FGTS) and the National Institute of Social Security (INSS), or similar charges of any kind, including, without limitation, all interest and penalties thereon, imposed on the Companies, applicable in Argentina, Brazil, Mexico and the United States of America.

 

“Transactions” shall mean the transactions contemplated by this Agreement and exhibits and schedules attached hereto, including without limitation the Purchase and Sale Transaction.

 

“Third Party Claim” shall mean any claim, action or proceeding, judicial or administrative, for any liability which constitutes Losses, instituted against the Parties by any Third Party.

 

“Third Party” shall mean any Person except the Parties.

 

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“Unpaid Obligations” shall mean the amount of Buyer Losses due and payable hereunder by a Managing Shareholder and which amount the Buyer is unable to recover from such Managing Shareholder either (i) through a set-off and deduction from such amounts otherwise payable (but not yet paid) to such Managing Shareholder by Buyer hereunder, or (ii) after Buyer has used its commercial best efforts to pursue all legal remedies available to it under Applicable Law for a period of at least one (1) year, provided that Unpaid Obligations shall not include Buyer Losses resulting from a breach of such Managing Shareholder’s personal covenants under this Agreement, such as provided in Section 11.

 

“Unresolved Claims” shall have the meaning ascribed to it in Section 4.2.

 

“Upfront Cash-out Payment of the Managing Shareholders” shall have the meaning ascribed to it in Section 2.3.1.

 

“Upfront Cash-out Payment of the Remaining Shareholders” shall have the meaning ascribed to it in Section 2.5(a).

 

“Variable Costs” shall mean the sum of costs described on Exhibit VC attached hereto.

 

“Working Capital” shall mean the result of the current assets of the Companies minus the current liabilities of the Companies (as expressed in United States Dollars as of the Closing Date, in each case as defined and calculated as per the Accounting Rules, provided that (i) any Debt outstanding as of the Closing Date will be also deducted (as a current liability) in such calculation, including any Debt paid by the Buyer on the Closing Date as provided for in Section 5.1(i), (ii) the current assets include accounts receivable relating to credit cards, accounts receivables, fees receivables, bad debt provisions – which have been properly addressed prior to the Closing Date using standard accounting practices, and (iii) current liabilities also include tax obligations, including any estimated tax liabilities as of the Closing Date for Federal, State, local or other tax returns, such as the taxes of the closing month, for taxes assessed monthly, and income tax and social contribution on profits monthly estimates, labor obligations, payments of management fees, or other Taxes, in each case only to the extent not otherwise paid and provided that they are accrued for on the applicable Closing Balance Sheet or Adjusted Date Balance Sheet in accordance with the Accounting Rules.

 

“Working Capital Overage” shall mean the amount, if any, by which the Working Capital as of the Closing Balance Sheet prepared in accordance with the Accounting Rules, exceeds the Target Working Capital on the Closing Date.

 

“Working Capital Underage” shall mean the amount, if any, by which the Target Working Capital on the Closing Date does not exceed the Working Capital as of the Closing Balance Sheet prepared in accordance with the Accounting Rules.

 

“Zenvia” shall have the meaning set forth in the preamble of this Agreement.

 

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2. Purchase and Sale of Shares, Purchase Price and Payment.

 

2.1            Ownership of the Shares. On the date hereof, the Sellers are the owners, free of any Encumbrances, of the Shares, representing one hundred percent (100%) of the outstanding shares of capital stock of the Companies, other than shares of capital stock of the Subsidiaries, which as of the date hereof are owned, free of any Encumbrances, by the Company.

 

2.2            Purchase and Sale. Pursuant to the clauses and conditions set forth in this Agreement, on the Closing Date, based on the Cash-out Valuation of [****], the Sellers hereby sell, transfer and assign to the Buyer, in consideration for the Purchase Price that shall be paid as provided for in this Agreement, and Buyer hereby purchases, the Shares, with all rights inherent thereto, from each and all of the Sellers (the “Purchase and Sale Transaction”). The number of Shares owned by each of the Sellers, as well as the proportion of the equity interest they hold in the capital of the Companies, are described in Exhibit C and Exhibit D of this Agreement.

 

2.3          Payment of the Managing Shareholders. The Managing Shareholders’ portion of the Purchase Price shall be paid to the Managing Shareholders by the Buyer as described in this Section 2.3 in consideration of the Managing Shareholders’ portion of the Purchase and Sale Transaction.

 

(a) Miguel Payments. Buyer shall pay Miguel his portion of the Purchase Price as follows:

 

a. an amount equal to the product of (i) forty-five percent (0.45), multiplied by (ii) Miguel’s Pro-rata Closing Date Purchase Price (“Miguel’s Cash-out Payment”) shall be paid as follows:

 

i. an amount equal to (i) the product of (A) seventy-eight percent (0.78), multiplied by (B) Miguel’s Cash-out Payment, minus (ii) Miguel’s Expense Fund Pro-Rata Share, shall be paid to Miguel on the Closing Date in cash by wire transfer of immediately available funds to the bank account indicated by Miguel (“Miguel’s Upfront Cash-out Payment”);

 

ii. an amount equal to Miguel’s Expense Fund Pro-Rata Share shall be paid on Miguel’s behalf to the Shareholder Representative in cash by wire transfer of immediately available funds to the bank account indicated by the Shareholder Representative;

 

iii. an amount equal to the product of (i) twenty-two percent (0.22), multiplied by (ii) Miguel’s Cash-out Payment (“Miguel’s Outstanding Cash-out Payment”) shall be paid as follows: (x) the Buyer shall make a payment in cash by wire transfer of immediately available funds to the bank account indicated by Miguel, on the thirty-six (36) month anniversary date of the Closing Date in an amount at least equal to Miguel’s Outstanding Cash-out Payment, but pursuant to the calculation and formula, including the potential increase in value provided for in Section 2.3.3 below (such amount, the “Miguel’s Final Cash-out Payment in Cash”); or (y) the Buyer shall grant shares of Buyer’s capital stock in favor of Miguel in the amount at least equivalent in value to the Miguel’s Outstanding Cash-out Payment, but pursuant to the calculation and formula, including the potential increase in value, provided in Section 2.3.4 below, in case of occurrence of a Liquidation Event prior to the payment of the Miguel’s Final Cash-out Payment in Cash and in any event prior to the thirty-six (36) month anniversary date of the Closing Date (“Miguel’s Share Subscription Grant”); and

 

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b. an amount equal to the product of (i) fifty-five percent (0.55), multiplied by (ii) Miguel’s Pro-rata Closing Date Purchase Price (the “Miguel Minimum Earn-out Amount”) shall be paid, together with any applicable increase thereto, in accordance with Section 2.7 below; provided however that an aggregate amount equal to the product of (A) fifteen percent (0.15), multiplied by (B) Miguel’s Pro-rata Closing Date Purchase Price (the “Miguel Holdback Amount”), shall be deducted from the aggregate amount payable to Miguel under Section 2.7 below and shall be paid to Miguel, if at all, in accordance with Sections 4, 9 and 10.

 

(b) Julián Payments. Buyer shall pay Julián his portion of the Purchase Price as follows:

 

a. an amount equal to the product of (i) forty-five percent (0.45), multiplied by (ii) Julián’s Pro-rata Closing Date Purchase Price (“Julián’s Cash-out Payment”) shall be paid as follows:

 

i. an amount equal to (i) the product of (A) seventy-eight percent (0.78), multiplied by (B) Julián’s Cash-out Payment, minus (ii) Julián’s Expense Fund Pro-Rata Share, shall be paid to Julián on the Closing Date in cash by wire transfer of immediately available funds to the bank account indicated by Julián (“Julián’s Upfront Cash-out Payment”);

 

ii. an amount equal to Julián’s Expense Fund Pro-Rata Share shall be paid on Julián’s behalf to the Shareholder Representative in cash by wire transfer of immediately available funds to the bank account indicated by the Shareholder Representative;

 

iii. an amount equal to the product of (i) twenty-two percent (0.22), multiplied by (ii) Julián’s Cash-out Payment (“Julián’s Outstanding Cash-out Payment”) shall be paid as follows: (x) the Buyer shall make a payment in cash by wire transfer of immediately available funds to the bank account indicated by Julián, on the thirty-six (36) month anniversary date of the Closing Date in an amount at least equal to Julián’s Outstanding Cash-out Payment, but pursuant to the calculation and formula, including the potential increase in value provided for in Section 2.3.3 below (such amount, the “Julián’s Final Cash-out Payment in Cash”); or (y) the Buyer shall grant shares of Buyer’s capital stock in favor of Julián in the amount at least equivalent in value to the Julián’s Outstanding Cash-out Payment, but pursuant to the calculation and formula, including the potential increase in value, provided in Section 2.3.4 below, in case of occurrence of a Liquidation Event prior to the payment of the Julián’s Final Cash-out Payment in Cash and in any event prior to the thirty-six (36) month anniversary date of the Closing Date (“Julián’s Share Subscription Grant”); and

 

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b. an amount equal to the product of (i) fifty-five percent (0.55), multiplied by (ii) Julián’s Pro-rata Closing Date Purchase Price (the “Julián Minimum Earn-out Amount”) shall be paid, together with any applicable increase thereto, in accordance with Section 2.7 below; provided however that an aggregate amount equal to the product of (A) fifteen percent (0.15), multiplied by (B) Julián’s Closing Date Purchase Price (the “Julián Holdback Amount”), shall be deducted from the aggregate amount payable to Julián under Section 2.7 below and shall be paid to Julián, if at all, in accordance with Sections 4, 9 and 10.

 

(c) Ezequiel Payments. Buyer shall pay Ezequiel his portion of the Purchase Price as follows:

 

a. an amount equal to the product of (i) fifty-five percent (0.55), multiplied by (ii) Ezequiel’s Pro-rata Closing Date Purchase Price (“Ezequiel’s Cash-out Payment”) shall be paid as follows:

 

i. an amount equal to (i) the product of (A) eighty percent (0.80), multiplied by (B) Ezequiel’s Cash-out Payment, minus (ii) Ezequiel’s Expense Fund Pro-Rata Share, shall be paid to Ezequiel on the Closing Date in cash by wire transfer of immediately available funds to the bank account indicated by Ezequiel (“Ezequiel’s Upfront Cash-out Payment”);

 

ii. an amount equal to Ezequiel’s Expense Fund Pro-Rata Share shall be paid on Ezequiel’s behalf to the Shareholder Representative in cash by wire transfer of immediately available funds to the bank account indicated by the Shareholder Representative;

 

iii. an amount equal to the product of (i) twenty percent (0.20), multiplied by (ii) Ezequiel’s Cash-out Payment (“Ezequiel’s Outstanding Cash-out Payment”) shall be paid as follows: (x) the Buyer shall make a payment in cash by wire transfer of immediately available funds to the bank account indicated by Ezequiel, on the thirty-six (36) month anniversary date of the Closing Date in an amount at least equal to Ezequiel’s Outstanding Cash-out Payment, but pursuant to the calculation and formula, including the potential increase in value provided for in Section 2.3.3 below (such amount, the “Ezequiel’s Final Cash-out Payment in Cash”); or (y) the Buyer shall grant shares of Buyer’s capital stock in favor of Ezequiel in the amount at least equivalent in value to the Ezequiel’s Outstanding Cash-out Payment, but pursuant to the calculation and formula, including the potential increase in value, provided in Section 2.3.4 below, in case of occurrence of a Liquidation Event prior to the payment of the Ezequiel’s Final Cash-out Payment in Cash and in any event prior to the thirty-six (36) month anniversary date of the Closing Date (“Ezequiel’s Share Subscription Grant”); and

 

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b. an amount equal to the product of (i) forty-five percent (0.45), multiplied by (ii) Ezequiel’s Pro-rata Closing Date Purchase Price (the “Ezequiel Minimum Earn-out Amount”) shall be paid, together with any applicable increase thereto, in accordance with Section 2.7 below; provided however that an aggregate amount equal to the product of (A) fifteen percent (0.15), multiplied by (B) Ezequiel’s Pro-rata Closing Date Purchase Price (the “Ezequiel Holdback Amount”), shall be deducted from the aggregate amount payable to Ezequiel under Section 2.7 below and shall be paid to Ezequiel, if at all, in accordance with Sections 4, 9 and 10.

 

(d) Lautaro Payments. Buyer shall pay Lautaro his portion of the Purchase Price as follows:

 

a. an amount equal to the product of (i) sixty percent (0.60), multiplied by (ii) Lautaro’s Pro-rata Closing Date Purchase Price (“Lautaro’s Cash-out Payment”) shall be paid as follows:

 

i. an amount equal to (i) the product of (A) eighty-five percent (0.85), multiplied by (B) Lautaro’s Cash-out Payment, minus (ii) Lautaro’s Expense Fund Pro-Rata Share, shall be paid to Lautaro on the Closing Date in cash by wire transfer of immediately available funds to the bank account indicated by Lautaro (“Lautaro’s Upfront Cash-out Payment”);

 

ii. an amount equal to Lautaro’s Expense Fund Pro-Rata Share shall be paid on Lautaro’s behalf to the Shareholder Representative in cash by wire transfer of immediately available funds to the bank account indicated by the Shareholder Representative;

 

iii. an amount equal to the product of (i) fifteen percent (0.15), multiplied by (ii) Lautaro’s Cash-out Payment (“Lautaro’s Outstanding Cash-out Payment”) shall be paid as follows: (x) the Buyer shall make a payment in cash by wire transfer of immediately available funds to the bank account indicated by Lautaro, on the thirty-six (36) month anniversary date of the Closing Date in an amount at least equal to Lautaro’s Outstanding Cash-out Payment, but pursuant to the calculation and formula, including the potential increase in value provided for in Section 2.3.3 below (such amount, the “Lautaro’s Final Cash-out Payment in Cash”); or (y) the Buyer shall grant shares of Buyer’s capital stock in favor of Lautaro in the amount at least equivalent in value to the Lautaro’s Outstanding Cash-out Payment, but pursuant to the calculation and formula, including the potential increase in value, provided in Section 2.3.4 below, in case of occurrence of a Liquidation Event prior to the payment of the Lautaro’s Final Cash-out Payment in Cash and in any event prior to the thirty-six (36) month anniversary date of the Closing Date (“Lautaro’s Share Subscription Grant”); and

 

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b. an amount equal to the product of (i) forty percent (0.40), multiplied by (ii) Lautaro’s Pro-rata Closing Date Purchase Price (the “Lautaro Minimum Earn-out Amount”) shall be paid, together with any applicable increase thereto, in accordance with Section 2.7 below; provided however that an aggregate amount equal to the product of (A) fifteen percent (0.15), multiplied by (B) Lautaro’s Pro-rata Closing Date Purchase Price (the “Lautaro Holdback Amount”), shall be deducted from the aggregate amount payable to Lautaro under Section 2.7 below and shall be paid to Lautaro, if at all, in accordance with Sections 4, 9 and 10.

 

2.3.1        For purpose of this Agreement, (a) “Upfront Cash-out Payment of the Managing Shareholders” shall mean, jointly, Miguel’s Upfront Cash-out Payment, Julián’s Upfront Cash-out Payment, Ezequiel’s Upfront Cash-out Payment and Lautaro’s Upfront Cash-out Payment; (b) “Outstanding Cash-out Payment” shall mean, jointly, Miguél’s Outstanding Cash-out Payment, Julian’s Outstanding Cash-out Payment, Ezequiel’s Outstanding Cash-out Payment and Lautaro’s Outstanding Cash-out Payment; (c) “Final Cash-out Payment in Cash” shall mean, jointly, Miguél’s Final Cash-out Payment in Cash, Julian’s Final Cash-out Payment in Cash, Ezequiel’s Final Cash-out Payment in Cash and Lautaro’s Final Cash-out Payment in Cash; and (d) “Share Subscription Grant” shall mean, jointly, Miguel’s Share Subscription Grant, Julián’s Share Subscription Grant, Ezequiel’s Share Subscription Grant and Lautaro’s Share Subscription Grant.

 

2.3.2        On the Closing Date, the amount of the Outstanding Cash-out Payment for each Managing Shareholder shall be converted from US Dollars to Brazilian Reais currency, based on the most recent PTAX rate issued by the Brazilian Central Bank, and will be subject to a potential adjustment increase based on the calculation and formula mentioned in Sections 2.3.3 and 2.3.4 below, as the case may be (“Converted Outstanding Payment Amount”). Notwithstanding anything herein to the contrary, and in all cases subject to Section 2.3.7(i) below, the Final Cash-out Payment in Cash shall in all cases be paid in US Dollars and as needed, converted from Brazilian Reais to US Dollars on the date of payment based on the then most recent PTAX rate issued by the Brazilian Central Bank.

 

2.3.3        In the event a Managing Shareholder’s Outstanding Cash-out Payment is required to be paid hereunder as a Final Cash-out Payment in Cash and not a Share Subscription Grant, such Final Cash-out Payment in Cash shall be determined by the following formula:

 

[****]

 

2.3.4        In the event a Managing Shareholder’s Outstanding Cash-out Payment is required to be paid hereunder as a Share Subscription Grant and not a Final Cash-out Payment in Cash, such Share Subscription Grant shall be determined by the following formula:

 

[****]

 

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2.3.5        All payments in cash from the Buyer to a Managing Shareholder as provided in Section 2.3 shall be paid into the bank accounts listed for such Managing Shareholders in Exhibit 2.3.5.

 

2.3.6        Upon the issuance of the shares of Buyer’s capital stock subject to the Share Subscription Grant to a Managing Shareholder (the “Option Shares”), such Managing Shareholder shall have all rights as Buyer’s shareholders, with the applicable annotation of their shares in the Buyer’s Registry Book of Shares and registration and execution of other necessary corporate documents, as applicable.

 

2.3.7        Notwithstanding the foregoing and anything herein to the contrary, including Section 2.3.9, the Buyer undertakes and agrees that (i) both the amount of the Final Cash-out Payment in Cash and the value of Share Subscription Grant amounts, when paid or delivered to the applicable Managing Shareholder shall not be lower than the amount of the Outstanding Cash-out Payment as calculated in US Dollars as of the Closing Date; (ii) the calculations provided in Sections 2.3.3 and 2.3.4 above are the same formulas in use as of the Closing Date for determining certain Buyer’s executive employee’s comparable cash or share bonus amounts (the “Executive Bonuses”), as applicable; (iii) the calculations provided in Sections 2.3.3 and 2.3.4 shall be performed and determined in the same way as such same formulas are performed and determined in the Executive Bonuses when paid, as applicable, and (iv) the Option Shares shall be the same class, series and type of share or equity security of Buyer as is issued pursuant to the Executive Bonuses, and in the event more than one type of share or equity security of Buyer is issued pursuant to the Executive Bonuses, then the Option Shares shall be the same class, series and type of share or equity security as the most senior such share or equity security.

 

2.3.8        The Buyer shall notify the Managing Shareholders in writing about the occurrence of a Liquidation Event within thirty (30) days prior to the effective time of such Liquidation Event, which notice shall include all the material details of the Liquidation Event (“Notice of Liquidation Event”). Within ten (10) Business Days after delivering the Notice of Liquidation Event the Buyer shall call and hold a shareholders’ meeting to formalize the approval of the capital increase of the Buyer through the issuance of the Option Shares in favor of the applicable Managing Shareholders. The Managing Shareholder shall attend, in person or remotely, such shareholders’ meeting of the Buyer and subscribe for the Option Shares, which shall be registered on the Buyer’s corporate books.

 

2.3.8.1      The Buyer and the Managing Shareholders agree that in case the Share Subscription Grant is to be paid by Buyer as a result of a Change of Control, (i) the Buyer shall make the Share Subscription Grant and issue the applicable Managing Shareholders their Option Shares prior to the closing of the Change of Control and, (ii) subsequently, on the terms (including price per share) indicated by the Buyer, which terms shall be substantially similar in all respects to the terms in the Change of Control applicable to any sale and transfer of shares or equity securities of Buyer which were initially issued in connection with any previous Executive Bonus, the applicable Managing Shareholders shall sell their Option Shares to the Third Party for the acquisition of the other shares of the Buyer the context of the Change of Control, provided that such Third Party is not otherwise an Affiliate of the Buyer or any of Buyers’ Affiliates.

 

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2.3.8.2      In the event a Managing Shareholder (i) in his sole discretion, notifies the Buyer in writing requesting the Buyer to formalize his dismissal, and without a Reasonable Cause, as defined in this Agreement, in a manner to cease to work in full-time at the operation of the Buyer, or (ii) is dismissed by Buyer as a full-time employee/service provider for Cause, as defined in this Agreement, then in both cases within thirty-six (36) months counted as of the Closing Date, the Final Cash-out Payment in Cash to be paid to such Managing Shareholder, shall be equivalent to the Converted Outstanding Payment Amount without any increase under Section 2.3.3 or Section 2.3.4. In the event a Managing Shareholder is dismissed by Zenvia as a full-time employee/service provider without Cause, as defined in this Agreement, within thirty-six (36) months counted as of the Closing Date, the Final Cash-out Payment in Cash to be paid to such Managing Shareholder shall be equivalent to the Converted Outstanding Payment Amount, and shall be due and payable at the sole discretion of the Managing Shareholder, either at the time of such dismissal or as of the later time as provided in Section 2.3(a)-(d) when such amount would otherwise be due and payable in the absence of the Managing Shareholder’s dismissal, and shall be subject to increase based on the formula mentioned in Section 2.3.3, and the time of calculation for such Converted Outstanding Payment Amount shall be in any case as of the time the Managing Shareholder elects to be paid (e.g. the time of dismissal or the time provided in Section 2.3(a)-(d)), except that in the case where the Managing Shareholder elects to be paid at the time provided in Section 2.3(a)-(d) and a Liquidation Event then occurs prior to such payment time, the Converted Outstanding Payment Amount shall be calculated and paid as of the time immediately prior to the closing of the Liquidation Event. Notwithstanding anything to the contrary, and for the avoidance of doubt, in no event shall the Final Cash-out Payment in Cash be in an amount less than the Converted Outstanding Payment Amount (as increased, if applicable, pursuant to Section 2.3.3) and in no event the Managing Shareholder will be entitled to the Share Subscription Grant for purposes of payment of the Outstanding Cash-out Payment in case the Managing Shareholder ceases to work in full-time at the Companies or another Affiliate of the Buyer, as determined by Buyer, pursuant to the terms and conditions provided for in this Section 2.3.9.

 

2.4           Lock-up. If and when the Share Subscription Grant is required to be made and the corresponding Option Shares are issued in connection with a Liquidation Event specifically defined as an IPO (and not other Change of Control), the Managing Shareholders shall be subject to a twelve (12) month lock-up period counted as from the day immediately after the Share Subscription Grant is required to be made (the “Lock-up Period”). During the Lock-up Period, the Managing Shareholder shall not, without Buyer’s prior written consent, sell, dispose, make any short sale of, loan, offer as mortgage, pledge, offer, grant any rights, trade or sell any option, in whole or in part, their Option Shares or any of its economic rights (collectively, the “Lock-up Obligations”).

 

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2.5          Cash-out Payment of the Remaining Shareholders. The Remaining Shareholders’ portion of the Purchase Price shall be paid to the Remaining Shareholders by the Buyer as described in this Section 2.5 in consideration of the Remaining Shareholders’ portion of the Purchase and Sale Transaction.

 

(a) Buyer shall pay to each Remaining Shareholder on the Closing Date an amount in cash, by wire transfer of immediately available funds, equal to (i) the product of (a) fifty percent (0.50), multiplied by (b) such Remaining Shareholder’s Pro-Rata Closing Date Purchase Price, minus (ii) such Remaining Shareholder’s Expense Fund Pro-Rata Share (“Upfront Cash-out Payment of the Remaining Shareholders”);

 

(b) Buyer shall pay, on behalf of each Remaining Shareholder, an amount in cash by wire transfer of immediately available funds to the bank account indicated by the Shareholder Representative, equal to such Remaining Shareholder’s Expense Fund Pro-Rata Share;

 

(c) Buyer shall pay to each Remaining Shareholder within twelve (12) months counted as of the Closing Date, an amount in cash, by wire transfer of immediately available funds, equal to the product of (i) thirty-five percent (0.35), multiplied by (ii) such Remaining Shareholder’s Pro-Rata Closing Date Purchase Price (“Second Installment”); and

 

(d) Buyer shall pay to each Remaining Shareholder within twenty-four (24) months counted as of the Closing Date, an amount in cash, by wire transfer of immediately available funds, equal to (i) the product of (a) fifteen percent (0.15), multiplied by (b) such Remaining Shareholder’s Pro-Rata Closing Date Purchase Price (“Final Installment”), minus (ii) an amount, if any, for which indemnification is required to be paid by such Remaining Shareholder, or withheld from such Remaining Shareholder’s Final Installment, pursuant to the provisions of Sections 4, 9 and 10 below.

 

2.5.1        All payments in cash from the Buyer to a Remaining Shareholder as provided in Section 2.5, except as set forth in Section 2.5(b), shall be paid into the bank account listed for such Remaining Shareholder in Exhibit 2.5.1.

 

2.5.2        Notwithstanding anything to the contrary in Section 2.5(c), the Second Installment shall be adjusted and increased for the accrual of interest at an annual interest rate (“Annual Interest Rate”), which will start on the Closing Date. The Annual Interest Rate on any unpaid Second Installment amount shall be the sum of (i) 10% plus (ii) the product of (1) 0.75% (seventy-five hundreds of percent) multiplied by (2) the number of months passed between the Closing Date and the date such unpaid Second Installment amount is paid. As an example, in the event a portion of the Second Installment is repaid on the six-month anniversary of the Closing Date, the Annual Interest Rate applicable to such repayment amount shall be 14.5% (e.g. 10% plus 0.75% multiplied by 6). The Buyer will have the right to pre-pay any of a remaining Second Installment, partially or totally, at its own discretion, paying the pro-rata interest due at the time the prepayment occurs, provided that any such prepayment shall be paid on a pro-rata basis among all Remaining Shareholders with respect to the remaining pro-rata unpaid amount of their respective Second Installments.

 

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2.6        Cash-out Payment of the Other Employees. The Other Employees’ portion of the Purchase Price shall be paid to the Other Employees by the Buyer as described in this Section 2.6 in consideration of the Other Employees’ portion of the Purchase and Sale Transaction.

 

(a) Buyer shall pay to each Other Employee within six (6) months as of the Closing Date an amount in cash, by wire transfer of immediately available funds, equal to (i) the product of forty percent (0.40), multiplied by (b) such Other Employee’s Pro-Rata Purchase Price (“Cash-out Payment of the Other Employees”); and

 

(b) Buyer shall pay to each Other Employee an amount equal to the product of (i) sixty percent (0.60), multiplied by (ii) such Other Employee’s Pro-Rata Closing Date Purchase Price (the “Other Employee Minimum Earn-out Amount”), together with any applicable increase thereto, in accordance with Section 2.7 below.

 

2.6.1        All payments in cash from the Buyer to an Other Employee as provided in Section 2.6, shall be paid into the bank account listed for such Other Employee in Exhibit 2.6.1, which Exhibit shall be provided to Buyer by the Shareholder Representative within six (6) months as of the Closing Date.

 

2.7         Earn-out. The Miguel Minimum Earn-out Amount, Julian Minimum Earn-out Amount, Ezequiel Minimum Earn-out Amount, Lautaro Minimum Earn-out Amount and Other Employee Minimum Earn-out Amount payable to the Managing Shareholders and the Other Employees, as applicable (each, the “Minimum Earn-out Amount”), shall be paid and subject to increase as provided for in this Section 2.7 (collectively, the “Earn-out Payment”). For purposes of this Agreement, the following terms shall have the following meanings and following calculations shall apply to the Earn-out Payments:

 

(a) “CIS” (Cash-in Share) means:

 

[****]

 

(b) “MSES” (Managing Shareholder Earn-out Share) means:

 

[****]

 

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(c) First Earn-out Payment Calculation:

 

[****]

 

(d) Second Earn-out Payment Calculation:

 

[****]

 

(e)          “Cash-in Investment” shall mean any necessary cash investment necessary in the Companies as mutually agreed between the Buyer and the Shareholder Representative. Any cash-in investment made during both Earn-out Payments will consider the Cash-out Valuation as basis.

 

(f)            “First Earn-out Period” shall mean the period beginning on the Closing Date and ending on and including the twelve (12) month anniversary date of the Closing Date.

 

(g)            “Second Earn-out Period” shall mean the period beginning on the Closing Date and ending on and including the twenty-four (24) month anniversary date of the Closing Date.

 

2.7.1        First Earn-out Payment. The Buyer shall pay the first-year portion of the Earn-Out Payment (“First Earn-out Payment”) to each Earn-Out Shareholder in an amount equal to the greater of (i) fifty percent (50%) of such Earn-out Shareholder’s applicable Minimum Earn-out Amount, and (ii) such Earn-out Shareholder’s applicable First Adjusted Earn-out Payment (as defined above).

 

2.7.2        Second Earn-out Payment. The Buyer shall pay the second-year portion of the Earn-Out Payment (“Second Earn-out Payment”) to each Earn-Out Shareholder in an amount equal to the greater of (i) fifty percent (50%) of such Earn-out Shareholder’s applicable Minimum Earn-out Amount, and (ii) such Earn-out Shareholder’s applicable Second Adjusted Earn-out Amount (as defined above).

 

2.7.3        For purposes of Sections 2.7.1 and 2.7.2 above, the Buyer shall calculate the First Annualized Gross Margin and the Second Annualized Gross Margin within thirty (30) Business Days as of the completion of the First Earn-out Period and Second Earn-out Period, respectively. The Buyer shall then immediately notify the Shareholder Representative indicating the corresponding calculations and supporting documents of the applicable First Annualized Gross Margin and the Second Annualized Gross Margin, First Earn-out Payment and Second Earn-out Payment (“Earn-out Notice”) and make the corresponding Earn-out Payment to the Managing Shareholders and Other Employees within five (5) Business Days as of the receipt of the Earn-out Notice by the Shareholder Representative and the Shareholder Representative’s written agreement to the calculations included therein, subject to the provisions set forth below.

 

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2.7.3.1.      The Shareholder Representative may, in good faith and under reasonable grounds, dispute the relevant First Annualized Gross Margin or the Second Annualized Gross Margin calculation by delivery of written notice thereof (“Annualized Gross Margin Dispute Notice”) to Buyer within thirty (30) days following receipt, by the Shareholder Representative, of the First Annualized Gross Margin or the Second Annualized Gross Margin calculation.

 

2.7.3.2.      The Annualized Gross Margin Dispute Notice shall set forth in detail all items disputed by the Shareholder Representative (“Annualized Gross Margin Disputed Items”), together with Shareholder Representative’s proposed changes thereto, including an explanation in detail of the basis on which Shareholder Representative proposes such changes.

 

2.7.3.3.      If (i) by written notice to Buyer, the Shareholder Representative accepts the relevant Annualized Gross Margin calculation; or (ii) the Shareholder Representative fails to deliver an Annualized Gross Margin Dispute Notice within the prescribed thirty-day (30-day) period, such Annualized Gross Margin calculation delivered by the Buyer shall become final and binding on Shareholder Representative and Buyer as of the date on which the earlier of the foregoing events occurs, except in case of an obvious error, as, for instance, basic errors in algebra, in which occasion either Party may communicate the occurrence of the error to the other, in writing, so that the error is corrected.

 

2.7.3.4.      If the Shareholder Representative has timely delivered an Annualized Gross Margin Dispute Notice, then Buyer and Shareholder Representative shall use commercially reasonable efforts to reach agreement on the Annualized Gross Margin Disputed Items.

 

2.7.3.5.      If, by the thirtieth (30th) day following Buyer’s receipt of the Annualized Gross Margin Dispute Notice, Buyer and Shareholder Representative have not agreed in writing to the resolution of the Annualized Gross Margin Disputed Items, then such Annualized Gross Margin Disputed Items shall be submitted by the Parties for review and final determination by an Appraiser for resolution.

 

2.7.3.6.      Buyer and Shareholder Representative shall instruct the Appraiser to prepare and deliver revised Annualized Gross Margin calculation to Buyer and Shareholder Representative within thirty (30) days of the referral of such dispute to the Appraiser, taking into account all items not in dispute between Buyer and Shareholder Representative (to be included in the revised Annualized Gross Margin calculation in the amounts agreed by Buyer and Shareholder Representative) and Annualized Gross Margin Disputed Items to be resolved by the Appraiser.

 

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2.7.3.7.      The Appraiser, acting in its capacity as an expert and not as an arbitrator, (a) shall confine its review to the unresolved Annualized Gross Margin Disputed Items (including with respect to the corresponding values assigned by Buyer and Shareholder Representative to each of the Annualized Gross Margin Disputed Items), except where it is necessary for the Appraiser to review other undisputed items to reflect the correct calculation of the Annualized Gross Margin, (b) shall make its determination based on presentations and supporting material provided by Buyer and Shareholder Representative, which, however, shall not restrict the review to be conducted by the Appraiser; (c) shall be bound by the express terms, conditions and covenants set forth in this Agreement, including the definitions included herein; (d) with respect to each Annualized Gross Margin Disputed Item, the Appraiser’s decision must be an amount between or equal to Shareholder Representative’s position as set forth in the Annualized Gross Margin Dispute Notice and Buyer’s position and related calculations.

 

2.7.3.8.      The revised Annualized Gross Margin calculation (including the calculation of the Earn-out Payment, as applicable) delivered by the Appraiser shall be final and binding upon Buyer and Shareholder Representative, except in case of an obvious error, as, for instance, basic errors in algebra, in which occasion either Party may communicate the occurrence of the error to the Appraiser, in writing, with a copy to the remaining Parties, so that the error is corrected.

 

2.7.3.9.      The fees and expenses arising from the hiring of the Appraiser and its services shall be borne fifty percent (50%) by the Managing Shareholders and Other Employees and fifty percent (50%) by Buyer.

 

2.8          Earn-out Condition. In order for an Earn-out Shareholder to have the right to receive an Earn-out Payment based on such Earn-out Shareholder’s applicable Adjusted Earn-out Amount and not such Earn-out Shareholder’s applicable Minimum Earn-out Amount, the Earn-out Shareholder must remain working full-time at the Companies or another Affiliate of the Buyer, with such Companies or Affiliate as determined by Buyer, as described, in the case of a Managing Shareholder, in the Services Agreement executed with each of the Managing Shareholders on the Closing Date, subject to the provisions of Sections 2.8.1 and 2.8.2 below.

 

2.8.1        In the event an Earn-out Shareholder (i) in his sole discretion, notifies the Buyer in writing requesting the Buyer to formalize his dismissal, and without a Reasonable Cause, as defined in this Agreement, in a manner to cease to work in full-time at the operation of the Companies or another Affiliate of the Buyer, or (ii) is dismissed by Buyer for Cause, as defined in this Agreement, then the Earn-out Payment to be paid to the applicable Earn-out Shareholder shall be equivalent to such Earn-out Shareholder’s applicable Minimum Earn-out Amount, when such payment is due, and shall not be subject to any increase as provided for in Section 2.7.

 

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2.8.2        In the event an Earn-out Shareholder (i) in his sole discretion, notifies the Buyer in writing requesting the Buyer to formalize his dismissal with a Reasonable Cause, as defined in this Agreement, in a manner to cease to work in full-time at the operation of the Buyer, or (ii) is dismissed by Buyer without Cause, as defined in this Agreement, then the Earn-out Payment to be paid to the applicable Earn-out Shareholder, when such payment is due, shall be equivalent to such Earn-out Shareholder’s applicable Minimum Earn-out Amount plus the First Adjusted Earn-out Payment or the Second Adjusted Earn-out Payment, as the case may be, calculated pursuant to Section 2.7, provided that the corresponding amount of the First Adjusted Earn-out Payment or the Second Adjusted Earn-out Payment, as the case may be, shall be, in both cases, calculated and paid proportionally to the period in which the Earn-out Shareholders remained working in full-time at the operation of the Buyer, provided further that (a) in case the Earn-out Shareholder ceases to work full-time at the operation of the Buyer during the First Earn-out Period, the First Adjusted Earn-out Payment applicable to such Earn-out Shareholder shall be an amount equal to the product of (X) one hundred percent (100%) of such Earn-out Shareholder’s Minimum Earn-out Amount, multiplied by (Y) the applicable First Adjusted Earn-out Payment; or (b) in case the Earn-out Shareholder ceases to work full-time at the operation of the Buyer during the Second Earn-out Period, the Second Adjusted Earn-out Payment shall be an amount equal to the product of (X) fifty percent (50%) of such Earn-out Shareholder’s Minimum Earn-out Amount, multiplied by (Y) the applicable Second Adjusted Earn-out Payment.

 

2.9            Minimum Budget. The Parties agree that the Managing Shareholders shall provide to the Buyer on the Closing Date a minimum budget for the Companies’ operations (such as expenditures and personnel headcount) for the two (2) years following the Closing Date (the “Budget Period”), which budget is hereby approved by Zenvia and which shall be part of this Agreement as Exhibit 2.9 (the “Budget”).

 

2.10         Earn-out Payment. All Earn-out Payments from the Buyer to an Earn-out Shareholder shall be made by wire transfer of immediately available funds to the bank account of such applicable Managing Shareholder or Other Employee identified in Exhibit 2.10.

 

2.11         Fine. In the event of any payment of the Purchase Price (including Escrow Amount as provided for in Section 3.4 below, Earn-out Payments or Subscription Share Grants) required to be made by the Buyer to the Sellers hereunder in not paid within five (5) Business Days after the date such payment is due, all then outstanding payment obligations of the Buyer hereunder (including Escrow Amount as provided for in Section 3.4 below, Earn-out Payments or Subscription Share Grants), shall become immediately due and payable, and it will be subject to late payment interest of [****] and late payment fine of [****] calculated until the date of the effective payment.

 

2.12         Taxes. The payments provided in Section 2 of this Agreement shall be subject to reduction to reflect Taxes, which shall be borne by the applicable Seller, required to be withheld by Buyer pursuant to any Applicable Law or regulation, as the case may be, which payment deductions the Buyer shall in each case withhold and remit to the applicable governmental authority on the behalf of the applicable Seller, provided, however, that (a) Buyer shall advise the applicable Seller, no later than 10 days in advance of such withholding, of the basis for any proposed withholding, shall provide such Seller the opportunity to provide any documentation or restructure to minimize such withholding and shall not make a withholding (and shall delay payment of the related payment) until such Seller shall agree in writing to the same; and (b) in any event where a Seller agrees to withholding and Buyer so withholds any Tax, Buyer shall provide any and all requisite documentation and certifications to enable such Seller to achieve a refund or credit of such withheld tax amounts, if applicable.

 

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3.            Purchase Price Adjustment.

 

3.1           Purchase Price Adjustment. After the Closing Date, the Purchase Price shall be adjusted based on the Companies’ Working Capital as of June 30, 2020 determined according to the Adjustment Date Balance Sheet, as defined below (“Final Working Capital”), which shall be calculated as follows, subject to the dispute resolution provisions in Section 3.2 (“Purchase Price Adjustment”): (i) in case the Final Working Capital is higher than the amount of the Target Net Working Capital on the Closing Date, then the Purchase Price will be increased by such amount; and (ii) in the event the Final Working Capital is less than the amount of the Target Net Working Capital on the Closing Date, then the Purchase Price will be decreased by such amount, provided that, in both cases, the Purchase Price Adjustment shall take into account the amounts of the Closing Date Working Capital Overage or the Closing Date Working Capital Underage, as the case may be, that has already been increased or decreased from the Closing Date Purchase Price, as the case may be.

 

3.1.1       The Parties agree that in case the Buyer needs to make any Cash-in Investment to cover any Working Capital need for ordinary course of Business of the Companies, such investment will be considered a Cash-in Investment for all purposes of this Agreement.

 

3.1.2       The Parties agree that in connection with Closing and the determination of the Final Working Capital, Buyer’s consolidated financials commencing as of July 1, 2020 shall include the accounts of the Companies, provided that all costs and expenses of the Sellers and/or Companies related to the Transaction shall be considered for purposes of calculation of the Final Working Capital and determination of the Purchase Price Adjustment.

 

3.2          Delivery of the Balance Sheet Report. Within ninety (90) calendar days as of the Closing Date (“Purchase Price Adjustment Date”), the Buyer shall prepare and deliver to the Shareholder Representative the Adjustment Date Balance Sheet analysis stating its calculation of the Working Capital as of the Closing Date and the corresponding Purchase Price Adjustment (the “Balance Sheet Report”). It is herein agreed between the Parties that, during the period mentioned above, the Shareholder Representative, including its advisors, shall reasonably collaborate with the requests and supply within the reasonably indicated timeframe any documents that may be necessary for the preparation of the Balance Sheet Report.

 

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3.2.1         Analysis of the Balance Sheet Report. The Shareholder Representative shall have forty-five (45) calendar days, as of the receipt of the Balance Sheet Report, including the related work, to examine it and notify Buyer of its acceptance or not of the Purchase Price Adjustment indicated therein on behalf of the Sellers. It is herein agreed between the Parties that, during the period mentioned above, the legal, financial and accounting advisors of the Sellers shall have free access to any and all documents and systems of the Companies necessary to the preparation of the Balance Sheet Report, and the Buyer and the Companies, including their respective employees and advisors, shall collaborate with the requests and supply within the reasonably indicated timeframe any documents that may be necessary for the preparation of the Balance Sheet Report. In case the Shareholder Representative contests the Purchase Price Adjustment, it shall deliver jointly with the notification set forth in this Section a report explaining in detail its disagreement and indicating its calculation of the Purchase Price Adjustment, with an explanation and a justification of such calculation (“Shareholder Representative’s Report”) and the procedure described in Section 3.2.2 below shall apply. The failure to timely send Shareholder Representative’s Report according to this Section shall be understood as an acceptance of the Balance Sheet Report and the Purchase Price Adjustment provided by the Buyer. In this case, the Purchase Price Adjustment provided for in the Balance Sheet Report shall be final and binding on the Parties and the payment of the Purchase Price Adjustment, if any, shall be made in accordance with Section 3.2.3 below.

 

3.2.2         Arbitration of the Purchase Price Adjustment. In case the amount of the Purchase Price Adjustment indicated in the Balance Sheet Report is not accepted by the Shareholder Representative, as described in Section 3.2.1 above, the Purchase Price Adjustment will be determined in accordance with the following procedure:

 

(a) Joint Determination. During the fifteen (15) day period immediately following the Buyer’s receipt of the Shareholder Representative’s Report (“Joint Determination Period”), the Buyer and Shareholder Representative shall negotiate in good faith to jointly reach an agreement in the non-accepted items and jointly determine the Purchase Price Adjustment (“Joint Determination”). In case such Joint Determination is made, the payment of the Purchase Price Adjustment, if any, shall be made in accordance with Section 3.2.3 below.

 

(b) Determination by an Appraiser. In case the Buyer and Shareholder Representative are unable to make a Joint Determination, then the Buyer and Shareholder Representative shall submit the issue to the independent audit company to be selected among one of the following independent audit companies of large international reputation (PricewaterhouseCoopers Auditores Independentes; KPMG Auditores Independentes and Ernst & Young Auditores Independentes) (“Appraiser”), provided such Appraiser shall not otherwise be engaged on other matters of accounting or advice by the Buyer and by the Sellers, to review the Adjustment Date Balance Sheet, the Balance Sheet Report and the Shareholder Representative’s Report to determine the Purchase Price Adjustment. The Appraiser shall, within the maximum term of twenty (20) calendar days after its appointment, present its revision of the Adjustment Date Balance Sheet, Balance Sheet Report and Shareholder Representative’s Report for the purposes of calculating the amount of the Purchase Price Adjustment. The amount so determined by the Appraiser, which shall necessarily be within the range established by Balance Sheet Report and the Shareholder Representative’s Report, shall be final and binding on the Parties and the payment of the Purchase Price Adjustment, if any, shall be made in accordance with Section 3.2.3 below.

 

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(c) Costs of the Procedure. The fees and expenses arising from the hiring of the Appraiser and its services shall be borne fifty percent (50%) by the Sellers and fifty percent (50%) by Buyer.

 

3.2.3        Payment of the Purchase Price Adjustment. After the end of the periods mentioned in Sections 3.2.1 or 3.2.2 above, as the case may be (“Purchase Price Payment Date”), the amount of the Purchase Price Adjustment shall be paid as follows: (i) if the amount of the Purchase Price Adjustment corresponds to an increase to the Purchase Price, the Purchase Price Adjustment shall be paid by Buyer to the Sellers, in cash in immediately available funds deposited into the bank accounts listed in Exhibits 2.3.5, 2.5.1 and 2.6.1 in accordance with each Seller’s applicable Seller Pro-Rata Share listed in Exhibit A, within five (5) Business Days after the end of the periods mentioned in Sections 3.2.1 and 3.2.2 above, as the case may be; or (ii) if the amount of the Purchase Price Adjustment corresponds to a deduction from the Purchase Price, the Purchase Price Adjustment shall be paid by Sellers to Buyer through the compensation of any amount owed to the Sellers related to the First Earn-out Payment and the Second Installment, based on their respective Seller Pro-Rata Share.

 

4.            Holdback, Final Installment Retention and Escrow.

 

4.1        Holdback and Final Installment Retention. The Parties agree that for purposes of securing the performance of the indemnification obligations of the Indemnifying Shareholders under this Agreement, the Buyer shall (a) holdback the applicable portion of the Holdback Amount from each Managing Shareholder’s Second Earn-out Payment, when such payment is due; and (b) deduct from the Final Installment payable to the Remaining Shareholders, in each case such Indemnifying Shareholder’s applicable Indemnification Pro-Rata Share of the amount of the Buyer Losses, subject to the other indemnification limitations and provisions provided for in this Agreement.

 

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4.2           Calculation Period. The Parties agree that, on the twenty-four (24) month anniversary of the Closing Date (“Aggregate Holdback Release Date”), Buyer shall evaluate and calculate the total (i) potential Buyer Losses for which claims related thereto (“Unresolved Claims”) have not been finally resolved and agreed to by the Buyer and the Indemnifying Shareholders (or Shareholder Representative on their behalf) pursuant to Section 10 during the Calculation Period (“Unresolved Buyer Losses”), and (ii) the total amount of the Buyer Losses which have been finally resolved and agreed to by the Buyer and the Indemnifying Shareholders (or Shareholder Representative on their behalf) pursuant to Section 10 during the Calculation Period (“Resolved Buyer Losses” and collectively with Unresolved Buyer Losses, the “Total Losses”), and the amount of the Total Losses shall be fully withheld and discounted from the Aggregate Holdback Amount to be paid to the Indemnifying Shareholders based on their applicable Indemnification Pro-Rata Share. Any Resolved Buyer Losses shall be converted into US dollars, based on the most recent PTAX rates issued by the Brazilian Central Bank at the time such Buyer Losses are finally resolved and agreed to by the Buyer and the Indemnifying Shareholders pursuant to Section 10, and any Unresolved Buyer Losses shall be converted into US dollars, based on the most recent PTAX rates issued by the Brazilian Central Bank at the Aggregate Holdback Release Date.

 

4.3           Contingencies Costs. The Parties agree that the Buyer Losses shall include any reasonable and documented costs or amounts advanced by the Buyer, and any similar deposits to proceed with the defense, in each case related to any Buyer Loss identified by the Buyer (“Contingencies Costs”).

 

4.4           Escrow. The Parties agree that, on the Aggregate Holdback Release Date, simultaneously to the set off of the Buyer Losses as provided in Sections 4.2, the total amount of the Unresolved Buyer Losses (“Escrow Amount”) shall be deposited by Buyer in a third-party escrow account (“Escrow Account”) in order to satisfy or provide a judicial or regulatory guarantee for the Unresolved Claims, provided that these amounts will be retained in such Escrow Account until the applicable Unresolved Claim to which they relate is finally resolved, as long as there are no procedures or claims pending final decision, which have been duly notified by Buyer to the Indemnifying Shareholders (or Shareholder Representative on their behalf), in which case, the respective amounts under discussion shall be retained as Escrow Amount until the final decisions of such procedures or claims are issued (“Escrow Period”).

 

4.4.1         For the avoidance of doubt, on the expiration of the Calculation Period, the Buyer shall pay to the Managing Shareholders and to the Remaining Shareholders the portion of the Aggregate Holdback Amount based on their Indemnification Pro-Rata Share thereof, that were not previously deducted for indemnification claims and that do not represent the Escrow Amount, as provided for in this Section 4.

 

4.5         Escrow Account. The Escrow Amount will be deposited in a bank account opened with a bank mutually approved by Buyer and the Shareholder Representative (“Escrow Bank”) in the name of Buyer and indicating the Indemnifying Shareholders as beneficiaries, and shall be maintained and operated by Bank, exclusively in accordance with the terms and conditions of this Agreement and of the Agreement for the Operation of the Escrow Account to be executed on the expiration term of the Calculation Period. The funds deposited in the such account, together with any income derived from its investment, shall be available to be used to pay any Buyer Losses, subject to the mechanism of Release of the Escrow Amount and of Release of the Earnings Amounts and the provisions of Sections 9 and 10 of this Agreement. The Parties agree that Escrow Bank shall be responsible for the opening, maintenance and operation of the Escrow Account and shall make available and deliver monthly to the Buyer and the Shareholder Representative a bank statement evidencing the movements as well as any earnings, credits and the balance in the account.

 

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4.6           Remuneration on the Escrow Amount. Buyer shall not be required, under the terms hereof, to act as a financial advisor. The Escrow Amount shall always be invested and reinvested in titles of the Bank Deposit Certificate readily convertible to cash, at the sole discretion of the Shareholder Representative, with a term coherent with the mechanism of Release of the Escrow Amount, as established in Sections 4.4 and 4.7 of this Agreement. The Parties agree that upon the periodic release of the balance of the Escrow Amount (if any), any earnings arising from the investment of the Escrow Amount not otherwise fully used for indemnification purposes under the conditions of this Agreement, as the case may be, shall be transferred to the Indemnifying Shareholders at such release time, based on their respective Indemnification Pro-Rata Share, subject to the internal approval procedures by the Escrow Bank to approve the Release of the Earnings Amounts and to the jointly signatures of the Buyer and of the Shareholder Representative on the respective instruction of Release of the Earnings Amounts, as provided for in the Agreement for the Operation of the Escrow Account, (“Release of the Earnings Amounts”). Any investment made with the Escrow Amount will be liquidated at any time in case a payment to the Buyer (or the Companies) is required in view of Buyer’s Losses, subject to the indemnification provisions provided for in this Agreement. Buyer shall not be responsible for any loss which may result from the investment or reinvestment of the Escrow Amount in accordance with the provisions of Shareholder Representative’s instructions, nor for the early liquidation of investments as necessary to cover payments to be made hereunder and that are made in accordance with this Agreement and with the Agreement for the Operation of the Escrow Account.

 

4.7         Release of the Escrow Amount. Notwithstanding the obligation regarding the Release of the Earnings Amounts, as provided for in Section 4.6 above, the Parties agree and the Buyer shall, in the event that there is any balance of the Escrow Amount upon the final resolution and agreement by the Buyer and the Shareholder Representative in accordance with Section 10, release and transfer to the Indemnifying Shareholders such balance of the Escrow Amount, based on their respective Indemnification Pro-Rata Share and to the bank accounts listed for each of the Indemnifying Shareholders in Exhibits 2.3.5 and 2.5.1 of this Agreement, subject to the internal approval procedures by Escrow Bank to release the balance of the Escrow Amount and to the jointly signatures of the Buyer and of the Shareholder Representative on the respective instruction to release such balance of the Escrow Amount, as provided for in the Agreement for the Operation of the Escrow Account (“Release of the Escrow Amount”) and subject to the provisions set forth in Section 4.7.1 below.

 

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4.7.1         The Release of the applicable portion of the Escrow Amount to the Indemnifying Shareholders or the Buyer shall occur, as applicable, within three (3) Business Days after such amount no longer represents an Unresolved Buyer Loss and as agreed between the Buyer and the Shareholder Representative. If the Parties, upon justified reasons, do not reach an agreement in relation to any portion of the Escrow Amount to be released and transferred to either the Buyer or the Indemnifying Shareholders, as applicable, the Buyer and the Shareholder Representative shall discuss the matter in arbitration, as per Section 12 of this Agreement.

 

4.8           Costs. The fees and expenses arising from the Escrow Account and its services shall be borne fifty percent (50%) by the Buyer and fifty percent (50%) by the Indemnifying Shareholders.

 

5.            Closing.

 

5.1          Closing. Subject to the terms and conditions set forth in this Agreement, the Closing of the Purchase and Sale Transaction, shall occur electronically on the date hereof (“Closing Date”). At the Closing, the Parties agree to perform the following acts:

 

(a) Sellers shall sell, transfer and assign to Buyer, free of Encumbrances, and Buyer shall acquire and accept such sale, transfer and assignment of, the Shares, and the Sellers shall execute and deliver to the Buyer such additional transfer certificates evidencing the same, in such forms as are satisfactory to the Buyer;

 

(b) Buyer shall pay and deliver the Upfront Cash-out Payment of the Managing Shareholders, and the Upfront Cash-out Payment of the Remaining Shareholders;

 

(c) The Companies shall deliver to Buyer written resignations executed by the members of the management of the Companies, substantially in form of Exhibit 5.1(c);

 

(d) Each Managing Shareholder shall enter into their respective form of employment agreement with the Buyer or applicable Company, substantially in the forms of Exhibit 5.1(d) (collectively, the “Services Agreements”);

 

(e) Buyer shall provide the Managing Shareholders with written confirmation, in such form as is satisfactory to the Managing Shareholders, that Buyer’s shareholders (i) expressly waive their preemptive rights related to the Option Shares and (ii) covenant and agree to approve, in such manner as is required by Applicable Law (including potentially at a Shareholders’ Meeting of the Buyer) such capital increase necessary for the issuance of the Option Shares, and to approve such issuance itself; and

 

(f) Buyer shall pay, on behalf of the Companies, by wire transfer of immediately available funds, such Debts and Liabilities of the Companies as are described on Exhibit 5.1(f), and to the bank accounts described thereon and corresponding thereto. For the avoidance of doubt, the payment of such Debts shall be considered for the calculation of the Working Capital and Purchase Price Adjustment under the conditions of this Agreement.

 

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5.2           Other Measures. The Parties also undertake to do all other measures and sign all other documents on the Closing Date or thereafter that may be reasonably necessary or convenient to the good and proper formalization of the Transactions, in each case pursuant to the Applicable Law

 

5.3          Post-Closing Obligations. The Managing Shareholders undertake and agree to take all necessary measures, promptly following Buyer’s request thereof, to execute and assist Buyer with registering with the Board of Commerce of the State of São Paulo of the instrument of rectification and ratification of the 4th Amendment to Rodati Brazil’s Articles of Association regularizing Rodati Brazil’s corporate capital.

 

5.3.1.        The Sellers acknowledge that in view of the lack of registration of the 4th Amendment to the Articles of Association of Rodati Brazil with the Board of Commerce of the State of São Paulo, the Buyer will not be able to proceed with the registration of the Instrument of 5th Amendment to the Articles of Association to approve the change of Rodati Brazil’s management and appointment of the officers determined by Buyer as of the Closing Date. In view of that, Julian, in his capacity of officer of Rodati Brazil, agrees and undertakes to practice any management act on behalf of Rodati Brazi in accordance with the orientation and approval of the Buyer, except for the practice of acts in the ordinary course of business of Rodati Brazil, which will not be subject to any prior approval of the Buyer.

 

6.            Representations and Warranties of the Companies.

 

As an inducement to Buyer to enter into this Agreement and to consummate the transactions contemplated hereby, the Companies represent and warrant to Buyer that except as set forth on the Schedules attached hereto as Exhibit 6A, or in the Data Room or reports attached as Exhibit 6B (collectively, the “Disclosure Schedules”), delivered by the Companies to Buyer at the Closing, each of which disclosures, in order to be effective, shall clearly indicate the Section and, if applicable, of this Section 6 to which it relates (unless and only to the extent the relevance to other representations and warranties is reasonably apparent from the text of the disclosures), and each of which disclosures shall also be deemed to be representations and warranties made by the Companies to Buyer under this Section 6, the following representations and warranties are true and correct on the Closing Date:

 

6.1           Incorporation and Corporate Power. The Companies are corporations and limited liability company, as the case may be, duly incorporated, validly existing and in good standing under the laws of the State of Delaware, United States of America, Brazil, Mexico and Argentina and have all requisite corporate powers and authorities necessary to carry on the Business.

 

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6.2           Subsidiaries and Investments. The Subsidiaries are the sole subsidiaries that the Company, directly or indirectly, owns any equity interest or rights. The Subsidiaries have no subsidiaries.

 

6.3           Shares. Shareholders Agreement. The Rodati US Shares being acquired by the Buyer represent one hundred per cent (100%) of the issued and outstanding shares of capital stock of the Company and, together with the Minority Shares, are free and clear of any Encumbrances. Except for this Agreement, there are no shareholders agreement or other valid agreements, arrangements, options, rights or commitments of any character relating to the issuance, sale, purchase or redemption of any shares of the capital stock of the Companies or to the issuance of any additional shares of the capital stock of the Companies to the Sellers or any Third Parties.

 

6.4           Permits. The Companies have all necessary material permits, certificates, licenses, enrollments, approvals, consents, and other authorizations required to carry on and conduct the Business as is currently conducted and to own, lease, use, and operate its Assets at the places and in the manner in which the Business is currently conducted.

 

6.5         Authorization; Enforceability. This Agreement is duly executed and delivered by, and constitutes a valid and binding obligation of the Companies, enforceable in accordance with its terms, subject to (i) laws of general application relating to bankruptcy, insolvency and the relief of debtors; and (ii) rules of law governing specific performance, injunctive relief and other equitable remedies. Neither the execution and performance of this Agreement, and of the other instruments contemplated herein, nor the consummation of the transactions contemplated herein and therein, violate or conflict with any Applicable Law, requires the consent by a Third Party, except for those consents, waivers or approvals set forth in this Agreement or described on Schedule 6.5 of the Disclosure Schedules, or constitute a material breach of, violate or result in the material breach or early termination of, or give rise to any material penalty, right of termination or modification under, any contract or agreement to which the Companies are party or by which the Companies or their Assets are bound, in each case whether with or without notice or lapse of time, or both.

 

6.6           Assets; Status of the Assets. The Assets constitute all assets necessary to conduct the Business as is currently conducted. The Assets are free of any Encumbrances, are in operating condition, and usable as of the Closing Date. All Assets are correctly reflected in the Financial Statements. The Companies (a) hold good and marketable title to the Assets they own, free and clear of all Encumbrances, and (b) are in due possession of the Assets. No Third Party has threatened the Companies to suspend or revoke the use of any software, platform or the operation of any of the Assets that would affect the performance of the Companies’ Business.

 

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6.7          Real Properties. The Companies do not own any real property and are parties to the lease agreements described in Schedule 6.7 of the Disclosure Schedules. The Companies have fulfilled and performed their obligations required to be performed as of the Closing Date, and are not in breach or default, under any lease agreement.

 

6.8         Contracts. Schedule 6.8 of the Disclosure Schedules contains a complete and correct list of all (i) the Companies collective 20 largest customer accounts based on revenue billed in the second quarter of 2020 (a simple 4 column list with the name of the client, date of acceptance of terms and conditions and the terms and conditions reference (such terms and conditions, the “Material Customer Contracts”), and Subsidiary a party to such Material Customer Contract, and (ii) the Companies collective 15 largest supplier accounts based on amounts paid by the Companies in the second quarter of 2020 (a simple 4 column list with the name of the vendor (the “Top Vendor”), and Subsidiary a invoiced for such amounts). The Companies have fulfilled and performed their obligations required to be performed as of the Closing Date, and are not in breach or default, under any Material Contract or agreements with the Top Vendors.

 

6.9           Intellectual Property Rights. The Companies own or have taken the necessary measures to obtain the Intellectual Property Rights listed in Schedule 6.9 of the Disclosure Schedules. To the actual knowledge of the Company, the Companies have sufficient title and ownership of, or licenses to, all Intellectual Property Rights used by the Companies in their Business as now conducted without any violation or infringement of the Intellectual Property Rights of Third Parties. Other than contracts with distributors, resellers, customers and other Third Parties relating to the Companies’ products and services entered into by the Companies in the ordinary course of business and other than as set forth in Schedule 6.9 of the Disclosure Schedules, there are no outstanding options, licenses, agreements, Encumbrances, liens or shared ownership of interests of any kind granted by the Companies to any Third Party with respect to any Intellectual Property Rights owned by or exclusively licensed to the Company. The Companies are not bound by or a party to any options, licenses or agreements of any kind with respect to the Intellectual Property Rights of any other Person or entity that are material to the current conduct of the Business, except for non-negotiated end-user, object code, internal-use software license and support/maintenance agreements, licenses for free or open source software and the agreements set forth in Schedule 6.9 of the Disclosure Schedules.

 

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6.10        No Infringements to Intellectual Property Rights. To the actual knowledge of the Company, no infringement of any Intellectual Property Right of any Third Party has occurred or results in any way from the operation of the Business. The Company has no actual knowledge of any basis for a claim against the Companies that the operation of the Business infringes any Intellectual Property Right of any Third Party. To the actual knowledge of the Company, the Companies have all necessary and enforceable licenses, options, agreements, permissions and other rights to use, reproduce, market, distribute, store, stream, cache, perform, display, import, export and otherwise provide all copyrighted materials of Third Parties in the manner done so by the Companies in the current conduct of the Business. The Companies have not received any written communications alleging that the Companies have violated or, by conducting their Businesses as proposed, would violate any of the Intellectual Property Rights of any Third Party and the Company has no actual knowledge that such an allegation may be forthcoming. The Companies comply in all material respects with all legal and contractual requirements, necessary or desirable to prevent the unauthorized use, copying, reproduction, distribution, display, performance, import or export of any copyrightable works of Third Parties licensed to the Companies; and do not encourage or promote any Third Party to engage in any unauthorized use, copying, reproduction, distribution, display, performance, import or export of any copyrightable works of Third Parties. The Company has no actual knowledge that any of the Companies’ Employees is obligated under any contract (including licenses, covenants or commitments of any nature) or other agreement, or is subject to any judgment, decree or order of any court or administrative agency, that would interfere with the use of his or her best efforts to promote the interests of the Companies or that would conflict with the Companies’ Businesses as presently conducted or as proposed to be conducted. To the actual knowledge of the Company, neither the execution of this Agreement, nor the carrying on of the Companies’ Businesses by the Employees of the Companies, will conflict with or result in a breach of the terms, conditions or provisions of, or constitute a default under, any contract, covenant or instrument under which any of such Employees is now obligated. The Company does not believe it is or will be necessary to utilize any inventions of any of the Company’s Employees made prior to or outside the scope of their employment by the Company.

 

6.11      Proprietary Information Agreements. Each present Employee and officer of the Companies has executed an agreement containing confidentiality and assignment of inventions provisions (“Proprietary Information and Inventions Agreement”), and each consultant to the Companies has executed an agreement containing confidentiality and assignment of inventions provisions. No current Employee has expressly excluded works or inventions or other subject matter from his or her Proprietary Information and Inventions Agreement. The Company is not aware that any of the Companies’ present Employees, officers or consultants are in violation of their applicable Proprietary Information and Inventions Agreement or consulting agreement.

 

6.12        Use of Software. The Companies have acquired a valid license and authorizations to use all software they currently use and all such software is being used in material accordance with the applicable license and Applicable Laws.

 

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6.13        Tax Matters.

 

6.13.1       Compliance With Tax Obligations. (a) the Companies have (i) timely paid all taxes owed in relation to their activities (ii) observed all of their tax obligations under Applicable Laws, and (iii) timely filed all tax returns and declarations required by Applicable Laws, and such returns and declarations are correct and complete; (b) the Sellers have delivered to the Buyer complete, true and correct copies of all income tax returns filed by the Companies, and all Tax examination reports and statements of deficiencies assessed against or agreed to by the Companies for the past five (5) years; (c) no fine or penalty has been imposed on the Companies as a result of failure to pay, or for delayed payment of, any tax or for failure to file, or for delayed filing of, any tax return or declaration; (d) all Taxes payable by the Companies are fully and correctly reflected in the Financial Statements wherever required by the Applicable Laws or Accounting Rules; and (e) the Companies have withheld and paid all Taxes required to have been withheld and paid in connection with amounts paid or owing to any Employee, former Employee or any Third Party.

 

6.13.2      Tax Audits. There is no tax audit or proceeding pending, nor has there been any notice to the Companies by any tax authority regarding any such audit or other proceeding, nor is any such tax audit or other proceeding threatened with regard to any Taxes.

 

6.13.3       Tax Litigation. The Companies are not party to any other administrative or judicial litigation with regard to Taxes.

 

6.14         Labor Matters.

 

6.14.1       Employees. All Employees of the Companies are listed in Schedule 6.14.1 of the Disclosure Schedules, which indicates for each of the Companies, each of the Employee, his/her position, type of relationship with the Companies, and hiring or contracting date.

 

6.14.2      Compliance with Labor Obligations. The Companies have (a) timely fulfilled and carry out all their obligations related to the compensation or remuneration paid to the Employees and former Employees, (b) timely calculated and paid all social charges, contributions and Taxes related to the Employees and former Employees, (c) complied in all material respects with all Applicable Laws relating to labor, social security and health in the workplace, (d) observed all collective bargaining agreements with unions representing the Employees, as applicable (e) paid all extra-hours owed to the Employees and former Employees, (f) not signed any agreements with Employees, outside the regular course of Business, and (g) not granted the Employees any salary or benefit increases (including through indirect payments, benefits, pension plans, stock option plans, or any other form or compensation) since the Date of the Financial Statements, except as provided in Schedule 6.14.2 and except required by Applicable Laws or collective bargaining agreements.

 

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6.14.3       Other Labor and Employment Matters. (i) The Companies’ Employees are properly registered as such in the appropriate registers, in conformity with Applicable Law except where the failure to so register would not have a material adverse effect on the Companies; (ii) the Companies have recorded, with a written contract, any and all material employment, work or activity relationships involving subordination and habituality maintained with Employees, including material details on wages, benefits, vacation, additional benefits of any nature, job functions and direct or indirect, regular or eventual compensation, in accordance with Applicable Laws in all material respects, and have kept all records of labor and/social security nature in an accurate manner, having taken all material steps required by law with regard to social security rights of all the Employees; (iii) the Companies have all required registrations and qualifications and have taken all measures required under social security, labor and employment, and pension law, except where the failure to do so would not have a material adverse effect; (iv) the Companies are in compliance with all material labor and social security obligations (including bargaining agreements) with respect to its Employees in all material respects, including those related to wages, work hours, fair labor practices, health, safety and payment of taxes due on employment relationships or social security and similar laws, and have made payments to, or with respect to their Employees in accordance with Applicable Law, including social security contributions and payments to the Workers Compensation Fund (FGTS); (v) the Companies have no material liabilities or obligations of a labor or employment nature (including social security or other tax liabilities) related to or in respect of any outsourced worker or any other Person that provides or has provided services to the Companies but who is not directly employed by the Companies.

 

6.14.4      Employee Benefit Plans. The Companies maintain or contribute, on a formal or informal basis, to any bonus, profit sharing, pension, retirement or other employee health, medical, hospitalization, welfare, insurance or benefit plan or other arrangement for the benefit of the Employees or former Employees, as provided for in Schedule 6.14.4 of the Disclosure Schedules.

 

6.14.5       Collective Bargaining Agreements; Union Relations. Schedule 6.14.5 of the Disclosure Schedules lists all collective bargaining or other similar agreements currently in force relating to the Employees. The Companies have no relations problem pending with the unions representing the Employees and the Sellers are not aware of any facts that could give rise to such a problem. The Companies have fulfilled and performed their obligations, and are not in breach or default, under any collective bargaining or other similar agreements.

 

6.14.6      Labor and Social Security Audits. The Companies have not been subject to any audit or other administrative proceeding with regard to any labor and social security matters, nor is any such audit or proceeding pending, nor has there been any notice to the Companies by any authority regarding any such audit or other proceeding, and there is no such audit or other proceeding threatened.

 

6.14.7       Labor Litigation. The Companies are not a party to any administrative or judicial litigation in relation to labor and social security matters, nor to the actual knowledge of the Companies are any such litigation threatened.

 

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6.15        Litigation. The Companies are not a party to any administrative or judicial litigation, nor the actual knowledge of the Companies are any such litigation threatened. There is no action, suit, proceeding or investigation of any nature, including, but not limited to, of civil, tax, labor, regulatory, consumer or environmental natures claimed or unasserted against the Companies that questions the validity of this Agreement, or the right of the Companies to enter into this Agreement, or to consummate the transactions contemplated hereby, or that might result, either individually or in the aggregate, in any judgment. The Companies are not a party or subject to the provisions of any order, writ, injunction, judgment or decree of any court or government agency or instrumentality. There is no action, suit, proceeding or investigation that the Companies intend to initiate, of any nature, including, but not limited to, of civil, tax, labor, regulatory, consumer or environmental natures.

 

6.16        Financial Statements. A copy of the Financial Statements is enclosed hereto as Schedule 6.16 of the Disclosure Schedules. The Financial Statements correctly reflect the financial and accounting situation, as well as the assets and liabilities of the Companies on the Date of the Financial Statements in all material respects applied throughout the periods indicated, and reflect, in all material respects, the financial position, as well as all the Assets and liabilities, obligations, shareholders’ equity, income and net profits of the Companies as of the dates and for the periods indicated, which are complete, true, correct in all material respects and derived from the accounting books and records of the Companies. The Financial Statements have been prepared in accordance with the Applicable Laws and the Accounting Rules. On the Date of the Financial Statements the Companies did not have any material Liabilities other than those expressly reflected in the Financial Statements, any undisclosed Liabilities arising out of past events which could have an adverse effect on the Companies or on the Business, and other obligations under contracts and commitments incurred in the ordinary course of Business and not required under Applicable Laws and the Accounting Rules to be reflected in the Financial Statements.

 

6.17       Ordinary Course of Business. Operations Since the Date of the Financial Statements. Since the Date of the Financial Statements, the activities of the Companies have been conducted in the ordinary course of Business consistent with past practices and its applicable organizational documents. Without limiting the generality of the foregoing, since the Date of the Financial Statements, the Companies have not done any of the acts below:

 

(a) Made any unusual capital expenditures or entered into unusual verbal or written commitments out of the normal course of Business;

 

(b) Entered into any new supplier or vendor agreement which extend for a term of twelve (12) months or more or requires aggregate payments by the Companies in excess of fifty thousand Reais (BRL 50,000.00);

 

(c) Entered into any real estate lease, except as otherwise established herein;

 

(d) Declared or paid any dividends or made any other non-cash distribution to the shareholders of the Companies;

 

(e) Issued any securities or granted any right to acquire any securities of the Companies;

 

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(f) Entered into any agreement or arrangement with any Employee outside the regular course of the Companies’ Business;

 

(g) Transferred any Asset from the Companies outside the regular course of the Companies’ Business;

 

(h) Instituted or agreed to institute any major increase in any compensation or benefit payable to any Employee, outside the regular course of the Companies’ Businesses;

 

(i) Created, incurred or assumed, or agreed to create, incur or assume, any obligation in excess of fifty thousand Reais (BRL 50,000.00);

 

(j) Hired any Employees outside the regular course of the Companies’ Businesses;

 

(k) Granted or contracted any loan or guarantee to/from the Sellers or to/from any Third Party;

 

(l) Converted, spun-off, merged or consolidated the Companies with and into any company, or merged or consolidated any company with and into the Companies, or any other form of corporate restructure of the Companies; and

 

(m) Changed any accounting methods or practices or revaluate any of the Companies’ Assets.

 

6.18        Accounts Receivable. The accounts receivable of the Companies reflected in the Financial Statements and the accounts received generated since the Date of the Financial Statements are valid in accordance with their terms.

 

6.19        Expenditures. All expenditures and payments to Third Parties reflected in the Financial Statements have been incurred by the Companies in the normal course of the Business and have been recorded in compliance with the Applicable Laws and Accounting Rules in all material respects.

 

6.20        Insurance. Schedule 6.20 of the Disclosure Schedules lists all insurance policies maintained by the Companies and sets forth the date of expiration of each such insurance policy. All of such insurance policies are in full force and effect and all premiums have been timely paid.

 

6.21        Powers of Attorney. Schedule 6.21 of the Disclosure Schedules sets forth a complete and correct list of all Persons holding a general or special power of attorney granted by the Companies, indicating for each power the grantee(s), the term and the powers granted thereunder.

 

6.22        Bank Accounts. Schedule 6.22 of the Disclosure Schedules sets forth a complete and correct list of all bank accounts of the Companies and all Persons authorized to sign or otherwise act with respect thereto.

 

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6.23       Related-Party Transactions. Except as provided for in Schedule 6.23 of the Disclosure Schedules, neither the Sellers nor any of their employees, partners or relatives until the fourth degree (“Related Party”), or any corporation, partnership or other entity in which such Related Party is an officer, director or partner, or in which such Related Party has significant ownership interests or otherwise controls, is indebted to the Companies, nor are the Companies indebted (or committed to make loans or extend or guarantee credit) to any of them. None of such Persons has any direct or indirect ownership interest in any firm or corporation with which the Companies are affiliated or with which the Companies have a business relationship, or, except to the Remaining Shareholders, any firm or corporation that competes with the Companies, except that they may own stock in publicly traded companies that may compete with the Companies. No Related Party has a direct or indirect material financial interest in any contract with the Companies.

 

6.24        Anticorruption Practices. The Sellers, the Companies and each of the officers, directors, employees and agents have complied at all times, and are in compliance, in each case in all material respects with all applicable Anti-Corruption Laws, including, without limitation, making use of the mails or any means or instrumentality of interstate commerce corruptly in furtherance of an offer, payment, promise to pay or authorization of the payment of any money, or other property, gift, promise to give, or authorization of the giving of anything of value to any “foreign official” or “public agent” (as such terms are defined in the Anti-Corruption Laws) or any foreign political party or official thereof or any candidate for foreign political office, in contravention of the Anti-Corruption Laws. Neither the Companies nor its shareholders, officers, directors, employees or agents have given, offered, agreed or promised to give, or authorized the giving directly or indirectly, of any money or other thing of value to any Person as an inducement or reward for favorable action or forbearance from action or the exercise of influence.

 

6.25        Distribution of Profits. There are no unpaid amounts owed by Companies to the Sellers, such as dividends to be declared or distributed, or other pecuniary advantages (such as, for purposes of illustration, loans or interest on capital (juros sobre o capital).

 

6.26         Clients. In the last twelve (12) months prior to the Closing Date: (a) there has been no termination outside of the ordinary course of business of the Companies’ business relationship with their respective ten (10) largest customers, and (b) except in the ordinary course of business, there has been no material adverse change in the business relationship of the Companies with such customers. The Companies have not received any written notice from any of such customers making any claim for breach of contract or other liability.

 

6.27         No Agents. No fee or commission has been paid or needs to be paid by the Companies or any Person acting on their behalf to any broker, agent or intermediary for or on account of the transactions contemplated by this Agreement.

 

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6.28        Corporate Books. The Companies’ respective corporate books and documents, including all books of minutes of meetings of shareholders, Board of Directors and Board of Officers are complete and accurate in all material respects and have been managed in such manner, including registering any of the same with the applicable governmental authority, as is required by Applicable Law.

 

6.29        Full Representation. None of the representations or warranties of the Companies contained in this Section 6, nor the information contained in the Disclosure Schedule referred to herein, when read together in their entirety, contains any untrue statement of a material fact, or omits to state a material fact herein or therein necessary to make the statements herein or therein not misleading in any material respect.

 

6.30        No Other Representations. The Companies specifically disclaim any representation and warranty other than those representations and warranties expressly made in Section 6 above, including any other statutory or implied representation and warranty or representation or warranty arising from any course of dealing, usage or trade practice.

 

6.31        Survival of Representations and Warranties. The representations and warranties of the Companies contained in this Section 6 shall survive the Closing Date and remain in effect for the Calculation Period, other than (i) the representations and warranties of the Companies contained in Section 6.13 of this Agreement, which shall survive for sixty (60) days counted as of the end of the applicable statute of limitation terms of the respective obligation under Applicable Laws, and (ii) the representations and warranties of the Companies contained in 6.1, 6.2, 6.3 and Section 6.5, which shall survive for indeterminate period of time, provided, however, in all instances that, with respect to any specific representation or warranty under which Buyer shall have made a claim for indemnification hereunder prior to the respective termination date in accordance with Section 9, such representation or warranty shall survive for the period of time, beyond such termination date, sufficient to resolve, completely and finally, the claim relating to such representation or warranty.

 

7.            Representations and Warranties of the Sellers.

 

As an inducement to Buyer to enter into this Agreement and to consummate the transactions contemplated hereby, each Seller, individually on their own behalf, and severally and not jointly with any other Seller, represent and warrant to Buyer as follows on the Closing Date:

 

7.1          No Breach. The execution, delivery and performance by such Seller of this Agreement and the consummation of the Transactions do not conflict with or result in any breach of any of the provisions of, nor constitute a default under (a) any agreement to which such Seller is bound, or (b) any Applicable Laws, or (c) any organizational documents of such Seller to the extent such Seller is a legal entity and not an individual.

 

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7.2          Litigation. There is no action, suit, proceeding or investigation of any nature, including, but not limited to, of civil, tax, labor, regulatory, consumer or environmental natures claimed or unasserted against such Seller that questions the validity of this Agreement, or the right of such Seller to enter into this Agreement, or to consummate the Transactions, or that might result, either individually or in the aggregate, in any judgment against such Seller.

 

7.3          No Agents. No fee or commission has been paid or needs to be paid by such Seller or any Person acting on their behalf to any broker, agent or intermediary for or on account of the transactions contemplated by this Agreement.

 

7.4          No Other Representations. Such Seller specifically disclaims any representation and warranty other than those representations and warranties expressly made in Section 7 above, including any other statutory or implied representation and warranty or representation or warranty arising from any course of dealing, usage or trade practice.

 

8.            Representations and Warranties of Buyer.

 

As an inducement to the Sellers to enter into this Agreement and to consummate the transactions contemplated hereby, Buyer represents and warrants to the Sellers as follows on this date:

 

8.1          Incorporation and Corporate Power. Buyer is a corporation duly incorporated, validly existing and in good standing under the laws of the Federative Republic of Brazil.

 

8.2          Authorization; Enforceability. This Agreement is duly executed and delivered by, and constitutes a valid and binding obligation of the Buyer, enforceable in accordance with its terms. Neither the execution and performance of this Agreement, and of the other instruments contemplated herein, nor the consummation of the Transactions, violate or conflict with any Applicable Law, requires the consent by a Third Party, or constitute a breach of, violate or result in the breach or early termination of, or give rise to any penalty, right of termination or modification, or any other measure under, any contract or agreement to which the Buyer is party or by which the Buyer is bound, in each case whether with or without notice or lapse of time, or both.

 

8.3          No Breach. The execution, delivery and performance by Buyer of this Agreement and the consummation of the Transactions do not conflict with or result in or constitute (a) any breach of any of the provisions of any agreement to which Buyer is bound, (b) termination or acceleration under any agreement to which Buyer is bound, (c) any provisions of the By-Laws of the Buyer, or (d) any Applicable Laws.

 

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8.4         Anticorruption Practices. The Buyer and each of the officers, directors, employees and agents have complied at all times, and are in compliance, with all applicable Anti-Corruption Laws, including, without limitation, making use of the mails or any means or instrumentality of interstate commerce corruptly in furtherance of an offer, payment, promise to pay or authorization of the payment of any money, or other property, gift, promise to give, or authorization of the giving of anything of value to any “foreign official” or “public agent” (as such terms are defined in the Anti-Corruption Laws) or any foreign political party or official thereof or any candidate for foreign political office, in contravention of the Anti-Corruption Laws. Neither the Buyer nor its shareholders, officers, directors, employees or agents have given, offered, agreed or promised to give, or authorized the giving directly or indirectly, of any money or other thing of value to any Person as an inducement or reward for favorable action or forbearance from action or the exercise of influence.

 

8.5          Financial Ability. The Buyer has the financial ability and resources to enter into this Agreement, pay the Purchase Price and to consummate the Transactions, under the terms and conditions provided for in this Agreement.

 

8.6          Full Representation. None of the representations or warranties of the Buyer contained in this Section 8, when read together in their entirety, contains any untrue statement of a material fact, or omits to state a material fact herein or therein necessary to make the statements herein or therein not misleading in any material respect.

 

8.7         Survival of Representations and Warranties. The representations and warranties of the Buyer contained in this Section 6 shall survive the Closing Date and remain in effect for the Calculation Period, other than the representations and warranties of the Buyer contained in Sections 8.1, 8.2 and 8.3 of this Agreement, which shall survive for indeterminate period of time; provided, however, in all instances that, with respect to any specific representation or warranty under which the Sellers shall have made a claim for indemnification hereunder prior to the respective termination date, such representation or warranty shall survive for the period of time, beyond such termination date, sufficient to resolve, completely and finally, the claim relating to such representation or warranty.

 

9.            Indemnification.

 

9.1          Indemnification by the Indemnifying Shareholders. Each of the Indemnifying Shareholders severally on a pro-rata basis in accordance with their respective Indemnification Pro-Rata Share, provided however that each Managing Shareholder shall be jointly and severally liable between the Managing Shareholders as to the Unpaid Obligations, agrees to indemnify in full the Buyer and the Companies and hold them and their Affiliates, employees, directors or representatives (collectively, the “Buyer Indemnified Parties”) harmless against any Buyer Losses, subject to the procedure described in Section 9 and 10 hereof. In case of any Buyer Losses, an indemnification corresponding to the amount of such Buyer Loss shall be paid to Buyer by the Indemnifying Shareholders, in immediately available funds, subject to the conditions and procedure described in Sections 9 and 10 and to the provisions of Sections 4, as applicable.

 

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9.1.1              Limits of Indemnification by the Indemnifying Shareholders. The Parties agree that any indemnification possibly due under Section 9.1 or otherwise under this Agreement, shall be subject to the following limitations:

 

9.1.1.1            Indemnification Period. The indemnification obligation set forth in Section 9.1 shall survive until twenty-four (24) month anniversary of the Closing Date, except for (a) the indemnification obligation related to the breach of Taxes representation and warranty provided for in Section 6.13 of this Agreement and Other Companies’ Liabilities, which shall survive for sixty (60) days counted as of the end of the applicable statute of limitation terms of the respective obligation under Applicable Laws; and (b) the indemnification obligation related to the (i) Sellers’ Fundamental Representations and Warranties; and (ii) breach of Sellers’ covenants of this Agreement, which any indemnification obligation shall be valid and enforceable for indeterminate period of time.

 

9.1.1.2            Cap. The maximum aggregate amount of all Buyer Losses for which any Indemnifying Shareholder will be required to indemnify the Buyer Indemnified Parties due to the breach of the representations and warranties provided in Sections 6 and 7 of this Agreement and for Specified Buyer Losses shall be, collectively, limited to such Indemnifying Shareholder’s Indemnification Pro-Rata Share of the Aggregate Holdback Amount, except for (i) in the case of Managing Shareholders and Buyer Losses which represent Unpaid Obligations, and (ii) Buyer Losses related to breach of Sellers’ Fundamental Representations and Warranties, for which the maximum aggregate amount of all such Buyer Losses for which any Indemnifying Shareholder will be required to indemnify the Buyer Indemnified Parties shall be the portion of the Purchase Price actually received by such Indemnifying Shareholder. Notwithstanding anything else to the contrary in this Agreement, (i) except in the case of Buyer Losses which are withheld from the Aggregate Holdback Amount in accordance with Sections 4, 9 and 10 hereof, no Indemnifying Shareholder shall have any liability or indemnification obligation under this Agreement for a breach of a representation or warranty in Section 7 hereof by another Indemnifying Shareholder, or a breach of a covenant or other obligation hereunder by another Indemnifying Shareholder, and (ii) the maximum aggregate amount of all Buyer Losses for which an Indemnifying Shareholder will be required to indemnify the Buyer Indemnified Parties under this Agreement shall be limited to the portion of the Purchase Price actually received by such Indemnifying Shareholder, provided that, for the avoidance of doubt, (i) for any amount otherwise due and payable to an Indemnifying Shareholder by the Buyer hereunder, the Buyer shall be permitted to deduct and withhold from such amount any amount of indemnification payable to the Buyer by such Indemnifying Shareholder (without such Indemnifying Shareholder having to receive it first), and (ii) any amount so withheld shall be deemed to be “actually received” for purposes of the foregoing indemnification limit.

 

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9.1.1.3          Basket. The Indemnifying Shareholders shall only be required to indemnify the Buyer Indemnified Parties pursuant to this Agreement for individual claims involving Buyer Losses indemnifiable hereunder which exceed the amount in Brazilian Reais equivalent to twenty thousand US dollars (USD $20,000.00), based on the then most recent PTAX rate issued by the Brazilian Central Bank (the “Basket Threshold”), in which case if the Basket Threshold is exceeded the full amount of the Buyer Losses for such individual claim will be due and payable, subject to the provisions of Section 9.1.1.4 below and the other limitations on indemnification in Section 9 of this Agreement; provided that in the event such Buyer Losses for an individual claim relate to a breach of Sellers’ Fundamental Representations and Warranties, the Basket Threshold shall not apply. For the avoidance of doubt, individual unrelated claims for indemnification of Buyer Losses in amounts less than Basket Threshold (“Nominal Claims”), will not be indemnifiable and will not count for any purpose in satisfying the Escrow Account Trigger Amount, in each case unless they relate to breach of Sellers’ Fundamental Representations and Warranties, and individual unrelated claims for indemnification in amounts more than the Basket Threshold or relating to breach of Sellers’ Fundamental Representations and Warranties will be indemnifiable from the first US dollar of the applicable Buyer Losses, subject to the other limitations in Section 9 of this Agreement.

 

9.1.1.4           Escrow. Subject to the limitations on indemnification in Section 9 of this Agreement, the Parties agree that the Escrow Amount shall be immediately used to pay any Buyer Losses incurred by Buyer and/or the Companies under this Agreement once the aggregate amount of such Buyer Losses indemnifiable hereunder (excluding Nominal Claims unrelated to a breach of Sellers’ Fundamental Representations and Warranties) is equal to or exceeds the amount in Brazilian Reais equivalent to two hundred and forty thousand US dollars (USD $240,000.00), based on the then most recent PTAX rate issued by the Brazilian Central Bank (“Escrow Account Trigger Amount”), except that Buyer Losses involving breach of Sellers’ Fundamental Representations and Warranties, shall not be subject to the Escrow Account Trigger Amount and may be immediately indemnified through the Escrow Amount. The Parties agree that in case the Escrow Account Trigger Amount is not reached after all Buyer Losses are identified and finally resolved under this Agreement, as long as there are no Unresolved Buyer Losses, such Buyer Losses shall be set off against the Escrow Amount, regardless of the Escrow Account Trigger Amount, and the outstanding balance of the Escrow Account shall be released to the Indemnifying Shareholders as provided in Sections 4.

 

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9.1.2              Exclusive Remedy. Except with respect to inaccuracies in or breaches of any of the Sellers’ Fundamental Representations and Warranties and for Unpaid Obligations from the Managing Shareholders (in each case to which the limitations set forth in this Section 9.1.2 shall not apply), recourse by the Buyer Indemnified Parties to the Aggregate Holdback Amount, and as applicable after the twenty-four (24) month anniversary of the Closing Date, the Escrow Amount, shall be the Buyer Indemnified Parties’ sole and exclusive remedy under this Agreement for monetary Buyer Losses.

 

9.2       Indemnification by Buyer. Buyer agrees to indemnify in full the Sellers and hold them and their Affiliates, employees, directors and representatives, as applicable, harmless against any Sellers Losses, subject to the procedure described in Section 10 hereof. In case of any Sellers Losses, an indemnification corresponding to the amount of such Seller Loss shall be paid to the Sellers by the Buyer, in immediately available funds, subject to the procedure described in Section 10.

 

9.2.1              Limits of indemnification by the Buyer. The Parties agree that any indemnification possibly due under Section 9.2 shall survive until twenty-four (24) month anniversary of the Closing Date, except for breach of the representations and warranties granted by Buyer in Sections 8.1, 8.2 and 8.3 (“Buyer’s Fundamental Representations and Warranties”), which any indemnification obligation shall be valid and enforceable for indeterminate period of time.

 

9.3       Exclusive Remedy. Except for equitable remedies, from and after the Closing Date, the rights to indemnification, compensation and reimbursement set forth in this Section 9 shall be the sole and exclusive monetary remedy of the Indemnified Parties with respect to any Buyer Losses or breach of this Agreement by another Party hereto.

 

10.            Procedure for Indemnification.

 

10.1        Third Party Claims. In the event any Indemnified Party is made a defendant in or a party to a Third Party Claim, such Indemnified Party shall give the corresponding Indemnifying Party prompt notice thereof (but in no event later than the date after which one-third of the period of time provided under law to respond to such Third Party Claim has expired), together with the identification of the effective or potential Losses object of the claim and a copy of all materials presented by the Third Party claimant, as well as other documents necessary for the exact and complete valuation of the Loss. The failure to give such notice or the incompleteness of the documents necessary for the exact and complete valuation of the Loss shall not affect the Indemnified Party’s ability to seek reimbursement only to the extent such failure or incompleteness has materially and adversely affected the Indemnifying Party’s ability to defend successfully a Third Party Claim.

 

10.1.1            Defense by the Indemnified Party. The Indemnifying Parties shall decide and inform the Indemnified Party before two thirds (2/3) of the period available for defense in accordance with Applicable Law has elapsed, whether or not they will pay the amount in question immediately or if they will contest the Third Party Claim, on their account and risk, on behalf of the Companies or of the Indemnified Party, as applicable. Should the Indemnifying Parties decide to present defense of such Third Party Claim, the Indemnifying Parties shall employ counsel of their choice and the necessary powers for the defense shall be granted to said counsel and the same shall be provided with the documents and information required for the preparation of the defense or response of the plea. The Indemnified Party shall be entitled at any time, at its own cost and expense, to consult with and assist the Indemnifying Parties and their counsel in such contest and defense.

 

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10.1.1.1          In case (i) the Indemnifying Parties do not notify the Indemnified Party about their option to present a defense to the Third Party Claim; or (ii) the Indemnifying Parties do not in fact assume the defense or pay the amount pleaded; or the Third Party Claim may result in a Encumbrance or freezing of any assets of the Companies, of the Indemnified Parties or any of their Affiliates, it shall be incumbent upon the Indemnified Party, at its sole discretion, to decide (a) whether to make immediate payment of the amount pleaded or (b) to conduct the defense. Any and all expenses and reasonable attorneys’ fees arising from the presentation of the defense or response to the plea shall constitute Contingencies Costs to borne exclusively and directly by such Indemnifying Parties (subject to the indemnification provisions of Section 9 and 10).

 

10.1.2            Payment of the Indemnification.  After the Third Party Claim is decided by a final unappealable decision of a court of law or arbitration panel, or in the event of a disbursement related to the Buyer Losses or Sellers’ Losses by the Indemnified Party related to the Third Party Claim, as the case may be, any eventual Buyer Losses or Sellers’ Losses resulting from such decision will be conclusively deemed a liability of the Indemnifying Party, and the Indemnifying Party shall pay the respective amount disbursed by the Indemnified Party, regardless of any conclusive decision to the Indemnified Party, in accordance with the provisions of Sections 4, 9 and 10, within thirty (30) days from its receipt of a notice of the Indemnified Party to that effect with evidence of payment in connection with the relevant Loss, in immediately available funds through deposit(s) into the bank account(s) indicated by the Indemnified Party in such notice.

 

10.2        Claims Among the Parties.  In the event of Buyer Losses or Sellers’ Losses that do not result from Third Party Claims but result from a claim presented by any Indemnified Party against an Indemnifying Party, the Indemnified Party shall deliver a notice of such claim to the Indemnifying Party. The notice shall contain an identification of the effective or potential Losses object of the claim, a copy of all materials related to the claim in the possession of the Indemnified Party and evidence related thereof. The Indemnifying Party shall respond to the notice within fifteen (15) days from its receipt of the notice to notify the Indemnified Party whether it will or not dispute the claim.

 

10.2.1            Agreement or Omission of the Indemnifying Party.  If the Indemnifying Party notifies the Indemnified Party that it does not dispute the claim described in such notice or fails to notify the Indemnified Party within fifteen (15) days after receiving such notice, the Losses in the amount specified in the Indemnified Party’s notice will be conclusively deemed a liability of the Indemnifying Party and the Indemnifying Party must pay the amount of such Losses to the Indemnified Party within thirty (30) days from its receipt of a notice of the Indemnified Party to that effect, in immediately available funds through deposit into the bank account indicated by the Indemnified Party in such notice, subject to the other limitations and procedures for payment (or withholding by a Buyer Indemnified Party in the case of an Indemnifying Party who is an Indemnifying Shareholder) in Sections 4 and 9.

 

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10.2.2            Dispute of the Claim by the Indemnifying Party.  In case the Indemnifying Party has timely decided to dispute the claim, representatives of the Indemnifying Party and the Indemnified Party will proceed in good faith to negotiate a resolution of such dispute, and if not resolved through the negotiations of such representatives within the following thirty (30) days, such dispute shall be resolved fully and finally by the dispute resolution provisions of Section 12.

 

10.3        Covenant to Mitigate Losses.  The Parties undertake to use commercially reasonable efforts in the event any Losses occur, as to mitigate in each case, to the extent reasonably possible, the amount of any Losses to be indemnified by any Indemnifying Party hereunder. No party shall be entitled to any payment more than once in respect with the same matter.

 

10.4        Indemnification Adjustments. The payment or reimbursement of the Losses shall consider all tax aspects of such Losses so that the Indemnified Party is put in a position as if it had not suffered the Loss, provided that for the avoidance of doubt, such tax aspects shall not, along, qualify a Loss as attributable to a breach of Section 6.13. The Parties further agree that Losses shall be net of (i) any recovery or benefit (including insurance and indemnification) payable to an Indemnified Party in connection with the facts giving rise to the right of indemnification and, if the indemnified party receives such recovery or benefit after receipt of payment from the Indemnifying Party, then the amount of such recovery or benefit, net of reasonable expenses incurred in obtaining such recovery or benefit, shall be reimbursed to the Indemnifying Party; and (ii) any Tax benefit available to and that can legally be used by an Indemnified Party or any of its Affiliates in connection with the accrual, incurrence or payment of any such Losses (accepted by applicable tax authorities), provided that the adhesion to such Tax benefit is beneficial to the Company, at the joint discretion of Buyer and the Shareholder Representative.

 

10.5        Penalty for Delay in Indemnify.  In cases where the Indemnifying Party fails to timely pay the indemnification owed to the Indemnified Party (excluding any payments that may and should be deducted from the Aggregate Holdback Amount or Escrow Amount by Buyer), the Indemnifying Party shall be subject to adjustment by the variation of [****], calculated from the due date until the date of effective payment, plus [****] interest, applied pro rata diem.

 

10.6        Attorneys. Each Party will have the right to appoint, at its own expense, its own attorneys to accompany and oversee the work that will be conducted by the attorneys appointed by the other Party.

 

10.7        Form of Defense. Under any and all circumstances, each Party shall take commercially reasonable steps to conduct its defense in such a manner as to not harm the public commercial reputation of the Parties on the market, and/or that negatively affect its capacity to conduct its business or any other businesses, or to avoid further adverse consequences to the businesses conducted by the other Parties.

 

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10.8        Information. The Parties shall always provide the other Party with any and all information or materials in its control that are justifiably required by the requesting Party for the presentation of a defense against any Thirty Party Claim.

 

11.            Additional Obligations.

 

11.1        Confidentiality. Each of the Parties hereby agrees that all terms and conditions set forth in this Agreement and, and any other related document relating to the Company and to the Purchase and Sale Transaction, shall be kept by it in strict confidence and shall not be disclosed by it to any Third Parties, without the prior written approval of the other Parties (“Confidential Information”). Sellers hereby agree and undertake that all information disclosed to them in connection with the Companies, as shareholders of the Companies or as representatives of the Companies, belongs exclusively to the Companies and Sellers undertake to keep all such information confidential. The confidentiality obligation provided hereunder shall remain in full force and effect for the term of [*****] years as of the date hereof.

 

11.1.1          The limits on disclosure of Confidential Information provided for under this Agreement are not applicable when the Confidential Information (a) is, on the date hereof, in the public domain, or (b) is known to the receiving Party at the time it is disclosed, and was not obtained, directly or indirectly, from the disclosing Party or, to the knowledge of the disclosing Party, from Third Parties, subject to confidentiality obligations, or (c) becomes known to the general public after the date hereof, other than as a result of an act or omission on the part of the receiving Party, or (d) is disclosed by reason of compliance with a legal requirement and/or order by any governmental authority, provided that (i) the receiving Party promptly sends a written communication to the disclosing Party regarding the order or requirement it has received, and the disclosing Party undertakes to comply with the terms of any judicial protection the Buyer or disclosing Party may obtain, and (ii) the disclosure is limited to the minimum necessary to comply with the order or requirement. In addition to the foregoing, Buyer acknowledges and agrees that certain Sellers are required by applicable local laws, rules and regulations (such as Stock Exchange rules) to disclose certain information regarding the Transactions following the Closing Date, which disclosures shall be subject to the foregoing but which the Buyer agrees to use it commercial best efforts to agree and consent to.

 

11.1.2            The Parties shall not, without the Buyer’s and Sellers’ prior written consent, disclose information with respect to this Agreement or the transactions contemplated hereby, except to the information to be released to their respective employees, representatives, consultants and Affiliates.

 

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11.2        Non-Compete. For a term of [*****] years counted as of the date of a Managing Shareholder’s termination of Services Agreement, such Managing Shareholder shall not, directly or indirectly, compete with the Business of the Companies, as it is conducted as of the Closing Date, or own, manage, operate, finance, administer, acquire control of, advice or participate in the ownership, management or control of, or be otherwise associated (whether as an administrator, advisor, agent, consultant, shareholder, partner, independent contractor or otherwise) with, or provide any kind of service, lend to or in any other manner invest in, any person carrying out the Business of the Companies, as it is conducted as of the Closing Date, in whole or in part, anywhere inside the Latin America and/or United States of America. The Managing Shareholders hereby acknowledge and agree that the Purchase Price includes adequate consideration for the non-compete obligation contained herein and that the restrictive covenants assumed by the Managing Shareholders under this Section 11.2 were a relevant component for the calculation of the Purchase Price and a fundamental inducement for Buyer to purchase the Shares, being provided that no additional compensation shall be due to the Managing Shareholder for the restrictive covenants undertaken herein. The Managing Shareholders agree to specifically advise their future employers, as applicable, about the prohibitions contained in this Section. Each Managing Shareholder undertaking the obligation of this Section 11.2 shall only be responsible for the non-compliance of its respective obligations.

 

11.3        Non-Solicitation. For a term of [*****] years counted as of the date of a Managing Shareholder’s termination of Services Agreement, such Managing Shareholder shall not: (i) induce or attempt to induce any Employee of the Companies or entice any such Employee to terminate his or her employment with the Companies; (ii) in any way interfere with the relationship between the Companies and any of its Employees; (iii) employ or otherwise engage as an employee, independent contractor or other service provider any Employee of the Companies; or (iv) induce or attempt to induce any potential or actual customer or supplier, licensee, consultant, contractor or other person to cease doing business with the Companies, or to reduce or otherwise alter the terms upon which such person does business with the Companies, or in any way interfere with the relationship between any such customer, supplier, licensee, consultant or other business entity and the Companies.

 

11.4        Injunction. The Managing Shareholders, as applicable, acknowledge that damages alone could not be adequate to compensate the Buyer and/or Companies for any breach by each of the Managing Shareholders, as applicable, of Sections 11.1, 11.2 and 11.3 and agree, without limiting any indemnification right pursuant to the terms hereof and fine provided in Section 11.5 below, that the Buyer and/or Companies are entitled to seek an injunction against the relevant party if any of the Managing Shareholders, as applicable, is in breach or threaten to breach or if Buyer and/or the Companies reasonably believe that the Managing Shareholders will breach the provisions of Sections 11.1, 11.2 and 11.3.

 

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11.5        Tax Matter.

 

11.5.1            Buyer-Prepared Tax Returns. Buyer shall prepare, approve and/or file, all Tax Returns for the Companies for all periods ending on or prior to the Closing Date (a “pre-Closing Period”) that are required to be filed after the Closing Date. For any Tax Return for which an Indemnifying Shareholder may reasonably have an indemnity obligation, including any Tax Return involving a pre-Closing Period in full or in part, Buyer shall provide the Shareholder Representative copies of draft Tax Returns for review no later than 30 (thirty) days before the due date (with extensions) thereof. If the Shareholder Representative does not provide the Buyer with a written description of the items in the Tax Returns or the tax statement that the Shareholder Representative intends to dispute within fifteen (15) Business Days following the delivery to the Shareholder Representative of such documents, the Shareholder Representative shall be deemed to have accepted and agreed to such documents in the form provided, and the Buyer shall thereafter cause all such Tax Returns to be timely filed. The Buyer shall not make any changes to such Tax Returns without the prior written approval of Shareholder Representative (which approval may not be unreasonably withheld, conditioned, or delayed). Buyer shall defend, indemnify and hold harmless the Sellers for any losses Sellers may suffer or incur for the Buyer’s failure exclusively with regards to timely file such Tax Returns, except if such failure occurred due to Seller’s fault pursuant to provisions of this Section 11.6.1. The Buyer and the Shareholder Representative agree to timely consult with each other and to negotiate in good faith any timely-raised issue arising as a result of the review of such Tax Returns to permit the filing of such Tax Returns as promptly as possible, which good faith negotiations shall include each side exchanging in writing their positions concerning the matter(s) in dispute and a meeting to discuss their respective positions. In the event Buyer and Shareholder Representative are unable to resolve any dispute within ten (10) Business Days following the delivery of written notice by the Shareholder Representative of such dispute, the Shareholder Representative or Buyer may require that they mutually engage and submit such dispute to, and the same shall be finally resolved in accordance with the provisions of this Agreement by Appraiser mutually agreed to by the Shareholder Representative and Buyer (the accounting firm ultimately chosen, the “Accounting Referee”), and they shall jointly request the Accounting Referee to resolve any issue in dispute at least ten (10) Business Days before the due date of such Tax Return, in order that such Tax Return may be timely filed. The Accounting Referee shall make a determination with respect to any disputed issue within five (5) Business Days before the due date (including extensions) for the filing of the Tax Return in question, and the Buyer shall cause the applicable Companies to file such Tax Return on the due date (including extensions) therefor in a manner consistent with the determination of the Accounting Referee. The determination of the Accounting Referee shall be binding; provided, however, that any such determination shall be limited to the resolution of issues in dispute. The fees and disbursements of the Accounting Referee shall be borne by the party (i.e., the Indemnifying Shareholders in accordance with their Indemnification Pro-Rata Share, on the one hand, and the Buyer, on the other hand), that assigned amounts to items in dispute that were, on a net basis, furthest in amount from the amount finally determined by the Accounting Referee, or equally, in the event the Parties’ assigned amounts were, on a net basis, equally far from the amount finally determined by the Accounting Referee. The Indemnifying Shareholders will be liable for paying Tax Liabilities shown as due and owing on all such Tax Returns which represent Buyer Losses, in accordance with Sections 4, 9 and 10 hereof.

 

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11.5.2            Tax Periods Beginning Before and Ending After the Closing Date. Buyer shall cause to be prepared and filed any Tax Returns of the Companies for Tax periods that begin before the Closing Date and end after the Closing Date. Buyer shall provide Shareholder Representative with summary calculations and results which shall appear in such Tax Returns for Shareholder Representative’s review and approval at least thirty (30) days prior to the due date for filing the Tax Returns which shall include such information, and Buyer will incorporate any reasonable and lawful comments thereto.

 

11.5.3            Straddle Period Taxes. For purposes of this Section 11.6, in the case of any Taxes that are imposed on a periodic basis and are payable for a Tax period that includes (but does not end on) the Closing Date, the portion of such Taxes that relates to the portion of such Tax period ending on the Closing Date shall (A) in the case of any Taxes other than Taxes based upon or related to income, disbursements (including payroll) or receipts, be deemed to be the amount of such Taxes for the entire Tax period multiplied by a fraction, the numerator of which is the number of days in the Tax period ending on and including the Closing Date, and the denominator of which is the number of days in the entire Tax period; and (B) in the case of any Taxes based upon or related to income, disbursements (including payroll) or receipts, be deemed equal to the amount that would be payable if the relevant Tax period ended on the Closing Date, using the “closing of the books” method of accounting, and in a manner consistent with the Closing Balance Sheet.

 

11.5.4            Tax Proceedings. If an audit, investigation or similar proceeding with respect to any Tax matter related to the Companies shall be commenced, or a claim shall be made, by any governmental authority, with respect to (i) any taxable period ending on or before the Closing Date or any taxable period beginning on or before and ending after the Closing Date or (ii) Taxes for which Indemnifying Shareholders may be liable pursuant to this Agreement, then Buyer shall, or shall cause the Companies to, promptly notify Shareholder Representative in writing of such audit, investigation or similar proceeding or claim (a “Tax Proceeding”), provided that the failure to provide such notice shall not release the Buyer Indemnified Parties’ right to indemnification except to the extent that the Indemnifying Shareholders are materially prejudiced by such failure. The Indemnifying Shareholders shall have the primary right, at their sole expense, to contest any Tax Proceeding relating to (i) a taxable period ending on or before the Closing Date or any taxable period beginning on or before and ending after the Closing Date or (ii) Taxes for which Indemnifying Shareholders may be liable pursuant to this Agreement; and Buyer shall have the primary right to contest all other such Tax Proceedings (the party controlling such Tax Proceeding hereinafter referred to as the “Controlling Party”). The Controlling Party shall have discretion and authority to pay, settle or compromise any such Tax Proceeding (including selection of counsel, the pursuit or waiver of any administrative proceeding or the right to pay the Tax and sue for a refund or contest the Tax Proceeding in any permissible manner); provided, however, that (i) Buyer or Indemnifying Shareholders, as applicable (the “Non-Controlling Party”) (or their advisors or representatives), may fully participate at the Non-Controlling Party’s expense in the Tax Proceeding and (ii) the Controlling Party shall not settle any Tax Proceeding in a manner that would materially and adversely affect the Non-Controlling Party without the prior written consent of the Non-Controlling Party, which consent shall not be unreasonably withheld, conditioned or delayed. The Controlling Party shall keep the Non-Controlling Party timely informed with respect to the commencement, status and nature of any Tax Proceeding. Upon the conclusion of any Tax Proceeding in accordance with the foregoing, whether by way of settlement or otherwise, Buyer shall cause the Companies to execute any and all agreements, instruments or other documents that are necessary or appropriate to conclude such Tax Proceeding. The Controlling Party shall take any necessary measures to prevent that any debts discussed in the Tax Proceedings prevent the Indemnified Party from obtaining clearance certificates (or positive certificates equivalent to clearance) during the course of the Tax Proceedings. To the extent this Section 11.6.5 conflicts with any other Section of this Agreement, this Section 11.6.5 shall control.

 

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11.5.5            Tax Treatment of Payments. Any payments pursuant to this Agreement shall be treated by the parties hereto, for Tax purposes, as an adjustment to the Purchase Price, except as otherwise required by Applicable Law.

 

11.6        Waiver of Conflicts Regarding Representation; Non-Assertion of Attorney-Client Privilege. Buyer waives and shall not assert, and agrees to cause its Affiliates (including, after the Closing, the Companies) to waive and not to assert, any conflict of interest arising out of or relating to the representation, after the Closing (the “Post-Closing Representation”), of any of the Sellers, or any of their Affiliates or any shareholder, officer, employee or director of the Companies or any of their Affiliates (any such Person, a “Designated Person”) in any matter involving this Agreement, the Transactions or the agreements referenced herein, by Wilmer Cutler Pickering Hale and Dorr LLP and Franco Advogados, both legal counsel currently representing the Companies in connection with the Transactions (the “Current Representation”). Buyer agrees, and Companies, to not use any materials that constitute attorney-client privileged communications solely to the extent inherited as a result of the Transactions between Wilmer Cutler Pickering Hale and Dorr LLP and or Franco Advogados, both legal counsel to the Companies, and any Designated Person occurring during the Current Representation prior to the Closing Date solely to the extent related to the negotiation, execution and delivery of this Agreement, the Transactions or the agreements referenced herein, against the Designated Persons and the Shareholder Representative to the detriment of the Designated Persons and the Shareholder Representative in connection with a dispute between the Designated Persons and the Shareholder Representative, on the one hand, and Buyer or any of its Affiliates, and following the Closing, the Companies, on the other hand.

 

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11.7        Shareholder Representative.

 

11.7.1            At the Closing, Miguel shall be constituted and appointed as the Shareholder Representative. The Shareholder Representative shall be the exclusive representative, agent and attorney-in-fact for and on behalf of the Sellers to: (i) give and receive notices, instructions and communications permitted or required under this Agreement, or any other agreement, document or instrument entered into or executed in connection with the Transactions, for and on behalf of any Seller, to or from Buyer (on behalf of itself or any other Seller) relating to this Agreement or any of the Transactions and any other matters contemplated by this Agreement or by such other agreement, document or instrument (except to the extent that this Agreement expressly contemplates that any such notice or communication shall be given or received by a Seller individually), (ii)  review, negotiate and agree to and authorize Buyer to reclaim an amount from the Aggregate Holdback Amount and Escrow Amount in satisfaction of claims asserted by Buyer (on behalf of itself or any other Buyer Indemnified Party, including by not objecting to such claims) pursuant to Sections 4, 9 and 10, (iii) object to such claims pursuant to Section 10, (iv) consent or agree to, negotiate, enter into, or, if applicable, contest, prosecute or defend, settlements and compromises of, and demand arbitration and comply with orders of courts and awards of arbitrators with respect to, such claims, resolve any such claims, take any actions in connection with the resolution of any dispute relating hereto or to the Transactions by arbitration, settlement or otherwise, and take or forego any or all actions permitted or required of any Indemnifying Shareholder or necessary in the judgment of the Shareholder Representative for the accomplishment of the foregoing and all of the other terms, conditions and limitations of this Agreement, (v) consult with legal counsel, independent public accountants and other experts selected by it, solely at the cost and expense of the Indemnifying Shareholders, (vi) consent or agree to, including the execution and delivery of, any amendment to this Agreement or to waive any terms and conditions of this Agreement providing rights or benefits to the Sellers in accordance with the terms hereof and in the manner provided herein, (vii) pursuant to Section 2 and 3, review, negotiate, object to, accept or agree to Buyer’s calculation of Purchase Price (including any portion thereof such as an Earn-out Payment and any Purchase Price Adjustment); and (viii) take all actions necessary or appropriate in the judgment of the Shareholder Representative for the accomplishment of the foregoing, in each case without having to seek or obtain the consent of any Person under any circumstance. Zenvia and its Affiliates (including after the Closing, the Companies) shall be entitled to rely on the appointment of Miguel as initial the Shareholder Representative and treat such Shareholder Representative as the duly appointed attorney-in-fact of each Seller and as having the duties, power and authority provided for in this Section 11.8. The Sellers shall be bound by all actions taken and documents executed by the Shareholder Representative in connection with this Section 11.8, and Buyer and other Buyer Indemnified Parties shall be entitled to rely exclusively on any action or decision of the Shareholder Representative. The Person serving as the Shareholder Representative may resign, or be removed or replaced at any time by the Seller’s holding more than fifty percent (50%) of the Seller Pro-Rata Share as of immediately prior to the effective time of the Closing, provided that if such Person resigns from its position as the Shareholder Representative, then a successor may be appointed, by the Seller’s holding more than fifty percent (50%) of the Seller Pro-Rata Share as of immediately prior to the effective time of the Closing, upon not less than 10 days’ prior written notice to Buyer.

 

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11.7.2            The Shareholder Representative shall not be liable to any Seller for any act done or omitted hereunder as the Shareholder Representative while acting in good faith (and any act done or omitted pursuant to the advice of counsel shall be conclusive evidence of such good faith) and without gross negligence or willful misconduct. The Shareholder Representative shall serve as the Shareholder Representative without compensation; provided that the Sellers shall severally but not jointly, on a pro-rata basis (i) in accordance with such Seller’s Seller Pro-Rata Share in the case of matters not related to indemnification matters hereunder, and (ii) in accordance with such Seller’s Indemnification Pro-Rata Share in the case of matters related to indemnification matters hereunder, indemnify the Shareholder Representative and hold him/her/it harmless against any loss, Liability or expense incurred without gross negligence, willful misconduct or bad faith on the part of the Shareholder Representative and arising out of, resulting from or in connection with the acceptance or administration of his duties hereunder, including without limitation all reasonable out-of-pocket costs and expenses and legal fees and other legal costs reasonably incurred by the Shareholder Representative (collectively, the “Shareholder Representative Expenses”). If not paid directly to the Shareholder Representative by the Sellers, such losses, Liabilities or expenses may be recovered by the Shareholder Representative from (i) the funds in the Expense Fund Amount and (ii) in the case of Shareholder Representative Expenses related to indemnification matters hereunder, the portion of the Aggregate Holdback Amount or Escrow Account otherwise distributable to the Indemnifying Shareholders (and not distributed or distributable to a Buyer Indemnified Party or subject to a Resolved Claim or an Unresolved Claim) on or after the applicable date of release and payment of such amounts by Buyer to the Indemnifying Shareholders pursuant to the terms hereof, at the time of distribution, and such recovery will be made from the Sellers according to their respective Seller Pro-Rata Shares or Indemnification Pro-Rata Share (depending on whether such matters do not relate, or relate, to indemnification matters hereunder, respectively) of such losses, Liabilities or expenses; provided, that while this section allows the Shareholder Representative to be paid from the aforementioned sources of funds, this does not relieve the Sellers from their obligation to promptly pay such Shareholder Representative Expenses as they are suffered or incurred, nor does it prevent the Shareholder Representative from seeking any remedies available to it at law or otherwise. In no event will the Shareholder Representative be required to advance its own funds on behalf of the Sellers or otherwise. Notwithstanding anything in this Agreement to the contrary, any restrictions or limitations on liability or indemnification obligations of the indemnifying Shareholders set forth elsewhere in this Agreement are not intended to be applicable to the indemnities provided to the Shareholder Representative under this Section. The foregoing indemnities will survive the Closing, the resignation or removal of the Shareholder Representative or the termination of this Agreement.

 

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11.7.3            The Buyer shall not, in any circumstance, be liable for any acts or omissions of the Shareholders Representative related to the Sellers, including, but not limited to, with regards to any conflict or dispute between the Shareholders Representative and the Sellers in relation to the content and conditions of this Agreement. The Sellers agree that the appointment of the Shareholders’ Representative pursuant to his duties mentioned in Section 11.8.1 shall not, in any circumstance, be considered as the Sellers have not reviewed, negotiated or agreed with any provision contained in this Agreement and, as such, the Sellers shall not be exempted from complying with any obligation applicable to the Sellers under this Agreement due to the appointment of the Shareholders’ Representative.

 

11.7.4            Upon the Closing, Buyer will wire to the Shareholder Representative the Expense Fund Amount, which will be used for the purposes of paying directly, or reimbursing the Shareholder Representative for, any Shareholder Representative Expenses incurred pursuant to this Agreement and any other agreement, document or instrument entered into or executed in connection with the Transactions. The Shareholder Representative is not providing any investment supervision, recommendations or advice and shall have no responsibility or liability for any loss of principal of the Expense Fund Amount other than as a result of its gross negligence or willful misconduct. The Shareholder Representative is not acting as a withholding agent or in any similar capacity in connection with the Expense Fund Amount, and has no tax reporting or income distribution obligations. The Sellers will not receive any interest or earnings on the Expense Fund Amount and irrevocably transfer and assign to the Shareholder Representative any ownership right that they may otherwise have had in any such interest or earnings. As soon as practicable following the earlier of (i) the twenty-four (24) month anniversary of the Closing Date, and (ii) the completion of the Shareholder Representative’s responsibilities, the Shareholder Representative will deliver any remaining balance of the Expense Fund Amount to the Indemnifying Shareholders in accordance with their Indemnification Pro-Rata Share thereof. For tax purposes, the Expense Fund Amount will be treated as having been received and voluntarily set aside by the Indemnifying Shareholders at the time of Closing.

 

11.8       After the Closing, any notice or communication given or received by, and any decision, action, failure to act within a designated period of time, agreement, consent, settlement, resolution or instruction of, the Shareholder Representative that is within the scope of the Shareholder Representative’s authority under Section 11.8(a) shall constitute a notice or communication to or by, or a decision, action, failure to act within a designated period of time, agreement, consent, settlement, resolution or instruction of all the Seller’s and shall be final, binding and conclusive upon each such Seller; and each Buyer Indemnified Party shall be entitled to rely exclusively upon any such notice, communication, decision, action, failure to act within a designated period of time, agreement, consent, settlement, resolution or instruction as being a notice or communication to or by, or a decision, action, failure to act within a designated period of time, agreement, consent, settlement, resolution or instruction of, each and every such Seller.

 

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11.9       Termination of Agreements. The Company and Sellers hereby agree that Investors’ Right Agreement, Voting Agreement, Right of First Refusal and Co-Sale Agreement and the Company’s Stock Incentive Plan, in each case as amended to date and to which any Seller is a party, are each hereby terminated in full and shall have no further force or effect.

 

12.           Dispute Resolution.

 

12.1       Submission to Arbitration. Any dispute among the Parties directly or indirectly related to this Agreement which may not be amicably resolved by the Parties shall be submitted to arbitration, in accordance with Law 9,307 of 1996, as amended, by the Arbitration Center of Câmara de Comércio Brasil-Canadá (“Arbitration Center”), which is hereby elected to conduct the arbitration procedure. The arbitration shall be conducted in São Paulo-SP and shall follow the rules of the Arbitration Center.

 

12.2       Arbitration Procedure. The arbitration decision shall be granted by three (3) arbitrators. Each Party shall appoint one arbitrator and such appointed arbitrators shall select the third arbitrator, who shall act as the President of the arbitration panel. Such appointments shall be made within the terms and in accordance with the rules of the Arbitration Center and any arbitrator not appointed within such terms will be appointed by the President of the Arbitration Center. The arbitration will be conducted in Portuguese. Documentary evidence may be submitted in English or in Portuguese. A translation into Portuguese will not be necessary in respect of any documentary evidence not written in Portuguese.

 

12.3       Costs of the Arbitration. All costs and expenses of the arbitration procedure, including the arbitrators’ fees, will be paid by the non-prevailing Party. In case the arbitration award benefits both Parties, such costs and expenses will be paid in the proportion determined in said award.

 

12.4       Exclusive Remedy, Except for Injunctive or Other Provisional Relief. The dispute resolution procedures specified in this Section 10 shall be the sole and exclusive procedures for the resolution of disputes between the Parties arising out of or relating to this Agreement; provided, however, that either Party may seek preliminary injunctions or other provisional judicial relief which may be necessary in the case of absolute and urgent necessity, or for the compulsory installation of the arbitration procedure. In such cases, the injunction or relief shall be sought exclusively in the State Courts of the District of São Paulo, State of São Paulo, Brazil, with express waiver of any other, no matter how privileged. Even in instances where a provisional judicial relief has been obtained, the merits of the matter in dispute will always be decided through the arbitration procedure.

 

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12.5       Parties in Arbitration. For purposes of this Section, there will be always only two parties to an arbitration. In cases where more than two Parties are involved in the procedure, each Party shall join one or more of the other Parties, as determined by their common interests, for purposes of appointing arbitrators and conducting the arbitration procedure.

 

13.           Miscellaneous.

 

13.1       Taxes and Expenses. Each Party shall pay all Taxes imposed on it/him and its/his own expenses (including fees of financial advisors, attorneys and accountants) arising out of or in connection with the negotiation of this Agreement, the performance of its/his/her respective obligations hereunder, and the consummation of the transactions contemplated by this Agreement (whether consummated or not).

 

13.2       Amendment and Waiver. This Agreement may not be amended or waived except by a written agreement executed by the Buyer and the Shareholder Representative.

 

13.3       Notices. Notices, demands or other communications required or permitted to be given or made hereunder shall be in writing and shall be sent by letter with delivery receipt requested or by e-mail with return receipt requested. The notifications, consents, requests, and/or other notices shall be sent to the following numbers, e-mails, and addresses, which may be amended at any time by each party upon written notice to the other Parties:

 

If to a Seller: to the address set forth on Exhibit 13.3(a) for such Seller.

 

If to the Companies:

 

Name: Miguel Ángel Morkin
Address: [XXXXX]
Telephone: [XXXXX]
E-mail: [XXXXX]

 

And by copy to (it being certain that receipt of notice by said recipient is only for information purposes, and shall not be considered for notification purposes):

 

Wilmer Cutler Pickering Hale and Dorr LLP

[XXXXX]

 

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If to the Shareholder Representative:

 

Name: Miguel Ángel Morkin
Address: [XXXXX]
Telephone: [XXXXX]
E-mail: [XXXXX]

 

And by copy to (it being certain that receipt of notice by said recipient is only for information purposes, and shall not be considered for notification purposes):

 

Wilmer Cutler Pickering Hale and Dorr LLP

[XXXXX]

 

If to Buyer:

 

Name: Cassio Bobsin Machado / Renato Friedrich
Address: Avenida Dr. Nilo Peçanha, 2.900, 14º andar, Chácara das Pedras, Porto Alegre-RS, Brazil
Telephone: [XXXXX]
E-mail: [XXXXX]

 

And by copy to (it being certain that receipt of notice by said recipient is only for information purposes, and shall not be considered for notification purposes):

 

KLA Advogados

[XXXXX]

 

13.4         Binding Effect and Assignment. This Agreement and all of the provisions hereof will be binding upon and inure to the benefit of the Parties hereto and their respective heirs, successors and permitted assigns. Neither this Agreement nor any of the rights, interests or obligations hereunder may be assigned by either Party hereto without the prior written consent of the other Parties.

 

13.5        Severability. Whenever possible, each provision of this Agreement will be interpreted in such manner as to be effective and valid under Applicable Laws, but if any provision of this Agreement is held to be prohibited by or invalid under Applicable Laws, such provision will be ineffective only to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions of this Agreement.

 

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13.6        Entire Agreement. This Agreement and its Exhibits and the other documents referred to herein contain the complete agreement between the Parties and supersede any prior understandings, agreements or representations by or between the Parties, written or oral, which may have related to the subject matter hereof in any way, including the Binding Offer, which Binding Offer the Parties hereby acknowledge and agree is terminated with no further force or effect as of the Closing Date, notwithstanding anything to the contrary in the Binding Offer.

 

13.7        Covid-19. The Parties agree that the Covid-19 pandemic and its related economic, social, political or any other effects shall not constitute any hypothesis or inference of a material adverse effect, force majeure, act or God and/or any other waiver or amendment of any term, covenant or obligation under this Agreement.

 

13.8        IPO. The Sellers shall severally (and not jointly), covenant and undertake to use all their reasonable endeavors to provide any financial or legal information related to this Purchase and Sale Transaction, which may be reasonably required by the Buyer or other advisors hired by the Buyer, with respect to requirements, whether prior or not, of any securities commission (including the Securities and Exchange Commission) or equivalent regulatory authority in Brazil or in the United States, in connection with the conversion of the Buyer into a public held company by an initial public offer.

 

13.9        Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the Federative Republic of Brazil.

 

13.10       Language. This Agreement shall be executed and signed in English.

 

13.11      Electronic Signatures. The Parties agree that this Agreement shall be electronically signed and that the signatures, once performed by means of a reliable and secure platform of electronic signatures (e.g. Docusign, Certisign and Clicksign) shall be considered as valid signatures, being this Agreement and its Exhibits, subject to its terms and conditions, as applicable, considered as enforceable, valid an in force between the Parties, in accordance with the laws of the Federative Republic of Brazil.

 

[Signature Pages Follow]

 

64

 

 

IN WITNESS WHEREOF, the Parties hereto have executed the electronic counterpart of the Share Purchase and Sale Agreement of Rodati Motors Corporation, Rodati Motors Central de Informações de Veículos Automotores Ltda., Rodati Services S.A. and Rodati Servicios, S.A. DE C.V. on the date below, in the presence of the witnesses below.

 

July 24, 2020

 

SELLERS:  
   
   
Managing Shareholders:  
   
   
/s/ Miguel Ángel Morkin  
Miguel Ángel Morkin  
   
   
/s/ Julián Bender  
Julián Bender  
   
   
/s/ Ezequiel Sculli  
Julián Bender  
   
   
/s/ Lautaro Schiaffino  
Julián Bender  

 

[Signature Page to Share Purchase and Sale Agreement]

 

 

 

IN WITNESS WHEREOF, the Parties hereto have executed the electronic counterpart of the Share Purchase and Sale Agreement of Rodati Motors Corporation, Rodati Motors Central de Informações de Veículos Automotores Ltda., Rodati Services S.A. and Rodati Servicios, S.A. DE C.V. on the date below, in the presence of the witnesses below.

 

July 24, 2020

 

Remaining Shareholders:
 
 
/s/ Andres Von Buch  
Andres Von Buch
 
/s/ Ariel Pfeffer  
Ariel Pfeffer
/s/ Luis Said Rajme Lopez (Trustee Officer)  
/s/ Talina Ximena Mora Rojas (Trustee Delegate)  
Banco Invex, S.A., Institución de Banca Mútiple, Invex Grupo Financeiro as Trustee of Irrevocable Trust F/2839, Designated Dalus Mexico II
 
/s/ Gonzalo Costa (Director)  
Certo S.A.
 
/s/ Christopher Tatum  
Christopher Tatum
 
/s/ Diego Pablo Serebrisky Solano (Managing Partner)  
Dalus Capital Fund II LP
 
/s/ Diego Pablo Serebrisky Solano (Legal Representative)  
DS Patrimonio, S.A. de C.V.
 
/s/ Patricio Martinelli (Director)  
Escada International LTD.
 
/s/ Federico Braun  
Federico Braun
 
/s/ Gonzalo Costa (Director)  
Fideicomiso NXTP Fondo II  

 

[Signature Page to Share Purchase and Sale Agreement]

 

 

 

/s/ Federico Tomasevich (Director)  
Jurwen S.A.  
   
/s/ Mariano Javier Pappalardo  
Mariano Javier Pappalardo  
   
/s/ Gonzalo Costa (Director)  
NXTP Fund II, L.P.  
   
/s/ Rogelio de los Santos Calderon (Legal Representative)  
Patrimonio Saco, S.A.P.I. de C.V.  
   
/s/ Pedro Maggi (Attorney in fact)  
Pitake Overseas Corp  
   
/s/ Facundo Carlos Vasquez (President)  
Poincenot Technology Studio S.A.  
   
/s/ Javier D’Alessandro (Power of attorney)  
Puerto Rondon S.A.  
   
/s/ Santiago Soldati  
Santiago Soldati  
   
/s/ Sasson Isaac Attie Katran  
Sasson Isaac Attie Katran  
   
/s/ Saul Chrem  
Saul Chrem  
   
/s/ Jose Ortiz Masllorens (Power of attorney)  
/s/ Federico Sandler Alvarez  
Tech Fund S.R.L.  
   
/s/ Gerardo Waisburg (Director)  
W Ventures LTD  
   
/s/ Santiago Bilinkis (Manager)  
Quasar Ventures, LLC  

 

2

 

 

IN WITNESS WHEREOF, the Parties hereto have executed the electronic counterpart of the Share Purchase and Sale Agreement of Rodati Motors Corporation, Rodati Motors Central de Informações de Veículos Automotores Ltda., Rodati Services S.A. and Rodati Servicios, S.A. DE C.V. on the date below, in the presence of the witnesses below.

 

July 24, 2020

 

Other Employees:  
   
/s/ Lucia Micaela Petrelli  
Lucia Micaela Petrelli  
   
/s/ Ramiro Moyano  
Ramiro Moyano  
   
/s/ Santiago Nogueira  
Santiago Nogueira  
   
/s/ Mathias Viel  
Mathias Viel  
   
/s/ Mathias Demian Efron  
Mathias Demian Efron  
   
/s/ Pablo Ois Lagarde  
Pablo Ois Lagarde  
   
/s/Demian Brener  
Demian Brener  
   
/s/ Juan Garre  
Juan Garre  
   
/s/ Leandro D’Onofrio  
Leandro D’Onofrio  
   
/s/ Francisco Mendes  
Francisco Mendes  
   
/s/ Juan Martitegui  
Juan Martitegui  
   
/s/Claudio Marrero  
Claudio Marrero  

 

[Signature Page to Share Purchase and Sale Agreement]

 

 

 

/s/ Juan Martin Pagella  
Juan Martin Pagella  
   
/s/ Luciano Ganga Carabante  
Luciano Ganga Carabante  
   
/s/ Juan Gesino  
Juan Gesino  
   
/s/ Tomas Battolla  
Tomas Battolla  
   
/s/ Facundo Quinteros  
Facundo Quinteros  
   
/s/ Agustin Bender  
Agustin Bender  
   
/s/ Andres Bruzzoni  
Andres Bruzzoni  
   
/s/ Pablo Leandro Martel  
Pablo Leandro Martel  
   
/s/ Ignacio Carioggia  
Ignacio Carioggia  
   
/s/ Jonathan Ruiz  
Jonathan Ruiz  
   
/s/ Adrian Ferre  
Adrian Ferre  
   
/s/ Tomas Celichini  
Tomas Celichini  
   
/s/ Nahuel Gomez  
Nahuel Gomez  
   
/s/ Celeste Martins  
Celeste Martins  
   
/s/ Alejandra Canas  
Alejandra Canas  

 

2

 

 

/s/ Paola Avilan Socolovich  
Paola Avilan Socolovich  
   
/s/ Jessica Costa  
Jessica Costa  
   
/s/ Ariel Eiberman  
Ariel Eiberman  
   
/s/ Luciano Paci  
Luciano Paci  
   
/s/ Magali de Sousa Candeias  
Magali de Sousa Candeias  
   
/s/ Luis Carias Toscano  
Luis Carias Toscano  

 

3

 

 

IN WITNESS WHEREOF, the Parties hereto have executed the electronic counterpart of the Share Purchase and Sale Agreement of Rodati Motors Corporation, Rodati Motors Central de Informações de Veículos Automotores Ltda., Rodati Services S.A. and Rodati Servicios, S.A. DE C.V. on the date below, in the presence of the witnesses below.

 

July 24, 2020

 

Buyer:  
   
/s/ Cassio Bobsin (CEO)  
   
/s/ Renato Friedrich (CEO)  
   
/s/ Osmair Souza (Approval)  
   
Zenvia Mobile Serviços Digitais S.A.  

 

[Signature Page to Share Purchase and Sale Agreement]

 

 

 

IN WITNESS WHEREOF, the Parties hereto have executed the electronic counterpart of the Share Purchase and Sale Agreement of Rodati Motors Corporation, Rodati Motors Central de Informações de Veículos Automotores Ltda., Rodati Services S.A. and Rodati Servicios, S.A. DE C.V. on the date below, in the presence of the witnesses below.

 

July 24, 2020

 

Shareholder Representative:  
   
/s/ Miguel Ángel Morkin  
Miguel Ángel Morkin  

 

[Signature Page to Share Purchase and Sale Agreement]

 

 

 

IN WITNESS WHEREOF, the Parties hereto have executed the electronic counterpart of the Share Purchase and Sale Agreement of Rodati Motors Corporation, Rodati Motors Central de Informações de Veículos Automotores Ltda., Rodati Services S.A. and Rodati Servicios, S.A. DE C.V. on the date below, in the presence of the witnesses below.

 

July 24, 2020

 

Companies:  
   
/s/ Miguel Ángel Morkin (CEO)  
Rodati Motors Corporation  
   
/s/ Julian Bender (Administrator)  
Rodati Motors Central DE Informações DE Veículos Automotores Ltda.  
   
/s/ Julian Bender (President)  
Rodati Services S.A.  
   
/s/ Julian Bender (Chairman of the board)  
Rodati Servicios, S.A. de C.V.  

 

[Signature Page to Share Purchase and Sale Agreement]

 

 

 

IN WITNESS WHEREOF, the Parties hereto have executed the electronic counterpart of the Share Purchase and Sale Agreement of Rodati Motors Corporation, Rodati Motors Central de Informações de Veículos Automotores Ltda., Rodati Services S.A. and Rodati Servicios, S.A. DE C.V. on the date below, in the presence of the witnesses below.

 

July 24, 2020

 

Witnesses:  
   
   
1. /s/ Alina Alvarez 2. /s/ Adrian Schiaffino
Name: Alina Alvarez Name: Adrian Schiaffino
ID: Italy Passport Number: [XXXXX] ID: Argentina Passport Number: [XXXXX]

 

 

 

Exhibit 10.09

 

CERTAIN INFORMATION IN THIS EXHIBIT, MARKED BY [****], HAS BEEN EXCLUDED.

SUCH EXCLUDED INFORMATION IS NOT MATERIAL AND IS THE TYPE THAT THE

REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL.

 

CERTAIN PERSONAL INFORMATION IN THIS EXHIBIT, MARKED BY [XXXXX] HAS BEEN

EXCLUDED.

 

AGREEMENT FOR THE PURCHASE AND SALE OF EQUITY INTEREST AND OTHER

COVENANTS

 

BETWEEN

ON ONE SIDE, AS A BUYER,

 

ZENVIA MOBILE SERVIÇOS DIGITAIS S.A.

 

AND, ON THE OTHER, AS SELLERS,

 

FERNANDO JORGE WOSNIAK STELER

 

FUNDO DE INVESTIMENTO EM PARTICIPAÇÕES

MULTIESTRATÉGIA INOVABRA I - INVESTIMENTO NO EXTERIOR

 

RAUL MARCELO WOSNIAK STELER

 

WAGNER GOMES CARVALHO

 

LUIZ CARLOS CAPELATI

 

GUSTAVO GONÇALVES CANDIAN

 

CRISTHIANO STEFANI FAÉ

 

LEANDRO PIGA

 

MARIA CAROLINA SANZOVO DE OLIVEIRA

 

JOÃO CARLOS RIBAS PEREIRA

 

FERNANDO MINGRONE ARTUZZI

 

STAR4 PARTICIPAÇÕES E CONSULTORIA EM GESTÃO EMPRESARIAL EIRELI

 

ONE TO ONE ENGINE DESENVOLVIMENTO E LICENCIAMENTO DE SISTEMAS DE
INFORMÁTICA S.A.

 

and, as a consenting intervening parties:

 

4 TI PARTICIPAÇÕES LTDA.

VANDERLEI ARCANJO CARNIELO CALEJON

 

HEITOR SAKODA

CLEBER AUGUSTO CALEJON

 

 

 

 

This Agreement of Purchase and Sale of Equity interest and Other Covenants (together with their respective Exhibits, this "Agreement") is entered into in the 19 day of March, in the year of 2021, by and between the following parties:

 

on the one hand, as a buyer

 

(a)             ZENVIA MOBILE SERVIÇOS DIGITAIS S.A., a closed joint stock company, headquartered at Av. Carlos Gomes, n° 300, seventh floor, Bairro Auxiliadora, in the city of Porto Alegre, State of Rio Grande do Sul, registered with CNPJ/ME No. 14.096.190/0001-05, represented herein in accordance with its organizational acts ("Zenvia" or "Buyer");

 

on the other hand, as Sellers:

 

(b)             FERNANDO JORGE WOSNIAK STELER, Brazilian, married, business administrator, bearer of ID Card RG No. [XXXXX], registered in the CPF under the no. [XXXXX], resident and domiciled at [XXXXX] (Fernando);

 

(c)             FUNDO DE INVESTIMENTO EM PARTICIPAÇÕES MULTIESTRATÉGIA INOVABRA I - INVESTIMENTO NO EXTERIOR, equity investment fund, registered in CNPJ/MF under no. 26.195.211/0001-10, duly represented by its manager 2B CAPITAL S.A., a company incorporated in accordance with the laws of Brazil, established at Avenida Presidente Juscelino Kubitschek, 1309 - 100 floor - Private Equity & Inovabra Ventures, Vila Nova Conceição, ZIP Code: 04543-011, in the City of São Paulo, State of São Paulo, registered with CNPJ/MF under No. 07.063.675/0001-29 (“Manager”), in this act represented in the form of its Articles of Incorporation (Inovabra);

 

(d)             RAUL MARCELO WOSNIAK STELER, Brazilian, married, Product Manager, bearer of Identity Card RG No. [XXXXX], registered with CPF/ME under No. [XXXXX], resident and domiciled in [XXXXX] ("Marcelo");

 

(e)             WAGNER GOMES CARVALHO, Brazilian, divorced, businessman, bearer of ID Card RG No. [XXXXX], registered with the CPF under No. [XXXXX], resident and domiciled at [XXXXX] (Wagner);

 

(f)              LUIZ CARLOS CAPELATI, Brazilian, married, holder of Identity Card RG nº [XXXXX], registered in CPF/ME under no. [XXXXX], resident and domiciled at [XXXXX] ("Capelati");

 

(g)             GUSTAVO GONÇALVES CANDIAN, living in a stable union, systems analyst, holder of identity card RG No. [XXXXX] and enrolled with the CPF/ME under No. [XXXXX], resident and domiciled in [XXXXX] (" Candian ");

 

(h)             CRISTHIANO STEFANI FAÉ, Brazilian, married, holder of identity card RG No. [XXXXX], registered in CPF/ME under no. [XXXXX], resident and domiciled in [XXXXX] ("Faé");

 

(i)              LEANDRO PIGA, Brazilian, married, systems analyst, holder of ID Card RG no. [XXXXX], enrolled with the CPF/ME under No. [XXXXX], resident and domiciled at [XXXXX] ("Leandro");

 

(j)              MARIA CAROLINA SANZOVO DE OLIVEIRA, Brazilian, married, business administrator, holder of ID Card RG No. [XXXXX], enrolled with the CPF under no. [XXXXX], resident and domiciled in [XXXXX] ("Carolina");

 

(k)             JOÃO CARLOS RIBAS PEREIRA, Brazilian, married, holder of identity card RG no. [XXXXX], registered in CPF/ME under no. [XXXXX], resident and domiciled in [XXXXX] ("Ribas");

 

 

 

 

(l)              FERNANDO MINGRONE ARTUZZI, Brazilian, single, accountant, RG carrier no [XXXXX], registered in the CPF under no [XXXXX], resident and domiciled at [XXXXX] (Artuzzi);

 

(m)            STAR4 PARTICIPAÇÕES E CONSULTORIA EM GESTÃO EMPRESARIAL, individual limited liability company, registered under CNPJ/ME no. 33.653.674/0001-44 and duly registered with the Board of Trade of the State of São Paulo - JUCESP under NIRE No. 35.630.348.641, with headquarters at Av. Dr. Altino Arantes, nº 692, apartamento 171, Vila Clementino, in the city and State of São Paulo, ZIP Code 04042-003, herein represented in accordance with its Articles of Organization ("Star4");

 

(n)             ONE TO ONE ENGINE DESENVOLVIMENTO E LICENCIAMENTO DE SISTEMAS DE INFORMÁTICA S.A, headquartered at Rua Luís Correia de Melo, no 92, Conj. 281 and 282, Edifício Urbanity Corporate, Bairro Santo Amaro, São Paulo/SP, ZIP Code: 04726-220, registered with CNPJ/ME under No. 15.435.155/0001-28, herein represented in accordance with its Articles of Incorporation (Company);

 

(Buyer and Sellers are collectively referred to as "Parties" and each of them individually and indistinctly as "Party")

 

As Intervening Parties,

 

(o)             4 TI PARTICIPAÇÕES LTDA., a company incorporated in accordance with the laws of Brazil, established at Rua Pequetita, 415, 70 floor (part), Vila Olímpia, ZIP Code 04552-060, in the City of São Paulo, State of São Paulo, registered with the CNPJ/MF under no. 21.935.097/0001-02, herein represented in accordance with its Articles of Organization (4TI); and

 

(p)             VANDERLEI ARCANJO CARNIELO CALEJON, Brazilian, married under the partial community property regime, businessman, holder of Identity Card RG No. [XXXXX] and CPF no. [XXXXX], with a business address in the City of São Paulo, State of São Paulo, at Rua Pequetita, n° 215, 7° andar, Parte, Vila Olímpia - CEP 04552-060 (Vanderlei);

 

(q)             HEITOR SAKODA, Brazilian, married under the partial community property regime, businessman, holder of identity card RG No. [XXXXX] and CPF No. [XXXXX], with business address in the City of São Paulo, State of São Paulo, at Rua Pequetita, n° 215, 7° andar, Parte, Vila Olimpia - CEP 04552-060 (Heitor)

 

(r)              CLEBER AUGUSTO CALEJON, Brazilian, born [XXXXX], single, businessman, holder of identity card RG No. [XXXXX] and CPF No. [XXXXX], with business address in the City of São Paulo, State of São Paulo, at Rua Pequetita, n° 215, 7° andar, Parte, Vila Olimpia - CEP 04552-060 (Cleber )

 

WHEREAS:

 

(i)              on this date, Fernando, Inovabra, Wagner, Artuzzi, Star 4, 4TI and the Company are the rightful owners and holders of all shares of the Company, fully paid up;

 

(ii)             Fernando, Wagner, Capelati, Candian, Faé, Leandro, Marcelo, Carolina, Ribas hold certain stock options issued by the Company ("SOPs"), which shall be converted into new shares (or replaced by shares currently in treasury) on or until the Closing Date (as defined below);

 

 

 

 

(iii)            Marcelo has a purchase option granted to him by Fernando, which should also be exercised until Closing Date ("Marcelo’s Purchase Option");

 

(iv)            company’s cap table, on this date, and after the exercise of all SOPs and Marcelo’s

 

(v)             on the Closing Date, after the exercise of the SOPs and the exercise, by Marcelo, of Marcelo’s Purchase Option, Sellers (including Company) and 4TI shall be the lawful owners and holders of all shares of the Company, fully paid off, free and clear from any Charges, except as otherwise provided for in Exhibit (B) and any Charges arising from the acquisition of Venture Debt (the "Shares", meaning the Shares held by Sellers - including the Company- hereinafter "Corporate Shares – Sellers" and the Shares held by 4TI, hereinafter "Corporate Shares- 4TI");

 

(vi)            The Company is the lawful owner and holder of the number of shares of SMARKIO TECNOLOGIA S.A., an Incorporation enrolled with the CNPJ/ME under No. 24.005.020/0001-13, headquartered at Rua Sergipe, 475, cj. 501 ao 506, ZIP Code 01243-001 Consolação, São Paulo/SP (“Smarkio”) provided for in the Agreement for Purchase and Sale of Smarkio Shares (duly made available in the Data Room), being such shares fully paid, freely and clear from any Encumbrances, except for the possibility of refunding such shares to its former holders, as provided for in the Agreement for Purchase and Sale of Smarkio Shares;

 

(vii)           on this date, Buyer has entered into a contract with Sellers for the purchase and sale of all shares issued by 4TI ("SPA 4TI");

 

(viii)          subject to compliance with the Closing Suspensive Conditions, Buyer wishes to: (a) make a primary investment in the Company, as described below ("Primary Investment"); and (b) acquire the Acquired Shares– Sellers from Sellers, partially by means of purchase and sale and partially via Flip (As provided below) (the “Acquisition of Shares” or “Operation”); and

 

(ix)            parties wish to establish the terms and conditions related to the Operation.

 

THEREFORE, the Parties consent, with the intervenience of the Intervening Parties, in consideration to the mutual promises and declarations herein, to enter into this Contract, which shall be governed by the following clauses and conditions:

 

I.                DEFINITIONS; INTERPRETATION

 

1.1.            Defined Terms. Without prejudice to the other definitions used in this Agreement, the expressions below, in singular or plural, shall have the following meanings:

 

Shares

means all shares issued, outstanding and in treasury, representing the entire Company’s capital.

 

Corporate Shares - 4TI

means all shares held by 4TI.

 

Corporate Shares - Sellers

means all Shares held by Sellers (including the Company).

 

Shareholders’ Agreement -2019

means the shareholders' agreement of the Company, executed on 07/24/2019, as amended.

 

 

 

 

 

Affiliate

means, with respect to any Person, any other Person who, directly or indirectly, Controls, is Controlled by, or is under common Control with the former.

 

Government Authority

means any direct and indirect public administration entity from any of the powers (executive, legislative and judiciary) that has jurisdiction over the Parties, including (i) the Union, States, Federal District and Municipalities; (ii) any municipality, public association, agency, department, division, commission, council, representation or body of such legal entity under national public law, including mixed-economy companies; and/or (iii) any court, judicial, administrative or arbitral body.

 

Database

means all personal data contained in the databases held, operated or controlled by the Company and/or its Subsidiaries.

 

Cash

In relation to the Company and its Subsidiaries, in a consolidated manner, the amount equivalent to the sum of the cash, including, but not limited to, bank deposits, short-term financial investments, that is, financial investments with a availability term up to four (4) months from the date of said investment and other assets with immediate liquidity, as set out in Brazilian GAAP , free of any Encumbrance.

 

Working Capital

means, in relation to the Company, in a consolidated manner, without duplication and in accordance with Brazilian GAAP, the difference between (i) current assets (including receivables adjusted by the provision for doubtful debtors), except Cash, and (ii) current liabilities (including taxes and labor liabilities payable), except Debt.

 

Minimum Working Capital It means, in relation to the Company, the amount of [*****], established by common agreement between the Parties.
   
Control

(including related terms, such as "controlling", "controlled" _ _controlled by" and "under common control with"), when used in relation to a Person, means the direct or indirect ownership of rights, of a partner or arising from any agreement, which ensures (i) predominance in resolutions at any general meetings of said Person; and (ii) the power to elect or appoint the majority of the directors and officers of the Person.

 

Ordinary Course or Ordinary Course of Business

means, in relation to the Company and its Subsidiaries, the set of activities that, due to their nature, purpose or form of execution, are necessary for the achievement of its corporate object or business, by means of performance of their respective activities at their levels and standards, which have been carried out on a recurring basis, even if not uninterruptedly, and in a manner consistent in nature, scope and magnitude with past practices of the Company and its Subsidiaries, being connected to the day-to-day operations of the Company, provided that activities carried out in response to the COVID-19 Pandemic will not be considered as acts outside the Ordinary Course.

 

 

 

 

 

Buyer's Fundamental Representations and Guarantees

 

means buyer's set of representations and Guarantees, specifically with respect to Clauses 9.2(i) (Organization and Capacity); 9.2(ii) (Binding Effect); and 9.2(iii) (Absence of Violation and Consents).
   

Sellers’ Fundamental Representations and Warranties

 

means sellers’ set of representations and Guarantees, specifically with respect to Clauses 9.1(i) (Organization and Capacity); 9.1(ii) (Binding Effect); 9.1(iii) (Absence of Violation and Consents); 9.1(iv) (Organizational Acts, Capital and Shares); 9.1(v) (Ownership); and 9.1(vi) (Preemptive Right); 9.1(vii) (Absence of Disputes On Actions).

 

Base Financial Statements

means Company’s Audited Financial Statements, in accordance with Brazilian GAAP, following the concepts and accounting standards of the Company and Subsidiaries, referring to the base date December 31, 2019.

 

Business Day

means any day except for Saturdays, Sundays, or other days when commercial banks are authorized by law to remain closed in the City of São Paulo, State of São Paulo, Brazil and in the City of Porto Alegre, State of Rio Grande do Sul, Brazil.

 

Intellectual Property Rights

means all rights in intellectual property that may be protected, including, but not limited to, all rights in the Softwares, the Platforms, trademarks, trademark registration applications, trade names, trade secrets, patents, patent applications, copyrights, domain names, image, name and voice rights contained in websites, mobile applications, institutional and advertising materials and other intellectual property rights that may be protected under applicable law.

 

Net Debt

Means, with respect to the Company and its Subsidiaries, in a consolidated manner, without duplication: The Indebtedness minus Cash on a certain date. For the purposes of calculating the First Payment of Initial Amount (regarding Treasury Shares): (i) the Net Debt on the Closing Date shall be taken into consideration (disregarding the funds from the First Payment of Initial Amount); and (ii) the amount of Primary Investment shall be taken into consideration. For the purposes of calculating the Second Payment of Initial Amount (Seller’s Shares): (i) The Net Debt of Closing Date shall be taking into consideration, duly adjusted to consider the receipt of funds from First Payment of Initial Amount (Treasury Shares); and (ii) the Primary Amount shall be taken into consideration.

 

Transaction Documents

means this Agreement, the Secured Fiduciary Sale for Collateral Shares, Bank Guarantee and all Exhibits thereof.

 

 

 

 

 

Relevant Adverse Effect

means the occurrence of any of the following substantial adverse changes, with respect to the business, assets or operating results of the Company and its Subsidiaries, compared to the situation on the date of execution of this Agreement: (i) the application for self-bankruptcy, judicial or extrajudicial recovery, liquidation or dissolution, (ii) adjudication of bankruptcy, (iii) the prohibition or impediment to operate or develop its activities in the Ordinary Course; (iv) law enforcement, that prevents the performance of the main Corporate activities and businesses, as they are currently carried out or (v) receipt of one or more Notices from customers requiring termination of contracts, payment of fines and/or any type of financial redress involving a Loss or loss of future revenue (during the fiscal year in question) in individual or aggregate value equal to or greater than twenty million Reais (BRL 20,000,000.00). For the purposes of this Agreement, the following events shall not be deemed as Relevant Adverse Effect: (A) changes to applicable law or Brazilian GAAP (including government orders to suspend all or part of activities); (B) change in global or local economic or political conditions, or in financial market or capital market conditions, whether in Brazil or abroad; (C) the onset or continuation of a natural disaster, war, political unrest, acts of terrorism (or similar situations), pandemics (including the COVID-19 Pandemic) or any other calamity; or (D) the disclosure of this Agreement, the performance of any act provided herein or necessary for its fulfillment

 

Indebtedness

means, in relation to the Company and its Subsidiaries, in a consolidated manner, without duplication: (i) all long- and short-term financial debts, overdue or outstanding; (ii) all other obligations to pay that do not come from financial contracts and that are overdue and unpaid; (iii) all debts reagreed, including installments of Taxes agreed under programs promoted by government authority; (iv) any dividends, interest on shareholders’ equity, other cash benefits and/or any other form of distribution of profits, in cash or in kind declared and unpaid, and which are not accounted for in current liabilities; (v) all amounts due as a result of final and unappealable judgments; (vi) all values arising from anticipation of receivables and early revenues; (vii) all amounts due relating to acquisitions made by the Company, including earn-outs or any type of obligation undertaken by means of agreements of such acquisitions; And (viii) any and all amounts adhering to the above, including arrears, fine and interest levied up to the date of assessment of indebtedness; in any of the above cases, regardless of whether or not they are recorded in the Company's financial statements. 7

 

Audit Firm

Means any of independent auditing companies listed below, that does not act or has not acted in the last two (2) years as an independent auditor of the Company itself, Buyer, Sellers or any of its Affiliates: (i) Deloitte Touche Tohmatsu; (ii) Ernst & Young; (iii) KPMG or (iv) PricewaterhouseCoopers.

 

Brazilian GAAP

means the accounting principles generally accepted in Brazil, based on the Brazilian Joint-Stock Company Law, Federal Accounting Council (CFC) regulations, and the pronouncements of the Accounting Pronouncements Committee.

 

Primary Investment

 

It has the meaning assigned in the Preambles (viii).
IPCA

means the Broad National Consumer Price Index released by the National Institute of Geography and Statistics and, in its absence, another official index that will replace it.

 

 

 

 

 

Zenvia IPO

Performance of initial primary and/or secondary public offering of shares pertaining to Zenvia Inc., that results in listing of shares on any stock exchange, including outside Brazil.

 

Good Cause

 

means, in relation to Fernando, (a) ratification of the receipt of a complaint in criminal proceedings related to crimes against life, corruption and competition, as a defendant; or (b) non-compliance with the obligation to non-competition provided for in this Agreement; or (c) material non-compliance with instructions or orders from the General Meeting or the Board of Directors of the Company that is not remedied within thirty (30) days of notice in this regard, unless such instructions or orders import clear unlawfulness or violation of the company's organizational acts or the Transaction Documents.

 

Law

means any law, statute, regulation, official letter, decision (judicial, administrative or arbitral), judgment, order (even in case of injunctions or interlocutory relief) or requirement issued, enacted, executed or imposed by any Governmental Authority, provided that they are in force.

 

Arbitration Act

means Law No. 9.307 of September 23, 1996, as amended.

 

Anti-corruption Laws

mean the Brazilian Laws relating to the prevention of corruption, bribery and money laundering acts enacted by any Brazilian Governmental Authority, including Laws 12.846/13, 9.613/98, 8.429/92, as well as the relevant provisions of Decree-Law 2.848/401.

 

 

Gross Profit

means, in relation to the Company and its Subsidiaries, in a consolidated manner, the Net Operating Income calculated in the Company's consolidated financial statements, minus the following costs: (i) cloud services directly related to the provision of Platform services; (ii) brokerage and/or intermediation costs with Brokers; (iii) costs of licensing third-party software directly related to Platform services provided by the Company and its Subsidiaries; and (iv) costs directly related to the provision of services for implementation of platforms, including those relating to payroll processing. The Gross Profit calculation from April 01 to December 30, 2020 is displayed in Exhibit (C).

 

Zenvia Gross Profit

means the gross profit calculated in Zenvia's audited financial statements.

 

 

 

 

 

Restricted Business

means the following activities, as performed by the Company or its Subsidiaries up to the date of discharge of a Principal Executive Partner: (1) development of (i) Communication as a Service (CPaaS) platforms that provide a framework for companies to be able to integrate their internal processes (back ends) of their communication services with the application programming interfaces (APIs) of outbound multichannel communication applications (when the company or application gets in contact with consumers) , using channels such as Email, SMS, WhatsApp, RCS, Push Notice s, Wallets, web pages, social media sites, between a company, its customers, potential customers, as well as inbound multichannel communication (when customers get in contact with the company), using chat channels through automatic text message (chatbots) software, by applications and channels that customers already use , such as Viber, Messenger, Whatsapp and RCS; (ii) Customer communications management (CCM) involving the management of outbound communications for customers, including data collection, processing, document generation and communications, storage and delivery of all types of communications, both printed and digital, such as marketing materials, invoices, renewals, contracts, collections and others; (iii) Customer Experience Management (CXM/CEM) comprising the management and enhancement of client, providing a 360 degree overview of their interaction with its company (e.g. support calls, sales emails and interactions in social networks), and a continuous flow of clients’ information from one department to the other, enabling the creation of enhanced marketing campaigns, qualification of leads, quality support and retaining of clients; (iv) Multichannel campaign management (MCM) that help companies during the creation, preparation, communication of inbound and outbound offers to clients, helping them interacting with prospects and costumers through online and offline channels in a proper and consistent manner (e.g. websites, mobiles, direct mails, social media, call centers and email); and (v) Customer Services Software (CSS) enabling companies to track, organize, and manage clients requests using a single platform, consolidating orders and chats, enhancing sales and services to clients with more insights and personalized campaigns. The main management features of tickers, social posts, links, transformer emails, messages of chat and others and direct them to agents for resolution, involving components of software such as service desk, help desk, IT support, technical support, support center, customer support center, call center and contact center; as well as (2) licensing or any type of exploitation of CPaaS, CCM, CXM/CEM, MCM and CSS to customers and provision of implementation services and technical support related to the communication platforms described above.

 

Encumbrances

means any and all encumbrance, charges , pledges or any other type of judicial or administrative constriction, pledges, mortgages, collateral, usufruct, right of guarantee, assignment or fiduciary sale or with title retention, lease, sublease, licensing, servitude, options, agreement for the exercise of voting, right of first offer, right of sale together, obligation of disposal together, right of acquisition, right of issue, or any other constrictions or restrictions of any nature related to them, except for any Charges applicable as a result of Law (other than judgment or judicial, administrative or arbitral decision binding the Person in question) or this Agreement.

 

Related Parties

means, (i) with respect to any natural Person, (a) their spouse, partner in a stable or similar union, and relative up to the 2nd (second) degree of consanguinity, ascending and descending in a straight line and to any degree, natural or civil (adopted), and testamentary heirs; or (b) any Legal Entity that is an Affiliate of such Person or of which said Person has significant influence (as defined by Brazilian GAAP); and (ii) with respect to any Legal Entity (a) any other Person who is an Affiliate of such Person; or (b) any shareholder or manager who owns more than twenty-five percent (25%) of the Capital of that Person or persons referred to in item (ii)(a) of such Person on the date on which the concept is applied.

 

 

 

 

 

Loss

 

means, without duplication, all losses, obligations, pecuniary or convertible in cash, contingencies, direct damages, costs and expenses, including reasonable attorneys, accountants and experts fees and expenses, costs with administrative and/or judicial and/or arbitrated fees, including deposits and guarantees required to allow a defense to be presented and properly conducted, interest, fines, contract penalties, or charges of any nature, or the impossibility of using the Platforms solely due to the proven absence of ownership of Company and its Subsidiaries Own IP Rights, being understood that: (i) except in the event of Losses arising from the impossibility of using the Platforms due exclusively to the proven absence of ownership of Company and its Subsidiaries Own IP Rights, a Loss shall be deemed to have been effectively incurred upon disbursing the cash of an Indemnifiable Party; (ii) Any accounting loss/adjustment in Indemnified Party shall not be deemed as a loss. Any loss of profits, loss of opportunity, interruption of activity, moral or indirect damages shall not be considered Losses, except in the cases in which amounts of this nature become owed (and are paid) by an Indemnifiable Party to a Third Party under a Third Party Claim . Specifically in the case of loss of profits, the impossibility to exploit and use the Platforms by the Company and its Subsidiaries, due solely to the proven absence of ownership of Company and its Subsidiaries Own IP Rights shall be considered a Loss, to the extent that such Own IP Rights cannot be replaced.

 

Person

means any natural or legal person, partnership, association, corporation, limited company, stock company, simple company, company without legal personality, investment fund, condominium, estate, trust, joint venture, joint stock company, de facto company, or any other entity or organization, whether private law or public law.

 

Platform D1 means the Software that composes, customizes, formats, fires and delivers messages, communications and documents, with or without legal validity, created from various data sources, managing electronic and printed communications that occur through a wide variety of channels, including mobile, Email, SMS, WhatsApp, RCS, Push Notice s, Wallets, web pages, social media sites, printing, etc., between a company , its customers, potential customers and business partners. The D1 platform manages, orchestrates, and analyzes the use of these channels through artificial intelligence optimizing contextualized digital experiences according to each customer's individual journey to increase communications efficiency and improve customer experience and satisfaction.

 

 

 

 

Smarkio Platform

 

means the Software for creating, integrating and processing conversational interfaces that can be used by developers and business users to build chatbots and virtual assistants for a variety of use cases. The platform uses chat interfaces such as messaging platforms, social media, SMS, web site chat, or the like, and features a developer API and/or software development kit (SDK), so that third parties and/or customers can extend the platform with their own customizations and additions. A chatbot is a domain-specific conversation interface that uses an app, messaging platform, social network, or chat solution for its conversations. Chatbots range in sophistication, from simple marketing or decision-tree-based services to feature-rich platform implementations, natural language processing (NLU/NLP) arrangements, and artificial intelligence (AI). A chatbot can be based on text or voice, or a combination of both.

 

Platforms

Means, collectively, the Platform D1 and Smarkio Platform.

 

Net Operating Income of the Company

means, in relation to the Company and its Subsidiaries, the amount corresponding to the sum of the services arising from Licensing and/or use of the Software Platform, including, but not limited to, the resale of communication channels provided by third parties, resale of third-party Software applications, computer processing and the provision of professional services related to the implementation and maintenance of the Software Platform, its communication channels and third-party Software, effectively provided and registered by the Company and/or Subsidiaries in accordance with Brazilian GAAP, deducted from taxes levied on gross sales of such services. The calculation of Operating Income from April 01 to December 31, 2020 is presented in the Exhibit (C).

 

Main Executive Partners

 

means Fernando, Marcelo, Capelati and Candian.

 

   
Software

means the Platforms and all computer programs, including APIs, both in the form of object code and source code, including modules, routines and subroutines thereof and all source and other materials related to them, including user requirements, functional specifications and programming specifications, algorithms, flowcharts, logical diagrams, file structures, coding sheets, coding and even any other manuals or other related documentation and computer-generated works owned or used by the Company and Subsidiaries.

 

Subsidiaries

means Smarkio and any other companies that will be acquired by the Company and become its Subsidiaries.

 

Third Party

means, with respect to any Person, any other Person other than a Party, Consenting Intervening Party, Zenvia Inc. or one of its Related Parties.

 

Working Territories

means Brazil, Argentina and Mexico.

 

Taxes

means any direct or indirect taxes, fees, taxes, social or social security contributions, any other contributions payable to any Government Authority (including interest, fines, penalties, monetary adjustments and additions assessed with respect to such taxes), including, without limitation, taxes on revenue, taxes subject to withholding tax, taxes on financial transactions, indirect taxes, ad valorem, taxes on added value, amounts due to social security , social contributions, payroll contribution, property and real estate taxes, and other taxes of any kind or nature, including contributions related to the FGTS.

 

 

 

 

 

US GAAS

Means Generally Accepted Audit Principles in the United States, as amended.

 

4TI Sellers

 

means 4TI, Vanderlei, Heitor and Cleber.
Seller in Charge

means Fernando

 

Sellers Initial Amount

 

means the Sellers provided for in item (ii)(2) of Exhibit 2.2.1(i)

 

Sellers Earn Out Amount 2022

 

means the Sellers provided for in item (ii) of Exhibit 2.2.1(ii)

 

Sellers Amount Earn Out 2023

 

means the Sellers provided for in item (ii) of Exhibit 2.2.1(iii)

 

Zenvia Stock Amount Sellers

 

means the Sellers provided for in item (ii) of Exhibit 2.2.2

 

Relevant Bond

means, with respect to a Main Executive Partner, the last of their bonds: (i) with the management of the Company or its Subsidiaries (on the Board of Directors or Executive Board); or (ii) in any other non-statutory management position in the Company or its Subsidiaries.

 

Zenvia Inc. Zenvia's parent company that will be the vehicle of the Zenvia IPO.
   

 

1.2.            Other Definitions. In addition to the definitions set forth above, the expressions and terms defined below, whenever used in this Agreement with their initials capitalized, shall have the meanings assigned to them in the respective clauses and/or items established below:

 

Definition Clause
Shares Preambles, item (iv)
Acquired Shares Clause 2.2
Contributed Shares-Contribution Clause 2.3
Encumbered Shares Clause 6.9
Primary Shares Clause 2.1
Corporate Shares-4TI Preambles, item (iv)
Corporate Shares-Sellers Clause 2.3
Zenvia Shares Clause 2.3
Amicable Agreement Clause 6.4
Amicable Agreement Earn-Out 2022 Amount Clause 6.4
Amicable Agreement Earn-Out 2023 Amount Clause 6.4
Amicable Agreement Initial Amount Clause 6.4
Initial Amount Adjustment Clause 4.5
Acquisition of Shares Preambles, item (vii)
Assets Clause 9.1 (xv)
Audited Balance Sheet Q1 2021 Clause 7.2(ix)
Audited Balance Sheet Q1 2022 Clause 5.1.1
Audited Balance Sheet Q1 2023 Clause 5.2.1
Break-Up Fee Clause 8.5
Arbitration Chamber Clause 15.2
Cap Clause 13.3 (i)

 

 

 

 

Effective Workin Capital Clause 4.5.1
Estimated Workin Capital Clause 3.2
Suspensive Conditions Clause 7.3
Buyers’ Suspensive Conditions Clause 7.2
Parties’ Buyers’ Suspensive Clause 7.1
Sellers’ Buyers’ Suspensive Clause 7.3
Conflict Clause 15.2
Escrow Account Clause 13.7
Agreement for Secured Fiduciary Sale Clause 6.9
Relevant Agreements Clause 9.1 (xxiii)
Closing Date Clause 8.1
Payment Date of Initial Amount Adjustmentl Clause 4.5.3
Payment Date of Earn-Out 2022 Amount Clause 5.1.3
Payment Date of Earn-Out 2023 Amount Clause 5.2.3
De Minimis Clause 13.3 (iii)
Demand Clause 9.1 (xix)
Direct Demand Clause 13.5
Financial Statement of Closing Clause 4.5.1
Rights of Own IP Clause 9.1 (ix) (a)
Effective Net Debt Clause 4.5.1
Estimated Net Debt Clause 4.2
Closing Clause 8.1
Bank Guarantee Clause 3.1.2
Flip Preambles, item (viii)
Guarantees Clause 12.10
Confidential Information Clause 11.1
Primary Investment Preambles, item (vii)
Licenses Clause 9.1 (xxxiv)
Leases Clause 9.1 (xxviv)
Earn-Out 2022 Amount Clause 2.2.1 (ii)
Earn-Out 2023 Amount Clause 2.2.1 (iii)
Initial Amount Clause 2.2.1 (i)
Primary Investment Amount Clause 2.1
Uncontroversial Amounts Clause 6.2
Non-CLosing due to Non-Compliance with CP Clause 16.2(iii)
Notice off Acceptance of Initial Amount Clause 4.5.2
Notice of Acceptance - Earn-Out 2022 Amount Clause 5.1.2
Notice of Acceptance - Earn-Out 2023 Amount Clause 5.2.2
Notice of Initial Amount Adjustment Clause 4.5.1
Notice of Disagreement with Initial Amount Clause 4.5.2
Notice of Disagreement with Earn-Out 2022 Amount Clause 5.1.2
Notice of Disagreement with Earn-Out 2023 Amount Clause 5.2.2
Notice of Closing Clause 4.2
Notice of Indemnity Clause 13.5
Notice of Loss Clause 13.4.1
Notice - Earn-Out 2022 Amount Clause 5.1.1
Notice -  Earn-Out 2023 Amount Clause 5.2.1
Official Notice Clause 9.1 (vii)
Obligation of Non-Competition Clause 10.1
Marcelo’s Purchase Option Preambles, item (iii)
Operation Preambles, item (ivviii)
Opinion Clause 6.5
Sellers’ Indemnifiable Parties Clause 13.2
Inmdenified Parties Clause 13.4
Indemnifiers Clause 13.4
Purchaser’s Indemnifiable Party Clause 13.1
Lock-Up Period Clause 2.3.2
Non-Competition Period Clause 10.1
Relevant Period Clause 14.1
Business Plan Clause 8.3 (xii)

 

 

 

 

Compensation Plan Clause 12.9
PPA Clause 7.2 (xi)
Inmdenity Period Clause 13.3 (iv)
Acquisition Price Clause 2.3
First Deadline Clause 3.1
First Payment of Initial Amount Clause 4.3
Properties Clause 9.1 (xxxviv)
Rules Clause 15.2
Third-Parties’ Claims Clause 13.4.1
Second Deadline Clause 3.1(ii)
Second Payment of Initial Amount Clause 4.4
Down Payment Clause 3.1
IT Systems Clause 9.1(x)
SOPs Preambles, item (ii)
SPA 4TI Preambles, item (iiivi)
Arbitral Tribunal Clause 15.3
Minimum Aggregated Indemnity Value Clause 13.3 (ii)
Valor Mínimo do Ajuste do Montante Inicial Clause 4.5.1(vi)
Venture Debt Clause 12.6

 

1.3.            Interpretation. For the purposes of this Agreement and except as provided herein:

 

(i)              The headings and titles of this AGREEMENT are for convenience of reference only and shall not limit or affect the meaning of the clauses, paragraphs or articles to which they apply.

 

(ii)             The terms "inclusive", "including" and other similar terms shall be interpreted as being accompanied by the term "exemplarily" and the phrase "including, but not limited to";

 

(iii)            Where required by the context, the definitions provided for in this Agreement shall apply in both the singular and the plural and the male gender will also contain female gender and vice versa, without change of meaning;

 

(iv)            References to any document or other instruments, or legal or regulatory provisions, include all its amendments, substitutions and consolidations and their supplements as existing on this date, unless expressly otherwise provided;

 

(v)             The expressions "of this instrument" and "herein" and words of similar meaning, such as "here" or "hereto" shall refer to this Agreement as a whole, including its exhibits, and not to any particular Clause or item, being understood that disclosure contained in an exhibit shall be construed as contained in any other exhibit;

 

(vi)            The expressions "the date of this Agreement", "on this date", "on the same date of this instrument" and expressions of similar meaning shall be deemed to refer to the date entered on signature page of this Agreement;

 

(vii)           Any reference to a Section includes all of its clauses (e.g., "clause 10.1" includes clause 10.1 itself, and all sub-clauses numbered "10.1.x");

 

(viii)          The term "any" and similar terms shall be construed as "any and all" as appropriate;

 

(ix)             Any disclosure made in a representation and warranty or Exhibit or this Agreement shall be deemed to be a disclosure made for the purposes of all Clauses and Exhibits to this Agreement, to the extent that it is reasonably apparent that such disclosure should apply to such other devices, notwithstanding the omission of the specific cross-reference.

 

 

 

 

 

(x)          All references to Parties include their authorized successors, beneficiaries and assignees; and

 

(xi)          Except as expressly provided for in this Agreement, the counting of deadlines set forth herein will take place on calendar days. The counting of deadlines should occur as provided for in Article 132 of Brazilian Civil Code. Any deadline to expire on a day other than a Business Day will automatically be extended to the next Business Day.

 

2. PRIMARY INVESTMENT, ACQUISITION OF SHARES AND FLIP

 

2.1.          Primary Investment. Subject to the terms and conditions set forth in this Agreement, Buyer irrevocably and irretrievably, upon fulfillment or waiver of Closing Suspensive Conditions, pursuant to Section VII below, as the case may be, undertakes to make a primary investment in the Company amounting to [*****] ("Primary Investment Amount"), through: (i) subscription of a number of common, registered shares, without par value, issued by the Company, calculated in accordance with the formula in Exhibit 2.1. ("Primary Shares"); and (ii) payment of Primary Shares, in national currency, also on the Closing Date.

 

2.1.1.       Sellers undertake to, at the Closing, attend the Closing AGE (as defined below) and assign, free of charge, their preemptive rights for subscription of Primary Shares to Buyer.

 

2.1.2.        If the Closing occurs between the First Deadline and the Second Deadline, the value of Down Payment (as defined below) shall be fully deducted from Primary Investment, not taking into consideration the amounts received by the Company by way of fine and interest for late payment arising from the default in the delivery of Bank Guarantee or Down Payment.

 

2.2.           Acquisition of Shares: Subject to the terms and conditions set forth in this Agreement, (a) Buyer shall, irrevocably and irretrievably, upon fulfillment or waiver of Suspensive Conditions to Closing under Section 7 below, as the case may be, on Closing Date, acquire and receive from Sellers and company , and (b) each of the Sellers and the Company shall, irretrievably, upon fulfillment or waiver of Suspensive Closing Conditions pursuant to Section 7 below, as the case may be, transfer and deliver to Buyer, on Closing Date, 901,655 Shares , fully subscribed and paid, free and clear from any and all Encumbrance , except as otherwise provided in this Agreement (the " Acquired Shares").

 

2.2.1.         On the Closing Date, Buyer will receive all Acquired Shares from Sellers and the Company, to be paid as described below:

 

(i) As set out in Clause 4.1 below, on the Closing Date, Buyer will pay to Company and Sellers the Initial Amount, corresponding to 432,130 Shares, subject to the formula provided in Exhibit 2.2.1 (i)  ("Initial Amount"), distributed among Sellers as follows:

 

Seller Initial Amount   Number of Shares Sold  
Fernando     97,235  
Inovabra     209,258  
Star4     2,704  
Marcelo     15,382  
Wagner     20,998  
Capelati     3,135  
Candian     5,117  
Faé     5,354  
Leandro     2,975  
Carolina     6,803  
Ribas     7,140  
Artuzzi     2,601  
Treasury     53.428  
Total     432,130  

 

 

 

 

(ii) As set out in Clause 5.1 below, on the Payment Date of Earn-Out 2022 Amount (As defined below), Buyer will pay to Sellers the Earn-Out 2022 Amount for 71,259 Shares, which total value, deferred and conditional, shall result from the application of the formula provided for in Exhibit 2.2.1(ii)  ("Earn-Out 2022 Amount ").

 

Seller Earn Out 2022 Amount   Number of Shares Sold  
Fernando     9,723  
Inovabra     23,251  
Marcelo     17,305  
Wagner     17,180  
Capelati     1,881  
Candian     1,919  
Total     71,259  

 

(iii) As set out in Clause 5.2 below, on the Payment Date of Earn-Out 2023 Amount (As defined below), Buyer will pay to Sellers the Earn-Out 2023 Amount for 148,800 Shares, which total value, deferred and conditional, shall result from the application of the formula provided for in Exhibit 2.2.1(iii)  ("Earn-Out 2023 Amount ").

 

Seller Earn Out 2023 Amount   Number of Shares Sold  
Fernando     136,129  
Marcelo     1,923  
Capelati     6,271  
Candian     4,477  
Total     148,800  

 

2.3.           Flip. Also on Closing Date, and subject to the terms and conditions set out in this Agreement, the Zenvia Amount Sellers (listed in the table below) shall, immediately after the acquisition of Primary Investment and Acquisition of Shares Initial Amount, contribute to Purchaser’s capital (“Increase of Purchaser’s Capital”), based on their par value (or cost value, whichever is lower), 249,466 Corporate Shares (“Shares- Contribution”), and receive a certain number of shares issued by the Company (“Zenvia Brasil Share Sellers”). IN a prompt subsequent act, Zenvia Inc shall approve an increase of its capital, to be subscribed and paid by Zenvia Amount Sellers (being both increases of capital collectively referred to as “ Flip ”), upon contribution of all Zenvia Brasil Shares Sellers at their price cost and Sellers shall receive, in consideration subject to the number of Zenvia Inc. Class A Shares, free and clear from any Encumbrances (except for the Lock-Up set out in this Agreement), to be calculated based on the formula set out in Exhibit 2.2.2 (“Zenvia Shares”). The Parties hereby agreed that the Flip shall be carried out upon contribution of Shares – Contribution directly in increase of Zenvia Inc capital (without previous increase of Zenvia Brasil capital) if Purchaser’s advisors complete, up to Closing Date, which may be made without adverse effects to Zenvia and Zenvia IPO and, give notice of this opinion to Zenvia Amount Sellers, with a reasonable advance that allows the organization of an alternative structure for Flip

 

 

 

 

Seller -          Zenvia Shares   Number of Shares Sold  
Fernando     243,087  
Marcelo     3,846  
Capelati     1,254  
Candian     1,279  
Total     249,466  

 

2.3.1.          The Parties and Zenvia Inc., after its adhesion to this Agreement, undertake to perform all acts and to take all necessary measures to ensure that Flip is approved and implemented on the Closing Date, including the procurement of the assessment reports required for the operations provided herein and the approval of all matters required by law (in particular the Law of jurisdiction applicable to Zenvia Inc.) as part of the Closing.

 

2.3.2.          The negotiations with Zenvia Shares, received by Zenvia Shares Sellers will be subject to a lock-up for the shortest period between (i) 12 (twelve) months from the Closing Date and (ii) the lock-up to which the other Zenvia executives receiving Zenvia Shares in the Zenvia IPO will be subject; provided that the minimum lock-up period required by applicable law in the jurisdiction in which the Zenvia IPO takes place should always be fulfilled. After the Lock-Up period, Sellers – Zenvia Shares must be free to dispose of their Zenvia Shares, and Zenvia Inc. undertakes to take all measures that may be necessary to allow shares to become freely tradable on stock exchanges where Zenvia's other shares are listed for trading.

 

 

 

 

3- DOWN PAYMENT AND BANK GUARANTEE

 

3.1            Down payment and Bank Guarantee. Notwithstanding any provision hereunder, and irrespective of Seller’s compliance with the obligations to be fulfilled until the First Deadline (as definied below), as conditions for execution of this Agreement, Purchaser undertakes to pay to the Company, up to May 31, 2012 (“First Deadline”), as a prepayment of Primary Investment or Break-Up Fee (as provided below) (as the case may be), the amount of [*****] (“Down Payment”), by means of electronic transfer of immediately available Funds -TED to Company’s bank account mentioned in Exhibit 3.3. In accordance with the provisions of this Agreement:

 

(i) if the Closing occurs until the First Deadline, the Down Payment will not be due by Buyer to the Company and there will be no deduction from the amount of the First Payment of the Initial Amount;

 

(ii) if the Closing occurs between the First Deadline and August 31, 2021 ("Second Deadline"), the Down Payment already paid must be deducted from the amount of the Primary Investment; Or

 

(iii) if the Closing does not occur by the Second Deadline, the Down Payment already paid will treated as mentioned in Clause 10 below.

 

3.1.1        The provisions of this Agreement governing the cases of loss and refund of Down Payment prevail over the provisions of Articles 418 to 420 of Brazilian Civil Code.

 

3.1.2.         As a guarantee of payment of Down Payment on the First Deadline, Buyer undertakes to provide Company, within twenty-five (25) days from the execution of this Agreement, with a bank guarantee issued by a first-line financial institution among those listed in Exhibit 3.1.2, in an amount corresponding to Down Payment, which shall establish that the payment of funds subject to the bank guarantee shall be made on the Business Day following First Deadline, if Sellers notify the financial institution issuing the security bank, with copy to Buyer, stating that the Closing did not occur until the Deadline and that the Buyer has not fulfilled its obligation to pay the Down Payment up to such date ("Bank Guarantee").

 

3.1.3          Without prejudice to the right of Sellers to terminate this Agreement pursuant to Clause 16.2 below, if Buyer does not submit a Bank Guarantee to the Company within the period set out in Clause 3.1.2 above or does not pay the Down Payment until the First Deadline, Buyer will be required to promptly deposit in Company’s current account set in Exhibit 3.3 the amount subject to Bank Guarantee or Down Payment, plus interest for late payment of [*****], and [*****] fine, as adjusted for inflation; being understood that the amount of the fine and interest for late payment: (a) will not be deducted from the First Payment of the Initial Amount, if the Closing occurs until the Second Deadline; and (b) will be added to the Break-Up Fee value (as defined below) for the purposes of Clause 8.5 below;

 

4. PAYMENT OF INITIAL AMOUNT

 

4.1.           Initial Amount. As provided for in Clause 2.2.1(i), the Initial Amount shall be paid in two (2) steps, both on the Closing Date: (i) the first payment, regarding 53,428 Shares held by the Company in treasury, pursuant to Clause 4.3 below; and (ii) the second payment, relating to the acquisition of 378,702 Shares of the other Sellers, pursuant to Clause 4.4 below.

 

4.2.           Notice of Estimated Net Debt. Within three (3) Business Days prior to the Closing Date, the Seller in Charge shall send a Notice to Buyer, pursuant to Section 6 below, stating the estimated amounts of Working Capital and Net Debt for the Closing Date (respectively, "Estimated Working Capital" and "Estimated Net Debt"), for the purposes of calculating the Initial Amount to be paid by Buyer on the Closing Date (Notice of Closing). The determination of Estimated Net Debt shall take into account the adjustments foreseen in the definition of Net Debt.

 

 

 

 

4.3.           First Payment of Initial Amount. On the Closing Date, Buyer will pay to the Company the amount of the First Payment of the Initial Amount, calculated in accordance with item (i)(2) of Exhibit 2.2.1(i) ("First Payment of Initial Amount"), in national currency, through electronic transfer of immediately available funds - TED to the Company's bank account , set out in Exhibit 3.3, or to another bank account that may be informed by the Company in reasonable advance.

 

4.4.           Second Payment of Initial Amount. On the Closing Date, immediately after the First Payment of the Initial Amount, Buyer will pay to Initial Amount Sellers the amount of the Second Payment of Initial Amount, based on the formula provided for in the item (i)(3) of Exhibit 2.2.1(i), ("Second Payment of Initial Amount"), in national currency, by means of electronic transfer of immediately available funds – TED to the bank accounts of Initial Amount Sellers, provided for in Exhibit 3.4, or to other bank accounts that may be provided by Sellers with reasonable advance notice , in the proportions established in item (ii)(2) of Exhibit 2.2.1(i).

 

4.5.           Post-Closing Adjustment. The Parties acknowledge that the Initial Amount will be calculated and paid based on an assessment of Company that took into consideration the Estimated Working Capital and Estimated Net Debt, and which, therefore, is subject to post-closing adjustment as explained below ("Initial Amount Adjustment") , only in the event that the Initial Amount Adjustment amount exceeds the Minimum Adjustment Value of Initial Amount.

 

4.5.1.         Within ninety (90) days from the Closing Date, the Company shall hand to the Parties a notice containing (i) Audited Balance Sheet Q1 2021, as provided below (if this sheet has not been delivered prior to Closing) and Company and its Subsidiaries consolidated financial statements for the base Closing Date Date, subject to the limited review by an independent auditor ("Closing Financial Statements"); (ii) the Initial Amount calculated on the basis of the formula in Exhibit 2.2.1(i); (iii) the amount of the Company's Net Debt and Working Capital on the Closing Date, based on Closing Financial Statements ("Effective Net Debt" and "Effective Working Capital", respectively); (iv) calculation of the Adjustment of Initial Amount in the terms detailed below ("Notice of Adjustment of the Initial Amount"):

 

(i) The Initial Amount will be calculated based on the formula set out in Exhibit 2.2.1(i) and will be subject to the Net Debt and Working Capital adjustments described in items (ii) to (vi) below;

 

(ii) If the Effective Working Capital exceeds the Estimated Working Capital, the Initial Amount will be increased by the amount which the Effective Working Capital exceeds the Estimated Working Capital;

 

(iii) If the Effective Working Capital is lower than the Estimated Working Capital, the Initial Amount will be reduced by the amount which the Estimated Working Capital exceeds Working Capital Effective;

 

(iv) If Effective Net Debt exceeds Estimated Net Debt, Initial Amount will be reduced by the amount which Effective Net Debt exceeds Estimated Net Debt;

 

(v) If the Effective Net Debt is lower than the estimated net debt amount, the Initial Amount will be increased by the amount at which the Effective Net Debt is less than the Estimated Net Debt; and

 

(vi) If the Initial Amount Adjustment results in a positive number lower, or a negative number higher than [*****] on behalf of Buyer or Sellers ("Minimum Adjustment Value of Initial Amount Adjustment"), no amount shall be due by either Party.

 

 

 

 

4.5.2.          Within fifteen (15) days after receiving the Notice of Adjustment of Initial Amount, Buyer shall send to the Seller in Charge , and Seller in Charge shall send Buyer a notice expressing their (i) consent to the calculation of the Initial Amount Adjustment ("Notice of Acceptance of the Initial Amount") or (ii) disagreement with the calculation of the Initial Amount Adjustment ("Notice of Disagreement of the Initial Amount"), in which case the provisions of Clauses 6.1 and following will be observed.

 

4.5.3.          Initial Amount Adjustment Payment Date.

 

(i) If the Initial Amount Adjustment results in a negative number (i.e. for the Buyer's benefit) that is less than the Minimum Amount of the Initial Amount Adjustment (i.e. if the amount due to Purchaser is higher than [*****], the total amount of the Negative Initial Amount Adjustment will be paid by the Sellers to Buyer, proportionately to their respective holdings (without joint and several liability) in relation to all Corporate Shares. Payment must take place within 15 (fifteen) days thereafter, the first to occur between: (a) receipt of the last Notice of Acceptance of the Initial Amount sent by the Parties; (b) the implementation of the Amicable Agreement - Initial Amount as set out in Clause 6.4; (c) the completion of Initial Amount Opinion, as per Clause 6.5; or (d) the course of mentioned in clause 4.5.2 above has been provided without any manifestation by the Parties (Date of Payment of Initial Amount Adjustment), by means of electronic transfers of immediately available funds– TED to Buyer's bank account to be appointed by the latter with reasonable advance.

 

(ii) If the Initial Amount Adjustment results in a positive number (i.e. for the benefit of Sellers) that is greater than the Minimum Amount of Initial Amount Adjustment (i.e. if the amount due to Sellers is higher than [*****], the total amount of positive Initial Amount Adjustment will be paid to Sellers Initial Amount in a single installment, on the Payment Date of Initial Amount Adjustment, through electronic transfers of immediately available funds – TED to Initial Amount Sellers’ Bank Account mentioned in Exhibit 3.4, or for other bank accounts that may be informed by the latter with reasonable advance notice, subject to the proportion described in item (ii) of Exhibit 2.2.1(i).

 

5.          PAYMENT OF THE EARN-OUT AMOUNT 2022 AND EARN-OUT 2023 AMOUNT

 

5.1.            Earn-Out 2022 Amount . Subject to the terms and conditions set forth in this Agreement, Buyer undertakes, on the Payment Date of Amount Earn-Out 2022, make payment of the Earn-Out 2022 Amount to Earn-Out 2022 Amount Sellers, subject to the proportion set out in Exhibit 2.2.1(ii).

 

5.1.1.          Within five (5) days after submitting Company and its Subsidiaries’ consolidated financial statements from March 31, 2021 to March 31, 2022, subject to review by independent auditor (Audited Balance Sheet Q1 2022), the Company shall hand to the Parties : (a) a copy of Audited Balance Q1 2022, as well as the details required for the calculation of Amount Earn-Out 2022; and (b) the calculation of the Earn-Out 2022 Amount, providing supporting documentation required for verification of such calculation ("Earn-Out 2022 Amount Notice ").

 

5.1.2.          Within 15 (fifteen) days after receiving the Earn-Out 2022 Amount Notice, Buyer shall send to Seller in Charge , and Seller in Charge shall send to Buyer, a notice establishing, in relation to the Earn-Out Amount Notice 2022, its (i) agreement ("Earn-Out 2022 Amount Acceptance Notice") or (ii) disagreement ("Earn-Out 2022 Amount Disagreement Notice") , in which case the provisions of Clauses 6.1 and following shall be met.

 

 

 

 

5.1.3.           The Earn-Out 2022 Amount shall be paid as described in Clause 5.1.4 below, within fifteen (15) days thereafter, as applicable: (a) the receipt of the Earn-Out 2022 Amount Acceptance Notices sent by both Parties; (b) the performance of the Amicable Agreement – Earn-Out 2022 Amount, as per Clause 6.4; (c) the completion of Earn-Out 2022 Amount Opinion, as per Clause 6.5; or (d) the course of period of Clause 5.1.2 above without any manifestation of the Parties, whichever occurs first (Payment Date of the Earn-Out 2022 Amount ).

 

5.1.4.           The Earn-Out 2022 Amount shall be paid to Earn-Out 2022 Amount Sellers in a single installment, on the Earn-Out 2022 Amount Payment Date, through electronic transfers of immediately available funds – TED to the Bank Accounts of Earn-Out 2022 Amount Sellers set out in Exhibit 3.4, or to other bank accounts that may be provided by Earn-Out 2022 Amount Sellers with reasonable advance notice, subject to the proportion described in item (ii) of Exhibit 2.2.1(ii).

 

5.2.             Earn-Out 2023 Amount. Subject to the terms and conditions set forth in this Agreement, Buyer undertakes, on the Date of Payment of Earn-Out 2023 Amount, pay the Earn-Out 2023 Amount to Earn-Out 2023 Amount Sellers , subject to the proportions set out in item (ii) of Exhibit 2.2.1(iii).

 

5.2.1.           Within five (05) days after the submission of Company and its Subsidiaries consolidated financial statements for the period from March 31, 2022 to March 31, 2023, subject to limited review by independent auditor (Audited Balance Sheet Q1 2023) , the Company shall submit to the Parties: (a) a copy of Audited Balance Sheet Q1 2023, as well as the details required for the calculation of the Earn-Out 2023 Amount ; and (b) the calculation of Earn-Out 2023 Amount and production of supporting documentation required for verification of such calculation ("Notice Earn-Out 2023 Amount").

 

5.2.2.           Within fifteen (15) days after receiving the Earn-Out 2023 Notice Amount, Buyer shall send to Seller in Charge , and Seller in Charge shall send Buyer a notice expressing, in relation to Earn-Out Amount Notice 2023 , their (i) agreement ("Earn-Out 2023 Amount Acceptance Notice") or (ii) disagreement ("Earn-Out 2023 Amount Disagreement Notice"), in which case it will comply with the provisions of Clauses 6.1 et seq.

 

5.2.3.           The Earn-Out 2023 Amount shall be paid as described in Clause 5.2.4 below, up to 15 (fifteen) days after, as applicable: (a) the receipt of Earn-Out 2023 Amount Acceptance Notices sent by both Parties; (b) the implementation of the Amicable Agreement - Earn-Out 2023 Amount, as per Clause 6.4; (c) the completion of the Earn-Out Amount Opinion 2023, as per Clause 6.5; or (d) the course of the period mentioned in Clause 5.2.2 above, without any manifestation by the Parties, whichever occurs first (Payment Date of the Earn-Out 2023 Amount ).

 

5.2.4.           The Earn-Out 2023 Amount shall be paid to Earn-Out 2023 Amount Sellers in a single installment, on the Payment Date of the Earn-Out 2023 Amount Adjustment, through electronic transfers of immediately available funds – TED to the bank accounts of Earn-Out 2023 Amount Sellers set out in Exhibit 3.4, or to other bank accounts that may be provided by Earn-Out 2023 Amount Sellers with reasonable advance notice, subject to the proportion described in item (ii) of Exhibit 2.2.1(iii).

 

5.3.             Quarterly Follow-up. Notwithstanding the provisions of Section 5, Buyer and Seller in Charge shall meet on quarterly basis, in order to monitor Company's Gross Profit and Net Debt growth, and record whether there is any disagreement regarding the methodology and accounting criteria for the calculation of such numbers. The Agreement of the Parties on the criteria and methodology pointed out shall bind the Parties in any future discussions as to the effective value of Earn-Out 2022 and Earn-Out 2023.

 

 

 

 

6.          PROCEDURES APPLICABLE TO ACQUISITION

 

6.1.           Rules Applicable to Sending Notices. Any Notices sent by Seller in Charge to Buyer will be sent on behalf of the other Sellers (which will be copied only for acknowledgement purposes), who hereby agree that they shall not be entitled to send another Notice or disagree and/or change such notice, and the procedure provided herein shall bind all Sellers for all purposes.

 

6.1.1.         Notices under SPA 4TI. 4TI Sellers hereby appoint the Seller in Charge as their faithful attorney, with powers to receive and send, on their behalf, any notice, notification, or communication relating to the determination and payment of Initial Amount, Initial Amount Adjustment, Flip and Earn-Out 2022 Amount. The mandate provided for in this Clause is granted in an irrevocable and irretrievable manner, as a business condition, subject to Article 684 and sole paragraph of Article 686 of the Civil Code.

 

6.1.2.         Earn-Out 2022 Notifications. Specifically in discussions on establishment and payment of Earn-Out 2022 Amount, 4TI Sellers, represented at all times by Vanderlei and Inovabra, shall also receive all notices, notifications or communications; and Notices sent by Sellers (as well as Notices sent by 4TI Sellers under SPA 4TI) will only be considered valid when signed by the Seller in Charge and Vanderlei and Inovabra.

 

6.2.           Notice of Disagreement. The Notices of Disagreement mentioned in Clauses 6.2.1, 5.1.2 or 5.2.2, shall describe in a specific and reasonably detailed manner the basis of such disagreement, with suggestion of corrections to be made in the calculation of that value and the respective value to be taken into consideration. All other calculation elements not expressly disputed in the respective Notice of Disagreement shall be deemed to be definitive, binding and conclusive between the Parties for the purposes of payment of amounts due under this Agreement ("Uncontroversial Amounts").

 

6.3.           No Notice of Acceptance or Notice of Disagreement. If both Parties, Buyer and Seller in Charge, fail to send the Notice of Acceptance or Notice of Disagreement in a timely manner within the time limit, as the case may be, in Clauses 4.5.2, 5.1.2 or 5.2.2 above, the calculation of value provided for in the respective notice presented by the Company shall be deemed as final, binding and conclusive for all purposes hereunder. If only one of them, Seller in Charge or Buyer, fail to send Notice of Acceptance or Notice of Disagreement in a timely manner, it shall be considered that the defaulting party has fully accepted the terms of the Notice received, taking into account the amount set out in the respective definitive, binding and conclusive notice for all the purposes of this Agreement.

 

6.4.           Amicable Agreement. If a Notice of Disagreement is sent in a timely manner to Buyer or Seller in Charge (as the case may be), the Parties shall make their best efforts to, within fifteen (15) days from receipt of the Notice of Disagreement in question, negotiate in good faith and seek consensus regarding the divergences relating to the calculation of the value set out in the respective Notice of Disagreement ("Amicable Agreement "). Seller in Charge will negotiate directly with Buyer on behalf of the other Sellers, who agree and authorize the Seller in Charge to enter into an Amicable Agreement with Buyer which shall be definitive, binding and conclusive for all purposes set forth in this Agreement.

 

 

 

 

6.5.           Review Audit. If the Parties do not reach an Amicable Agreement in relation to Initial Amount, Earn-Out 2022 Amount or Earn-Out 2023 Amount (as the case may be) within the period referred to in Clause 6.4 above, the divergences set out in the relevant Notice of Disagreement shall be subject to the analysis and decision of an audit firm to be chosen by common agreement by the Parties within thirty (30) days from the deadline for the Amicable Agreement. If the Parties do not reach an agreement, the Audit Firm presenting the lowest value proposal for the performance of its services will be selected. This audit firm shall produce a conclusive opinion on the calculations and amounts subject to divergences between the Parties, as per the following terms and conditions (Opinion):

 

(i)           The Audit Firm shall consider the divergent and/or controversial items and amounts as expressly disputed in the Notice of Disagreement and others arising, in each case, with the depth that the Audit Firm deems necessary for such analysis;

 

(ii)          The Audit Firm shall consider, in its analysis, the accounting criteria specifically provided for in this Agreement or in its Exhibits or, in their absence, those used in the Base Financial Statements;

 

(iii)          The amount to be determined by the Audit Firm in the Opinion shall not, under any circumstances, be lower than the lowest value or higher than the highest value reported in the respective Notice of Disagreement, which will serve as limits for Audit Firm;

 

(iv)          The Opinion shall be produced by the Audit Firm and delivered simultaneously to the Parties, within thirty (30) days from its procurement;

 

(v)           The Opinion shall be final, binding and conclusive for the Parties, unless material errors occur and, in this case, Buyer or Seller in Charge may report such error to the Audit Firm, in writing and with a copy to the other Party, so Audit Firm may immediately correct said error and send a rectified version of the respective Opinion; and

 

(vi)          It is hereby agreed that both Sellers and Buyer may, together, meet with the Audit Firm, in order to clarify the methodologies used in their respective calculations for the determination of the amounts, provided that the methodology to be used by the Audit Firm must be the one provided for in item (ii) above. The Parties, the Company and its Subsidiaries shall cooperate with the Audit Firm, providing all information and documents reasonably requested by it within the shortest possible time, but in no event within more than ten (10) days from its procurement.

 

(vii)          Costs with audit firm. If the amount assessed by the Audit Firm in the Opinion is closer to the amount initially reported by the Seller in Charge in its Notice to Buyer, all costs related to the procurement of Audit Firm will be solely borne by Buyer. Likewise, if the amount assessed by the Audit Firm in the Opinion is closer to the amount reported by Buyer in the respective Notice of Disagreement submitted to Seller in Charge , all costs of the contract shall be solely borne by Sellers.

 

6.6.           Payment of Uncontroversial Amounts. For clarification purposes, if a Notice of Disagreement is sent and as long as there is no Amicable Agreement pursuant to Clause 6.4, or Opinion (regarding Initial Amount, Earn-Out 2022 Amount and Earn-Out 2023 Amount, as the case may be) is not completed, as set forth in Clause 6.5 , Buyer will only be required to pay Sellers the Uncontroversial Amount under Clause 6.2 above, if any.

 

 

 

 

6.7.           Default. The failure to pay amounts due pursuant to Sections 4, 5 and 6 within the established period shall subject the debtor to adjustment for inflation based on IPCA variation from the expected date of payment to the actual date of payment, plus interest on late payment of [*****], and [*****] fine on the adjusted value. In the event of arrears of Earn-Out 2022 Amount for more than thirty (30) days from the Payment Date of the Earn-Out 2022 Amount , as established in Clause 5.1.3: (i) the Earn-Out 2023 Amount will expire in advance, considering the maximum amount that can be reached by applying the formula set out in Exhibit 2.2.2 (iii), assuming a Net Debt equal to zero; and (ii) the Non-Competition Period must be automatically terminated. In the event of late payment of the Earn-Out 2023 Amount for more than 30 (thirty) days from the Payment Date of the Earn-Out 2023 Amount, the Non-Competition Period shall be automatically terminated.

 

6.8.           Discharge of Prices Owed by Buyer. For the purposes of amounts owed by Buyer as an Initial Amount, Earn-Out 2022 Amount and Earn-Out 2023 Amount, the confirmation of receipt of TEDs regarding these amounts in Sellers’ and Company’s bank accounts (pursuant to Exhibits 3.3 and 3.4 (as applicable) or to other bank accounts that have been reported by Sellers or the Company reasonably in advance), subject to the proportions established in Exhibits 2.2.1(i), 2.2.2.1(ii) and/or 2.2.1(iii) above (as the case may be) will imply automatic granting of the most complete, broad, irrevocable and irretrievable discharge in relation to the amounts received by Sellers and by the Company to Buyer (as the case may be), without the need for execution of any other instrument.

 

6.9.           Secured Fiduciary Sale. As a guarantee of the payment regarding Earn-Out 2022 Amount and Earn-Out 2023 Amount, Buyer shall constitute a secured fiduciary sale on behalf of the Earn-Out 2022 Amount Sellers, Earn-Out 2023 Amount Sellers and 4TI Sellers on common shares representing fifty percent plus one (50% + 1) shares issued by the Company at any time ("Encumbered Shares"), in accordance with the Agreement for Secured Fiduciary Sale of Shares to be executed between the Parties on Closing Date ("Contract for Secured Fiduciary Sale of Shares"). The Contract for Secured Fiduciary Sale of Shares must be registered and filed with the Register of Deeds and Documents of the District of São Paulo/SP; and (b) in the Company's Registered Shares Register.

 

7.          SUSPENSIVE CONDITIONS

 

7.1.           Suspensive Conditions on Closing. Without prejudice to clauses 7.2 and 7.3 below, the Parties’ obligation to perform the acts on Closing is subject to the following Suspensive Conditions ("Parties’ Suspensive Conditions "):

 

(i)             The performance of Zenvia IPO; And

 

(ii)             Non-existence of any Law prohibiting, suspending, changing, postponing or limiting, in any way, the performance of operations provided for in this Agreement and its Exhibits or questioning its validity or legitimacy.

 

7.2.           Suspensive Conditions at Closing by Buyer. 1 Buyer's obligation to perform its acts upon Closing is subject to the following Suspensive Conditions, that must be fulfilled by Sellers and/or by the Company, as the case may be, until or on the Closing Date, unless waived in writing by Buyer ("Buyer's Suspension Conditions"):

 

(i)             Corporate Shares - Sellers shall be free and clear of any Encumbrance, except as provided for in the Exhibit (B) or as a result of Venture Debt (as set out below);

 

(ii)             the Fundamental Representations and Warranties of Sellers shall be true and correct on Closing as if they were provided on that date (provided that representations and warranties given on a specific date shall be true and correct only on said date);

 

 

 

 

(iii)          the other representations and warranties of Sellers set out in Clause IX shall be true and correct (in all its relevant respects) on Closing, as if they were provided on the Closing Date (notwithstanding that the representations and warranties provided on a specific date shall be true and correct, in all its relevant respects, only on such date), in accordance with the provisions of Clause 9.1.1 below;

 

(iv)          Sellers, Company and its Subsidiaries shall have fulfilled all their obligations under this Agreement by the Closing Date; furthermore, the Company and its Subsidiaries shall have conducted their activities in its Ordinary Course;

 

(v)          no Material Adverse Effect shall have occurred between this date and Closing Date;

 

(vi)          (a) all shares and/or any other equity rights to which Sellers or any Third Party may be entitled due to Company’s or its Subsidiaries’ stock options or similar plans shall be subscribed and paid until the Closing Date and, after Closing, there will be no stock option or similar plans, or outstanding cash or related obligations; and (b) Marcelo’s Purchase Option has been exercised; (c) the minutes of Company’s Special Meeting attached to this instrument as Exhibit 7.2(vi) must have been registered (“AGE conversion PNB”); (d) the books of registration and transfer and Company’s registered share must be regularized for equity interests listed in Exhibit (A) and AGE Conversion PNB;

 

(vii)         authorizations listed in Exhibit 7.2 (vii) must have been obtained;

 

(viii)        Fernando is expected to continue to head Corporate business, just as is on this date;

 

(ix)          only in the event that the Closing did not occur by the First Deadline, the Company shall have delivered, within the terms set forth in Clause 7.2.1 below, Company’s and its Subsidiaries’ Consolidated Financial Statements, for the period from March 31, 2020 to March 31, 2021, subject to the limited review of an independent auditor (Audited Balance Sheet Q1 2021), without any exceptions, prepared in accordance with IFRS-IASB accounting rules and US GAAS and/or PCAOB standards, as per Clause 7.2.1 below, or: (a) if Sellers do not deliver the Audited Balance Sheet Q1 2021 within the period set out in Clause 7.2.1; and (b) the Contract remains in force after the Second Deadline, the financial statements enabling Zenvia IPO to be held;

 

(x)          the Company shall have provided Buyer with the report of Purchase Price Allocation ("PPA") in relation to all its Subsidiaries;

 

(xi)          the restitution of Smarkio's shares to Smarkio's sellers shall not have occurred, and the transference of the Company’s control according to this Contract must have been subjected to a waiver by Smarkio’s Sellers, in case the price has still not been paid; and

 

(xii)         all Company and its Subsidiaries employees who worked in the Company as of January 1, 2020 must have entered into terms of assignment of intellectual property rights on behalf of the Company.

 

(xiii)        Buyer acknowledges that the Precedent Condition referred to in Clause 7.2(ix) : (i) will be deemed fulfilled upon the Delivery Audited Balance Sheet Q1 2021 up to May 9, 2021, provided that (1) the Balance Sheet Q1 2021 has been issued in US GAAS and/or PCAOB standard and (2) the audit opinion does not contain reservations (even if independent audit of Buyer or Zenvia Inc., or any Government Authority requests changes to, or point out inconsistencies or request clarification on, the Audited Balance Sheet Q1 2021); (ii) will be automatically waived without any liability to Sellers, if the Zenvia IPO occurs by the First Deadline; and (iii) will be automatically waived without any liability to Sellers if the deadline of May 9, 2021 is not met, but the Zenvia IPO is still held by the Second Deadline.

 

 

 

 

7.2.1.1.           If: (a) Sellers have not delivered the Audited Balance Sheet Q1 2021 by May 9, 2021; (b) Closing has not occurred until the Second Deadline due to the absence or delay in the delivery of Audited Balance Sheet Q1 2021; and (c) the Agreement remains in force beyond the Second Deadline under the terms set forth herein, the Precedent Condition referred to in Clause 7.2(viii)  shall be replaced by Seller’s obligation to deliver, up to a time limit set in good faith and in writing by Buyer's legal advisors as a deadline to enable the performance of Zenvia IPO in a new window, the audit of financial statements, without reservations, enabling the Zenvia IPO to be held, applying mutatis mutandis to the provisions of Clause 7.2.1 above.

 

7.2.1.2.           Without prejudice to the provisions of Clause 7.2.1 above, Sellers undertake, in good faith, to make their best efforts to comply with reasonable requests made by Buyer's or Zenvia Inc.'s independent audit, or any Government Authority, as soon as possible.

 

7.2.2.             The Parties acknowledge that Buyer's Suspensive Conditions have been established for Buyer's sole and exclusive benefit. Therefore, the Parties agree that Buyer may, at its sole discretion, waive compliance with such Buyer's Suspension Conditions that may not be implemented until the Closing Date or until the date provided for in the respective Precedent Condition, by sending written communication to the other Parties. If Buyer waives any of Buyer's Suspensive Conditions and, provided that the other Suspensive Conditions have been implemented and/or waived, as the case may be, Buyer, Company and Sellers will be required to implement the obligations hereunder.

 

7.2.3.            The Sellers and/or the Company and its Subsidiaries, as the case may be, undertake to perform, diligently and in good faith, all acts reasonably necessary for the implementation of Buyer's Suspension Conditions and notify Buyer of compliance with all Buyer's Suspensive Conditions within two (02) Business Days as from the date of full compliance with Buyer's last Suspensive Condition, except for those which, by their nature, shall be fulfilled only on the Closing Date. To avoid any doubts, the provisions of this Clause shall not imply any obligation of Sellers, the Company or the Subsidiaries to make payments to any Third Party to obtain consent that is necessary for the Operation.

 

7.3.              Suspensive Conditions for Closing by Sellers. The obligation of each Seller to perform their acts on Closing is subject to the following Suspensive Conditions, which shall be fulfilled by Buyer until the Closing Date, unless they are waived, in writing, by Sellers ("Sellers' Suspensive Conditions" and, along with Buyer's Suspensive Conditions and Parties’ Suspensive Conditions, the “Suspensive Conditions"):

 

(i)          Buyer's representations and warranties contained herein shall be true and correct on Closing, as if they were provided on the Closing Date (provided that the representations and warranties given on a specific date shall be true and correct only on such date); And

 

(ii)          Buyer shall have fulfilled all of its obligations under this Agreement by the Closing Date.

 

7.3.1.           The Parties acknowledge that the Sellers’ Suspensive Conditions have been established for the sole and exclusive benefit of Sellers. Therefore, the Parties agree that Sellers may, at their sole discretion, waive compliance with one or more of the above-mentioned Suspensive Conditions of Sellers that may not be implemented until the Closing Date, by sending written communication to Buyer. If Sellers waive any Seller’s Suspensive Conditions and provided that the other Suspensive Conditions have been implemented and/or waived, as the case may be, Buyer, Company and Sellers will be required to implement the obligations hereunder.

 

 

 

 

7.3.2.         Buyer undertakes to perform, diligently and in good faith, all acts reasonably required for the establishment of Sellers’ Suspensive Conditions and notify Sellers of compliance with all Sellers’ Suspensive Conditions within two (2) as from the date of full compliance with the last of Sellers’ Suspensive Condition, except for those that, by their nature, should be fulfilled only on the Closing Date.

 

7.4.           Mutual Cooperation Duty. The Parties shall cooperate with each other in good faith so that the Suspensive Conditions described in this Section 7 are implemented and verified in the shortest possible time, performing the acts and taking the necessary steps to do so; each Party shall immediately give notice to the other Parties, subject to the applicable Law, with respect to any act, fact or omission that they may become aware, whether or not they may cause an impact in the verification of any of the Suspensive Conditions.

 

8.          CLOSING

 

8.1.           Closing. Subject to the terms and conditions set forth in this Agreement, the closing of Acquisition of Shares ("Closing") shall occur: (a) on the last Business Day of the month where Zenvia IPO is held; or (b) on another date mutually agreed by the Parties. The day where Closing occurs will be considered the "Closing Date".

 

8.1.1.         The Parties acknowledge that the obligation to fulfill the Closing is solely subject to the verification or waiver (by the applicable Party) of the Suspensive Conditions. Once the compliance and/or waiver of the entire Suspensive Conditions has been verified, the obligations to enter into the Closing acts shall be fully and automatically effective.

 

8.2.           Place. Unless the Parties agree to perform Closing online, pursuant to Clause 8.2.1 below, the acts related to Closing will be carried out at Pinheiro Neto Advogados' office, at Rua Hungria, 1100, in the City of São Paulo, and the Parties, by themselves or by their duly appointed legal representatives shall appear for the formalization of the legal business agreed in this Agreement.

 

8.2.1.        Formalization of Closing Acts by electronic means. The Parties acknowledge and agree that certain documents required for the formalization of the Closing provided for in this Agreement may be signed electronically, using the DocuSign platform, and only electronic signatures made through a digital certificate validated pursuant to the Brazilian Public Key Infrastructure ICP-Brazil, pursuant to Provisional Measure No. 2.200-2/2001, will be considered valid. The Parties irrevocably and irretrievably acknowledge that in the event of the Closing as set out in this Clause 8.2.1 , the execution of Transaction Documents by digital certificate shall be deemed authentic, valid and fully effective for all purposes of law, constituting an extrajudicial enforceable instrument, as provided for in Article 784 of the Code of Civil Procedure.

 

8.3.           Closing Acts. Without prejudice to other actions required to implement the legal business established in this Agreement, the Parties and, as the case may be, the Consenting Intervening Parties or Zenvia Inc, undertake to perform the acts described below until the Closing Date (unless waived in writing by the Parties):

 

(i) Execute a closing agreement, establishing a statement by each Party, (a) confirming the representations and warranties, in accordance with Clauses 7.2(ii), 7.2(iii) and 7.3(i); and (b) attesting the fulfillment and/or waiver (by the applicable Party) of all Suspensive Conditions;

 

 

 

 

(ii) exercise of all SOPs that still remain open on the Closing Date and, if it was not exercised until Closing, the exercise of Marcelo's Purchase Option;

 

(iii) signature by Sellers, 4TI and the Company, of the Termination of Shareholders' Agreement-2019, giving discharge to the Company;

 

(iv) payment of the Primary Investment Amount by Buyer;

 

(v) payment of the First Payment of Initial Amount and Second Payment of Initial Amount by Buyer;

 

(vi) holding Company’s Shareholders Special Meeting, in order to formalize: (a) the increase in Corporate Capital for the purposes of Primary Investment; and (b) the amendment to Company’s Articles;

 

(vii) approval of increase of Purchaser and Zenvia Inc, or just Zenvia, Inc.’s capital, as set out in Clause 2.3 after performing Flip acts;

 

(viii) Registration of Flip at the Central Bank of Brazil;

 

(ix) Execution, by the Parties, of Company's share transfer book, formalizing the transfer of Acquired Shares– Sellers by Sellers (including the Company) to Buyer;

 

(x) performance of the Agreement for Secured Fiduciary Sale of Shares by Buyer and other relevant parties and annotation of such Secured Fiduciary Sale of the Encumbered Shares in the Company's Registered Shares Register;

 

(xi) production and receipt of a waiver agreement by the Company's directors, except for those whose permanence is agreed between the Parties, granting mutual and reciprocal release to the directors and the Company and its Subsidiaries in relation to the acts carried out during the period where such directors held their positions and performed their tasks in the Company and/or its Subsidiaries, except for acts or omissions and frauds identified thereafter;

 

(xii) approval, from Company and its Subsidiaries bodies, of Company's business plan to be previously agreed between Buyer and the Main Executive Partners, based on the principles set out in the Exhibit 8.3 (xii)  ("Business Plan");

 

(xiii) if not yet delivered by such date, Sellers will deliver to Buyer a file in USB format or other recoverable digital media, with all documents and information made available by Sellers and the Company in the Virtual Data Room; and

 

(xiv) Performance of Closing acts provided for in SPA 4TI; and

 

(xv) Zenvia Inc.’s adhesion to the Contract, as a guarantor of Buyer's obligations.

 

8.3.1.            All acts of Closing and obligations set out in Clause 8.3 above shall be deemed concurrent, being agreed that no act and/or obligation shall be deemed to have been effectively performed until all other acts and/or obligations of the Closing have been terminated, unless the Parties agree otherwise in writing or expressly established in this Agreement.

 

 

 

 

 

8.4.        Taxes. Notwithstanding any other provision of this Agreement, all Taxes and fees relating to transfers, documents, endorsements, notary fees, sales, use, records and other Taxes or similar fees, imposed by any Government Authority in connection with the transactions hereunder shall be borne by the Party upon which the obligation is imposed by applicable Law. None of the amounts to be paid by one Party to another as a result of this Agreement will suffer any accruals due to any applicable Taxes, including withholding taxes.

 

8.5.         Break-Up Fee. If Closing does not occur by the Second Deadline and in accordance with the provisions of Clause 16.3.1 the Down Payment made by Buyer (plus fine and interest on arrears arising from the late delivery of bank Guarantee or payment of the Down Payment) will be retained on behalf of the Company as a compensatory fine ("Break-Up Fee ").

 

8.5.1.      The failure to pay the Break Up Fee will subject Buyer to adjustment for inflation based on IPCA variation from the expected date of payment to the actual date of payment, plus interest on late payment of [*****], and [*****] on the adjusted amount, without prejudice to the company's right to request the financial institution that issued the Bank Guarantee to enforce the obligation to pay the Break-Up Fee, immediately and regardless of Notice to Buyer.

 

9.            REPRESENTATIONS AND WARRANTIES

 

9.1.         Representations and warranties from the Company and the Sellers. Subject, at all times, to the provisions of Exhibits of this Clause 9.1 , as well as all documents and information made available by Sellers and the Company in Virtual Data Room until 02.04.2021, in accordance with the USB file or other type of recoverable digital media to be provided and encrypted by Intralinks and which will be delivered to Buyer by the Closing Date, the Company and its Subsidiaries, jointly and severally represent and warrant to Buyer that the following information is true, complete, correct and accurate on this date and that, in accordance with the provisions of clause 9.1.1 below, will continue to be true, complete, correct and accurate on the Closing Date, as if they had been provided on such date:

 

(i)          Organization and Capacity. The Company, and each of its Subsidiaries, is a company duly incorporated and existing in accordance with the laws of Brazil. The Sellers, the Company and its Subsidiaries have full capacity to: (a) enter into this Agreement and all documents which execution is provided herein; and (b) fulfill the obligations hereunder, and complete the operations contemplated in this Agreement and in the Transaction Documents. The execution and formalization of this Agreement and other Transaction Documents by Sellers and the Company, as well as the fulfillment of their respective obligations have been duly approved and authorized by all proper acts, including corporate approvals, where applicable.

 

(ii)          Binding Effect. This Agreement constitutes a legal, valid and binding obligation of Sellers, Company and its Subsidiaries, enforceable in accordance with its terms.

 

(iii)        No Breach, Consents . The Sellers, the Company and its Subsidiaries declare and warrant that (a) the performance and formalization of this Agreement and other Transaction Documents, (b) the fulfillment of any and all of their obligations under this Agreement and other Transaction Documents and (c) the implementation of the operations established in this Agreement and the other Transaction Documents , do not (I) infringe, conflict, result in default of obligation of Sellers under any contract where they are parties, or create Encumbrance on the Shares; (b) (I) violate the Shareholders' Agreement-2019, to the extent that the Shareholders' Agreement-2019 will be terminated at Closing; (II) violate or conflict with any Law to which Sellers, the Company, its Subsidiaries or any of their Shares, assets, credits or properties are subject; or (III) depend on any condition, consent, approval or authorization of, Notice to, or filing or registering with, or contract with, any Person, entity, judgment or Governmental or Regulatory Authority. In order to avoid doubts, this statement does not capture the maturity or non-compliance of contracts executed by the Company, which are the subject of the declaration in clause 9.1 (xxi) .

 

 

 

 

(iv)      Organizational Acts, Capital and Shares. On this date, Company’s subscribed and paid-in Capital amounts to BRL 24,488,751.41, divided into 1,274,723 Shares, being 1,011,334 common shares and 263,389 Class A preferred shares. On Closing Date, immediately before the Primary Investment, the Company’s capital shall be divided into one million two hundred seventy-four thousand, seven hundred twenty-three (1,274,723) shares, being (i) eight hundred ninety-two thousand three hundred fifty-eight (892,358) common, registered shares without par value; (ii) two hundred sixty-three thousand three hundred eighty-nine (263,389) Class A preferred, registered shares and without par value; and (iii) one hundred eighteen thousand nine hundred seventy-six (118,976) Class B preferred, registered shares, without par value.

 

(v)          Ownership. (a) Sellers and the Company will be, on the Closing Date, the lawful and sole holders, and owners of all Corporate Shares - Sellers, with all they represent, including the right to profits, dividends, bonuses and any rights conferred thereto. On the Closing Date, all Shares of the Company and its Subsidiaries will be duly authorized, issued and, except as provided for in Exhibit (B) , by Agreement for Purchase and Sale of Smarkio Shares, the Shareholders' Agreement-2019 (and, if applicable, until the Closing Date by Venture Debt) they shall be fully paid up, free and clear from any and all Encumbrances, including, without limitation, any subscription rights, options or other rights to acquire any shares or any other securities issued by the Company and/or its Subsidiaries or any other securities from any other company which may confer on its respective holders any issued by the Company and/or its Subsidiaries, upon the exercise of such rights, or that could be converted into, or exchanged for shares issued by the Company and/or its Subsidiaries, issued or in the process of issuing. Except for this Agreement, SOPs and Marcelo’s Purchase Option and by Agreement for Purchase and Sale of Smarkio Shares, the Sellers have not entered into any agreement or made any commitment (and have not caused the Company to enter into any agreement or make any commitment) to any Person to dispose of or otherwise transfer any of the Shares. On this date, there are no (except for SOPs and Marcelo’s Purchase Option), and on the Closing Date there will be no outstanding subscription rights, options, stock options, phantom shares, subscription bonuses, convertible securities or other rights, contracts, agreements, obligations or commitments related to or granting any Person a right to purchase or other form of acquisition of any share of the Company and/or its Subsidiaries or by obliging Sellers or the Company to issue or sell any shares or other stake in the Company and/or its Subsidiaries, other than those provided for in this Agreement. After the Closing Date, upon subscription of the Primary Shares, direct acquisition of Corporate Shares – Sellers, the Flip and the indirect acquisition of Corporate Shares - 4TI: (a) Zenvia Inc. and Buyer will become the sole and lawful holders, directly or indirectly, of all Shares, free and clear from any and all Encumbrance, and may fully exercise all political and property rights inherent to them and (b) on the Closing Date, the Company shall remain the sole and lawful owner of the number of Smarkio shares set out in Exhibit (D).

 

(vi)         Preemptive Right. Except for the Shareholders' Agreement-2019, which shall be terminated on the Closing Date, and the Agreement for Purchase and Sale of Smarkio Shares no Person (a) has the right, in contract or otherwise, to compel Sellers or the Company to issue or sell shares or any other securities representing the capital of the Company and/or its Subsidiaries, or any other security or securities, convertible or not, or with political or economic rights relating to the Company and/or its Subsidiaries; or (b) has any Preemptive Right, right of resale, subscription or acquisition right, joint sales right, options or other similar rights to subscribe, acquire or sell any shares issued by the Company and/or its Subsidiaries and/or any other securities representing Company and/or its Subsidiaries capital.

 

 

 

 

(vii)       No Litigation regarding Shares. Neither the Company nor its Subsidiaries, nor the Sellers have received any written Notice or subpoena (in person or through the electronic system of the Courts (e-CAC, SAJ, PJE etc.) or any other arbitration system) from any Governmental Authority (in any case an "Official Notice") of pending lawsuits, proceedings, investigations or judicial proceedings, filed or brought against Sellers, the Company and/or its respective Subsidiaries, which affect, or are reasonably expected to affect the Actions, or impose limits of any nature, on the Shares or on the rights or ownership of Sellers on the Shares, or prohibit, or reasonably expected to prohibit or restrict Sellers’ or Company’s capacity, with respect to Shares: (a) to dispose of the Shares; or (b) fulfill any of the transactions described in this Agreement and other Transaction Documents.

 

(viii)      Other Equity Interests/Subsidiaries. Except for the investment in Smarkio, the Company has no direct or indirect equity interest in any other Person. The Company does not only have branches. Smarkio has only one (1) branch, located in the city of Itajubá, State of Minas Gerais. The Company has no obligation to hold an interest in the Capital of any other company, or to be part of any consortium, joint venture or other business agreement with any Person. The Company is part of the Agreement for Purchase and Sale of Smarkio Shares which, inter alia, grants certain differentiated rights to the other Smarkio Shareholder, and such document has been provided and became known to Buyer.

 

(ix)         Intellectual Property.

 

(a) The Company and/or its Subsidiaries are the sole and lawful owners and holders of all Intellectual Property Rights which, together with the Intellectual Property Rights referred to in item (b) below, are necessary and sufficient for Company and/or Subsidiaries business activities, as they carried out on this date, even if the works, inventions, Software, technologies or other tangible or intangible assets subject to such Intellectual Property Rights have been created, designed, developed or enhanced by Third Parties, individually or jointly with the Company and/or its Subsidiaries , under the supervision and instructions of the Company and/or its Subsidiaries, or under contracts entered into between the Company and/or its Subsidiaries and Third Parties ("Own IP Rights"). The Company had the registration of the mark "D1" rejected by the National Institute of Industrial Property, and the matter is under discussion at the National Institute of Industrial Property - INPI.

 

(b) Except for the rejection of “D1” Trademark application by the National Institute of Industrial Property, the Company and/or its Subsidiaries are the lawful licensees of all Intellectual Property Rights which, together with the Own IP Rights, are necessary and sufficient for the businesses of the Company and/or its Subsidiaries as carried out on this date. The Third Party Software and applications used by the Company and/or each of its Subsidiaries, used in the conduct of its activities, have been duly licensed by the Company, and/or its Subsidiaries, as applicable, and have been and are used in accordance with the Law and in strict compliance with the terms of such licenses, in all relevant respects. Any and all payments due in respect of the use of Third-Party Software are duly paid.

 

(c) The complete list of the Software, including the Platforms, trademarks and trademark, patent and patent applications that are part of the Own IP Rights, is set out in Exhibit 9.1(ix)(c). All Own PI Rights which registration is mandatory for due legal protection are duly registered or are the subject of applications for registration in Brazil and/or in other countries where the Company and/or its Subsidiaries operate, as applicable, and identified individually in that Exhibit, without any opposition from Third Parties to date, being understood that none of the Software held by the Company is registered. All fees related to these registrations and applications were fully paid in timely manner, and all documents required to its effectiveness and maintenance of these records were produced before the relevant registry bodies in a timely manner.

 

 

 

 

(d)  There are no licenses, sublicenses and there was no execution of any other relevant agreements, where the Company and/or its Subsidiaries are licensors, subject to which any Person is authorized to use any of the Own IP Rights, except for those regarding the Company and its Subsidiaries with their customers, agents, or distributors.

 

(e) Except for the rejection of “D1” Trademark application by the National Institute of Industrial Property, no Own IP Right is subject to any Encumbrance, complaint, judgment, injunction, order, decree or pending agreement that restricts its use by the Company and/or its Subsidiaries or restricts its licensing by the Company and/or its Subsidiaries to any Person.

 

(f) There are no royalties, fees or other overdue payments to be made to any Person by virtue of the ownership, development, use, license, sale or disposal of intellectual property rights by the Company and/or its Subsidiaries.

 

(g) Except for the rejection of “D1” Trademark application by the National Institute of Industrial Property, neither the Company, its Subsidiaries nor the Sellers have received any notice of any infringement, expropriation, misuse or violation of Third Party Intellectual Property Rights, and the Company and its Subsidiaries do not infringe, expropriate, misuse or violate any Third-Party Intellectual Property Right. The Company took all necessary measures to avoid any violations and, at the best of Sellers’ belief, the development, manufacture, use, offer, sale or license of any product from the Company and/or its Subsidiaries, including the Platform, do not violate, misuse, or breaches any Intellectual Property Rights from Third-Parties.

 

(h) The fulfillment of the operation established herein shall not result in the loss, by the Company or its Subsidiaries, of any Own IP Right. The Company and its Subsidiaries own or have the right to legitimate use of the Intellectual Property Rights necessary to enable them to proceed with their business as carried out until the date of execution of this Agreement.

 

(l) Sellers have taken all reasonable steps to protect and preserve the confidentiality of Company and its Subsidiaries confidential information, including platform source codes, supplier customer-related information, and pricing. None of this information has been disclosed to any Third Party that has not signed a confidentiality agreement (except directors, employees or service providers of the Company and/or its Subsidiaries whose access was necessary in conducting the business of the Company and its Subsidiaries).

 

(j) The Company and its Subsidiaries comply, in all relevant respects, with all licensing terms applicable to the Third-Party Software used, including the open source Software included or not on the Platform. The open codes used by the Company and/or its non-Subsidiaries: (1) require licensing, disclosure or distribution of the source code to any other Person; (2) require the Company or its Subsidiaries to transfer and assign any Intellectual Property Rights to any other Person; (3) prohibit or limit the receipt of a claim in connection with the licensing or otherwise distribution of any Software; (4) allow any Person to decompile, disassemble or reverse the engineering of any Proprietary Software or Information Technology System of the Company or its Subsidiaries; and (5) infringe the Intellectual Property Rights of any Third Party.

 

 

 

 

(k) Exhibit 9.1(ix)(k) provides for a complete list of electronic addresses (domains) that (i) are registered on behalf of the Company and/or its Subsidiaries on this date and (ii) will be transferred to the Company by the Closing Date, there are no other domains or domain names in use by the Company and/or its Subsidiaries.

 

(l) All Own IP Rights, especially the Platforms, were developed internally or upon request by employees and/or service providers hired by the Company and/or its Subsidiaries to, among other duties, create, develop and improve such Own IP Rights, under the orders of the Company and/or its Subsidiaries and using technical and financial resources held by the Company and/or its Subsidiaries. Subject to Sellers’ best knowledge and belief, there is no employee, service provider of the Company and/or its Subsidiaries, any Third Party or any Person (including Sellers and their respective Affiliates and Related Parties) who has any right, claim, opposition or demand in relation to the effective ownership of the Own IP Rights – which solely and exclusively belong to the Company and/or its Subsidiaries.

 

(x)           Information Technology. The Company and its Subsidiaries have taken reasonable steps and have implemented consistent procedures to ensure that the digital infrastructure and service delivery ("IT Systems") internally used by them are free of malicious code. The Company and its Subsidiaries have taken reasonable steps to maintain the security and integrity of their IT Systems. According to Sellers’ reasonable belief, there were no unauthorized intrusions or security breaches that could compromise IT Systems. To the best of Sellers’ knowledge and belief, the Company and its Subsidiaries have implemented security patches or updates that are generally available for IT Systems.

 

(xi)           Privacy. (a) The Company and its Subsidiaries comply, in all relevant respects, with applicable laws relating to the privacy and protection of personal data. (b) All information available in the Database was collected in accordance with applicable Laws at the time of collection, including with express, free and informed consent of the respective data subjects, where such consent is necessary for the maintenance of the data by the Company pursuant to applicable Laws, being worth noting that Sellers and the Company make no representations and warranties as to obtaining express consent , free and informed by the clients of the Company and its Subsidiaries. (c) The Company and its Subsidiaries process the information present in the Database in accordance with and within the limits of applicable laws and only for processing purposes that comply with applicable laws. (d) Neither the Company nor any of its Subsidiaries has received any Official Notice alleging non-compliance with data protection standards. (e) The Company and its Subsidiaries have no dispute with any Data Protection Person, including requests for anonymization, blocking or deletion of data. (f) The Company and its Subsidiaries have taken all legally required measures, so all information provided for in the Database were protected against damages, losses and access, use, modification or disclosure that were not expressly authorized. (g) Except as provided for in Exhibit 9.1(xi), neither the Company nor its Subsidiaries suffered any security accident which exposed their Data Base, whether wholly or in part, to unauthorized access, use, modification or disclosure. (h) Sellers and the Company are not aware of any act or fact that may have cause the leak, improper use, share or treatment of data in violation of the applicable legislation.

 

(xii)          Financial Statements, Absence of Hidden Liabilities. The Base Financial Statements, which have been provided and are included in this Agreement as Exhibit 9.1(xii): (a) are true, correct and complete, in all of its relevant aspects, being prepared in accordance with the governing Law and Company and its Subsidiaries Bookkeeping (as the case may be), consistently on the date they were assessed and in accordance with past practices adopted by the Company or its Subsidiaries (As the case may be), and being able to be lawfully reconciled with books and registers held for tax purposes by the Company and its Subsidiaries; (b) provide, in accurate manner, in all relevant aspects, the wealth status, as well as transaction proceeds and changes in financial status, as applicable, pertaining to the Company or its Subsidiaries within relevant periods; and (c) were prepared in accordance with Brazilian GAAP, consistently throughout the periods covered by said financial statements, including with respect to accounting provisions. Except as otherwise provided for in this Agreements and its Exhibits,, as except for the specifications provided for in the Base Financial Statements, on the base date of such Financial Statements, neither the Company, or any of its Subsidiaries had a Indebtedness, liabilities, obligation or responsibilities, whether overdue or to become due, that are not settled or from any other nature not established in the Base Financial Statement and that, according to Brazilian GAAP, should be established in such Company’s statements. The accounting books and registers belonging to the Company and its Subsidiaries are, in all relevant aspects, true, correct and full, being prepared in accordance with the applicable Legislation. The accounting books are, in all of its relevant aspects, duly bookkept and full, being kept in accordance with the good business practices, and express, in all of its relevant aspects, and subject to the Law, all transactions comprising Company’s and its Subsidiaries’ business and activities, without an error or omission, and without any changes in any accounting practice or method, expect as for those required by the applicable Law. The audit opinion related to Base Financial Statement has one reservation.

 

 

 

 

(xiii)         No Material Adverse Effect. After the date of the Base Financial Statements there has been no extraordinary event or circumstance that may result in a Material Adverse Effect.

 

(xiv)         Bank Debt. Except as provided in the Data Room, neither the Company nor its Subsidiaries have any Debt on this date. Except as provided for in the agreements made available in the Data Room, the Company and its Subsidiaries are not responsible for any Indebtedness or breach in the performance of any other Person's obligations.

 

(xv)        Assets. The Company and its Subsidiaries are legitimate owners, holders or, as the case may be, lessors, of all assets used and necessary for the performance and development of their business ("Assets"). All Assets are in good operating conditions (except for normal wear and tear) and, except for Smarkio Shares, as provided for in Exhibit (B) and Exhibit 9.1(xv), are free and clear of any Encumbrance except in the Ordinary Course. The Assets owned, leased or used by the Company and its Subsidiaries are sufficient to carry out the business as currently conducted.

 

(xvi)       Accounts Receivable. The items receivable from the Company and its Subsidiaries reflected in the Base Financial Statements and all receivables subsequent to that date: (i) represent legal, valid and binding obligations of the respective debtors, enforceable in accordance with their terms for services already effectively provided or for delivered products; (ii) result from services actually provided regularly, within the Ordinary Course of Business; (iii) may be charged in full, in accordance with the procedures provided for by law, for the amount recorded in the Basic Financial Statements; (iv) are not subject to any legal or arbitration proceedings or proceedings initiated by or on behalf of the Company or its Subsidiaries; and (v) have a level of default provisions consistent with the Company's and its Subsidiaries’ past practices. Neither the Company, nor its Subsidiaries, nor Sellers have received any notice of any relevant dispute or claim regarding the value or validity of such accounts receivable. In order to avoid any doubt, Sellers do not guarantee that the Company and its Subsidiaries will receive the amounts provided in their receivables.

 

(xvii)       Accounts Payable. All accounts payable by the Company and its Subsidiaries reflected in the Base Financial Statements represent valid obligations arising, in all relevant respects, from goods and services actually provided to the Company or its Subsidiaries.

 

(xviii)      Guarantees. The Company and its Subsidiaries are not guarantors of any liability or obligation (including personal Guarantees) of Sellers or any Third Party. Except for guarantees provided in the contracts provided for in the Data Room, neither the Company, nor its Subsidiaries have provided any aval guarantees, guarantee or endorsement on behalf (a) of the Company itself; (b) of its Subsidiaries; (c) of Sellers; (d) any Third Party; and (e) its Related Parties.

 

 

 

 

(xix)       Taxes. Neither the Company, nor its Subsidiaries, nor Sellers have received any Official Notice claiming that the Company or any of its Subsidiaries is a party to any claim, action, lawsuit, complaint, investigation, inquiry, arbitration, mediation or other type of action or process, whether judicial or administrative, individual or collective ("Demand") of a Tax nature. The Company and its Subsidiaries presented, in a timely manner to the competent tax authorities, all statements, forms and tax reports related to the Company, the Subsidiaries and their respective assets, properties, businesses and activities. These statements faithfully reflected all tax obligations of the Company and its Subsidiaries, as well as their respective businesses and activities in the relevant periods, in all its relevant aspects.

 

(a) Neither the Company nor its Subsidiaries were subject to inspection, audit or other examination of Taxes noticed through Official Notice. There are no sharing, allocation, indemnification agreements for taxes, contributions or the like in force between, on the one hand, the Company or any of its Subsidiaries and, on the other hand, the Sellers or any Related Parties for which the Company or its Subsidiaries may be liable for any Taxes. The provisions for Taxes in the Base Financial Statements of the Company and its Subsidiaries and in subsequent interim balance sheets are sufficient for the payment of all Taxes that were not paid on the dates of these Base Financial Statements and for all periods subsequent to that date, as required by Brazilian GAAP. Except for installments made available in Data Room, neither Company nor its Subsidiaries have taken or are parties to any installment program or payment program in arrears.

 

(b) Tax Incentives. Except for the incentive arising from the Good Law, which is pending approval, as provided in the Data Room, the Company and its Subsidiaries do not benefit from any tax incentive program except for those who benefit indistinctly from all taxpayers performing activities subject to the incentive.

 

(xx) Labor Issues .

 

(a) the Company and its Subsidiaries comply, in all its relevant aspects, with all applicable Labor and Social Security Laws and Agreements (including collective bargaining), relating to its employees and service providers, including, without limitation, those related to wages, registration, FGTS, working hours, overtime, equitable labor practices, health, safety, payment of social security and others similar taxes.

 

(b) all contributions, premiums, payments, interest or fines that must be paid, made or provisioned by the Company and its Subsidiaries in relation to labor or social security obligations, including payments to the INSS and FGTS were made on their respective due dates or earlier.

 

(c) on this date, all employees of the Company and its Subsidiaries under Consolidation of Labor Laws (CLT) are hired for an indefinite period.

 

(d) except as disclosed in Data Room, neither the Company nor its Subsidiaries have been summoned or notified of any legal, administrative or arbitration proceedings involving labor, social security or social security contribution proceedings against them. Except as disclosed in Data Room, there is no pending Claim against the Company or its Subsidiaries before any Governmental Authority or entity competent to resolve labor or social security disputes, as direct, joint and several or subsidiary liability and there is no pending formal claim or, in the best knowledge of the Company and the Sellers, threatened claims against the Company or its Subsidiaries , before the Government Authority with jurisdiction to decide on labor or social security disputes.

 

 

 

 

(e) except as provided for in Exhibit 9.1(xx)(e), there was and there is no plan, program, benefit, incentive, insurance or special condition (including health insurance, social security plan, medical assistance plans, or complementary pension, loans, performance bonus, stock option plans, profit-sharing programs, bonuses or other benefits of any kind, whether formal or informal) offered or promised, formally or informally, to the managers, employees, or service providers of the Company and its Subsidiaries.

 

(f) The execution of this Agreement and the fulfillment of the operations provided herein shall not result in special payment, bonuses, or increase of Salary to any employee, administrator, employee, provider or executive of the Company and/or its Subsidiaries.

 

(g) all records of professional councils and registrations with companies or authorities currently existing on behalf of the Company and its Subsidiaries are in force.

 

(i) there are no strikes, outages or ongoing blockades or, in the best knowledge of Sellers, threatened against the Company or its Subsidiaries.

 

(xxi)     Contracts. All Indebtedness agreement and all contracts, commitments or covenants, involving obligations or rights of the Company and its Subsidiaries in individual or aggregate value exceeding three hundred thousand Brazilian reais (BRL 300,000.00) per month (including contracts with clients representing seventy and five percent (75%) of the Company's revenues in the average of the last twelve (12) months as from January 1, 2020, and which are in effect on this date, whether verbally or in writing("Relevant Contracts") were made available in the Data Room or Exhibit 9.1 (xxi) (a). Each of the Relevant Contracts is in full force and effect and constitutes a valid, enforceable and binding obligation of their respective parties, in accordance with their terms. The Company and its Subsidiaries have fulfilled, in all its relevant respects, all contract obligations of the Relevant Agreements and they are not aware of the occurrence of any situation, fact, act, omission or event that, by providing notice, in the course of time, or both, resulting in a default in compliance by the Company, its Subsidiaries with any of these Relevant Agreements. Except as provided in Exhibit 9.1(xxi)(b), neither the Company, nor its Subsidiaries have executed any agreement, contract or covenant that restricts, limits and/or prevents the Company and/or its Subsidiaries from competing in, or performing any business or line of business in any segment. The Company and its Subsidiaries have adopted and continue to take reasonable steps to preserve the good relationship with customers and suppliers and to give strict and full compliance with each of the Relevant Agreements. To the best knowledge of Sellers, there is no circumstance that reasonably may prevent the renewal of each of the Relevant Agreements under the terms currently executed. There is no undeclared agreement that will guarantee future discounts or compensation to customers of the Company and its Subsidiaries. The execution of this Agreement does not create encumbrances on any assets, credits or assets of the Company and its Subsidiaries under any Relevant Agreement to which the Company and/or its Subsidiaries are parties or the Company and/or its Subsidiaries (including its respective Shares, assets, credits or assets) are subject or connected. The Relevant Agreements with customers do not provide for the imposition of a fine for breach of contract (excluding indemnification for losses) in an individual amount greater than fifty percent (50%) of the contracted amount. Except as provided in Exhibit 7.2(vii), and by Agreement for Purchase and Sale of Smarkio Shares, the execution of this Agreement and other Transaction Documents does not infringe, conflict, result in default, or early expiration or any violation of the terms of the Relevant Agreements.

 

 

 

 

(xxii)        Contracts with Customers. The Company and its Subsidiaries have been performing their activities with their customers on a regular basis. To the best knowledge of Sellers, the performance of this Agreement, the other Transaction Documents and their respective Exhibits by the Parties will not result in the loss and impossibility of maintaining the regular portfolio of Company (and/or its Subsidiaries) customers and the continuity of the provision of services to those clients. There is no Demand filed by any of their respective customers and there are no known facts or circumstances that will make a Demand of such a nature, whether expected or imminent. To the best knowledge of Sellers and in all substantial aspects, no customers of the Company (or its Subsidiaries) in the last 12 (twelve) months, (a) claimed or threatened to terminate its business with the Company (or its Subsidiaries) or to significantly alter the terms and conditions of its respective current relationships, in both cases in writing, (b) claimed to be by the Company (or its Subsidiaries) any breach or non-compliance with the terms and conditions under contract. The amounts due by customers are accounted for in their entirety and there are no extensions, agreements, exchanges or alternative payment methods involving any client of the Company (or its Subsidiaries) that are not reflected in the Base Financial Statements. There are no benefits established with clients of the Company (or its Subsidiaries) relating to the services provided by the Company (or its Subsidiaries), whose beneficiary is not the Company itself and/or its Subsidiaries. The performance of this Agreement and other Transaction Documents shall not constitute early maturity or any breach of the terms of contracts with the Company's customers or its Subsidiaries.

 

(xxiii)       Operations with Related Parties. Except as provided in Exhibit 9.1(xxiii) , Sellers (or any of its Related Parties), representatives of the Company and/or its Subsidiaries (or any of its Related Parties) do not participate, directly or indirectly, in any transaction or contract with the Company or its Subsidiaries, including, without limitation, any leasing, licensing, supply, service and/or indebtedness, guarantee agreements.

 

(xxiv)       Real Estate. (a) Neither the Company nor its Subsidiaries own real estate properties. Exhibit 9.1(xxiv) lists all real estate rented or occupied by the Company and/or its Subsidiaries ("Properties"). The Properties are the only real estate rented, used or occupied by Company and/or its Subsidiaries for which they have any right or responsibility and each of the Properties is used or occupied for business purposes. (b) The Company and/or its Subsidiaries are legally entitled to use the Properties. The Company and/or its Subsidiaries are in physical possession and effective occupation of all properties on an exclusive basis, in relation to properties leased by the Company and/or its Subsidiaries through lease or sublease agreements ("Leases"); no right of occupation or usufruct has been acquired or, in the best knowledge of Sellers, is in the process of being acquired by any Third Party. (c) With respect to each of the Leases, to the best knowledge of Sellers, (1) all clauses and conditions contained in the Leases or, in any license, authorization or other supplementary document concluded in relation to the Leases, have been observed and executed to this date, in all its relevant aspects; (2) no relevant violation has been waived or tolerated; and (3) there is no Notice of violation of these clauses and conditions that has been received or, if received, that has not been properly resolved. No event has occurred, and no circumstances exist, in the best knowledge of Sellers, which is or can reasonably be expected to prevent the Company and/or its Subsidiaries from renewing leases.

 

(xxv)        Insurance. The insurance policies procured by the Company were made available in the Data Room, being understood that (a) they were acquired under market conditions; (b) are valid and are in effect and all premiums have been paid; (c) the Company and/or its Subsidiaries are the only beneficiaries of such insurance policies; (d) the Company and/or its Subsidiaries have not ceased to practice or give cause to any act that is reasonably expected to result in the refusal, by their insurers, indemnify them, as the case may be, upon the occurrence of insured events; (e) the Company's exchange of control of the Closing Date does not affect or in any way impair the coverage provided by the listed policies.

 

 

 

 

(xxvi)      Disputes. Except as provided in the Data Room and Exhibit 9.1(xxvi) , the Company and/or its Subsidiaries are not parties to any legal action or administrative or arbitration proceedings of any nature before any court or Governmental Authority, nor is it known to Sellers to have any threat of litigation. The Company and/or its Subsidiaries have not failed, and they are not in breach of any judgment, order, decision, warrant, injunction or order of any Governmental Authority.

 

(xxvii)      Brokers, Intermediaries and Legal Advisors. Except as provided for in Clause 12.3 below, Sellers are solely responsible, without co-responsibility or assignment of obligation to the Company and/or its Subsidiaries, for payment of all amounts due to brokers, intermediaries, investment banks, financial advisors, accounting and legal contracts for the operations set out in this Agreement. Except as provided for in Clause 12.3 below, if applicable, on the Closing Date there will be no outstanding payments to be made by the Company or its Subsidiaries to any broker, intermediary or advisor as a result of the transaction agreed in this Agreement or the other Transaction Documents.

 

(xxviii)    Power of Attorney. All powers of attorney in force that have been granted by the Company and/or its Subsidiaries, including powers to operate bank accounts and/or assume obligations of any nature in their respective names in any case related to their business are listed in Exhibit 9.1(xxviii) .

 

(xxix)      Environmental Issues. (a) The Company and its Subsidiaries are in good standing with respect to the environmental laws in force and there is no condition or event that constitutes an infringement or would cause any burden to the Company or any of its assets, projects or activities under said Laws. All past non-compliances, as applicable, have been resolved and there is no requirement for adoption or implementation of remediation under the Environmental Law. (b) The Company and its Subsidiaries have not received any Official Notice that any aspect of the Company's business, operations, projects or facilities is infringing any Environmental Law, or that the Company and its Subsidiaries are responsible, or potentially responsible for, the cleanliness or sanitation of any substance, anywhere. (c) To the best knowledge of Sellers, there was no condition and no event occurred with respect to any property that may have been held, at any time, by the Company and/or its Subsidiaries, that were sold, transferred or disposed, with respect to any lease that may have been terminated, which may, with or without notice, due to mere lapse of time, or both, cause any future liabilities to the Company o its Subsidiaries, in accordance with the Environmental Law.

 

(xxx)        Consumer Protection. The Company and its Subsidiaries meet the requirements of the Consumer Protection Act. In the best of Sellers, there are no acts, facts, omissions or circumstances that may represent non-compliance with the Consumer Protection Act by the Company or its Subsidiaries.

 

(xxxi)       Bank Accounts. All bank accounts on behalf of the Company and on behalf of its Subsidiaries in banks, national or foreign, as well as a list of persons empowered to move them, are listed in Exhibit 9.1(xxxi).

 

(xxxii)      Insolvency. Neither the Company nor its Subsidiaries are insolvent or unable to pay their debts on the due date or have stopped paying their debts at maturity, and there is no threat related to its assets that may affect the transaction under this Agreement. The Company and its Subsidiaries are under no circumstances being managed by a third party due to any arrangement with creditors, bankruptcy or reorganization proceedings. Sellers are not insolvent and there is no threat related to their assets that may affect the transaction under this Agreement. In particular, but without limiting the general nature of the previous statement: (a) the performance of this Agreement by Sellers shall not imply its insolvency; (b) the economic, financial and equity status of Sellers would not imply the frustration of any enforcement arising out of any dispute or demand existing against Sellers; and (c) there are no securities issued by Sellers or withdrawn against them that have been protested.

 

 

 

 

(xxxiii)     Good Practices. The Company, its Subsidiaries and Sellers, including through any employee, director or manager and, in the best knowledge of Sellers, any agent, consultant or any other Person, (i) has not violated or breached any Anti-Corruption Laws; (ii) did not offer, pay, commit to pay or promise to pay or authorize the payment of money or other valuables, contribution, expense reimbursement, gifted, gave benefits or delivered any kind of good to any person who is an officer, agent, official or representative of any Governmental Authority or to any political party, any candidate for public office or to offices of political parties , or to any other Person, knowing or having reason to believe that any or all part of the money or something of value offered, given or promised (a) would facilitate or seek to facilitate obtaining favorable treatment in business, (b) pay for favorable treatment in business, (c) facilitate or seek to facilitate the obtaining of special concessions or serve as payment for special concessions already obtained , in favor of or in relation to Sellers, the Company or its Subsidiaries, or (d) would represent violation of Anti-Corruption Laws. Neither the Company, nor its Subsidiaries, nor Sellers have conducted or initiated any internal investigation, received any complaint or other internal or external reports, complaints or allegations, or made voluntary, direct, or involuntary disclosure to any Government Authority in connection with any act of omission relating to any bribery, bribery, illegal payment, corruption or failure to comply with any Anti-Corruption Law. Neither the Company nor its Subsidiaries nor Sellers and, to the best knowledge of Sellers, none of the representatives of the Company, its Subsidiaries or Sellers, has received any notice, request or service, is part of any administrative, civil or criminal proceedings, or has been convicted or pleaded guilty to any current or potential non-compliance with matters contained in the first part of this item.

 

(xxxiv)     Company’s Permit and Licenses. As of this date, the Company holds the permits, licenses, approvals, authorizations and registrations, as relevant, required by the Government Authorities for the performance of its activities as currently performed (“Licenses”), which are in force or under renewal. Company’s business activities shall be carried out in accordance with said Licenses. There are no, to the best knowledge of Sellers, threaten actions, administrative proceedings or inquires that may cause loss, invalidation or non-renewal of said Licenses.

 

(xxxv)    Subsidiaries’ Permit and Licenses. To the best knowledge of Sellers, as of this date, the Subsidiaries hold the permits, licenses, approvals, authorizations and registrations, as relevant, required by the Government Authorities for the performance of their activities as currently performed (“Licenses”), which are in force or under renewal. Subsidiaries’ business activities shall be carried out in accordance with said Licenses. There are no, to the best knowledge of Sellers, threaten actions, administrative proceedings or inquires that may cause loss, invalidation or non-renewal of said Licenses

 

(xxxiv)     Absence of Other Representations and warranties. Except as provided in this Agreement, Sellers have not provided any additional Representations and Warranties to Buyer, express or implied, written or verbal, in connection with any matter subject to this Agreement.

 

 

 

 

9.1.1.      Update of Representations and Warranties. The Parties agree that, except for Sellers’ Fundamental Representations and Warranties, Sellers may, in good faith, update the Exhibits relating to the representations and warranties provided in Clause 9.1, provided that any updates: (a) may only refer to acts, facts or omissions occurring after this date or, exclusively with respect to representations and warranties that relate to a specific date or period , after the date or period to which they relate, (b) shall not exempt Sellers from any of the obligations under this Agreement; and (c) may not involve matters that constitute a Material Adverse Effect under this Agreement.

 

9.2.          Buyer and Zenvia Inc.’s Representations and warranties. Buyer hereby declares and warrants to Sellers (and Zenvia, Inc., as from its adhesion to this Agreement, shall represent and warrant to Sellers) that the following information is true, complete, accurate, correct and not misleading on this date (with respect to Buyer) and that it will remain true, complete, accurate, correct and non-misleading on the Closing Date (with respect to Purchaser and Zenvia Inc.), as if provided on the Closing Date:

 

(i)           Organization and Capacity. Buyer is a company duly incorporated and existing in accordance with the Laws of Brazil. Buyer has full capacity to: (a) enter into this Agreement and all documents which performance is established herein; and (b) fulfill the obligations assumed herein and perform the operations set out in this Agreement and in the Transaction Documents. Execution and formalization of this Agreement and the other Transaction Documents by Buyer and the fulfillment of their respective obligations have been duly approved and authorized by all necessary own acts, including corporate approvals, where applicable. No other measure, act, consent, authorization of any Governmental Authority, approval or action with any Person, Judgment, Governmental Authority or Regulator or any third party is required to authorize Buyer's signature, formalization and performance of this Agreement.

 

(ii)           Binding Effect. This Agreement constitutes Buyer's legal, valid and binding obligation, enforceable in accordance with its terms.

 

(iii)          No Breach, Consents. Neither buyer's signature and formalization of this Agreement, nor Buyer's compliance with any and all of its obligations under this Agreement, nor the implementation of the operations set forth in this Agreement, (a) violate or conflict with any statute, ordinance, Law, rule, regulation, license or permission, judgment or order of any judgment or other Governmental or Regulatory Authority to which Buyer is subject; or (c) depend on any consent, approval or authorization of, Notice to, filing or registration with, any Person, entity, judgment or Governmental or Regulatory Authority.

 

(iv)         Financial Statements, Absence of Hidden Liabilities. Buyer's unaudited Financial Statements, which have been provided and incorporated into this Agreement as Exhibit 9.2.1(iv): (a) are true, correct and complete, in all relevant respects, and have been prepared in accordance with applicable law and the bookkeeping of Buyer and Zenvia Inc. (as the case may be), consistently on the date they were assessed and in accordance with past practices adopted by Buyer and Zenvia Inc. (as the case may be), and may be legitimately reconciled with the books and records kept for the tax purposes of Buyer and Zenvia Inc.; (b) correctly present, in all relevant respects, the financial and equity position, as well as the results of the transaction and changes in the financial position, as applicable, of Buyer and Zenvia Inc. within the relevant periods; and (c) were prepared in accordance with Brazilian GAAP, consistently in all periods covered by these financial statements, including with respect to the provisions recorded. Except as provided in this Agreement and its Exhibits and except for the specifications contained in the Financial Statements of Buyer and Zenvia Inc., on the base date of such Financial Statements, neither Buyer nor Zenvia Inc. had Indebtedness, liabilities, obligation or liability, whether due or to become due, hidden, contingent, unsettled or of any other nature not reflected in the financial statements, and which, according to best accounting practices (including, in Buyer's case, Brazilian GAAP), should be reflected in the financial statements of Buyer or Zenvia Inc.. Buyer and Zenvia Inc.'s books and accounting records are, in all its relevant aspects, true, correct and complete and have been prepared in accordance with applicable law. The accounting books are, in all relevant respects, duly booked and complete, being maintained in accordance with good commercial practice and expressing, in all its relevant aspects, and in compliance with the requirements of the Law, all transactions involving the business and activities of Buyer and Zenvia Inc., containing no relevant error or omission, and there has been no change in any accounting practice or method , except for those required by applicable law.

 

 

 

 

(v)           Absence of Relevant Adverse Effect. After the date of the Financial Statements of Buyer and Zenvia Inc. there has been no extraordinary event or circumstance that may result in a Material Adverse Effect.

 

(vi)         Good Practices. Buyer, including through any employee, director or manager and, to Buyer's best knowledge, any agent, consultant or any other Person, (i) has not violated or violates any Anti-Corruption Laws; (ii) did not offer, pay, commit to pay or promise to pay or authorize the payment of money or other valuables, contribution, expense reimbursement, gifted, gave benefits or delivered any kind of good to any person who is an officer, agent, official or representative of any Governmental Authority or to any political party, any candidate for public office or to offices of political parties , or to any other Person, knowing or having reason to believe that any or all part of the money or something of value offered, given or promised (a) would facilitate or seek to facilitate obtaining favorable treatment in business, (b) pay favorable treatment in business, (c) facilitate or seek to facilitate the obtaining of special concessions or serve as payment for special concessions already obtained in favor of or in relation to Buyer, or (d) would represent violation of Anti-Corruption Laws. Buyer has appropriate practices and policies to avoid non-compliance with Anti-Corruption Laws by its employees, directors, managers, agents and consultants. Buyer has not conducted or initiated any internal investigation, received any complaint or other internal or external reports, complaints or allegations, or made a voluntary, direct, or involuntary disclosure to any Government Authority with respect to any act of omission relating to any bribery, unlawful payment, acts of corruption or non-compliance with any Anti-Corruption Act. Buyer does not and, in Buyer's best knowledge, none of the representatives of Buyer, has received any notice, request or service, is part of any administrative, civil or criminal proceedings, or has been convicted or pleaded guilty, in relation to any current or potential non-compliance with matters contained in the first part of this part.

 

(vii)         Knowledge. Buyer is an active institute in the relevant market, has knowledge and experience in transactional, financial and commercial matters of this nature, is perfectly capable of making an independent assessment of the merits and risks resulting from the Operation and to bear the economic risks associated with it. Buyer acknowledges that, except as expressly set forth in this Clause 9, none of Sellers, the Company (or its Subsidiaries), or any other Person acting in its interest has made any statement and warranty, express or implied, whether written or oral, as to any matter relating to this Agreement or as to the accuracy or completeness of any information that Sellers, the Company (or its Subsidiaries) or its representatives, have provided or made available to Buyer and its representatives in connection with its audit, in particular in relation to financial projections, business plans, budgets and/or forecasts related to the Company and its activities.

 

(i)            Sufficiency of Funds. Buyer has, on this date, or will hold up to First Deadline, as the case may be, sufficient funds to perform the procurement of Bank Guarantee and the Down Payment and to comply with all its indemnification obligations under this Agreement, with funds immediately available, in national currency. Subject to the performance of Zenvia IPO, Buyer will have sufficient funds to make the full payment of Purchase Price, with funds immediately available and in national currency.

 

 

 

 

(viii)        Insolvency. Buyer is not insolvent and there is no threat related to its assets that may affect the transaction under this Agreement. In particular, but without limiting the general nature of the previous statement: (a) the execution and performance of this Agreement by Buyer shall not result in its insolvency; (b) Buyer's economic, and financial situation would not imply in frustration with any execution arising out of any dispute or demand that exists against Buyer; and (c) there are no securities issued by Buyer or withdrawn against Buyer that have been protested.

 

(ix)          Absence of Other Representations and warranties. Except as provided in this Agreement, Buyer has not provided any additional representations and warranties to Sellers, express or implied, written or verbal, in connection with any subject matter of this Agreement.

 

10.           NO COMPETITION AND NO REQUEST FROM MAIN EXECUTIVE PARTNERS

 

10.1.        Restrictions on Main Executive Partners. Each of Main Executive Partners, individually, undertakes to, from the Closing Date and for an additional term of [*****] years from the date of maturity of the portion of Earn-Out 2023 (or as provided for in Clause 6.7 above) ("Non-Competition Period"), refrain from, directly or by intermediaries, and cause its Subsidiaries, their respective spouses, partners in a stable or equivalent union regime, ascendants and descendants to refrain from, in all Territories of Activity ("Non-competition obligation"):

 

(i)            compete with any of the Restricted Business;

 

(ii)           holding a direct or indirect interest, including participation as partners and/or shareholders, in any form or modality (e.g. by means of an usufruct or contract model for interest in economic or political rights, profit sharing, etc.), in any Person who develops, directly or indirectly, any of the Restricted Business or that is concerned with the development of any such Restricted Business, subject to the restrictions of this Clause does not prevent the passive investment in shares of companies that develop such Restricted Business, provided that in an amount less than five percent (5%) of its capital and that there is no involvement or interference by the Main Executive Partner concerned in the management or guidance of the business of such companies;

 

(iii)         accept a job offer, to provide advice or any services (including, without limitation, supply of labor, distribution, agency or commercial representation) within the restricted business, including consulting and similar, for a Person who has (or will have, after hiring Principal Executive Partners) restricted business as a relevant activity that generates revenue also relevant. In order to avoid any doubts, this item (iii) restricts the performance only in Persons who, under the terms of this Agreement, are "competitors", but do not restrict the performance in "customers" or potential "customers" of the Company and/or its Subsidiaries;

 

(iv)         persuade or attempt to attract any Person employed and/or hired by the Company or its Subsidiaries to leave their employment or terminate their contract relationship with the Company (or its Subsidiaries, as the case may be), and shall also refrain from employing in a contractual, temporary or unprofessional manner, employed, self-employed or autonomous, directly or indirectly, such Persons, nor assist Third Parties to use such Persons in any capacity or provide resources or any other type of support to the activity or business of Third Parties, being agreed that the obligation described above shall not apply to employment opportunities and/or contract (a) resulting from an advertisement to the general public not specifically directed to Persons employed and/or contracted by the Company or its Subsidiaries, or (b) offered to Persons who have ceased to be employed and/or procured by the Company or its Subsidiaries for more than six (6) months and without any involvement of the Main Executive Partner in question; and

 

 

 

 

(v)           induce or attempt to influence, directly or indirectly, any customer, supplier or service provider of the Company or its Subsidiaries to terminate their respective supply, service agreement or any other contract entered into with the Company or any of its Subsidiaries, nor induce or attempt to influence such Persons to terminate, reduce or deviate from the business held with the Company or any of its Subsidiaries.

 

10.1.1. Buyer hereby agrees that they will not be considered as a violation of non-competition obligations: (i) to participate as an investor (angel or otherwise) or in any other way in companies that do not develop Restricted Business (including Pay Systems Serviços de Informática Ltda., which is now Fernando’s investee); (ii) teach classes in educational institutions; (iii) exclusive or collective mentoring; or (iv) development, in any position, of business involving: (a) cryptocurrencies; (b)blockchain as long as not related to Restricted Business; (c) artificial intelligence as long as not related to Restricted Business; (d)  Non-customer-facing communications platform such as machine-to-machine communication (IoT), networks and the like; ( e) cloud computing infrastructure and telecom (including 5G); and (f) quantum computing.

 

10.1.2. If one or more Principal Executive Partners remain with Relevant Bonds after the end of the Non-competition period, the Parties shall, in good faith, negotiate extensions of the non-competition obligation.

 

10.2.        Fines; Losses and Damages. In the event of non-compliance with Clause 10.1, Buyer shall notify the infringing Executive Partner, who shall have a period of thirty (30) days to address the default indicated. If the violation of Clause 10.1 is not met, the Infringing Main Executive Partner shall pay Buyer a non-compensatory, contract fine corresponding to the amount applicable to each Chief Executive Member in Exhibit 10.2 . This fine (a) shall be applied without prejudice to the provisions of Sections 12 and 15, (b) may, at Buyer's discretion, be offset against any amount that is in place to the defaulting Executive Partner under this Agreement, and (c) even if required and paid (one or more times), shall not exclude the Principal Executive Partners, their Subsidiaries, their respective spouses, partners in a stable or equivalent union regime to continue to comply with the provisions of Clause 10.1 for the periods set out herein.

 

10.2.1.     Failure to pay the fine due under Clause 10.2 shall subject the debtor to adjustment for inflation based on IPCA variation from the expected date of payment to the actual date of payment, plus interest on late payment of [*****], and [*****] on the adjusted amount.

 

10.3.       Consideration. The Parties agree that the amounts received by the Main Executive Partners include a portion intended to compensate Main Executive Partners for the obligations assumed herein, and no additional payment will be due to the Main Executive Partners in this regard, for the period mentioned in Clause 10.1 above. Likewise, the Parties agree that receipt of the fine provided for in Clause 10.2 shall not affect Buyer's right to obtain additional compensation for Losses suffered under Section 13.

 

11.          CONFIDENTIALITY

 

11.1.     Confidentiality. In accordance with Clause 11.1.2, Parties, Consenting Intervening Parties and, after its adhesion to this Contract, Zenvia Inc. undertake to maintain confidentiality and not to disclose or make public to any Third Party, without the prior consent of the other Parties (1) the terms and conditions of the Transaction Documents and their Exhibits (except the Secured Fiduciary Sale of Warranty Actions, in the form of Clause 6.9); and (2) any information, relating to the other Parties, the Company or its Subsidiaries, to which it has had or will have access depending on the transactions contemplated in this Agreement ("Confidential Information"). Confidential Information shall not be considered information that (a) is or will become in the public domain for reason other than non-compliance with the obligation of confidentiality of this Clause; (b) were already proven to be aware of the Receiving Party of information at the time of such disclosure; or (c) have been lawfully received by either Party from Third Parties not subject to any obligation of secrecy. Parties, Consenting Intervening Parties and to Zenvia Inc. shall instruct its agents, contractors, consultants, advisors, auditors, lawyers, representatives, agents and/or any other Person who, by virtue of the relationship with such Party, will have access to Confidential Information, to observe the duty of confidentiality imposed by this Clause.

 

 

 

 

11.1.1.    The confidentiality obligation herein shall not prevent the Parties from disclosing Confidential Information to any Governmental Authority under the strict terms and within the strict limits of any court order given to them to that effect. In case either Party and/or the Consenting Intervening Parties and Zenvia Inc. are required, as required by the competent Governmental Authority, to provide in whole or in part any Confidential Information, such Party and/or the Consenting Intervening Parties and Zenvia Inc. may do so, without giving rise to indemnification or charges, provided that the rules set forth in this Clause 11.1.1 are fulfilled. However, this party shall, in any case: (a) provide only the part of the Confidential Information and the documents that its legal advisors deem legally chargeable, (b) make the necessary efforts to obtain assurances from those who requested the Confidential Information that a confidential treatment will be conferred on it, (c) if allowed by the Government Authority, notify the other Parties promptly and in writing of the need for breach of confidentiality , enabling them to take appropriate measures to protect the confidentiality of Confidential Information.

 

11.1.2.    The Sellers hereby agree that Buyer may disclose the information regarding the terms and conditions of the Transaction Documents and its Exhibits and the Company and its Subsidiaries as may be required in the context of Zenvia IPO, as determined by Zenvia's legal and financial advisors, and Buyer must : (i) do it under confidentiality whenever this is possible in the course of the Zenvia IPO process; and (ii) notify Sellers reasonably in advance of the information to be disclosed, in accordance with the terms of clause 12.7 below.

 

11.2.      Disclosure. The Parties agree that any announcement or disclosure addressed to the general public, including customers and/or suppliers of the Company and its Subsidiaries, in relation to the operations subject to this Agreement and its Exhibits, may only be issued after approved in writing by all Parties, except for disclosures that are required by the Laws applicable to the respective Parties. In the case of disclosures required by law, the Party obliged to make the disclosure shall provide the other, as early as possible, an opportunity to review the disclosure to be made and to submit comments, which shall be considered, in good faith, by the Party required to make the disclosure.

 

11.2.1.    The Parties undertake to cause the press release regarding: the execution of this Agreement informs Zenvia's future union with the Company for the formation of the largest communications platform in Latin America and the permanence Fernando as CEO of the Company and his election to the position of full member of the Board of Directors of Zenvia Inc., substantially as agreed in Exhibit 11.2.1; and if Buyer or Zenvia, Inc. disclose a press-release related to IPO, Buyer undertakes to mention the union with the Company and that Fernando remains CEO of the Company and as a full member of Zenvia Inc.'s Board of Directors. Zenvia also undertakes to make its Main Executives (including its Chief Executive Officer) grant interviews to Mobile Time, Brazil Journal or another similar vehicle, together with the founders of the Company, giving emphasis to the Founders of the Company in accordance with this Clause.

 

 

 

 

11.3.       Penalty. The failure to comply with the confidentiality obligation set out in this Section 11 by either Party and/or by the Consenting Intervening Parties and/or Zenvia Inc., by act of its own or any of its agents, contractors, consultants, advisors, auditors, lawyers, representatives, agents and/or any other Person who by his/her nomination has had access to confidential information shall give rise to the immediate obligation to indemnify for all losses that may occur.

 

11.4.        Confidentiality Obligation Deadline. The obligations under this Clause 11 shall remain in force from this date until the end of the three (3) years from the last to occur between: (a) the termination of this Agreement; or (b) the end date of payment of the Acquisition Price. In order to avoid any doubts, if this Agreement is terminated for any reason: (i) the Sellers shall have no obligation of confidentiality with respect to Company's Confidential Information, but shall remain required to keep the terms of the Transaction confidential; and (ii) Buyer shall be required to maintain confidential information under secrecy until the end of the period set out herein.

 

12.          OTHER OBLIGATIONS

 

12.1.      Records. The Company shall register with the competent Government Authorities, within five (5) Business Days of each event, the corporate acts mentioned in this Agreement, and the costs will be borne by the Company. Buyer shall make, at its expense, within five (5) Business Days from the Closing Date, the protocol of the Secured Fiduciary Sale with the competent Notary Offices and use its best endeavors to make it possible for the registration occur as quickly as possible. The Parties shall cooperate with each other as necessary to make such records appropriately.

 

12.2.       Joint Efforts. Parties, Consenting Intervening Parties and, after its adhesion to this Contract, Zenvia Inc. hereby agree that they shall take all necessary steps to faithfully comply with the obligations set forth in this Agreement by signing all instruments, certificates and other documents necessary for the conduct of the transaction contemplated herein, with the parties, the Consenting Intervening Parties and, after its adhesion to this Contract,, Zenvia Inc. to make their best efforts to obtain necessary authorizations and records.

 

12.3.        Operating costs. Except as otherwise provided in this Agreement, the costs of the operation due by the Parties, the Company or its Subsidiaries before Government Authorities, brokers and/or intermediaries (including, without limitation, fees of legal advisors, committees of financial advisors, strategic advisors and publicity), directly related to the negotiation and implementation of the legal business subject to this Agreement shall be borne by: (a) by Buyer, in the case of costs incurred by Buyer; and (b) by the Company, in the case of costs incurred by the Company or Sellers, including the fees due to the law firm that advises Sellers (and, until the Closing Date, the Company and its Subsidiaries) in this Operation.

 

12.4.     Performance Obligation of Sellers. Unless otherwise consented in writing by Buyer, if otherwise expressly contemplated in this Agreement or if necessary as a result of Brazilian Law or GAAP, or if required by government authority' up to Date Closing, each of the Sellers (with respect to its Shares) and, within the limits of the powers assigned to its Shares or as an administrator of the Company or its Subsidiaries shall cause the Company and its Subsidiaries to make the Company and its Subsidiaries (a) perform business in accordance with their Ordinary Course; and (b) make commercially reasonable efforts, in the light of the Company's past practices, to preserve and protect the goodwill and relationships with suppliers, customers and employees of the Company and its Subsidiaries.

 

 

 

 

 

 

12.5.        Non-Performance Obligations of Sellers. Except as otherwise authorized in writing by Buyer, if otherwise expressly set out in this Agreement (including with regard to the acts for contracting Venture Debt), if necessary as a result of Law or Brazilian GAAP, or if required by government authority, by closing date, or as provided in Clause 12.6 below , each of the Sellers undertakes not to practice (with respect to its Shares) and, within the limits of the powers assigned to its Shares or as a manager of the Company or its Subsidiaries, if applicable, to cause the Company and its Subsidiaries not to perform any of the following acts:

 

(i)            create any new benefit plans for employees, or members of the Company's management or its Subsidiaries, except for the new Executive Compensation Plan;

 

(ii)           to enter into or alter any agreements or commitments of the Company and/or its Subsidiaries in an individual value greater than [*****];

 

(iii)          transfer and/or Encumber Shares of the Company or its Subsidiaries;

 

(iv)          sell, lease, undertake, mortgage, burden, assign or otherwise dispose of, or undertake to sell, lease, engage, mortgage, assign, license or otherwise dispose of, including by granting option or preemptive right, of any relevant asset of the Company or its Subsidiaries in an individual value greater than [*****];

 

(v)           enter into any contract, commitment or obligation that otherwise contains any non-competition provisions relating to the business of the Company or its Subsidiaries;

 

(vi)          cancel, compromise, discharge or forgive any judicial or administrative proceedings involving the Company and/or its Subsidiaries, proposed by or against any Person, or waive any right of the Company and/or its Subsidiaries, except for rights, claims or actions involving amounts lower than [*****];

 

(vii)         initiate any process of incorporation, division, merger or liquidation or dissolution involving the Company and/or its Subsidiaries, or if it is required to do so;

 

(viii)        authorize the issuance of (a) any share of the Capital , Share or other equity or voting interest in the Company and/or its Subsidiaries, or (b) any securities convertible into or interchangeable by right to subscribe to or acquire any Shares, or other shareholding or voting in the Company and/or its Subsidiaries;

 

(ix)          split, group, redeem or amortize any Shares of the company's capital and/or its Subsidiaries;

 

(x)            create any subsidiaries of the Company;

 

(xi)           to enter into, significantly alter, terminate or make the Company subject to any joint venture, company and/or new shareholders' agreement;

 

(xii)          implement or make any reduction greater than [*****] of the Company's staff and/or its Subsidiaries on this date (being understood that this does not include voluntary dismissals of employees and termination of fixed-term employment contracts), unless such reduction is compatible with that made by other companies in the company's field of activities as a result of the COVID-19 Pandemic;

 

 

 

 

(xiii)         assume obligations or at an individual value greater than [*****]; or not compatible with the corporate object;

 

(xiv)        approve and perform any distribution of dividends, payment of interest on equity or reduction of capital of the Company and/or its Subsidiaries, or any other form of distribution of funds to the partners;

 

(xv)         hire new directors or increase or promise to increase the Compensation or benefits assigned to any directors or employees of the Company and/or its Subsidiaries, outside the Ordinary Course;

 

(xvi)        to carry out any expense or investment or development of new projects by the Company and/or its Subsidiaries, the value of which is considered the act alone or a set of related acts, exceeds the amount of [*****]; and

 

(xvii)       conduct any new business of any nature with, on the one hand, the Sellers and/or the Related Parties of the Sellers and, on the other hand, the Company and/or its Subsidiaries.

 

12.6.        Venture Debt. Buyer hereby authorizes: (i) the Company to contract financing (by lending or issuing debentures) in the amount of up to [*****] for the payment of the purchase price due to the purchase of Smarkio shares (" Venture Debt "); and (ii) Sellers and the Company to constitute an Encumbrance on the Company's Shares or Assets in connection with the hiring of Venture Debt.

 

12.7.        Zenvia IPO. The Sellers, the Company and its Subsidiaries hereby agree that they will take all reasonably necessary steps and cooperate with Buyer in relation to the Zenvia IPO, including providing (directly or through representatives, including without limitation their auditors and legal advisors as necessary) any legal and/or financial information relating to the Transaction reasonably requested by the financial advisors hired to provide advice in the Zenvia IPO, as well as making themselves available to clarify questions and doubts that may be made by such financial advisors in the context of the Zenvia IPO. In case of doubt about the need to send information, an opinion should be requested from legal advisors of the Zenvia IPO.

 

12.7.1.     Buyer undertakes to: (i) keep Sellers and the Company informed about, and allow follow-up of, Zenvia IPO progress (including its schedule, roadshow progress and pricing of the offer), from time to time or through the provision of information and answers to questions made by Sellers; and (ii) share with Sellers and with the Company the filings and exchanges of communication with bodies regulators.

 

12.8.        Zenvia Restrictions. Buyer and Zenvia Inc. will not make or allow it to be made without the approval of Sellers: (i) an initial primary and/or secondary public offering of shares resulting in listing of another Affiliate from Buyer or Zenvia Inc. (other than Zenvia Inc. itself) on any stock exchange, including outside the Brazil; or (ii) a private placement of Buyer, Zenvia Inc., or any of its respective Affiliates.

 

12.9.        Approval of the Compensation Plan. The Parties undertake to negotiate in good faith from this date a new compensation plan of the Company ("Compensation Plan"), which will be based on the Company's current Compensation practices, and which shall provide that the Company will: (i) retain at least five (5) Officers; (ii) may pay annual fixed gross individual Compensation up to [*****] or in a higher amount when provided in the Company's annual budget or in the Business Plan itself; and (iii) be authorized to continue offering Compensation (including variable) to certain of its employees (or their substitutes) in terms similar to those being performed on this date. If the Parties do not reach an agreement on the Compensation Plan by the Closing Date, the Company may maintain Compensation practices consistent with those currently maintained.

 

 

 

 

12.10.      Replacement of Guarantees. Buyer undertakes, within 90 (ninety) days after the Closing Date, to release and/or replace (or, as the case may be, promote the release and/or replacement of) the guarantees granted by the Sellers in obligations related to the Company, including those granted under Venture Debt ("Guarantees"), and the obligation to release or replace the Guarantees shall be deemed fulfilled to the extent that the respective Sellers and their assets are released unconditionally, irreversibly and irrevocable from any obligations related to the principal obligation subject to such Guarantee. Buyer and, after the Closing Date, the Company, shall exempt the Sellers and its Affiliates from any obligations arising from the eventual execution of the Guarantees due to the Company's default, after closing, from the obligations guaranteed by the applicable Guarantees.

 

12.10.1.   If any Guarantee cannot be replaced, including due to the fact that the respective creditor or beneficiary has not approved such replacement, Buyer shall grant, on behalf of Sellers, a counter-guarantee in terms and conditions similar to those to those established in the Guarantee in question, within ninety (90) days from the Closing Date, and without prejudice or limitation of Buyer's obligation to indemnify and hold Sellers harmless from any loss arising from any of the Guarantees.

 

12.10.2.   If, after closing, any provisional imposition, collection, execution, seizure, constriction and/or attachment related to a fact relating to the Company is imposed or bound in relation to any good, right or asset from Sellers, Buyer shall take any and all measures, at its expense, necessary to reverse such provisional imposition, collection, execution, seizure, constriction and/or attachment, including by means of payment or granting of new guarantees, without prejudice to indemnify for any losses suffered by the Sellers.

 

13.           OBLIGATION TO INDEMNIFY

 

13.1.        Indemnity for Sellers . Each of Sellers is required, in a an individual manner, to indemnify and hold Buyer, its Related Parties (which, after closing, will include the Company, its Subsidiaries and/or invested), its directors, employees, consultants, representatives and their respective successors ("Buyer's Indemnifiable Parties"), harmless from any Loss actually suffered or incurred by a Buyer’s Indemnifiable Party arising out of or arising out of:

 

(i)            any falsehood, omission, error or inaccuracy of any statement or warranty provided, pursuant to Clause 9.1 and its sub-clauses; and/or

 

(ii)           non-compliance, partially or in full, of any agreement or agreement contained in this Agreement by a Seller (and, until Closing, by the Company and its Subsidiaries) until the legal business and other obligations provided for therein; and/or

 

(iii)          any Third Party Claims arising out of commissive or omitted act, contingent liabilities, facts, events or omissions related to the Company and/or its Subsidiaries, its business or activities, of any nature, including, without limitation, labor, social security, tax, civil, insurance, tax, environmental, intellectual property or any other, in each case, the generating event of which has occurred, in part (in the latter case, considering only the period prior to the Closing Date), in a period prior to the Closing Date(excluding the latter), even though its effects only materialize in the future, identified or not in the course of the due diligence process, whether or not informed (and/or not qualified by knowledge or relevance) through the representations and warranties provided under this Agreement, whether or not Sellers, the Company, its Subsidiaries or Buyer, noted, however, that no amounts that are reflected as liabilities in the Base Financial Statements or that have been taken into account for the purposes of determining Net Debt or calculating the Price Adjustment will not be considered as Loss; and/or

 

 

 

 

(iv)          any and all commissive or omitted act, debt, liabilities, contingent or absolute, facts, events or omissions related to one of Sellers (acting by themselves and not as a Representative of the Company or its Subsidiaries), its business or activities, or any of its Related Parties (other than the Company and its Subsidiaries) and/or entities that are current, future or previously owned directly or indirectly by Sellers (other than the Company and its Subsidiaries), of any nature, including, without limitation, labor, social security, tax, civil, insurance, tax, financial, environmental, intellectual property or any other, occurred at any time, identified or not in the course of the due diligence process , either informed or not (and/or qualified or not by knowledge or relevance) through the representations and warranties made under this Agreement, known or not to Sellers or Buyer at any time, which may be imputed or otherwise collected from any Indemnified Party of Buyer or Company and its Subsidiaries (in the latter case, after the Closing Date);

 

(v)           in relation to Sellers who carry out the Flip, and its structuring and/or implementation.

 

13.1.1.     Buyer's total or partial waiver of compliance with one or more Suspensive Conditions, or its decision not to perform the Closing under Section 8, shall not exempt Sellers from the obligation to indemnify Buyer's Indemnified Party for Losses incurred in connection with the waived Suspension Conditions.

 

13.1.2.     Although the Sellers (before Closing Date) or Buyer (after Closing Date) will approve, or cause the accounts and financial statements of any subsequent financial year of the Company to be approved, such approval shall not mean that any Indemnified Party of Buyer has waived the right to demand from Sellers the reparation provided for in this Clause 13.1 , and Sellers, Company and its Subsidiaries shall remain as provided for in this Agreement.

 

13.1.3.     The obligation to indemnify Sellers shall be distributed among them as follows: (a) in the event of Losses arising from the matters of which Clause 13.1(iii) or Clause 13.1(i) - in the latter case, only when related to a statement and guarantee provided in relation to the Company - each of the Sellers will respond, without solidarity, only for the amount corresponding to its percentage of equity holding in the Company on this date multiplied by the value of the Loss suffered by the Buyer's Indemnified Parts; and (b) in the event of Losses arising from matters of which Clause 13.1(ii), Clause 13.1(iv), Clause 13.1(v) or Clause 13.1(i) - in the latter case, only when related to a statement and warranty provided with respect to Sellers themselves - the Seller(s) who gave(s) cause the Loss will be liable to the full amount of the Loss suffered by the Indemnified Parties of the Buyer.

 

13.2.        Buyer Compensation. Buyer undertakes to indemnify and hold Sellers, its Related Parties (which until closing includes the Company and its Subsidiaries), its directors, employees, consultants, representatives and their respective successors ("Sellers Indemnifiable Parties"), harmless in relation to any and all Loss actually suffered or incurred by an Indemnified Party of Sellers arising out of or arising from :

 

(i)            any falsehood, omission, error or inaccuracy of any statement or warranty provided by Buyer under Clause 9.2 and its sub-clauses; and/or

 

 

 

 

(ii)           non-compliance, in whole or in part, with any of Buyer’s or Zenvia’s agreement or covenant (or, after Closing, of the Company and its Subsidiaries) contained in this Agreement, until the completion of legal business and other obligations provided for therein; and/or

 

(iii)          any and all commissive or omitted act, debt, liabilities, contingent or absolute, facts, events or omissions relating to Buyer, its business or activities, or any of its Related Parties (including Company and its Subsidiaries, only with respect to taxable events occurring after the Closing Date), of any nature, including, without limitation, labor, social security, tax, civil, security, tax , financial, environmental, intellectual property or any other, occurred at any time, informed or not through the representations and warranties provided under this Agreement, known or not of Sellers or Buyer, which may be imputed or otherwise collected from any Indemnified Party of the Sellers.

 

13.3.        Limitations to the Obligation to Indemnify of Sellers and Buyer. The indemnification obligations set forth in Clauses 13.1 and 13.2 above will be subject to the following terms and conditions:

 

(i)            Maximum Limit of Indemnification Obligation: (a) the obligation to indemnify arising from (i) fraud or breach of the Agreement, or violation of anti-corruption laws; (ii) falsehood, error or inaccuracy as to Fundamental Representations and warranties from Seller or Buyer or the events provided for in Clauses 13.1(iv) or 13.2(iii); and (iii) 13.1 (v) shall not be subject to any maximum indemnification limit; (b) the obligations to indemnify arising from Loss involving the impossibility of use of the Platforms due solely to the absence of ownership of Own Intellectual Property Rights by the Company are subject to the total amount per Seller equivalent to forty-five million Brazilian reais (BRL 45,000,000.00) times the participation of such Seller in the Company after the exercise of all SOPs and Marcelo’s Buy Option as provided for in the Exhibit (A); (c) the obligations to indemnify customers arising from non-compliance with contracts with customers and contractual fines with customers are subject to the total amount per Seller equivalent to forty-five million Brazilian reais (BRL 45,000,000.00) times the participation of such Seller in the Company after the exercise of all SOPs and Marcelo’s Buy Option as provided for in the Exhibit (A); and (d) the other indemnification obligations under this Agreement are subject to the total amount per Seller equivalent to twenty million Brazilian Reais (BRL 20,000,000.00), times the interest of this Seller in the Company after the exercise of all SOPs and Marcelo’s Buy Option as provided for in the Exhibit (A) ("Cap"), adjusted by the IPCA as of this date, provided that the Caps of items (b), (c) and (d) are independent and non-cumulative.

 

(ii)           Minimum Aggregate Indemnity Value: Indemnifier shall only be required to indemnify Losses when (a) the amounts relating to such Losses add up and exceed one million Brazilian Reais (BRL 1,000,000.00) ("Minimum Aggregate Indemnity") , in which case they will be paid within ten (10) Business Days from the completion of procedures established in Clauses 13.6 and 13.7 below, in relation to the amount of the indemnified Loss that exceeds the limit of the Minimum Aggregate Indemnity Value. At any time after reaching the Minimum Aggregate Indemnity Value, Future Losses will be indemnified in full by Indemnifier, in the light of the other limitations imposed by this Clause 13.

 

(iii)          De minimis: Indemnifier shall only be required to indemnify Losses if and when the individual value of such Loss exceeds the amount of fifty thousand Brazilian reais BRL 50,000.00) (" De Minimis "). In order to avoid any doubts, no Loss which individual value is less than De Minimis will be indemnified under 13.1 and 13.2, nor will it be accounted for the purposes of achieving the Minimum Indemnification Value. The obligation to indemnify arising from (i) fraud or failure to comply with this Agreement or violation of anti-corruption laws; or arising out of, falsehood, error or inaccuracy as to the Fundamental Representations and Warranties of the Sellers or Buyer or in the events provided for in Clauses 13.1 (iv) and 13.2(iii) shall not be subject to De Minimis.

 

 

 

 

(iv)          Time Limit for Indemnity Obligation: Seller’s Obligation to Indemnify provided for in Clause 13.1 and Buyer's indemnification obligation under Clause 13.2 shall last for the following periods from the Closing Date: (a) three (3) years for matters of a civil nature; (b) six (6) years for matters of a tax nature; and (c) five (5) years for any other matters ("Indemnification Term"), being understood that once an event has occurred that may characterize an indemnifiable Loss within the Indemnification Period, and provided that the Indemnified Party: (a) notifies the Indemnifier of the existence of a Third Party Claim within the Indemnification Period; or (b) initiate, pursuant to Clause XV below, an Arbitration against the Indemnifiable Party with respect to a Direct Claim within the Indemnification Period, the obligation to indemnify with respect to such Loss shall remain beyond the Indemnification Period until the date on which the Loss has been indemnified or it is acknowledged that the event in question has not resulted in an indemnifiable Loss as non-indemnifiable. The obligation to indemnify the Parties provided for in Clause 13.1 (iv) and 13.2(iii) shall not be subject to temporal limitation.

 

(v)           Non-Accountability for Amendment of Laws or Accounting Practices. Sellers shall not be liable for indemnification obligations under this Agreement if and to the extent that it is attributable to, or the amount of such indemnification is the result of (i) any Applicable Law that is not in effect on the date of this Agreement, (ii) any change in Law, (iii) change in the accounting practices or principles of Buyer's Indemnifiable Parties (including the Company after the Closing Date).

 

(vi)          Voluntary Disclosures. Sellers shall not be liable for any Loss arising from a spontaneous disclosure, confession or similar act performed by Buyer, the Company or its Subsidiaries after closing, except to the extent that such act is performed in accordance with the terms and conditions set forth in Clause 13.4.4.

 

(vii)         Provisioned Values. The Sellers shall not be required to indemnify Buyer's Indemnifiable Parties in relation to contingencies already provisioned in the Base Financial Statements.

 

(viii)        Double Indemnity Prohibition. Acts, facts or omissions that are indemnifiable under this Agreement shall not be indemnified under any of the other Transaction Documents and vice versa, and the same act, fact or omission may not be indemnified more than once under this Agreement, so that there is, in any event, no double indemnification for Loss arising from the same acts facts or omissions.

 

13.4.        Conditions to Sellers and Buyer Indemnity Obligation. The obligation of the Parties in charge, pursuant to Clauses 13.1 and 13.2 above ("Indemnifiers") for indemnification of Losses incurred by Parties entitled to indemnification under the same Clauses 13.1 and 13.2 above ("Indemnified Parties") shall comply with the following conditions:

 

(a)           the Indemnified Party shall pay the Indemnified Party one hundred percent (100%) of Loss suffered by the Indemnified Party, provided that, if the Indemnified Party is the Company or a Subsidiary and the Indemnifier is one or more Sellers, then: (i) the indemnifications will only be due after the Closing Date; (ii) the amount corresponding to the total amount of the Loss will be paid by the Indemnifier to the Buyer; and (iii) the amount paid will be treated as a price adjustment for the purposes of this Agreement;

 

 

 

 

(b)           all payments due by the Indemnifiers shall be structured in such a way as to avoid any additional cost to the Indemnified Parties, and any additional cost or charge that may arise shall be solely and exclusively borne by the Indemnifiers. In order to avoid doubt, in this case, the Indemnifiers shall pay such additional amounts as may be necessary to ensure that the net amounts received by the Indemnified Parties are equal to the respective amounts that would have been received in the absence of such additional cost or charge;

 

13.4.1.     Procedure in the case of Third Party Claim. After Closing, if any Indemnified Party is to be subpoenaed, notified, or summoned, administratively or judicially or in an arbitration or out of court, for enforceability that constitutes or may constitute a Loss ("Third Party Claim"), this party shall notify Indemnifier, in writing, as soon as possible, but in any case within the period of up to 1/3 (one third) of the legal term for the submission of manifestation, defense or challenge of the Third Party Claim, as the case may be, by sending a copy of the documentation received and other information available at that time relating to the Third Party Claim ("Notice of Loss"). Failure to Notice The Loss of the Indemnified Party within the period indicated above shall exempt the Indemnifying Party from the obligation to indemnify the Indemnified Party for such Loss to the extent that such Default adversely affects the indemnifying Party's ability to defend itself against the claim in question. The Parties agree that the Indemnified Party shall be exempt from sending the Notice of Loss to the Indemnifying Party (a) as long as the Seller in Charge maintains a Relevant Link; or (b) where the Seller in Charge also appears in the passive pole of the Third Party Claim and has also received the same service or notice.

 

13.4.2.     The Indemnifier shall, within 2/3 (two thirds) of the legal deadline for the submission of manifestation, defense or contestation of the Third Party Claim, send a Notice informing the Indemnified Party: (a)if it wishes to take charge of the third party claim defense, informing the office that you will be hired to do so; or (b) if does not wish to assume the conduct of the defense of the Third Party Claim, in which case the Indemnified Party will be responsible for conducting the defense. If the Indemnifying Party does not send notice pursuant to this Clause 13.4.2, it shall be considered, for all purposes of law, that the Indemnifying Party does not wish to assume the conduct of the defense.

 

13.4.3.     The Party conducting the defense shall have the right to choose the law firm that will be responsible for the defense, and it is certain that the choice of the law firm should be reasonable taking into account the value and complexity of the cause. In any case the defense shall be conducted diligently by the lawyers, always in the name and for the benefit of the Indemnified Party and with a view to reducing the amount of possible conviction.

 

13.4.4.     The Party conducting the defense (whether Indemnifier or Indemnified Party) may not compromise or make an agreement without prior written authorization from the other Party, an authorization which may not be unjustifiably denied. If the Indemnifiable Party is Sellers, and Buyer rejects the terms and conditions of a proposed agreement accepted by Sellers, the following rules shall apply: (i) if a Loss materialized, Sellers, as an Indemnifier, shall be liable only up to the limit of the value of the proposed agreement refused by Buyer, provided that such agreement proposal has been demonstrably accepted by the opposing party in the respective Third Party Dispute (not only not materialized by buyer refusal of buyer or company); and (ii) if buyer's indemnified Party succeeds in defending the Third Party Dispute, Sellers shall reimburse it, to the limit indicated in the agreement proposal, the reasonable and proven costs incurred by the Company with attorneys' fees, procedural costs and procedural costs in general, relating to such demand. Mutatis mutandis, the provisions of item (i) of this Clause shall apply in relation to opportunities arising from law granting relief, discount and/or amnesty or any other economic advantage for taxpayers who adhere to cash or installment payment programs of due and unpaid taxes, when Sellers, as an Indemnifier, wish to adhere to such encouraged tax program. In order to avoid any doubts, during the Restricted Period, the Company may not compromise, make voluntary disclosures, make an agreement or adhere to any encouraged tax program without requesting the prior consent of Sellers and Buyer, in accordance with the procedures described in this Clause.

 

 

 

 

13.4.5.     The Parties shall cooperate with the Party conducting the defense (whether Indemnifier or Indemnified Party), and with its consultants, in the defense of any Third Party Claim, including by granting power of attorney and access to the necessary documents in the possession of the Company or its Subsidiaries, as the case may be.

 

13.4.6.     Regardless of the Party conducting the defense, the Indemnifier shall bear all costs and expenses of defending the Third Party Claim that are indemnified under this Section 8 (including, without limitation, reasonable attorneys' fees), as well as make any legal deposits or provide any other necessary or required Guarantees in connection with any Third Party Losses or Claims. Such costs and expenses shall be posted to the Escrow Account when proving your payment by the Indemnified Party. The Indemnified Party, before providing any warranty, shall notify in writing the Indemnifying Party of the obligation to effect such warranty, for acknowledgement purposes only.

 

13.4.7.     The Party conducting the defense shall maintain, and instruct its lawyers to maintain, the other Party informed of the progress of the defense for the duration of the proceedings. The party that is not conducting the defense shall have the right to participate in discussions on strategy and measures in each claim, and may, to do so, pass on the points it deems necessary with the lawyers responsible for the defense, have access to the documents and, as far as possible, participate in meetings that are necessary with any Third Party, including Government Authorities; in any event, that the Party conducting the defense and its legal advisors shall have the right to make final decisions on how the defense is conducted, in accordance with the provisions of Clause 13.4.3 above. If a Buyer's Indemnified Party chooses to hire advisors or advisors to accompany a defense being conducted by Sellers, such Buyer's Indemnifiable Party shall bear the costs of its respective advisors or consultants.

 

13.4.8.     Existing and Supervenient Demands. In addition to the provisions of other sentences of this Clause 13.4 above, the defenses of the claims existing on this date or materialized until the Closing Date in which the Company or its Subsidiaries are parties will continue to be made through the same lawyers who currently conduct such claims, in the manner in which they have been made to date, and the costs and expenses related to the same shall be borne by the Indemnifier.

 

13.5.        Direct Claims. In the event that an Indemnified Party understands that it has suffered a Loss that does not involve a Third Party Claim ("Direct Claim"), the Indemnified Party shall notify, within 15 (fifteen) Business Days in writing, the Indemnifying Party (Notice of Indemnification). The Notice of Indemnification shall describe the Loss, submit the provisions of this Agreement from which the right of indemnification shall take place, include copies of the available written documents and indicate the estimated amount, if reasonably possible, of the Loss suffered by the Indemnified Party. Failure to Notice The Loss of the Indemnified Party within the period indicated above shall not exempt the Indemnifying Party from the obligation to indemnify the Indemnified Party for such Loss except to the extent that such Default adversely affects the indemnifying Party's ability to defend itself against the claim in question.

 

13.5.1.     The Indemnifying Party shall have a period of thirty (30) Working Days to respond in writing to the Notice of Indemnification. If the Indemnifying Party (a) agrees to the terms of the Notice of Indemnification or ceases to send a response to the Notice of Indemnification within the indicated period, payment of such Loss shall be made in the form of Clause 13.8 below; (b) express, in writing and in writing and in a well-grounded manner, its disagreement with the terms of the Notice of Indemnification within the said period of 30 (thirty) Business Days, the indemnification shall be deemed due when (b.i) the settlement of the impasse relating to such obligation to indemnify the Loss through mutual agreement between the Indemnified Party and the Indemnifying Party or (b.ii) date of the final decision , in accordance with the terms of Clause 15 below; and in any case it will be paid in the form of Clause 13.8 below.

 

 

 

 

13.6.        Loss Value. Regardless of the provisions of this Agreement, the determination of the value of a Loss shall take into account the payment made or the recovery actually received as a result of any third-party indemnification to which the Indemnified Party is entitled as a result of the fact or circumstance that originated the Loss, including because of insurance policies (i.e. the indemnification will be net of the amount of any third party indemnification actually received by the Indemnified Party, including if arising from insurance policies, but taking into account the costs necessary for the receipt of such indemnities, including the deductible cost incurred for receipt of the insurance). In addition, the payment of a Loss shall take into account the inter-time tax effects relating to the applicable deductibility or taxability (i.e. if the payment generates an actual deductible expense in the same fiscal year, the payment will be made at its net value). In cases of indemnification of Third Parties or insurance, if recovery occurs after payment of indemnification for Loss by the Indemnified Party, the Indemnified Party undertakes to reimburse the Indemnified Party the amount recovered within 10 (days) Working Days from the date on which the Loss was partially or fully recovered. If, on the other hand, the receipt of an indemnity payment generates a taxable obligation, the gross amount of the indemnity must be adjusted to result in a full indemnification of the Loss suffered.

 

13.6.1.     For the purposes of this Section 13, a Loss shall be deemed to have been incurred when a Party is in demand, depending on: (a) a final decision and not subject to any kind of appeal or appeal; or (b) judicial agreement or out-of-court transaction that has been duly approved and entered into under this Agreement. In the case of Losses that do not involve disbursement of funds or transfer of funds, a Loss shall be deemed in effect at the time of a final decision, in accordance with the provisions of Clause 15 below, or the agreement between the Parties regarding the materialization of a Loss.

 

13.7.        Escrow Account. The Company, as of closing and until no further indemnification is due under this Agreement, shall keep a record of the amounts of Losses (arising or not from Third Party Claims) indemnified under this Agreement, incurred by each of the Indemnified Parties by releasing on credit the amounts of losses incurred by buyer's indemnified parties and debit the Losses incurred by the Indemnified Parties of Sellers ("Escrow Account"). In the event of a shared Loss (hereinafter understood as any Loss whose liability is partially applicable to any Indemnifier), the Escrow Account shall indicate the percentage due for each Indemnifier. The balance (positive or negative) of the Escrow Account should be updated monthly based on the IPCA.

 

13.7.1.     In accordance with the provisions of This Clause 13, in particular the limitations provided for in Clause 13.3, each Party (and, in the case of Sellers, each Seller) shall pay the balance of the Escrow Account (or, in the case of Sellers, its percentage of the negative balance of the Escrow Account) at each anniversary of the Closing Date of this Agreement or on 10 (ten) Business Days counted from the date the positive or negative balance of the Escrow Account reaches BRL 1,000,000.00, by means of electronic transfers of immediately available resources – TED, of the respective amounts in the bank accounts of Sellers, buyer or company that have been informed in this Agreement, or to other bank accounts that have been informed by the Indemnified Party reasonably in advance.

 

13.7.2.     The Company shall send to Sellers: (i) half-yearly statements (or in lower periods, as reasonably requested by Sellers) indicating the balance of the Escrow Account and the postings made; and (ii) on the date that is ten (10) Working Days prior to the release date of payment of the Balance of the Escrow Account, the final amount of the balance to be paid by the Indemnifier.

 

 

 

 

13.8.        Default. Failure to pay amounts due pursuant to this Section XIII within the terms set forth herein shall subject the Indemnifier to bear the positive variation of the IPCA between the expected date of payment and the date of actual payment, plus interest on late payment of [*****] and fine [*****] on the corrected value.

 

13.9.        Continuity of The Obligation to Indemnify. Subject to the limits set forth in this Section XIII, the obligation to indemnify will not be impaired as a result of the potential transfer to Third Parties of equity interest in the Company or its Subsidiaries.

 

13.10.       Mitigating Duty. The Indemnified Parties shall make best efforts to mitigate the chances of materializing a Loss under this Agreement by taking, or failing to take, any necessary or convenient measures to do so. Upon the occurrence of a Loss (or upon receipt of a notice of a Third Party Claim that may result in a Loss), the Parties shall, in good faith and to the limit possible, cooperate and act to mitigate the value of any Losses.

 

13.11.      Single Appeal. The Parties acknowledge and agree that the indemnity provisions provided for in this Agreement and other Transaction Documents will constitute the Parties' only remedy with respect to the legal deals contemplated in this Agreement and other Transaction Documents and any other inquiries related to the Company. Each Party waives, in this act, to the extent permitted to do so, any other rights or appeals that may arise by law.

 

13.12.      General Compensation Law. Any amounts owed by a specific Seller to Buyer may be offset by Buyer against any balances due to such relevant Seller under this Agreement through the Graphical Account mechanism.

 

14.          PERMANENCE OF THE MAIN EXECUTIVE PARTNERS AND CONDUCTING BUSINESS AFTER CLOSING

 

14.1.        Permanence of the Principal Executive Partners. During the period between the Closing Date and March 31, 2023 ("Relevant Period"), the Company and its Subsidiaries will be managed by the Main Executive Partners in accordance with one of the Business Plan. Subject to the provisions of this Clause 14, and as to its departure, the provisions of Clauses 14.3.1 and 14.3.2 , Fernando and the other Main Executive Partners who are in the Company on the Closing Date shall remain in the management of the Company and/or its Subsidiaries under a dedication similar to that existing on this date.

 

14.2.        Company Management During the Relevant Period . During the Relevant Period, the Main Executive Partners will have the authority, freedom and operational autonomy to manage the business of the Company and its Subsidiaries within the limit of the Business Plan, always aiming at achieving their goals. Any transaction or activity not provided for in the Business Plan, including the creation or launch of new products by the Company and its Subsidiaries, shall be previously approved by Buyer in writing. In order to avoid any doubts, Buyer's approval will not be required for the development of features coupled to the Platform or for hiring and firing employees or paying compensation within the provisions of the Business Plan or the Compensation Plan (provided that, if the Parties do not reach an agreement on the Compensation Plan by the Closing Date , the Company may maintain Compensation practices consistent with those currently maintained, in particular those described in Clause 12.9 ).

 

 

 

 

14.2.1.     Except if otherwise approved in writing by the Main Executive Partners, until the end of the Relevant Period, Buyer, The Company and each of its Subsidiaries shall not approve any change to the Business Plan, and not perform any act that is contradictory or inconsistent with the Business Plan that makes it impossible or difficult to achieve or achieve its goals. , or that negatively affects the amounts to be paid as Earn-Out 2022 Amount and Earn-Out 2023 Amount . In addition, during the Relevant Period, Buyer, The Company and its Subsidiaries may not, without Fernando's written consent: (i) transfer and/or Charge any Shares of the Company or equity interest in its Subsidiaries; (ii) make changes in the organizational acts of the Company and its Subsidiaries that involve capital increases or impact the governance of the Company and Fernando's autonomy; (iii) hire or dismiss directors and officers in key positions or any other employees, change their Compensation or change the Compensation Plan; (iv) to modify the policies of hiring and Compensation of directors and executives, as described in the Compensation Plan (except if necessary to meet Zenvia standards and to the extent that it is not justifiably refused by Fernando); (v) contract debt, acquire a stake in any Person, create a new line of business, or compel the management of the Company or its Subsidiaries to perform any such act; (vi) approve and perform any distribution of dividends, payment of interest on equity or reduction of the Company's capital, or any other form of distribution of funds to the Company's partners; (vii) enter into any contract or agreement that imposes restrictions with respect to the operation of the Company and its Subsidiaries, including exclusivity provision; (xi) hire employees or service providers exclusive to, the Company or its Subsidiaries; or (xii) make an application for self-bankruptcy or judicial or extrajudicial recovery.

 

14.2.2.     In the event of buyer's failure to comply with the provisions of Clause 14.2, the Earn-Out 2022 and Earn-Out 2023 amounts shall expire in advance, being due to Earn-Out 2022 Amount Sellers and Earn-Out 2023 Amount Sellers , immediately, the maximum amounts that can be reached by applying the formulas listed in Exhibit 2.2.1(ii) and Exhibit 2.2.1(iii) , assuming a Net Debt equal to zero.

 

14.3.        Specific Causes of Fernando Dismissal. The Parties hereby agree that Fernando will act as Chief Executive Officer of the Company until the end of the Relevant Period and may only be removed from his position in the Company: (a) in the event of Good Cause; or (b) in the event of disability (physical or mental) that removes the conditions to exercise his position in the management of the Company.

 

14.3.1.     In no event of termination of the Main Executive Partners (including Fernando): (i) any Main Executive Partner shall be required to refund any amounts received from buyer or company until the date of its termination; or (ii) any discount, retention or reduction of the amounts due to any Main Executive Member will be made as payment of the Purchase Price.

 

14.3.2.     Although understanding that the absence of any of the Main Executive Partners in the Company's management, pursuant to this Section 15, may potentially impact, directly or indirectly, the Company's prospects and, consequently, elements of the calculation formulas for the Acquisition Price, Buyer, irrevocably and irretrievably, (a) waives any right or claim to demand or question any impact related to the departure of any of the Executive Partners , and (b) undertakes not to question such fact (much less eventual impacts) in any way, under any claim or pretext or in any sphere.

 

14.4.        Fernando's performance at Zenvia Inc. The Parties agree that: (a) during the Relevant Period, Fernando shall be elected to Zenvia Inc.'s executive committees, as well as (b) for the period of up to 4 (four) years from the Closing Date and as long as Fernando holds a stake equal to or greater than 2% (two percent) of Zenvia Inc.'s Capital . Fernando will be elected (and shall have the right to remain during the period in question, being re-elected as necessary) as a full member of the Board of Directors of Zenvia Inc.; always observed, in Fernando's performance, in any of the cases (a) and (b) the rules applicable to conflicts of interest applicable to Zenvia Inc.

 

 

 

 

15.          DISPUTE RESOLUTION

 

15.1.        Brazilian Law. This Agreement shall be governed by, and construed in accordance with, the laws of the Federative Republic of Brazil, which shall apply to the merits of the arbitration provided for herein.

 

15.2.        Arbitration Chamber. The Parties (including, where used in this Section 15, Consenting Intervening Parties and Zenvia Inc.) agree that, with the exception of the net, certain and enforceable payment obligations, comprising judicial enforcement, any and all disputes, disputes, disputes, doubts, or controversy arising out of or related directly or indirectly to the existence, validity, interpretation, termination or termination of this Agreement and the other Transaction Documents , as well as their respective Exhibits ("Conflict") shall be required, exclusively and definitively resolved by arbitration in accordance with the Arbitration Rules ("Rules") of the Arbitration and Mediation Center of the Brazil-Canada Chamber of Commerce (CAM-CCBC) ("Arbitration Chamber"), which shall be responsible for the administration of the arbitration. Arbitration shall be governed by the Rules in force at the time the arbitration request is filed with the Arbitration Chamber.

 

15.3.        Arbitral Tribunal. The Arbitral Tribunal shall be composed of three (3) arbitrators ("Arbitral Tribunal"), and the choice of arbitrators shall not be restricted to the arbitration panel of the Arbitration Chamber. An arbitrator shall be appointed by the arbitrator(s), another arbitrator shall be appointed by the requested arbitrator(s), and the third arbitrator, who shall be the president of the Arbitral Tribunal, shall be appointed by the two arbitrators appointed by the parties in accordance with the Rules. If either party does not appoint an arbitrator, or if the two arbitrators chosen by the Parties do not appoint the third arbitrator within the prescribed period, the missing arbitrator(s) nomination shall be made by the President of the Arbitration Chamber. The same procedure shall apply in the event that any refusal, dispute, doubt or lack of understanding with respect to the nomination, choice or replacement of the members of the Arbitral Tribunal will be resolved by the Arbitration Chamber in accordance with the Rules. Arbitrators may be chosen from outside the Arbitration Chamber's list of arbitrators.

 

15.3.1.     The proceedings provided in this Clause shall also be applied to cases of replacement of arbitrators.

 

15.4.        Impediments. In addition to the impediments provided for in the Brazilian Rules and legislation, no arbitrator designated in accordance with this arbitration clause may be an official, representative or former employee of either Party.

 

15.5.        Arbitration and Language. The head office of the arbitration will be the City of São Paulo, State of São Paulo, Brazil, where the arbitral award will be rendered, and the arbitration will be conducted in Portuguese. The Arbitral Tribunal may, on a basis, and after consulting the parties, designate the performance of specific acts in other locations.

 

15.6.        No Judgement by Equity. The Arbitral Tribunal will adjudicate any Disputes based solely on the right and never on equity.

 

 

 

 

15.7.        Confidentiality. The Parties undertake not to disclose (and not to allow disclosure of) any information of which they become aware of and any documents submitted in arbitration, which are not otherwise in the public domain, any evidence and materials produced in the arbitration and any decisions given in arbitration, unless and to the extent that (a) the duty to disclose such information swerves from the law; (b) disclosure of such information is required by a governmental authority or determined by the judiciary; or (c) such information becomes public by any other means unrelated to disclosure by the Parties or their affiliates. Any and all disputes relating to the obligation of confidentiality shall be resolved by the Arbitral Tribunal in a final and binding manner.

 

15.8.        Default Judgement Arbitration proceedings shall continue even in the absence of one of the Parties, as provided for in the Rules.

 

15.9.        Final and Binding Judgement. The arbitral award shall be final and binding on the parties to the arbitration and shall not be subject to judicial approval or appeal of any kind, according to the exercise of good faith by one of the Parties to the request (a) to the Arbitral Tribunal, correction of material error or clarification of obscurity, doubt, contradiction or omission of the Arbitral Tribunal, pursuant to the Rules; and/or (b) to the Judiciary, of the decree of nullity of the arbitral award, in the strict terms of Article 32 of the Arbitration Law. The arbitral award may be enforced before any judicial authority that has jurisdiction over the parties and/or their assets.

 

15.10.      Costs, Expenses, Fees. The costs, expenses and fees incurred in the arbitration shall also be divided between the parties until the final judgment is delivered by the Arbitral Tribunal. The arbitral award shall define which party shall bear, or to what extent each party shall bear, the costs, including (a) the fees and any other amount due, paid or reimbursed to the Arbitration Chamber; (b) fees and any other amount due, paid or reimbursed to arbitrators, including fees; (c) fees and any other amount due, paid or reimbursed to experts, translators, interpreters, stenographers and other assistants, possibly indicated by the Arbitration Chamber or the Arbitral Tribunal; (d) attorneys' fees that have been spent by the parties during the arbitration and provided that they are reasonable; (e) fees incurred by the parties with technical assistants, experts and other expenses necessary for their representation; and (f) fine and/or compensation for possible litigation in bad faith. The Arbitral Tribunal shall not have jurisdiction to impose attorneys' fees due to loss of action.

 

15.11.      Exceptional State Jurisdiction. The Parties are fully aware of all the terms and effects of the arbitration clause herein, and irrevocably agree that arbitration is the only way to settle any disputes arising out of or relating to this Agreement. Without prejudice to the validity of the arbitration agreement, however, the Parties elect, with the exclusion of any others, the jurisdiction of the District of São Paulo, State of São Paulo, Brazil, for the exclusive purposes of: (a) obtaining urgent reliefs; and (b) exercise, in good faith, of an application for the decree of nullity of the arbitral award, pursuant to Article 32 of the Arbitration Law. Any urgent measure granted by the Judiciary shall be promptly notified by the party that requested such a measure to the Arbitration Chamber. The Arbitral Tribunal, once constituted, may review, maintain or revoke the measures granted by the Judiciary. After the constitution of the Arbitral Tribunal, precautionary measures or other measures shall be requested from the Arbitral Tribunal.

 

15.12.      Consolidation. If two or more disputes arise with respect to this Agreement and/or any other Transaction Document, its resolution may occur through a single arbitration proceeding. Prior to the constitution of the Arbitral Tribunal, it will be up to the Arbitration Chamber to consolidate such disputes into a single arbitration proceeding, in accordance with the Rules. After the constitution of the Arbitral Tribunal, in order to facilitate the resolution of related disputes, the Arbitral Tribunal may, at the request of one of the parties, consolidate the arbitration procedure with any other outstanding arbitration proceedings involving the resolution of disputes arising out of this Agreement and/or other Transaction Document. The Arbitral Tribunal shall consolidate the proceedings provided that (a) the proceedings involve the same parties; (b) there are common issues of fact and/or law between them; and (c) consolidation in these circumstances does not result in losses arising from unjustified Defaults in the settlement of disputes. The jurisdiction to determine the consolidation of proceedings and conduct the consolidated procedure shall be of the first arbitral tribunal constituted. The consolidation decision will be final and binding on all parties involved in disputes and arbitration proceedings subject to the consolidation order.

 

 

 

 

15.13.      12.14.     Binding of the Intervening Consenting Parties and Zenvia Inc. to arbitration. The Consenting Intervening Parties and Zenvia Inc.is expressly bound by this arbitration clause for all purposes of law.

 

16.          TERM AND TERMINATION

 

16.1.        Term. This Agreement shall be effective from the date of its signature and will remain valid and effective until your object is completed.

 

16.2.        Termination. Until Closing occurs, this Agreement may be terminated or terminated, as per:

 

(i) by mutual agreement between the Parties, in accordance with clause 16.3(i);

 

(ii) unilaterally by Sellers if Buyer does not deliver the Bank Guarantee or makes payment of the Down Payment within the terms set forth in Clause 2.4;

 

(iii) unilaterally by either Party, if the Closing does not occur by the Second Deadline, being certain, however, that if the non-realization of the Closing until the Second Deadline was caused solely by the timely non-satisfaction, by the Sellers, from any of "Suspensive Conditions to Closing by Buyer", as exhaustively listed in Clause 6.2 ("No Closing By Non-Compliance of PC by Sellers") , the right of Sellers to terminate this Agreement based on this item (iii) shall be conditional on effective return of the Down Payment value to the Buyer, as detailed in Clause 15.3(iii) below.

 

(iv) unilaterally and at any time by the innocent party, in case of non-compliance with this Agreement, provided that, notified to the defaulting Party of its default, such defaulting Party has not complied with the non-compliance within thirty (30) days of receipt of the Notice .

 

16.3.        Consequences of Termination.

 

(i)            If this Agreement is terminated pursuant to Clause 16.2(i) above, the Parties shall jointly define the treatment of Down Payment, and no amount, fine, reimbursement of expenses or indemnification shall be due by either Party to any of the others, unless otherwise agreed.

 

(ii)           If this Agreement is terminated pursuant to Clause 16.2(ii)  above, Buyer shall indemnify Sellers for any Losses suffered pursuant to clause XIII above.

 

 

 

 

(iii)          If this Agreement is terminated pursuant to Clause 16.2 (iii) , the following situations may occur:

 

(a) If the Closing has not occurred due to Non-Compliance with CP by Sellers up to the Second Deadline (i.e., unless the non-satisfaction of one of "Suspensive Conditions for Closing by Buyer ", as exhaustively listed in Clause 6.2, was the only reason for the non-realization of the Closing until the Second Deadline), either Party may terminate this Agreement and the Sellers will be entitled to the Break-Up pursuant to Clause 7.5 above.

 

(b) in case of Non-Closing for Non-Compliance of PC by Sellers (i.e., if the non-satisfaction of one of " Suspensive Conditions for Closing by Buyer ", as exhaustively listed in Clause 6.2, was the only reason for not performing the Closing until the Second Deadline) So:

 

(1) Sellers may only terminate the Agreement by return of the Buyer Down Payment Value , duly adjusted by the IPCA from the date of its payment until the date of its effective return to the Buyer(excluding any amounts received by the Company as a fine and interest due to possible Default in the delivery of the Bank Guarantee or payment of the Down Payment, which will not need to be refunded by Company). In order to avoid any doubts, and unless the termination is in accordance with item (c) below: (1) the Sellers and the Company shall have no deadline to make return of the value of the Down Payment to buyer and, consequently, terminate this Agreement; and (2) and until the Down Payment is returned to Buyer, Sellers and the Company shall remain bound by this Agreement, and the provisions of clause 7.2.1.1 shall apply; and

 

(2) Buyer may terminate the Agreement and, in this case, Sellers or the Company shall return the Down Payment, duly adjusted by IPCA as from the date of its payment until the date of its actual refund to Buyer, within ninety (90) days as from the receipt of Buyer’s notice establishing its interest of terminating the agreement. If the Down Payment is not returned within said term, Sellers shall be subject, in addition to Adjustment by IPCA, to interest for late payment of [*****], and [*****] fine on the adjusted amount.

 

(iv)         If this Agreement is terminated pursuant to clause 16.2 (iv)  above (and, except to the extent that the matter is already dealt with in clause 16.2 (ii)  or (iii)  , which shall always prevail), the defaulting Party shall indemnify the Indemnified Party for losses suffered , pursuant to Section 13 above.

 

16.3.1. In order to avoid any doubts, the Sellers will be automatically entitled to the Break-Up Fee, only in the hypotheses of Clause 16.3 (ii), (iii )(a) and (iv) (in the latter case, in case of non-compliance with obligations by Buyer).

 

16.4.        Survival. The following clauses will survive the termination of this Agreement: Clause 11(Confidentiality), Clause 15 (Dispute Resolution), Clause 17(Miscellaneous) and Clause 13 (Indemnification), in the latter case, only with regard to acts, events or omissions occurring prior to the end date of this Agreement.

 

 

 

 

XVII.      MISCELLANEOUS

 

17.1.        Notices. All notices, consents, requests and other communications provided for in this Agreement shall only be deemed valid and effective if they comply with written form and are sent by letter with acknowledged receipt or protocol, or e-mail with proof of receipt, and shall be sent to the Parties at the following addresses:

 

(i)            To Sellers:

 

At. Fernando Jorge Wosniak Steler

Address: [XXXXX]

Telephone: [XXXXX]

E-mail: [XXXXX]

 

(ii)           If for Buyer (and/or its successors and assigns):

 

Name: Zenvia Mobile Serviços Digitais Ltda., to the attention of Legal Manager and M&A Manager.

Address: Avenida Paulista, 2300, 18º andar, cjto 182 e 184, Bela Vista

ZIP Code 01310-300, São Paulo-SP

Email: [XXXXX]

 

With a copy to:

 

(provided that the receipt of Notice by such recipients is intended to inform only, and will not be considered for Notice purposes).

 

Name: Pinheiro Neto Advogados, in the care of [XXXXX]

[XXXXX]

 

(iii)          If for the Company (and/or its successors and assigns):

 

Name: Fernando Jorge Wosniak Steler

Address: [XXXXX]

Telephone: [XXXXX]

Email: [XXXXX]

 

(iv)          to Vanderlei:

 

Name: Vanderlei Calejon / Heitor Sakoda / Cleber Calejon

Address: Rua Pequetita, n° 215, 7° andar, Parte, Vila Olímpia,

São Paulo, SP – ZIP Code 04552-060

Emails: [XXXXX]

 

(v)           to Inovabra:

 

Name: Eduardo Gomes Kupper

Address: Avenida Presidente Juscelino Kubitschek, nº 1.309 – 10º andar - Private Equity, Vila Nova

Conceição, São Paulo – SP - CEP: 04543-011

E-mails: [XXXXX]

 

 

 

 

 

17.1.1. The change of addressee, address or any of the information indicated above by a Party must be promptly communicated in writing to the other Party, as provided herein; if said communication is no longer made, any notice or communication delivered to the addressees or at the addresses indicated above will be deemed to have been duly made and received.

 

17.1.2. Where it is a jointly assigned right or obligation to Sellers, Seller in Charge shall have general powers to send and receive Notices on behalf of all Sellers under this Agreement. For the purposes of this Clause, the Seller in Charge is hereby appointed by each of the Sellers as its faithful attorney, empowered to receive and send, on behalf of such Seller, any notice, notice, court service or notice of arbitration, or communication of any nature provided for in or relating to this Agreement. The mandate provided for in this Clause is granted irrevocable and irrevocable, as a condition of the business, in the form of Article 684 and the sole paragraph of Article 686 of the Civil Code. The Sellers may replace the Seller in Charge by written communication to the Company and the Buyer with the indication of the new Seller(s) In Charge

 

17.2.     Irrevocability. This Agreement is irrevocable and irrevocable, and the obligations herein assumed by the Parties also oblige their successors in any way.

 

17.3.    Full Agreement. Any declaration by any court of nullity or the ineffectiveness of any of the covenants contained in this Articles of Incorporation shall not affect the validity and effectiveness of the others, which shall be fully complied with, obliging the PARTNERS to do their best to adjust, validly to obtain the same effects as the agreement that has been canceled or has become ineffective.

 

17.4.    Exhibits and Addenda. This Agreement and its Exhibits constitute the entire understandings and agreements of the Parties with respect to the matters herein. This Agreement and its Exhibits may only be amended or added by means of a written instrument signed by the Parties. In the event of a conflict between this Agreement and its Exhibits, the provisions of the Agreement shall prevail.

 

17.5.    Novation. The failure or Default of any of the PARTNERS in exercising any of their rights in this Agreement shall not be considered as a waiver or novation and shall not affect the subsequent exercise of such right. Any waiver shall take effect only if specifically granted and in writing.

 

17.6.    Assignment. Except for the assignment to Vanderlei of the rights and obligations of 4TI under this Agreement, it is denied the assignment of any of the rights and obligations of the Sellers agreed upon in this Agreement, without the prior and express written consent of Buyer. It is also denied the assignment of any of Buyer's rights and obligations under this Agreement, without the prior and express written consent of Sellers. In case of assignments made as provided in this Clause, assignors and assignees shall remain jointly and severally liable for all obligations hereunder.

 

17.7.    Capacity. Each Party signs this Agreement and declares (a) to be aware of the obligations arising from this Agreement and the legislation governing this Agreement; (b) have been assisted by lawyers; (c) that the terms and conditions of this Agreement have all been negotiated in detail and commutatively are regarded as fair and proportionate; (d) that, by virtue of their day-to-day activities in the management of their respective companies, have full understanding of all the terms and conditions of this Agreement; and (e) is not subject to any exceptional economic or financial necessity and fully assumes the charges and risks inherent in this Agreement, including, without limitation, the indemnification obligation set out in Section 13 of this Agreement.

 

 

 

17.8.    Free Stipulation. The Parties acknowledge that the legal agreement entered into through this Agreement has been established by free stipulation between the Parties, so that the terms and provisions set forth herein shall be respected by the Parties. No public policy standard shall be used to benefit a part in a manner other than that agreed herein. The obligations provided herein are exclusively business in nature, and do not represent any obligation or provision of a labor nature.

 

17.9.   Out-of-Court Title and Specific Execution. All obligations under this Agreement are irrevocable and irrevocable and are subject to specific performance. In accordance with the provisions of Section XVI above, any Party has the right to use any legal or extrajudicial action or proceedings to comply with this Agreement and all obligations assumed herein, and either Party shall have the right to seek the defaulting Party in order to (a) the specific performance of the obligations; and/or (b) indemnification for Losses. This Agreement constitutes an out-of-court enforcement order, pursuant to Article 585, item II, of the Brazilian Code of Civil Procedure.

 

17.10.  Liability. This Agreement is irrevocably and irretrievably signed and binds the Parties and their successors in any way.

 

17.11.  Consenting Intervening Parties and Intervening Guarantor. The Consenting Intervening Parties -Notices declare that they are fully aware of the Agreement and expressly agree to all of its terms and conditions, as well as to all obligations assumed by them in this Agreement.

 

17.12.  Zenvia Inc.’s Adhesion, Joint Liability and Guarantee. Buyer is committed to making Zenvia Inc. adheres to this Agreement on the Closing Date: (i) assuming its obligations pursuant to this Contract, and making every declaration and guarantees established in the 9.2 Clause related to itself (as the Buyer); and (ii) as guarantor, in solidarity, without benefit of order, for the fulfillment of any and all obligations assumed by Buyer. For the avoidance of doubt, Zenvia Inc. buyer, as debtor and principal payer, shall be guaranteed to Sellers and the Indemnified Parties of Sellers, with waiver of the benefits provided for in Articles 333, paragraph, 364, 366, 821, 824, 827, 829, sole paragraph, 830, 831, 834, 835, 837, 838 and 839 of the Civil Code and articles 130 and 794 of the Code of Civil Procedure (and any successor or substitute provisions of such articles).

 

17.13.  Digital Signature. The Parties agree and agree that the conclusion of this Agreement may be made in accordance with the provisions of Decree No. 10.278 of March 18, 2020, and the proof of authorship and integrity will be made through DocuSign, being considered valid only electronic signatures made by means of digital certificate validated according to the Brazilian Public Key Infrastructure ICP-Brazil, pursuant to Provisional Measure No. 2.200-2/2001.

 

17.14.  Authorization for Heading. (a) Each Seller (including the Company) authorize Maria Carolina Sanzovo de Oliveira to execute the Agreement on their behalf; (b) Buyer authorizes Letícia de Alencar Machado to execute the Agreement on its behalf and (c) the Consenting Intervening Parties authorize Vanderlei or Cleber to execute this Agreement on their behalf

 

17.15.  Pandemic. The Parties are aware of the extraordinary situation experienced, arising from the pandemic of COVID-19, declared by the World Health Organization on March 11, 2020, and its present and future impacts, so that none of them may frame such event as justification for possible default or termination of this Agreement, claim this extraordinary situation as a fortuitous event, force greater , the fact that the prince or claims excessive burden in the context of the obligations hereunder, seeking the revision or termination of this Agreement, and hereby assume sums of any and all risks arising from such event and immediately waive any remedies to justify the fulfillment of obligations.

 

In witness whereof, the parties sign this Agreement at in four (04) counterparts of equal contents in the presence of the 2 (two) undersigned witnesses

 

 

 

Sao Paulo, March 19, 2021.

 

/s/ Cassio Bobsin, CEO  
/s/ Renato Friedrich, CFO  
Zenvia Mobile Serviços Digitais S.A.  
   
/s/ Fernando Jorge Wosniak Steler  
Fernando Jorge Wosniak Steler  
   
/s/ Rafael Padilha de Lima Costa, Officer  
/s/ Manuel Ferrao de Souza, Managing Officer  
Fundo de Investimento em Participações Multiestratégia Inovabra I - Investimento no Exterior  
   
/s/ Raul Marcelo Wosniak Steler  
Raul Marcelo Wosniak Steler  
   
/s/ Wagner Gomes Carvalho  
Wagner Gomes Carvalho  
   
/s/ Luiz Carlos Capelati  
Luiz Carlos Capelati  
   
/s/ Gustavo Gonçalves Candian  
Gustavo Gonçalves Candian  
   
/s/ Cristhiano Stefani Faé  
Cristhiano Stefani Faé  
   
/s/ Leandro Piga  
Leandro Piga  
   
/s/ Maria Carolina Sanzovo de Oliveira  
Maria Carolina Sanzovo de Oliveira  
   
/s/ João Carlos Ribas Pereira  
João Carlos Ribas Pereira  
   
/s/ Fernando Mingrone Artuzzi  
Fernando Mingrone Artuzzi  
   
/s/ Cristhiano Stefani Faé, Partner  
Star4 Participações e Consultoria em Gestão Empresarial  
   
/s/ Fernando Jorge Wosniak Steler, CEO  
One to One Engine Desenvolvimento e Licenciamento de Sistemas de Informática S.A.  
   
/s/ Vanderlei Arcanjo Carnielo Calejon  
Vanderlei Arcanjo Carnielo Calejon  
   
/s/ Heitor Sakoda  
Heitor Sakoda  
   
/s/ Cleber Augusto Calejon  
Cleber Augusto Calejon  
   
/s/ Vanderlei Arcanjo Carnielo Calejon, Partner  
/s/ Cleber Augusto Calejon, Partner  
4 TI Participações Ltda  
   
WITNESSES:  
/s/ Caio Figueiredo  
Identity: [XXXXX]  
   
/s/ Eduardo Gomes Kupper  
Identity: [XXXXX]  

 

 

Exhibit 10.10

 

CERTAIN INFORMATION IN THIS EXHIBIT, MARKED BY [****], HAS BEEN EXCLUDED. SUCH EXCLUDED INFORMATION IS NOT MATERIAL AND IS THE TYPE THAT THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL.

 

CERTAIN PERSONAL INFORMATION IN THIS EXHIBIT, MARKED BY [XXXXX] HAS BEEN EXCLUDED.

 

AGREEMENT FOR THE PURCHASE AND SALE OF EQUITY INTEREST AND OTHER COVENANTS

 

BETWEEN

ON ONE SIDE, AS A BUYER,

 

Zenvia Mobile Serviços Digitais S.A.

 

ON THE OTHER HAND, AS SELLERS,

 

VANDERLEI ARCHANGEL CARNIELO CALEJON

 

HEITOR SAKODA

 

CLEBER AUGUSTO CALEJON

 

and, as a consenting intervening parties:

 

4 TI PARTICIPAÇÕES LTDA

 

ONE TO ONE ENGINE DESENVOLVIMENTO E LICENCIAMENTO DE SISTEMAS DE
INFORMÁTICA S.A. — DIRECT ONE

 

FERNANDO JORGE WOSNIAK STELER

 

 

This Agreement for the Purchase and Sale of Equity Interest and Other Covenants (together with their respective Exhibits, this "Agreement") is entered into in 18 March 2021, by and between the following Parties:

 

on the one hand as a buyer

 

(a)       ZENVIA MOBILE SERVIÇOS DIGITAIS S.A., a closed joint stock company, headquartered at Av. Carlos Gomes, n° 300, seventh floor, Bairro Auxiliadora, in the city of Porto Alegre, State of Rio Grande do Sul, registered with CNPJ/ME No. 14.096.190/0001-05, represented herein in accordance with its organizational acts ("Zenvia" or "Buyer");

 

on the other hand, as Sellers:

 

(b)       VANDERLEI ARCANJO CARNIELO CALEJON, Brazilian, married under the partial community property regime, businessman, holder of Identity Card RG No. [XXXXX] and CPF no. [XXXXX], with a business address in the City of São Paulo, State of São Paulo, at Rua Pequetita, n° 215, 7° andar, Parte, Vila Olímpia - CEP 04552-060 (Vanderlei);

 

(c)       HEITOR SAKODA, married under the partial community property regime, businessman, holder of identity card RG No. [XXXXX] and CPF No. [XXXXX], with business address in the City of São Paulo, State of São Paulo, at Rua Pequetita, n° 215, 7° andar, Parte, Vila Olimpia - CEP 04552-060 (Heitor)

 

(d)       CLEBER AUGUSTO CALEJON, Brazilian born [XXXXX], single, businessman, holder of identity card RG No. [XXXXX] and CPF No. [XXXXX], with business address in the City of São Paulo, State of São Paulo, at Rua Pequetita, n° 215, 7° andar, Parte, Vila Olimpia - CEP 04552-060 (Cleber, and, together with Vanderlei, Heitor and Cleber, "Sellers").

 

(Buyer and Sellers are collectively referred to as " Parties" and each of them are individually and indistinctly referred to as "Party")

 

and, also, as part of the consenting intervening parties,

 

(e)        4 TI PARTICIPAÇÕES LTDA., a company incorporated in accordance with the laws of Brazil, established at Rua Pequetita, 415, 70 floor (part), Vila Olímpia, ZIP Code 04552-060, in the City of São Paulo, State of São Paulo, registered with the CNPJ/MF under no. 21.935.097/0001-02, herein represented in accordance with its Articles of Organization (4TI); and

 

(f)        ONE TO ONE ENGINE DEVELOPMENT AND LICENSING OF SYSTEMS OF INFORMÁTICA S.A. — DIRECT ONE, headquartered at Rua Luís Correia de Melo, no 92, Conj. 281 and 282, Edifício Urbanity Corporate, Bairro Santo Amaro, São Paulo/SP, ZIP Code: 04726-220, registered with CNPJ/ME under No. 15.435.155/0001-28, herein represented in accordance with its Articles of Incorporation (D1); and

 

(g)       FERNANDO JORGE WOSNIAK STELER, Brazilian, married, business administrator, bearer of ID Card RG No. [XXXXX], registered in the CPF under the no. [XXXXX], resident and domiciled at [XXXXX] (Fernando);

 

 

WHEREAS:

 

I. The Company is the legitimate owner and holder of 373,068 (three hundred and seventy-three thousand sixty-eight) shares issued by D1, representing 29.27% (twenty-nine point twenty-seven percent) of D1's share capital, free and clear of any Encumbrance (" D1 Shares-4TI"), which is its main asset;

 

II. At this date, Buyer has entered into, with D1's shareholders, a Contract for the Purchase and Sale of Equity Interest and Other Covenants, under which Buyer has undertaken to acquire, subject to compliance with certain preceding conditions, from other D1 Shareholders, 904,655 (nine hundred and four thousand, six hundred and fifty-five) shares, representing 70.73% (seventy point seventy-three percent) of the share capital of D1 ("D1 Shares-Other Shareholders") ("SPA D1");

 

III. Subject to compliance with the Suspensive Conditions for Closing, Buyer wishes to acquire from Sellers, partially through purchase and sale, partially via Flip, and Sellers wish to dispose equity interest representing Company's total and voting share capital, free and clear of any Encumbrance ("Acquisition") to Buyer;

 

IV. Upon completion of the Acquisition, Buyer shall be the lawful owner and holder, directly or indirectly, of (I) the shares representing 100% (one hundred percent) of the Company's total and voting share capital, (II) shares representing 100% (one hundred percent) of D1's total and voting share capital (considering, together with D1-4TI Shares, the D1-Other Shareholders' Shares to be acquired by Purchaser , pursuant to SPA D1); And
     
  V. The Parties wish to govern the terms and conditions related to the Acquisition.

 

IN VIEW OF THE FOREGOING the Parties have decided, with the intervention of the Consenting Intervening Parties, in consideration of the mutual promises and representations herein, to enter into this Agreement, which shall be governed by the following clauses and conditions:

 

1.             SETTINGS; INTERPRETATION

 

1.1.          Defined Terms. Without prejudice to the other definitions used in this Agreement, the expressions below, in singular or plural, that are not defined in this instrument and that will have the meaning attributed to them in SPA D1, shall have the following meanings:

 

Shares       means all shares issued, outstanding and in treasury, representing D1's entire capital.

 

 

Affiliate means, with respect to any Person, any other Person who, directly or indirectly, Controls, is Controlled by, or is under common Control with, the former.
   
Authority Government means any direct and indirect public administration entity of any of the powers (executive, legislative and judiciary) that has jurisdiction over the Parties, including (i) the Union, states, the Federal District and municipalities; (ii) any municipality, public association, agency, department, division, commission, council, representation or body of such legal entity under domestic public law, including mixed-economy companies; and/or (iii) any court, court or judicial, administrative or arbitral body.
   
Cash In relation to the Company and its Subsidiaries, in a consolidated manner, the amount equivalent to the sum of the cash, including, but not limited to, bank deposits, short-term financial investments, that is, financial investments with a availability term up to four (4) months from the date of said investment and other assets with immediate liquidity, as set out in Brazilian GAAP , free of any Encumbrance.
   
Working Capital means, in relation to the Company, in a consolidated manner, without duplication and in accordance with Brazilian GAAP, difference between (i) current assets (including receivables adjusted by the provision for doubtful accounts), except Cash, and (ii) current liabilities (including taxes and labor liabilities payable), except Debt.
   
Control (including related, such as "controlling", "controlled" _ _controlled by" and "under common control with"), when employed in relation to a Person, means the direct or indirect ownership of rights, of partner or arising from any agreement, which ensure (i) predominance in resolutions at any general meetings of the Person concerned; and (ii) the power to elect or appoint the majority of the directors and directors of the Person in question.
   
Ordinary Course or Ordinary Course of Business means, in relation to the Company and its Subsidiaries, the set of activities that, due their nature, purpose or form of execution, are necessary for the achievement of its social object or its business, through the conduct of their respective activities at their levels and standards, which have been carried out on a recurring basis, even if not uninterrupted, and in a consistent manner, scope and magnitude with past practices of the Company and its Subsidiaries and is related to the day-to-day operations of the Company, observed that activities carried out in response to COVID-19 PANDEMIC will not be considered as acts outside the Normal Course.

 

 

Statements and Fundamental Guarantees of Sellers Means the set of statements and guarantees from Sellers specifically with respect to Clauses 8.1(i) (Organization and Capacity); 8.1(ii) (Binding Effect); 8.1(iii) (Non-Existence of Violation Consents); 8.1(iv) (Constitutive Acts, Share Capital and Quotas); 8.1(v) (Ownership); 8.1(vi) (Right of Preference); and 8.1(vii) (Absence of Disputes On Actions).
   
Base Financial Statements means Company’s Audited Financial Statements, in accordance with Brazilian GAAP, following the concepts and accounting standards of the Company and Subsidiaries, referring to the base date November 30, 2020.
   
Business Day means any day except Saturdays, Sundays or other days when commercial banks are authorized by law to remain closed in the City of São Paulo, State of São Paulo, Brazil and the City of Porto Alegre, State of Rio Grande do Sul, Brazil.
 
Intellectual Property Rights means all rights in intellectual property that may be protected, including, but not limited to, all rights in the Software, the Platforms, trademarks, trademark registration applications, trade names, trade secrets, patents, patent applications, copyrights, domain names, image, name and voice rights contained in websites, mobile applications, institutional and advertising materials and other intellectual property rights that may be protected under applicable law.
   
Operation Documents means this Agreement, SPA D1 and all its respective Exhibits.

 

 

Relevant Adverse Effect means the occurrence of any of the following substantial adverse changes, with respect to the business, assets or operating results of the Company and its Subsidiaries, compared to the situation on the date of execution of this Agreement: (i) the application for self-bankruptcy, judicial or extrajudicial recovery, liquidation or dissolution, (ii) adjudication of bankruptcy, (iii) the prohibition or impediment to operate or develop its activities in the Ordinary Course; (iv) law enforcement, that prevents the performance of the main Corporate activities and businesses, as they are currently carried out or (v) receipt of one or more Notices from customers requiring termination of contracts, payment of fines and/or any type of financial redress involving a Loss or loss of future revenue (during the fiscal year in question) in individual or aggregate value equal to or greater than one million Brazilian Reais (BRL 1,000,000.00).

 

 

  For the purposes of this Agreement, the following events shall not be deemed as Relevant Adverse Effect: (A) changes to applicable law or Brazilian GAAP (including government orders to suspend all or part of activities); (B) change in global or local economic or political conditions, or in financial market or capital market conditions, whether in Brazil or abroad; (C) the onset or continuation of a natural disaster, war, political unrest, acts of terrorism (or similar situations), pandemics (including the COVID-19 Pandemic) or any other calamity; or (D) the disclosure of this Agreement, the performance of any act provided herein or necessary for its fulfillment
   
Indebtednes means, in relation to the Company and its Subsidiaries, in a consolidated manner, without duplication: (i) all long- and short-term financial debts, overdue or outstanding; (ii) all other obligations to pay that do not come from financial contracts and that are overdue and unpaid; (iii) all debts reagreed, including installments of Taxes agreed under programs promoted by government authority; (iv) any dividends, interest on shareholders’ equity, other cash benefits and/or any other form of distribution of profits, in cash or in kind declared and unpaid, and which are not accounted for in current liabilities; (v) all amounts due as a result of final and unappealable judgments; (vi) all values arising from anticipation of receivables and early revenues; (vii) all amounts due relating to acquisitions made by the Company, including earn-outs or any type of obligation undertaken by means of agreements of such acquisitions; And (viii) any and all amounts adhering to the above
   
IPCA means the Broad National Consumer Price Index released by the National Institute of Geography and Statistics and, in its absence, another official index that will replace it.
   
Zenvia IPO Performance of initial primary and/or secondary public offering of shares pertaining to Zenvia Inc., that results in listing of shares on any stock exchange, including outside Brazil.
   
Law

means any law, statute, regulation, official letter, decision (judicial, administrative or arbitral), judgment, order (even in case of injunctions or interlocutory relief) or requirement issued, enacted, executed or imposed by any Governmental Authority, provided that they are in force.

   
Arbitration Act means Law No. 9.307 of September 23, 1996, as amended.

 

 

Anti-Corruption Laws mean the Laws relating to the prohibition of acts of corruption, bribery and money laundering enacted by any Governmental Authority, including Laws 12.846/13, 9.613/98, 8.429/92 and the relevant provisions of Decree-Law 2.848/401
   
Onus means any and all encumbrance, charges , pledges or any other type of judicial or administrative constriction, pledges, mortgages, collateral, usufruct, right of guarantee, assignment or fiduciary sale or with title retention, lease, sublease, licensing, servitude, options, agreement for the exercise of voting, right of first offer, right of sale together, obligation of disposal together, right of acquisition, right of issue, or any other constrictions or restrictions of any nature related to them, except for any Charges applicable as a result of Law (other than judgment or judicial, administrative or arbitral decision binding the Person in question) or this Agreement. or other Transaction Documents.
   
Operation means (i) the transactions provided for in SPA D1; and (i) the transactions set out in this Agreement.
   
Related Parties means, (i) with respect to any natural Person, (a) their spouse, partner in a stable or similar union, and relative up to the 2nd (second) degree of consanguinity, ascending and descending in a straight line and to any degree, natural or civil (adopted), and testamentary heirs; or (b) any Legal Entity that is an Affiliate of such Person or of which said Person has significant influence (as defined by Brazilian GAAP); and (ii) with respect to any Legal Entity (a) any other Person who is an Affiliate of such Person; or (b) any shareholder or manager who owns more than twenty-five percent (25%) of the Capital  of that Person or persons referred to in item (ii)(a) of such Person on the date on which the concept is applied.
   
Loss means, without duplication, all losses, obligations, pecuniary or convertible in cash, contingencies, direct damages, costs and expenses, including reasonable attorneys, accountants and experts fees and expenses, costs with administrative and/or judicial and/or arbitrated fees, including deposits and guarantees required to allow a defense to be presented and properly conducted, interest, fines, contract penalties, or charges of any nature, or the impossibility of using the Platforms solely due to the proven absence of ownership of Company and its Subsidiaries Own IP Rights, being understood that: (i) except in the event of Losses arising from the impossibility of using the Platforms due exclusively to the proven absence of ownership of Company and its Subsidiaries Own IP Rights, a Loss shall be deemed to have been effectively incurred upon disbursing the cash of an Indemnifiable Party;

 

 

Shares means all shares issued, outstanding and in treasury, representing the entire share capital of the Company.
   
Subsidiaries It means, in relation to a company, companies that have been or will be acquired by the Company and become its Subsidiaries.
   
Third-Parties means, with respect to any Person, any other Person other than a Party, Consenting Intervening Party, Zenvia Inc. or one of its Related Parties.
   
Taxes means any direct or indirect taxes, fees, taxes, social or social security contributions, any other contributions payable to any Government Authority (including interest, fines, penalties, monetary adjustments and additions assessed with respect to such taxes), including, without limitation, taxes on revenue, taxes subject to withholding tax, taxes on financial transactions, indirect taxes, ad valorem, taxes on added value, amounts due to social security , social contributions, payroll contribution, property and real estate taxes, and other taxes of any kind or nature, including contributions related to the FGTS
   
Zenvia Inc Zenvia's parent company that will be the vehicle of the Zenvia IPO.

 

1.2.       Interpretation. For the purposes of this Agreement and except as provided herein:

 

(i)         The headings and titles of this AGREEMENT are for convenience of reference only and shall not limit or affect the meaning of the clauses, paragraphs or articles to which they apply.

 

(ii)        The terms "inclusive", "including" and other similar terms shall be interpreted as being accompanied by the term "exemplarily" and the phrase "including, but not limited to";

 

(iii)       Where required by the context, the definitions provided for in this Agreement shall apply in both the singular and the plural and the male gender will also contain female gender and vice versa, without change of meaning;

 

(iv)       References to any document or other instruments, or legal or regulatory provisions, include all its amendments, substitutions and consolidations and their supplements as existing on this date, unless expressly otherwise provided;

 

(v)        The expressions "of this instrument" and "herein" and words of similar meaning, such as "here" or "hereto" shall refer to this Agreement as a whole, including its exhibits, and not to any particular Clause or item, being understood that disclosure contained in an exhibit shall be construed as contained in any other exhibit;

 

 

 

(vi)           The expressions "the date of this Agreement", "on this date", "on the same date of this instrument" and expressions of similar meaning shall be deemed to refer to the date entered on signature page of this Agreement;

 

(vii)          Any reference to a Section includes all of its clauses (e.g., "clause 10.1" includes clause 10.1 itself, and all sub-clauses numbered "10.1.x");

 

(viii)         The term "any" and similar terms shall be construed as "any and all" as appropriate;

 

(ix)           Any disclosure made in a representation and warranty or Exhibit or this Agreement shall be deemed to be a disclosure made for the purposes of all Clauses and Exhibits to this Agreement, to the extent that it is reasonably apparent that such disclosure should apply to such other devices, notwithstanding the omission of the specific cross-reference.

 

(x)            All references to Parties include their authorized successors, beneficiaries and assignees; and

 

(xi)           Except as expressly provided for in this Agreement, the counting of deadlines set forth herein will take place on calendar days. The counting of deadlines should occur as provided for in Article 132 of Brazilian Civil Code. Any deadline to expire on a day other than a Business Day will automatically be extended to the next Business Day.

 

II.             ACQUISITION

 

2.1.            Acquisition. Subject to the terms and conditions set forth in this Agreement and other Transaction Documents, (a) Buyer, irrevocable and irrevocably, upon fulfillment or, as the case may be, waiver of the Suspensive Conditions to Closing under Section VI below, undertakes, on the Closing Date, to acquire and receive from Sellers, and (b) each of the Sellers, irrevocably and irrevocably , upon fulfillment or, as the case may be, waiver of the Suspensive Conditions to Closing, are required to sell and deliver to Buyer, on the Closing Date, the Shares, fully paid-up and free and clear from any Encumbrance.

 

2.1.1.        On the Closing Date, Buyer will receive all Shares from Sellers, which will be paid as described below:

 

(i)              Subject to the terms and conditions set forth in this Agreement, Buyer will pay Sellers by 95% of the Shares, on the Closing Date, the total amount resulting from the application of the formula provided for in Exhibit 2.1.1(i), in the proportion highlighted in the same Exhibitand below, as detailed in Clause 3.1 ("Initial Amount Sellers 4TI"), in addition to the Earn-Out Amount 2022 Sellers 4TI, noted that the Initial Amount Sellers 4TI and the Earn-Out Amount 2022 Sellers 4TI will be distributed among Sellers as follows:

 

Seller - Zenvia Shares   Number of Alienated Shares     % of shares in relation to total
share capital 		    % of Initial Amount  
Vanderlei     7.708.401       64,5525 %     67,95000 %
Hector     1.934.190       16.1975 %     17,05000 %
Cleber     1.701.634       14,2500 %     15,00000 %
                         
Total     11.344.225       95,0000 %     100 %

 

 

 

 

(ii)            Subject to the terms and conditions set forth in this Agreement, Purchaser will pay Sellers, on the Payment Date of the Earn-Out Amount 2022 (as defined in Clause 5.2.3 of SPA D1), the total amount resulting from the application of the formula provided for in Exhibit2.1.1(ii), as detailed in Clause 4.1 ("Earn-Out Amount 2022 Sellers 4TI");

 

2.1.2.        Flip. Also on the Closing Date, and also subject to the terms and conditions set forth in this Agreement, immediately after the acquisition of the Shares, Sellers shall contribute to Buyer's share capital ("Increase in Buyer’s Capital"), based on its nominal value (or cost value, whichever is lower), Shares representing 5% of the Company's capital ("Shares - Contribution") , and will receive a certain number of shares issued by Buyer ("Zenvia Brasil Sellers Shares"). Then, Zenvia Inc. will approve an increase in its share capital, to be subscribed and paid in by Sellers (both capital increases being jointly referred to as " Flip "), upon the contribution of all Zenvia Brasil Sellers Shares at the value of their cost and Sellers will receive, in return, a certain number of Class A shares of Zenvia Inc., free and clear of any Encumbrance (except for the Lock-Up provided for in this Agreement) , calculated on the basis of the formula set out in Exhibit2.1.2 ("Zenvia Shares"). The Parties hereby agree that flip will be carried out by contribution of Shares - Contribution directly to capital increase of Zenvia Inc. (without Zenvia Brasil's prior capital increase) if Buyer's advisors conclude, until closing, that this can be done without adverse effects to Zenvia and the Zenvia IPO and give notice to Sellers, with reasonable and sufficient notice to allow the alternative structure to perform the Flip to be carried out.

 

Seller - Zenvia Shares   Number of Shares
Contributed to Flip 		    % of shares in relation to
total share capital 		 
Vanderlei     405.705       3,3975 %
Hector     101,799       0,8925 %
Cleber     89.559       7500  
Total     597.065       5,0000 %

 

2.1.3.        The Parties undertake to perform all acts and to take all necessary measures to ensure that Flip is approved and implemented on the Closing Date, including the acquisition of assessment reports necessary for the operations provided for herein and the approval of all matters required by Law (in particular the Law of jurisdiction applicable to Zenvia Inc.) as part of the Closing.

 

2.1.4.        Trading with Zenvia Shares received by Zenvia Stock Sellers will be subject to a lock-up for the shortest period between (i) 12 (twelve) months from the Closing Date and (ii) the lock-up period to which other Zenvia executives who receive Zenvia Shares in the Zenvia IPO will be subject; provided that the minimum lock-up period and other restrictions on trading imposed by applicable law in the jurisdiction in which the Zenvia IPO takes place (Lock-Up Period ) must be respected. After the Lock-Up Period, Zenvia Shares Sellers should be free to dispose of their Zenvia Shares, committing to Zenvia Inc. to take all measures that may be necessary to enable Zenvia Shares to become freely tradable on stock exchanges where Zenvia's other shares are listed for trading.

 

III.            PAYMENT OF THE INITIAL AMOUNT

 

3.1.           Initial Amount. The Initial Amount will be paid to Sellers in a single installment, in national current, by means of electronic transfers of immediately available funds - TED to bank accounts that may be informed by Sellers reasonably in advance, in the proportions set out in Exhibit2.1.1(i) ("Payment of the Initial Amount").

 

3.2.           Post-Closing Adjustment. The Parties acknowledge that the Initial Amount will be calculated and paid based on an assessment of D1 that took estimated working capital and net debt estimated in consideration, and is therefore subject to post-closing adjustment pursuant to Clauses 4.5 and following of SPA D1 ("Adjustment of Initial Amount") taking into account the percentage of indirect equity interest in D1 held by Sellers. For the purposes of determining the Adjustment of the Initial Amount, the Parties shall observe the same procedures and deadlines provided for in SPA D1, including with respect to the rules provided for in Section VI of SPA D1.

 

 

 

 

3.2.1.         Payment Date of the Initial Amount Adjustment. The Initial Amount Adjustment will be paid on the Payment Date of the Initial Amount Adjustment (as defined in Clause 4.5.3 of SPA D1). For the purposes of payment of the Initial Amount, the Parties shall comply with the same procedures and deadlines provided for in SPA D1 taking into account the percentage of indirect equity interest in D1 held by the Sellers.

 

IV.            PAYMENT OF EARN-OUT 2022

 

4.1.            Earn-Out Amount 2022. The Earn-Out Amount 2022 will be paid to Sellers in a single installment on the Payment Date of the Earn-Out Amount 2022 (as defined in Clause 5.2.3 of SPA D1), in national currency, through electronic transfers of immediately available funds - TED to bank accounts that may be informed by Sellers reasonably in advance, in the proportions highlighted in 2.1.1(ii) ("Payment of the Earn-Out Amount 2022"). For the purposes of the 2022 Earn-Out Amount Payment, the Parties shall observe the same procedures and deadlines set forth in Clause 5.1 and following of SPA D1, including with respect to the rules provided for in Section VI of SPA D1.

 

4.2.            Specifically in discussions on determining and payment of the Earn-Out Amount 2022, Sellers, always represented by Vanderlei, shall also receive all notices, notifications or communications sent by Buyer under SPA D1; and notifications sent by Sellers (as well as notifications sent by Sellers under SPA 4TI) will only be considered valid when signed by the Responsible Seller in conjunction with Vanderlei.

 

V.            APPLICABLE NOTIFICATION PROCEDURES ACQUISITION

 

5.1.           Rules Applicable to Initial Amount Calculations and Earn-Out 2022. Solely for the purposes of any notice concerning the determination and/or payment of the Initial Amount, Initial Amount Adjustment or the Earn-Out Amount 2022 pursuant to Clause 6 of SPA D1, Fernando shall hold general powers to send and receive notices on behalf of all Sellers (who shall be copied only by way of acknowledgement) under this Agreement and other Transaction Documents ("Sellers Representative"), who hereby agree that they shall not be entitled to send another notification or disagree and/or amend such notice, and the procedure provided herein will bind all Sellers for all purposes, being certain that such provision is intended to make the discussions about Earn-Out Amount 2022 between Buyer and the others more efficient, and shall not limit or restrict any right of action of sellers, nor to seek arbitration or state judgment under this instrument to secure rights and resolve disputes.

 

5.2.           Secured Fiduciary Sale. As a guarantee of payment of the Earn-Out Amount 2022, Buyer shall constitute Secured Fiduciary Sale on behalf of Sellers and Sellers defined as such in SPA D1, representing 50% + 1 (fifty percent plus one) shares issued by the Company at any time ("Encumbered Shares"), in accordance with the fiduciary disposal agreement to be entered into between the Parties and Sellers of SPA D1 on the Closing Date (“Secured Fiduciary Sale of Shares”) The Agreement for Fiduciary Sale of Shares must be registered and registered with the Registry Office of Deeds and Documents of the District of São Paulo/SP; and (b) in the registered book of registered shares of the Company.

 

 

 

 

VI.           SUSPENSIVE CONDITIONS

 

6.1.           Suspensive Conditions at Closing. Without prejudice to the provisions of Clauses 6.2 and 6.3 below, the Parties' obligation to perform the acts on Closing is subject to the following Suspensive Conditions ("Suspensive Conditions of the Parties"):

 

(i)             the Closing as provided for in Clause 8.1 of SPA D1; and

 

(ii)            Non-existence of any Law prohibiting, suspending, changing, postponing or limiting, in any way, the performance of operations provided for in this Agreement and its Exhibits or questioning its validity or legitimacy.

 

6.2.           Suspensive Conditions for Closing by Buyer. Buyer's obligation to perform its acts upon Closing is subject to the following Suspensive Conditions, that must be fulfilled by Sellers and/or by the Company, as the case may be, until or on the Closing Date, unless waived in writing by Buyer ("Buyer's Suspensive Conditions")

 

(i)             D1-4TI Shares shall be free and clear of any Encumbrance;

 

(ii)            Sellers' Fundamental Representations and warranties shall be true and correct on Closing as if they were provided on that date (notwithstanding that the statements and guarantees provided on a specific date will be true and correct only on such date);

 

(iii)           Sellers' other representations and warranties shall be true and correct (in all its relevant aspects) in the Closing, as if they had been provided on the Closing Date (notwithstanding that the statements and guarantees provided on a specific date shall be true and correct, in all its relevant aspects, only on such date), subject to the provisions of Clause 8.1.1 below;

 

(iv)           authorizations listed in Exhibit 8.1(iii) must have been obtained or the contracts settled; and

 

(v)            Sellers and the Company shall have fulfilled all its obligations in accordance with this Agreement until the Closing Date, and the Company must have carried out its activities in its Ordinary Course.

 

6.2.1.       The Parties acknowledge that Buyer's Suspensive Conditions have been stipulated for buyer's sole and exclusive benefit. Accordingly, the Parties agree that Buyer may, in its sole discretion, waive compliance with such Buyer's Suspensive Conditions that may not be implemented until the Closing Date or until the date provided for in the respective preceding condition, by sending written communication to the other Parties. If Buyer waives any of Buyer's Suspensive Conditions and provided that the other Suspensive Conditions have been implemented and/or waived, as the case may be, Buyer, Company and Sellers will be required to implement the obligations contained in this Agreement and other Transaction Documents.

 

6.2.2.       The Sellers and/or the Company, as the case may be, undertake, diligently and in good faith, all acts reasonably necessary for the implementation of Buyer's Suspensive Conditions and notify Buyer of compliance with all Buyer's Suspensive Conditions within 2 (two) Business Days of the date of full compliance with Buyer's last Suspensive Condition, except for those which, by their nature, shall be fulfilled only on the Closing Date. In order to avoid any doubts, the provisions of this Clause shall not imply any obligation towards Sellers and the Company to make payments to any Third Party in order to obtain consent that is necessary for the Operation.

 

 

 

 

6.3.           Suspensive Conditions for Closing by Sellers. The obligation of each of the Sellers to perform their acts at Closing is subject to the following Suspensive Conditions, which must be fulfilled by the Buyer until Closing Date, unless waived, in writing, by the Sellers (“Sellers’ Suspensive Conditions” and, together with the Buyer's Suspensive Conditions and the Parties’ Suspensive Conditions, the“ Suspensive Conditions”):

 

(i)             Buyer's representations and warranties contained herein shall be true and correct in Closing, as if they had been provided on the Closing Date (with the exception that the statements and guarantees provided on a specific date will be true and correct only on that date); and

 

(ii)            Buyer shall have fulfilled all of its obligations under this Agreement by Closing Date

 

6.3.1.        The Parties acknowledge that the Sellers' Suspensive Conditions have been stipulated for the sole and exclusive benefit of Sellers. Accordingly, the Parties agree that Sellers may, at their sole discretion, waive compliance with one or more of the aforementioned Sellers' Suspensive Conditions that may not be implemented until the Closing Date, by sending written communication to Buyer. If Sellers waive any of the Sellers' Suspensive Conditions and provided that the other Suspensive Conditions have been implemented and/or waived, as the case may be, Buyer, Company and Sellers will be required to implement the obligations contained in this Agreement and other Transaction Documents.

 

6.3.2.        Buyer undertakes, diligently and in good faith, to perform all acts reasonably necessary for the implementation of the Sellers' Suspensive Conditions and Suspensive Conditions of the Parties and give notice to Sellers regarding the compliance with all Sellers' Suspensive Conditions within 2 (two) Business Days of the date of full compliance with the last Suspensive Condition of the Sellers , except for those that, by their nature, should be fulfilled only on the Closing Date.

 

6.4.            Duty of Mutual Cooperation. The Parties shall cooperate with each other in good faith so that the Suspensive Conditions described in this Section VI are implemented and verified in the shortest possible time, practicing the acts and taking the necessary steps to do so, each Party shall immediately communicate to the other Parties, subject to the applicable Law, any act, fact or omission that comes to its knowledge and that may cause an impact in verification of any of the Suspensive Conditions.

 

VII.          CLOSING

 

7.1.           Closing. In accordance with the terms and conditions set forth in this Agreement, the closing of the Acquisition ("Closing") shall occur immediately after the closing of SPA D1 (but on the same day of such closing). The day the Closing occurs will be considered the "Closing Date".

 

7.1.1.        The Parties acknowledge that the obligation to perform the Closing is solely subject to the verification or waiver (by the applicable Party) of the Suspensive Conditions. Once the compliance and/or waiver of the entire Suspensive Conditions has been verified, the obligations to execute the Closing acts shall fully and automatically enter into force.

 

7.2.           Place. Except if the Parties agree to perform the Closing by electronic means, pursuant to Clause 7.2.1 below, the acts related to the Closing shall be performed at Pinheiro Neto Advogados' Law Firm, at Rua Hungria, 1.100, in the city of São Paulo, and the Parties undertake, by themselves or by their duly appointed legal representatives, to attend the formalization of the legal business agreed in this Agreement and other Transaction Documents.

 

 

 

 

7.2.1.         Formalization of the of Closing Acts by electronic means. The Parties acknowledge and agree that the documents necessary for the formalization of the Closing provided for in this Agreement and other Transaction Documents may be signed electronically, by means of DocuSign platform, and only electronic signatures made through a digital certificate validated pursuant to the Brazilian Public Key Infrastructure ICP-Brazil, as per Provisional Measure No. 2,200-2/2001, are considered valid. The Parties irrevocably acknowledge that in the event of Closing as set out in this Clause 7.2.1, the signature of the Transaction Documents by digital certificate will be considered authentic, valid and effective for all purposes of law, constituting an out-of-court enforcement order, as set out in Article 784 of the Code of Civil Procedure.

 

7.3.           Closing Acts. Without prejudice to other actions required to implement the legal business provided for in this Agreement and other Transaction Documents, the Parties and, as the case may be, the Consenting Intervening Parties undertake to perform the acts described below on or until the Closing Date (unless waived in writing by the Parties):

 

(i) Execution of Closing agreement providing a declaration by each of the Parties, (a) confirming the representations and warranties, in the exact terms of Clauses 6.2(iii), 6.2(iv) and 6.3(ii); and (b) attesting to the satisfaction and/or waiver (by the applicable Party) of all Suspensive Conditions;

 

(ii)            payment by Buyer of the Initial Amount in the form of Clause 3.1;

 

(iii) the amendment to the Company's Articles of Organization and the change in the Company's management, with replacement of the Company's directors by directors appointed by Buyer, being agreed that, in that same act, the Company, the Buyer and the Company's management shall grant, in their own names and its Affiliates, the most complete, broad, general, express, irrevocable and reciprocal discharge for nothing more to complain, receive or claim by themselves or by their successors, at any title, in court or out of court, today or in the future, expressly stating that nothing else has to claim, receive or plead by virtue of any act or fact directly or indirectly related to the position of directors of the Company, recognizing, finally, with waiver of any right or expectation of right, including any right of action, without any inducement or coercion, the absolute regularity , validity, effectiveness and lawfulness of any and all acts that have been performed by the Company's directors, except for cases of fraud. The Parties agree that this discharge does not affect the Sellers' indemnification obligations set forth in this agreement.

 

7.3.1.       All Closing acts provided for in SPA D1 and obligations set out in Clause 7.3 above shall be deemed concurrent, and it is certain that no act and/or obligation will be deemed to be effectively performed until all other acts and/or obligations of the Closing have been terminated, unless the Parties agree otherwise in writing or expressly indicated in this Agreement and other Transaction Documents.

 

7.4.            Tributes. Notwithstanding any other provision of this Agreement and other Transaction Documents, all Taxes and fees relating to transfers, documents, endorsements, notary fees, sales, use, records and other Taxes or similar fees, imposed by any Government Authority in connection with the transactions contemplated in this Agreement and other Transaction Documents shall be borne by the Party upon which the obligation is imposed by applicable law. None of the amounts to be paid by one Party to another as a result of this Agreement and other Transaction Documents will suffer any accruals due to any applicable Taxes, including withholding.

 

 

 

 

VIII.         REPRESENTATIONS AND WARRANTIES

 

8.1.           Sellers' Representations and Warranties. The Sellers and the Company in this act, represent and warrant to Buyer, jointly and severally, that the following information about the Company is true, complete, correct and accurate on this date and that, in compliance with the provisions of Clause 8.1.1 below, will continue to be true, complete, correct and accurate on the Closing Date, as if they had been provided on the Closing Date :

 

(i)             Organization and Capacity. The Company is a limited company duly incorporated accordance with the laws of Brazil. The Sellers and the Company have full capacity to: (a) enter into this Agreement and other Transaction Documents, as well as all documents which execution is provided for herein; and (b) fulfill the obligations assumed herein and perform the operations contemplated in this Agreement and in the Transaction Documents. The execution and formalization of this Agreement and the other Transaction Documents by the Sellers and the Company, as well as the fulfillment of their respective obligations were duly approved and authorized by all necessary own acts, including corporate approvals, when applicable. There is no agreement filed or not at the Company's parent company of any nature that directly or indirectly binds the Company's Shares, or restricts the right to vote with respect to such Shares.

 

(ii)            Binding Effect. This Agreement and the other Transaction Documents constitute an legal, valid and binding obligation of sellers and the Company, enforceable in accordance with its terms.

 

(iii)           No Breach, Consents . Except for third party authorizations listed in Exhibit8.1(iii), Sellers, the Company declare and warrant that (a) the execution and formalization of this Agreement and other Transaction Documents, (b) the fulfillment of any and all of its obligations under this Agreement and the other Transaction Documents and (c) the establishment of the operations set forth in this Agreement and the other Transaction Documents, (I) do not infringe, conflict, result in default of Sellers' obligation under any contract to which Sellers or the Company are a party to or in respect of which they are bound, or create Encumbrances on D1-4TI Shares; (II) do not violate or conflict with any Law to which Sellers, the Company or any of its shares, assets, credits or assets are subject; or (III) do not depend on any condition, consent, approval or authorization of, notification to, or filing or registration with, or contract with, any Person, entity, judgment or Governmental or Regulatory Authority.

 

(iv)           Organizational Documents, Capital and Shares. (a) On this date, the subscribed share capital and paid-up amount of the Company is BRL 11,941,290.00 reais, divided into 11,941,290 shares of BRL 1.00 (one Brazilian real) each, representing the entire voting capital of the Company, held by the Sellers in the proportion indicated in the 2ndamendment to the Company's Articles. All Shares are free and clear of Encumbrance.

 

 

 

 

(v)            Ownership. (a) Sellers are the lawful and sole holders, and owners of all Shares, with everything they represent, including the right to profits, dividends, bonuses and any rights conferred to them. (b) The Company is the lawful holder, and owner of the D1-4TI Shares, with everything they represent, including the right to profits, dividends, bonuses and any rights conferred on them. (c) On this date, all the Company's Shares are fully paid up, free and clear of any and all encumbrances, including, without limitation, any subscription rights, options or other rights for the acquisition of any share or any other transferable security. issued by the Company or on any other security of any other company which, if exercised, may confer on their respective holders shares issued by the Company, or which could be converted into, or exchanged for shares issued by the Company, issued or in process of issue. (d) On the Closing Date, the Purchaser will have (dI) directly, valid and effective title on the totality of the Shares, free and clear of any encumbrances, being able to fully exercise all the inherent political and property rights. (d.II) indirectly, valid and effective title on the D1-4TI Shares, free and clear of any encumbrances, being able to fully exercise all the inherent political and property rights. (e) Sellers and the Company have not entered into any agreement (other than this instrument) or made any commitment (and have not caused the Company to enter into any agreement or make any commitment) to any Person to dispose of or otherwise transfer any of the Shares or D1-4TI Shares (As the case may be). (f) On this date, there are no, and on the Closing Date there will be no outstanding subscription rights, options, stock options, phantom stock, subscription bonuses, convertible securities or other rights, contracts, agreements, obligations or commitments related to or granting any Person a right to purchase or other form of acquisition of any share of the Company or causing Sellers or the Company to issue or sell any shares or other stake in the Company, other than those provided for in this Agreement. (g) After the Closing Date, upon completion of Acquisition and operations under SPA D1, Buyer will become the sole and lawful holder, direct or indirect, of all Shares, free and clear from any and all Encumbrance, and may fully exercise all political and property rights inherent to them and (h) on the Closing Date, the Company shall remain the sole and lawful owner of the number of D1-4TI shares, free and clear of any Encumbrances, being fully able to exercise the political and property rights inherent to them on Closing Date.

 

(vi)           Preemptive Right. No Person (a) has the right, whether in contract or otherwise, of obliging sellers or the Company to issue or sell shares or any other securities representing the company's capital stock, or any other security or securities, convertible or not, or with political or economic rights relating to the Company; or (b) has any preemptive right, right of resale, subscription or acquisition right, joint sales right, options or other similar rights to subscribe, acquire or sell any shares issued by the Company and/or any other securities representing the Company's share capital.

 

(vii)          No Disputes on Shares. Neither the Company nor the Sellers have received any written notice or notification (physically or through the electronic system of the Courts (e-CAC, SAJ, PJE etc.) or any other arbitral authority) from any Governmental Authority (in any case a "Official Notice") of ongoing lawsuits, proceedings, investigations or judicial proceedings, administrative or arbitration proceedings, established or filed against Sellers and/or the Company, which affect, or are reasonably expected to affect Shares, D1-4TI Shares or impose limits of any kind on Shares, D1-4TI Shares or on sellers' rights or ownership over D1 Shares (as the case may be), or prohibit, or reasonably expected, prohibit or restrict capacity , sellers and the Company to dispose of D1-4TI Shares and Shares (respectively), as well as to consummate any of the transactions described in this Agreement and other Transaction Documents.

 

(viii)         Other Holdings/Subsidiaries. Except for venture capital investments made through the acquisition of convertible debentures issued by FLEETY MOBILIDADE S/A, (CNPJ/MF n. 20.352.819/0001-25) and PETCHANNEL COMUNICAÇÃO S/A (CNPJ/MF n 21.757.648/0001-87) and convertible notes issued by D2AIRPORT, INC. - since such securities have never been converted into equity interests and the values of such investments have been reduced to zero (write-off) in view of the failure of such undertakings and in the case of the latter two all rights and obligations were previously transferred by the Company to third parties, without any remaining obligation to the Company - the Company does not own, or never own, a direct or indirect Equity Interest in any other Person or has owned or owned subsidiaries in the past. Except for the debentures and convertible notes described above, the Company has no obligation to become part of the share capital of any other company, or to join any consortium, joint venture or other business agreement with any Person, and there is no obligation in force on this instrument to participate in the forms described in this sentence.

 

(ix)            Intellectual Property. The Company is not a proprietor or licensee of any Right tointellectual property, nor is it involved in any dispute involving Intellectual Property Right.

 

 

 

 

(x)            Financial Statements, Absence of Hidden Liabilities. The Base Financial Statements dated 11/30/2020, which have been provided and are included in this Agreement as Exhibit 8.1(xii): (a) are true, correct and complete, in all of its relevant aspects, being prepared in accordance with the governing Law and Company and its Subsidiaries Bookkeeping (as the case may be), consistently on the date they were assessed and in accordance with past practices adopted by the Company or its Subsidiaries (As the case may be), and being able to be lawfully reconciled with books and registers held for tax purposes by the Company and its Subsidiaries; (b) provide, in accurate manner, in all relevant aspects, the wealth status, as well as transaction proceeds and changes in financial status, as applicable, pertaining to the Company or its Subsidiaries within relevant periods. The accounting books and registers belonging to the Company in all relevant aspects: (a) are true, correct and full, being prepared in accordance with the applicable Legislation.(b) are duly bookkept and full, being kept in accordance with the good business practices, and express, in all of its relevant aspects, and subject to the Law, all transactions comprising Company’ business. All requirements, formalities, and terms required or imposed by Applicable Law, with respect to calling, establishment, performance, resolution and approval, minutes, publication nad registration (including, as applicable, registration with the respective Board of Trades), of financial statements and other corporate documents applicable to the Company were, in all relevant aspects, duly fulfilled, and there is not significant error or omission.

 

(xi)            No Adverse Effect. After the date of the Base Financial Statements, there was no any extraordinary event or circumstance that may result in a Loss to the Company over BRL 10,000.00 (ten thousand reais).

 

(xii)          Indebtedness. Except as listed in Exhibit8.1(xii), The Company does not have on this date any Indebtedness in the position of debtor, nor is it responsible (i.e. guarantor ) for any Indebtedness or breach in the performance of obligations of any other Person.

 

(xiii)         Assets. D1-4TI Shares represent the sole asset of the Company, which is free and clear from any charges, debts and Encumbrance.

 

(xiv)          Guarantees. The Company is not a guarantor of any liability or liability (including personal warranties) of Sellers or any Third Party. Neither Sellers nor any Third Party is guarantor of any obligation of the Company.

 

(xv)          Taxes. Neither the Company nor the Sellers have received any Official Notice claiming that the Company or any of its Subsidiaries is a party to any claim, action, lawsuit, complaint, investigation, inquiry, arbitration, mediation or other type of action or process, whether judicial or administrative, individual or collective ("Demand") of a Tax nature. The Company presented, in a timely manner to the competent tax authorities, all statements, forms and tax reports related to the Company, the Subsidiaries and their respective assets, properties, businesses and activities. These statements faithfully reflected all tax obligations of the Company and its Subsidiaries, as well as their respective businesses and activities in the relevant periods, in all its relevant aspects.

 

(xvi)         Tax Incentives. The Company does not benefit from any tax incentive program except for those who benefit indistinctly from all taxpayers who conduct the activity subject to the incentive.

 

(xvii)        Labor Issues . The Company does not own or have ever owned employees, employees or service providers (except for administrative services such as accountants, lawyers, etc.). The Company has not been named or notified of any legal, administrative or arbitration proceedings involving labor, social security or social security contribution sums against it. There is no pending claim against the Company before any Governmental Authority or entity competent to resolve on labor or social security disputes, as direct, joint and several liability or subsidiary and there is no pending formal claim or, in the best knowledge of the Company and sellers, threatened against the Company, before the Government Authority with jurisdiction to resolve on labor or social security conflicts.

 

 

 

 

(xviii)       Contracts. Exhibit8.1(xvi) contains a faithful and complete list of all contracts, commitments or agreements involving obligations or rights of the Company that are in effect on this date, written or verbal ("Contracts"). The Company has complied with all the contractual obligations of the Contracts and is not aware of the occurrence of any situation, fact, act, omission or event that, through the provision of notification, the passage of time, or both, results in a default in compliance part of the Society. The performance of this Agreement and other Transaction Documents does not infringe, conflict, result in default or create encumbrance on any assets, credits or assets (including the Shares and D1 -4TII Shares of the Company under any Agreement to which the Company is a party or is subject or bound. The Contracts do not provide for the imposition of penalties for breach of contract. The execution of this Agreement and other Transaction Documents will not constitute early maturity or any violation of the terms of the Agreements.

 

(xix)          Operations with Related Parties. Sellers (or any of its Related Parties), representatives of the Company (or any of its Related Parties) are not parties, directly or indirectly, in any transaction or agreement with the Company, including, without limitation, any lease agreements, licenses, supply, provision of services and/or indebtedness, provision of warranties.

 

(xx)           Real Estate. The Company does not own real estate properties, nor rent or occupy real estate rented from third parties.

 

(xxi)          Insurance. The Company does not have insurance contracted, except in the context of the financing obtained and as it is embedded as a financial service by the institution that granted the loan.

 

(xxii)         Disputes. The Company is not and has never been a party to any judicial or administrative or arbitration proceeding of any nature, before any forum or court or Governmental Authority, nor is it known to the Sellers the existence of any threat of imminent litigation. The Company has not failed or is in breach of any judgment, order, decision, warrant, injunction or order of any Governmental Authority.

 

(xxiii)        Brokers, Intermediaries and Legal Advisors. Sellers are solely responsible, without co-responsibility or assignment of obligation to the Company, for payment of all amounts due to brokers, intermediaries, investment banks, financial advisors, accounting and legal contracts contracted by them for the operations contemplated in this Agreement. On the Closing Date there will be no open payments to be made by the Company to any broker, intermediary or advisor as a result of the transaction agreed in this Agreement and other Transaction Documents.

 

(xxiv)       Power of Attorneys. All powers of attorney in force that have been granted by the Company, including powers to operate bank accounts and/or assume obligations of any nature in their respective names in any case related to its business are listed in Exhibit8.1(xxiv).

 

(xxv)        Environmental Issues. (a) The Company is in good standing as to the environmental laws in force and there is no condition or event that constitutes an infringement or would cause any burden to the Company under said Laws.

 

(xxvi)       Permits and Licenses. The Company owns, on this date, all relevant and common permissions, licenses, authorizations, and records, as required by all Government Authorities to conduct their activities and relevant records necessary for the regular conduct of their activities ("Licenses"), which are in full force and effect or in the renewal phase, having been timely and properly delivered all information and data necessary to obtain such renewals before the Government Authorities. The Company's business is conducted in compliance with these Licenses. There are no and, to the best knowledge of Sellers, no legal action, administrative proceedings or investigations that may result in the loss, invalidation or non-renewal of such Licenses are imminent.

 

 

 

 

(xxvii)      Bank Accounts. All bank accounts on behalf of the Company in banks, national or foreign, as well as a list of persons entitled to make transactions thereto, are listed in Exhibit8.1(xxvii).

 

(xxviii)     Insolvency. The Company is not insolvent or unable to pay its debts on the due date and there is no threat related to its assets that may affect the transaction subject to this Agreement and other Transaction Documents. The Company is under no circumstances being managed by a third party by way of disposition of any creditors or by bankruptcy or reorganization proceedings. Sellers are not insolvent and there is no threat related to their assets that may affect the transaction subject to this Agreement or other Transaction Documents.

 

(xxix)        Good Practices. The Company and Sellers, including through any employee, director or manager and, in the best knowledge of Sellers, any agent, consultant or any other Person, (i) has not violated or breached any Anti-Corruption Laws; (ii) did not offer, pay, commit to pay or promise to pay or authorize the payment of money or other valuables, contribution, expense reimbursement, gifted, gave benefits or delivered any kind of good to any person who is an officer, agent, official or representative of any Governmental Authority or to any political party, any candidate for public office or to offices of political parties , or to any other Person, knowing or having reason to believe that any or all part of the money or something of value offered, given or promised (a) would facilitate or seek to facilitate obtaining favorable treatment in business, (b) pay for favorable treatment in business, (c) facilitate or seek to facilitate the obtaining of special concessions or serve as payment for special concessions already obtained , in favor of or in relation to Sellers, the Company or its Subsidiaries, or (d) would represent violation of Anti-Corruption Laws. Neither the Company nor Sellers have conducted or initiated any internal investigation, received any complaint or other internal or external reports, complaints or allegations, or made voluntary, direct, or involuntary disclosure to any Government Authority in connection with any act of omission relating to any bribery, bribery, illegal payment, corruption or failure to comply with any Anti-Corruption Law. Neither the Company nor Sellers and, to the best knowledge of Sellers, none of the representatives of the Company or Sellers, has received any notice, request or service, is part of any administrative, civil or criminal proceedings, or has been convicted or pleaded guilty to any current or potential non-compliance with matters contained in the first part of this item

 

(xxx)         Absence of Other Representations and warranties. Except as provided in this Agreement, Sellers have not provided any additional Representations and Warranties to Buyer, express or implied, written or verbal, in connection with any matter subject to this Agreement.

 

8.1.1.        Update of Representations and Warranties. The Parties agree that, except for Sellers’ Fundamental Representations and Warranties, Sellers may, in good faith, update the Exhibits relating to the representations and warranties provided in Clause 8.1 noted that any updates: provided that any updates: (a) may only refer to acts, facts or omissions occurring after this date or, exclusively with respect to representations and warranties that relate to a specific date or period , after the date or period to which they relate, (b) shall not exempt Sellers from any of the obligations under this Agreement; and (c) may not involve matters that constitute a Material Adverse Effect under this Agreement.

 

 

 

 

8.2.           Buyer's Representations and Warranties. Buyer hereby declares and warrants to Sellers that the following information is true, complete, accurate, correct and not misleading on this date and that they will remain true, complete, accurate, correct and not misleading on the Closing Date, as if provided on the Closing Date:

 

(i)             Organization and Capacity. Buyer is a company duly incorporated and existing in accordance with the Laws of Brazil. Buyer has full capacity to: (a) enter into this Agreement and all documents which performance is established herein; and (b) fulfill the obligations assumed herein and perform the operations set out in this Agreement and in the Transaction Documents. Execution and formalization of this Agreement and the other Transaction Documents by Buyer and the fulfillment of their respective obligations have been duly approved and authorized by all necessary own acts, including corporate approvals, where applicable. No other measure, act, consent, authorization of any Governmental Authority, approval or action with any Person, Judgment, Governmental Authority or Regulator or any third party is required to authorize Buyer's signature, formalization and performance of this Agreement.

 

(ii)            Binding Effect. This Agreement constitutes buyer's legal, valid and binding obligation, enforceable in accordance with its terms.

 

(iii)           No Breach, Consent . Neither the signing and formalization of this Agreement buyer's compliance with any and all of its obligations under this Agreement, nor the implementation of the operations set forth in this Agreement, (a) violate or conflict with any statute, ordinance, Law, rule, regulation, license or permission, judgment or order of any judgment or other Governmental or Regulatory Authority to which Buyer is subject; or (c) depend on any consent, approval or authorization of, notification to, or filing or registration with, any Person, entity, judgment or Governmental or Regulatory Authority.

 

(iv)           Good Practice. Buyer, including through any employee, director or manager and, to Buyer's best knowledge, any agent, consultant or any other Person, (i) has not violated or violates any Anti-Corruption Laws; (ii) did not offer, pay, commit to pay or promise to pay or authorize the payment of money or other valuables, contribution, expense reimbursement, gifted, gave benefits or delivered any kind of good to any person who is an officer, agent, official or representative of any Governmental Authority or to any political party, any candidate for public office or to offices of political parties , or to any other Person, knowing or having reason to believe that any or all part of the money or something of value offered, given or promised (a) would facilitate or seek to facilitate obtaining favorable treatment in business, (b) pay favorable treatment in business, (c) facilitate or seek to facilitate the obtaining of special concessions or serve as payment for special concessions already obtained in favor of or in relation to Buyer , or (d) would represent violation of Anti-Corruption Laws. Buyer has appropriate practices and policies to avoid non-compliance with Anti-Corruption Laws by its employees, directors, managers, agents and consultants. Purchaser has not carried out or initiated any internal investigation, received any denunciation or other internal or external reports, complaints or allegations, or made a voluntary, direct, or involuntary disclosure to any Government Authority, with respect to any act of omission relating to any bribery , bribe, illegal payment, act of corruption or failure to comply with any Anti-Corruption Law. Buyer does not and, to Buyer's best knowledge, none of Buyer's representatives, has received any notice, solicitation or service, is part of any administrative, civil or criminal proceedings, or has been convicted or pleaded guilty, to any current or potential non-compliance with matters contained in the first part of it.

 

 

 

 

(v)            Knowledge. Buyer is an active institute in the relevant market, has knowledge and experience in transactional, financial and commercial matters of this nature, is perfectly capable of making an independent assessment of the merits and risks resulting from the Operation and to bear the economic risks associated with it. Buyer acknowledges that, except as expressly set forth in this Clause VIII, none of Sellers, the Company, or any other Person acting in its interest has made any statement and warranty, express or implied, whether written or oral, as to any matter relating to this Agreement or as to the accuracy or completeness of any information that Sellers, the Company or its representatives, have provided or made available to Buyer and its representatives in connection with its audit, in particular in relation to financial projections, business plans, budgets and/or forecasts related to the Company and its activities.

 

(vi)            Insolvency. Buyer is not insolvent and there is no threat related to its assets that may affect the transaction subject to this Agreement. In particular, but without limiting the generic nature of the previous statement: (a) the execution and performance of this Agreement by the Purchaser will not imply its insolvency; (b) the economic, financial and equity situation of Buyer would not imply the frustration of any performance arising from any dispute or demand existing against Buyer; and (c) there are no securities issued by Buyer or drawn against it that have been protested.

 

(vii)          Absence of Other Representations and Warranties. Except as provided in this Agreement, Buyer has not provided any additional representations and warranties to Sellers, express or implied, written or verbal, in connection with any subject matter of this Agreement.

 

IX.            CONFIDENTIALITY

 

9.1.           Confidentiality. Subject to the provisions of Clause 9.1.2, the Parties and Intervening Consenting Parties undertake to maintain confidentiality and not to disclose or make public to any Third Parties, without the prior consent of the other Parties (1) the terms and conditions of the Transaction Documents and their Exhibits (except the Secured Fiduciary Sale of Warranty Actions, in the form of Clause 6.9); and (2) any information, relating to the other Parties, the Company or its Subsidiaries, to which it has had or will have access depending on the transactions contemplated in this Agreement ("Confidential Information"). Confidential Information shall not be considered information that (a) is or will become in the public domain for reason other than non-compliance with the obligation of confidentiality of this Clause; (b) were already proven to be aware of the Receiving Party of information at the time of such disclosure; or (c) have been lawfully received by either Party from Third Parties not subject to any obligation of secrecy. Parties, Interveners and to Zenvia Inc. shall instruct its agents, contractors, consultants, advisors, auditors, lawyers, representatives, agents and/or any other Person who, by virtue of the relationship with such Party, will have access to Confidential Information, to observe the duty of confidentiality imposed by this Clause.

 

9.1.1.        The confidentiality obligation herein shall not prevent the Parties from disclosing Confidential Information to any Governmental Authority under the strict terms and within the strict limits of any court order given to them to that effect. In case either Party and/or the Consenting Intervening Parties are required, as required by the competent Governmental Authority, to provide in whole or in part any Confidential Information, such Party and/or Consenting Intervening Parties may do so, without giving rise to indemnification or charges, provided that the rules set forth in this Clause 9.1.1 are fulfilled. However, this party shall, in any case: (a) provide only the part of the Confidential Information and the documents that its legal advisors deem legally chargeable, (b) make the necessary efforts to obtain assurances from those who requested the Confidential Information that a confidential treatment will be conferred on it, (c) notify the other Parties promptly and in writing of the need for breach of confidentiality , enabling them to take appropriate measures to protect the confidentiality of Confidential Information.

 

9.1.2.        Sellers hereby agree that Buyer may disclose the information regarding the terms and conditions of the Transaction Documents and their Exhibits and the Company, as may be required in the context of Zenvia IPO, as determined by Zenvia's legal and financial advisors, and shall do so in confidentiality whenever this is possible in the course of the Zenvia IPO process.

 

 

 

 

9.2.           Disclosure. The Parties agree that any announcement or disclosure addressed to the general public, including customers and/or suppliers of the Company, in relation to the operations subject to this Agreement and its Exhibits, may only be issued after approved in writing by all Parties, except for disclosures that are required by the Laws applicable to the respective Parties. In the case of disclosures required by law, the Party obliged to make the disclosure shall provide the other, as early as possible, an opportunity to review the disclosure to be made and to submit comments, which shall be considered, in good faith, by the Party required to make the disclosure.

 

9.3.           Penalty. . The failure to comply with the confidentiality obligation set out in this Clause XI by either Party and/or by the Consenting Intervening Parties and/or Zenvia Inc., by act of its own or any of its agents, contractors, consultants, advisors, auditors, lawyers, representatives, agents and/or any other Person who by his/her nomination has had access to confidential information shall give rise to the immediate obligation to indemnify for all losses that may occur.

 

9.4.           Confidentiality Obligation Deadline. The obligations under this Clause XI shall remain in force from this date until the end of the [*****] years from the last to occur between: (a) the termination of this Agreement SPA D1; or (b) the end date of payment of the Earn Out Amount 2022 Sellers 4TI. In order to avoid any doubts, if this Agreement is terminated for any reason: (i) Sellers shall have no obligation of confidentiality with respect to The Company's Confidential Information, but shall remain required to keep the terms of the Transaction confidential; and (ii) Buyer shall be required to maintain the confidentiality of confidential information until the end of the period set out herein.

 

X.             OTHER OBLIGATIONS

 

10.1.         Records. The Company shall register with the competent Government Authorities, within ten (10) Business Days of each event, the corporate acts mentioned in this Agreement, and the costs will be borne by the Company. The Parties shall cooperate with each other as necessary to make such records appropriately.

 

10.2.         Joint Efforts. The Parties and Consenting Intervening Parties hereby agree that they shall take all necessary measures to faithfully comply with the obligations set forth in this Agreement and other Transaction Documents, signing all instruments, certificates and other documents necessary for the conduct of the transaction contemplated herein, and the Parties and Consenting Intervening Parties to make their best efforts in order to obtain the necessary authorizations and records are obliged.

 

10.3.         Operating Costs. Except as otherwise provided in this Agreement, the operating costs owed by the Parties or the Company to Governmental Authorities, brokers and/or intermediaries (including, without limitation, fees of legal advisors, committees of financial advisors, strategic advisors and publicity), directly related to the negotiation and implementation of the legal business subject to this Agreement shall be borne by Buyer in the event of costs incurred by Buyer; and (b) by Sellers, in the case of costs incurred by Sellers directly or indirectly, including if incurred by the Company (provided for the exclusive benefit of the Sellers and not the Company), including the fees due to the law firm that advises the Sellers (and, until the Closing Date, the Company) in this Operation.

 

10.4.         Non- Performance Obligations of Sellers. Except as otherwise consented in writing by Buyer, if necessary as a result of law, or if required by a Government Authority, until the Closing Date, each Seller undertakes not to practice (with respect to its Shares) and, to the limits of the powers assigned to its Shares or as an administrator of the Company, if applicable, to cause the Company not to engage in any of the following acts :

 

 

 

 

(i)             transfer and/or Encumber Shares and/or D1-4TI Shares;

 

(ii)            execute any contract, commitment or obligation that otherwise contains any non-competition provisions relating to Company's business;

 

(iii)           cancel, compromise, discharge or forgive any judicial or administrative proceedings involving the Company, filed by or against any Person, or waiver any right of the Company.

 

(iv)           file any process of incorporation, division, merger or liquidation or dissolution involving the Company, or if it is required to do so;

 

(v)            execute or amend any agreements or commitments in order to assume new obligations on behalf of the Company, as well as to make any expenditure or investment or development of new projects by the Company; and

 

(vi)           conduct any new business, of any nature with, on the one hand, the Sellers and/or the Related Parties of the Sellers and, on the other hand, the Company.

 

10.5.         Zenvia IPO. Sellers, the Company hereby agrees that they shall take all reasonably necessary steps and cooperate with Buyer in relation to the Zenvia IPO, including providing (directly or through representatives, including without limitation their auditors and legal advisors as necessary) any legal and/or financial information relating to the Acquisition that is reasonably requested by the financial advisors hired to provide advice in the Zenvia IPO, as well as making itself available to clarify questions and questions that may be made by such financial advisors in the context of the Zenvia IPO.

 

10.6.         The Buyer undertakes to: (i) keep the Sellers informed about, and allow the monitoring of the progress of the Zenvia IPO (including its schedule, progress of the roadshow and pricing of the offer), periodically or through the provision of information and responses to inquiries made by the Sellers; and (ii) sharing the filings and exchanges of communication with the regulatory agencies with the Sellers and the Company.

 

10.7.         Zenvia Restrictions. Buyer and Zenvia Inc. will not make or allow it to be made without sellers' approval: (i) an initial primary and/or secondary public offering of shares resulting in the listing of another Buyer Affiliate or Zenvia Inc. (other than Zenvia Inc. itself) on any stock exchange, including outside Brazil; or (ii) a private placement of Buyer, Zenvia Inc., or any of its respective Affiliates.

 

 

 

 

10.8.         Replacement of Guarantees. Buyer undertakes, within 90 (ninety) days after the Closing Date, to release and/or replace (or, as the case may be, promote the release and/or replacement of) the warranties granted by Sellers and their Affiliates (including Servix) in obligations relating to the Company or D1 (Guarantees), and the obligation to release or replace the warranties shall be deemed fulfilled to the extent that the respective Sellers and their assets are released unconditionally, irreversibly and irrevocably from any obligations related to the principal obligation subject to such Warranty. Buyer and, after the Closing Date, the Company, shall exempt the Sellers and its Affiliates from any obligations arising from the eventual execution of the Guarantees due to the Company's default, after closing, from the obligations guaranteed by the applicable Guarantees.

 

10.9.         If any Guarantee cannot be replaced, including due to the fact that the respective creditor or beneficiary has not approved such replacement, the Buyer will grant, on behalf of the Sellers, a counter-guarantee in terms and conditions similar to those established the Guarantee in question, within the term of 90 (ninety) days from the Closing Date, and without prejudice or limitation to Buyer's obligation to indemnify and exempt Sellers as a result of any loss arising from any of the Warranties.

 

10.10.       If, after closing, any provisional imposition, collection, execution, seizure, constriction and/or attachment related to a fact relating to the Company is imposed or linked in relation to any good, right or asset of the Sellers, Buyer shall take any and all measures, at its expense, necessary to reverse such provisional imposition, collection, execution, seizure, constriction and/or attachment, including by means of payment or granting of new guarantees, without prejudice to indemnify for any damages incurred by sellers.

 

XI.            OBLIGATION TO INDEMNIFY

 

11.1.         Indemnification by Sellers for acts relating to SPA D1. Sellers jointly and severally undertake to bear 29.27% (twenty-nine point twenty-seven percent) of any Losses (as defined in SPA D1) indemnifiable to Buyer, its investments, its directors, employees, consultants, representatives and respective successors, pursuant to SPA D1, in proportion to the percentage of capital held by the Company in D1, in accordance with the procedures, limits and payment deadlines set out in SPA D1 for indemnification to Buyer. Likewise, Sellers will receive any benefits and will be entitled to the rights provided for in relation to the same indemnification obligations stipulated in SPA D1. For example, if Buyer has an indemnifiable Loss under SPA D1 in the amount of BRL 100.00 (one hundred reais), Sellers must reimburse Buyer BRL 29.27 (twenty-nine reais and twenty-seven cents) and SPA D1 Sellers BRL 70.73 (seventy reais and seventy-three cents).

 

11.2.         Indemnity by Sellers. Sellers undertake, jointly, to indemnify and hold buyer, its Related Parties (which, after closing, will include the Company), its directors, employees, consultants, representatives and their respective successors harmless ("Buyer’s Indemnifiable Parties "), in relation to any and all Losses actually suffered or incurred by a Buyer's Indemnifiable Party arising out of or arising out of:

 

(i)             any falsehood, omission, error or inaccuracy of any statement or warranty provided by a Seller in relation to himself or the Company;

 

(ii)            non-compliance, in whole or in part, with any Buyer’s agreement and covenants contained in this Agreement (and, until Closing, the Company), until the termination of legal business and other obligations provided for therein; and/or

 

 

 

 

(iii)           any commissive or omitted act, contingent liabilities, facts, events or omissions related to the Company, its business or activities, of any nature, including, without limitation, labor, social security, tax, civil, insurance, tax, environmental, intellectual property or any other, in each case, the event of which occurred, in whole or in part (in the latter case, considering only the period prior to the Closing Date), in the period prior to the Closing Date (excluding the latter), although its effects only materialize in the future, identified or not in the course of the due diligence process, whether informed or not (and/or qualified or not by knowledge or relevance) through the statements and guarantees provided under this Agreement, whether or not sellers, shareholders of D1, The Company, D1 and its respective Subsidiaries or Purchaser, noted, however, that no amounts that are reflected as liabilities in the Base Financial Statements will be considered as Loss;

 

(iv)           in relation to tax aspects related to Sellers to the structuring or implementation of the Flip; and/or

 

(v)            any and all commissive or omitted act, debt, liabilities, contingent or absolute, facts, events or omissions related to Sellers, their business or activities, or any of their Related Parties (other than the Company) and/or current, future or previously owned entities directly or indirectly by Sellers (other than the Company), of any nature, including, without limitation, labor, social security, tax, civil, insurance, tax, financial, environmental, intellectual property or any other, occurred at any time, whether or not identified in the course of the due diligence process, whether or not informed (and/or qualified or not by knowledge or relevance) through the representations and warranties provided under this Agreement, whether known or not from Sellers, shareholders of D1, Company, D1 and its respective Subsidiaries or Buyer, noted, however, that any amounts that are reflected as liabilities in the Financial Base Statements shall not be considered as Loss , which may be imputed or otherwise charged to any Indemnified Party of Buyer or Company, D1 and its Subsidiaries (in the latter case, after the Closing Date);

 

11.2.1.      Buyer's total or partial waiver of compliance with one or more Suspensive Conditions, or its decision not to perform (i) the Closing, pursuant to Section VII of this Agreement; or (ii) the closing of SPA D1, will not exempt Sellers from the obligation to indemnify Buyer's Indemnifiable Party for losses incurred in connection with the waived Suspensive Conditions.

 

11.2.2.      Even if Sellers (prior to Closing Date) or Buyer (after Approval Date) approves, or causes the accounts and financial statements of any subsequent financial year of the Company to be approved, such approval shall not mean that any Indemnifiable Parties of Buyer has waived the right to require sellers to redress provided for in this Clause XI, and sellers, company and its subsidiaries are bound by this Agreement.

 

11.3.         Buyer's Indemnity. The Purchaser undertakes to indemnify and hold Sellers, their Related Parties (which up to Closing includes the Company), their managers, employees, consultants, representatives and their respective successors ("Indemnifiable Part of Sellers") harmless, in relation to any and all Loss actually suffered or incurred by an Indemnifiable Party of Sellers resulting from or resulting from:

 

(i)             any falsehood, omission, error or inaccuracy of any statement or warranty provided by the Buyer pursuant to Clause 8.2 and its sub-clauses; and/or

 

(ii)            non-compliance, in whole or in part, with any agreement or covenant of Buyer contained in this Agreement and SPA D1, until the legal business and other obligations provided for therein are terminated; and/or

 

 

 

 

(iii)           any and all commissive or omitted act, debt, liabilities, contingent or absolute, facts, events or omissions related to Buyer, your business or activities, or to any of your Related Parties (including Company and D1 and its Subsidiaries, only with respect to taxable events occurring after the Closing Date), of any nature, including, without limitation, labor, social security, tax, civil, insurance, tax, financial, environmental, intellectual property or any other, occurred at any time, informed or not through the statements and guarantees provided under this Agreement , known or not to Sellers or Buyer, which may be imputed or otherwise charged to any Indemnified Party of Sellers.

 

11.4.         Conditions to Sellers and Buyer's Indemnify Obligation. Sellers' obligation to indemnify Buyer and other indemnification beneficiaries pursuant to Clause 11.1 above shall follow the rite and moment established to SPA D1 Sellers to pay their percentage of said indemnification. The obligation of the Parties liable to indemnify ("Indemnifiers") the Parties that are entitled to indemnification ("Indemnified Parties") for Losses incurred pursuant to Clauses 11.2 and 11.3 above shall comply with the following conditions:

 

(a)            the Indemnifiers shall pay the Indemnified Party 100% of the amount of the loss disbursed by the Indemnified Party;

 

(b)            all payments owed by the Indemnifiers will be structured in such a way as to avoid any additional cost to the Indemnified Parties, and any additional cost or charge that may arise shall be solely and exclusively borne by the Indemnified Parties. In order to avoid doubt, in this case, the Indemnifiers shall pay such additional amounts as may be necessary to ensure that the net amounts received by the Indemnified Parties are equal to the respective amounts that would have been received in the absence of such additional cost or charge;

 

11.4.1.      Procedure in the case of Third Party Claim . After closing, if any Indemnified Party is to be served, notified, administratively or judicially or in arbitration or out of court, for enforceability that constitutes or may constitute an Indemnifiable Loss pursuant to Clause 11.2 and 11.3 ("Third Party Claim"), this party shall give notice, in writing, to Indemnifiers, as soon as possible, but in any case within the period of up to 1/3 (one third) of the legal term for filing a statement, defense or dispute of the Third Party Claim, as the case may be, by sending a copy of the documentation received and other information available at that time relating to the Third Party Claim ("Notice of Loss"). The failure to provide Notice of Loss by Indemnified Party within the period indicated above shall exempt the Indemnifiers from the obligation to indemnify the Indemnified Party for such Loss to the extent that such delay adversely affects the indemnifiers’ ability to defend itself against the claim in question.

 

11.4.2.      The Indemnifiers shall, within 2/3 (two thirds) of the legal deadline for the submission of manifestation, defense or contestation of the Third Party Claim, send a notification informing the Indemnified Party: (a) if it wishes to assume the conduct of the defense of the Third Party Claim, informing the office that it will be hired to do so; or (b) if does not wish to assume the conduct of the defense of the Third Party Claim, in which case the Indemnified Party will be responsible for conducting the defense. If the Indemnifiers does not send notice pursuant to this Clause 11.4.2, it shall be considered, for all purposes of law, that the Indemnifiers does not wish to assume the conduct of the defense.

 

11.4.3.      The Party conducting the defense shall have the right to choose the law firm that will be responsible for the defense, and it is agreed that the choice of the law firm should be reasonable taking into account the value and complexity of the action. In any case the defense shall be conducted diligently by the lawyers, always on behalf of Indemnified Party and with a view to reducing the amount of possible conviction.

 

 

 

 

11.4.4.     The Party conducting the defense (whether Indemnifier or Indemnified Party) may not compromise or make an agreement without prior written authorization from the other Party, an authorization which may not be unjustifiably denied. If the Indemnifiable Party is the Sellers, and Buyer rejects the terms and conditions of a settlement proposal accepted by Sellers, the following rules shall apply: (i) in case of Loss, Sellers shall apply as a Indemnifiers, shall be liable only up to the limit of value of the proposal refused by the buyer, provided such proposed agreement has been proven to be accepted by the contrary to the respective Third Party Dispute (not only not materialized by the refusal of Buyer or Company); and (ii) if Buyer's indemnified Party succeeds in defending the Third Party Dispute, Sellers shall reimburse it, to the limit provided in the proposal, the reasonable and proven costs incurred by the Company (as the case may be) with attorneys' fees, procedural costs and procedural costs in general, relating to such demand. Mutatis mutandis, the provisions of this Clause shall apply in relation to opportunities arising from law granting rebate, discount and/or amnesty or any other economic advantage for taxpayers who adhere to cash or installment payment programs of taxes due and unpaid, when Sellers, as an Indemnification Party, wish to adhere to such incentive tax program.

 

11.4.5.     The Parties shall cooperate with the Party conducting the defense (whether Indemnifier or Indemnified Party), and with its consultants, in the defense of any Third Party Claim, including by granting power of attorney and access to the necessary documents in the company's possession.

 

11.4.6.     Regardless of the Party conducting the defense, the Indemnification Party shall bear all costs and expenses of the defense of the Third Party Claim that are indemnified under this Clause XI (including, without limitation, reasonable attorneys' fees), as well as make any legal deposits or provide any other necessary or required warranties in connection with any Third Party Losses or Claims. Such costs and expenses shall be informed to the Indemnifier when proving its payment by the Indemnified Party. The Indemnified Party, before providing any warranty, shall notify in writing the Indemnifiers with respect to the obligation to make such warranty, for acknowledgement purposes only.

 

11.4.7.     The Party conducting the defense shall maintain, and instruct its lawyers to maintain, the other Party informed of the progress of the defense throughout the proceedings. The party that is not conducting the defense shall have the right to participate in discussions on strategy and measures in each claim, and may, to do so, pass on the points it deems necessary with the lawyers responsible for the defense, have access to the documents and, as far as possible, participate in meetings that are necessary with any Third Party, including Government Authorities; in any event, that the Party conducting the defense and its legal advisors shall have the right to make final decisions on how the defense is conducted, in accordance with the provisions of Clause 11.4.3 above. If a Buyer's Indemnifiable Party chooses to hire advisors or consultants to accompany a defense being conducted by sellers, such Buyer's Indemnifiable Party shall bear the costs of its respective advisors or advisors.

 

11.4.8.     Existing and Supervenient Demands. In addition to the provisions of other sentences of this Clause 11.4 above, the defenses of the claims existing on this date or materialized until the Closing Date to which the Company is a party will continue to be made through the same lawyers who currently conduct such demands, in the way they have been made to date, and the costs and expenses related to the same shall be borne by the Indemnifier.

 

 

 

 

11.5.       Direct Claims. In the event that an Indemnified Party understands that it has suffered a Loss that does not involve a Third Party Claim ("Direct Claim"), the Indemnified Party shall notify, within 15 (fifteen) Business Days in writing, the Indemnifiers (Notice of Indemnification). The Notice of Indemnification shall describe the Loss, submit the provisions of this Agreement from which the right of indemnification shall take place, include copies of the available written documents and indicate the estimated amount, if reasonably possible, of the Loss suffered by the Indemnified Party. Failure to Notice Of Loss of the Indemnified Party within the period indicated above shall not exempt the Indemnifiers from the obligation to indemnify the Indemnified Party for such Loss except to the extent that such delay adversely affects the Indemnifier’s’ ability to defend itself against the claim in question.

 

11.5.1.   The Indemnifiers will have 30 (thirty) Business Days to respond in writing to the Indemnification Notification. If the Indemnifiers (a) agrees to the terms of the Indemnification Notice or ceases to send a response to the Notice of Indemnification within the indicated period, it shall pay the amount to the Indemnified Party; (b) express, in writing and in a well-grounded manner, its disagreement with the terms of the Notice of Indemnification within the said period of 30 (thirty) Business Days, the indemnification shall be deemed to be due if and when (b.i) the settlement of the impasse relating to such obligation to indemnify the Loss through mutual agreement between the Indemnified Party and the Indemnifiers or (b.ii) the date of the final decision , in accordance with the terms of Clause XII below; and in any case will be paid in the form of Clause 11.8 below.

 

11.6.        Loss Value. Regardless of the provisions of this Agreement, the determination of the value of a Loss shall take into account the payment made or the recovery actually received as a result of any third-party indemnification to which the Indemnified Party is entitled as a result of the fact or circumstance that originated the Loss, including because of insurance policies (i.e. the indemnification will be net of the amount of any third party indemnification actually received by the Indemnified Party, including if arising from insurance policies, but taking into account the costs necessary for the receipt of such indemnities, including the deductible cost incurred for receipt of the insurance). In addition, the payment of a Loss shall take into account the inter-time tax effects relating to the applicable deductibility or taxability (i.e. if the payment generates an actual deductible expense in the same fiscal year, the payment will be made at its net value). In cases of indemnification of Third Parties or insurance, if recovery occurs after payment of indemnification for Loss by the Indemnified Party, the Indemnified Party undertakes to reimburse the Indemnified Party the amount recovered within 10 (days) Working Days from the date on which the Loss was partially or fully recovered. If, on the other hand, the receipt of an indemnity payment generates a taxable obligation, the gross amount of the indemnity must be adjusted to result in a full indemnification of the Loss suffered.

 

11.6.1.    For the purposes of this Clause XIII, a Loss shall be deemed to have been incurred when a Party is in demand, depending on: (a) a final decision and not subject to any kind of appeal or appeal; or (b) judicial agreement or out-of-court transaction that has been duly approved and entered into under this Agreement. In the case of Losses that do not involve disbursement of funds or transfer of funds, a Loss shall be deemed in effect at the time of a final decision, in accordance with the provisions of Clause XII below, or the agreement between the Parties regarding the materialization of a Loss.

 

11.7         Escrow Account. The Company, as of closing and until no further indemnification is due under this Agreement, shall keep a record of the amounts of Losses (arising or not from Third Party Claims) indemnified under this Agreement, incurred by each of the Indemnified Parties by releasing on credit the amounts of losses incurred by buyer's indemnified parties and debit the Losses incurred by the Indemnified Parties of Sellers ("Escrow Account"). In the event of a Shared Loss (hereinafter understood as any Loss whose liability is partially applicable to any Indemnifier), the Escrow Account shall indicate the percentage due for each Indemnifier. The balance (positive or negative) of the Escrow Account should be updated monthly based on the IPCA.

 

 

 

 

11.7.1.    In accordance with the provisions of this Clause XI, each Party (and, in the case of Sellers, each Seller) shall pay the balance of the Escrow Account (or, in the case of Sellers, its percentage of the negative balance of the Escrow Account) at each anniversary of the Closing Date of this Agreement or on 10 (ten) Business Days counted from the date the positive or negative balance of the Escrow Account reaches BRL 500,000.00 (five hundred thousand reais) , by means of electronic transfers of immediately available resources – TED, of the respective amounts in the bank accounts of Sellers, buyer or company that have been informed in this Agreement, or to other bank accounts that have been informed by the Indemnified Party reasonably in advance.

 

11.7.2.   The Company shall send to the Parties: (i) half-yearly statements (or in smaller periods, as reasonably requested by sellers) indicating the balance of the Escrow Account and the postings made; and (ii) on the date that is ten (10) Working Days prior to the release date of payment of the Balance of the Escrow Account, the final amount of the balance to be paid by the Indemnification Party.

 

1.8.         Delay. Failure to pay amounts due pursuant to this Clause XI within the terms set forth herein shall subject the Indemnification Party to bear the positive variation of the IPCA between the expected date of payment and the date of actual payment, plus interest on late payment of [*****] per month and a fine of [*****] on the corrected amount.

 

1.9.          Continuity of Indemnification Obligation. The obligation to indemnify will not be impaired as a result of the potential transfer to Third Parties of equity interest in the Company.

 

1.10.       Mitigating Duty. The Indemnified Parties shall make best efforts to mitigate the chances of materializing a Loss under this Agreement by taking, or failing to take, any necessary or convenient measures to do so. Upon the occurrence of a Loss (or upon receipt of a notice of a Third Party Claim that may result in a Loss), the Parties shall, in good faith and to the limit possible, cooperate and act to mitigate the value of any Losses.

 

1.11.        Single Appeal. The Parties acknowledge and agree that the indemnity provisions provided for in this Agreement and other Transaction Documents will constitute the Parties' only remedy with respect to the legal deals contemplated in this Agreement and other Transaction Documents and any other inquiries related to the Company. Each Party waives, in this act, to the extent permitted to do so, any other rights or appeals that may arise by law.

 

1.12.        General Compensation Law. Any amounts owed by Sellers to Buyer may be offset by Buyer, upon prior notice ten (10) days in advance, against any balances due by Sellers under this Agreement through the Graphical Account mechanism. Any amounts deemed due by Sellers defined in SPA D1 to Buyer under SPA D1 pursuant to Clause 11.1 above may be offset by Buyer, upon prior notification 10 (ten) days in advance, against any balances due to Sellers under this Agreement, subject to the proportion of their participation in the Company's share capital and the mechanisms of the Escrow Account.

 

XII.         DISPUTE RESOLUTION

 

12.1.        Brazilian Law. This Agreement shall be governed by, and construed in accordance with, the laws of the Federative Republic of Brazil, which shall apply to the merits of the arbitration provided for herein.

 

 

 

 

12.2.        Arbitration Chamber. The Parties (including, where used in this Clause XII, Consenting Intervening Parties and Zenvia Inc.) Consenting Intervening Parties and Zenvia Inc.) agree that, with the exception of the net, certain and enforceable payment obligations, comprising judicial enforcement, any and all disputes, disputes, disputes, doubts, or controversy arising out of or related directly or indirectly to the existence, validity, interpretation, termination or termination of this Agreement and the other Transaction Documents , as well as their respective Exhibits ("Conflict") shall be required, exclusively and definitively resolved by arbitration in accordance with the Arbitration Rules ("Rules") of the Arbitration and Mediation Center of the Brazil-Canada Chamber of Commerce (CAM-CCBC) ("Arbitration Chamber"), which shall be responsible for the administration of the arbitration. Arbitration shall be governed by the Rules in force at the time the arbitration request is filed with the Arbitration Chamber.

 

12.3.        Arbitral Tribunal. The Arbitral Tribunal shall be composed of three (3) arbitrators ("Arbitral Tribunal"), and the choice of arbitrators shall not be restricted to the arbitration panel of the Arbitration Chamber. An arbitrator shall be appointed by the arbitrator(s), another arbitrator shall be appointed by the requested arbitrator(s), and the third arbitrator, who shall be the president of the Arbitral Tribunal, shall be appointed by the two arbitrators appointed by the parties in accordance with the Rules. If either party does not appoint an arbitrator, or if the two arbitrators chosen by the Parties do not appoint the third arbitrator within the prescribed period, the missing arbitrator(s) nomination shall be made by the President of the Arbitration Chamber. The same procedure shall apply in the event that any refusal, dispute, doubt or lack of understanding with respect to the nomination, choice or replacement of the members of the Arbitral Tribunal will be resolved by the Arbitration Chamber in accordance with the Rules. Arbitrators may be chosen from outside the Arbitration Chamber's list of arbitrators.

 

12.4.        The proceedings provided in this Clause shall also be applied to cases of replacement of arbitrators.

 

12.5.        Impediments. In addition to the impediments provided for in the Brazilian Rules and legislation, no arbitrator designated in accordance with this arbitration clause may be an official, representative or former employee of either Party.

 

12.6.       Arbitration and Language () The arbitration's office will be the City of São Paulo, State of São Paulo, Brazil, where the arbitral award will be rendered, and the arbitration will be conducted in Portuguese. The Arbitral Tribunal may, on a basis, and after consulting the parties, designate the performance of specific acts in other locations.

 

12.7.        No Judgement by Equity. The Arbitral Tribunal will adjudicate any Disputes based solely on the right and never on equity.

 

12.8.        Confidentiality. The Parties undertake not to disclose (and not to allow disclosure of) any information of which they become aware of and any documents submitted in arbitration, which are not otherwise in the public domain, any evidence and materials produced in the arbitration and any decisions given in arbitration, unless and to the extent that (a) the duty to disclose such information swerves from the law; (b) disclosure of such information is required by a governmental authority or determined by the judiciary; or (c) such information becomes public by any other means unrelated to disclosure by the Parties or their affiliates. Any and all disputes related to the obligation of confidentiality will be settled by the Arbitral Tribunal in a final and binding manner.

 

12.9.        15.8.       Default Judgement Arbitration proceedings shall continue even in the absence of one of the Parties, as provided for in the Rules.

 

 

 

 

12.10.      Final and Binding Judgment. The arbitral award shall be final and binding on the parties to the arbitration and shall not be subject to judicial approval or appeal of any kind, according to the exercise of good faith by one of the Parties to the request (a) to the Arbitral Tribunal, correction of material error or clarification of obscurity, doubt, contradiction or omission of the Arbitral Tribunal, pursuant to the Rules; and/or (b) to the Judiciary, of the decree of nullity of the arbitral award, in the strict terms of Article 32 of the Arbitration Law. The arbitral award may be enforced before any judicial authority that has jurisdiction over the parties and/or their assets.

 

12.11.      Costs, Expenses, Fees. The costs, expenses and fees incurred in the arbitration shall also be divided between the parties until the final judgment is delivered by the Arbitral Tribunal. The arbitral award shall define which party shall bear, or to what extent each party shall bear, the costs, including (a) the fees and any other amount due, paid or reimbursed to the Arbitration Chamber; (b) fees and any other amount due, paid or reimbursed to arbitrators, including fees; (c) fees and any other amount due, paid or reimbursed to experts, translators, interpreters, stenographers and other assistants, possibly indicated by the Arbitration Chamber or the Arbitral Tribunal; (d) attorneys' fees that have been spent by the parties during the arbitration and provided that they are reasonable; (e) fees incurred by the parties with technical assistants, experts and other expenses necessary for their representation; and (f) fine and/or compensation for possible litigation in bad faith. The Arbitral Tribunal shall not have jurisdiction to impose attorneys' fees due to loss of action.

 

12.12.      Exceptional State Jurisdiction. The Parties are fully aware of all the terms and effects of the arbitration clause herein, and irrevocably agree that arbitration is the only way to settle any disputes arising out of or relating to this Agreement. Without prejudice to the validity of the arbitration agreement, however, the Parties elect, with the exclusion of any others, the jurisdiction of the District of São Paulo, State of São Paulo, Brazil, for the exclusive purposes of: (a) obtaining urgent reliefs; and (b) exercise, in good faith, of an application for the decree of nullity of the arbitral award, pursuant to Article 32 of the Arbitration Law. Any urgent measure granted by the Judiciary shall be promptly notified by the party that requested such a measure to the Arbitration Chamber. The Arbitral Tribunal, once constituted, may review, maintain or revoke the measures granted by the Judiciary. After the constitution of the Arbitral Tribunal, precautionary measures or other measures shall be requested from the Arbitral Tribunal.

 

12.13.      Consolidation. If two or more disputes arise with respect to this Agreement and/or any other Transaction Document, its resolution may occur through a single arbitration proceeding. Prior to the constitution of the Arbitral Tribunal, it will be up to the Arbitration Chamber to consolidate such disputes into a single arbitration proceeding, in accordance with the Rules. After the constitution of the Arbitral Tribunal, in order to facilitate the resolution of related disputes, the Arbitral Tribunal may, at the request of one of the parties, consolidate the arbitration procedure with any other outstanding arbitration proceedings involving the resolution of disputes arising out of this Agreement and/or other Transaction Document. The Arbitral Tribunal shall consolidate the proceedings provided that (a) the proceedings involve the same parties; (b) there are common issues of fact and/or law between them; and (c) consolidation in these circumstances does not result in losses arising from unjustified delays in the settlement of disputes. The jurisdiction to determine the consolidation of proceedings and conduct the consolidated procedure shall be of the first arbitral tribunal constituted. The consolidation decision will be final and binding on all parties involved in disputes and arbitration proceedings subject to the consolidation order.

 

12.14.      Binding of the Intervening Consenting Parties and Zenvia Inc. to arbitration. Consenting Intervening Parties and Zenvia Inc. are expressly bound by this arbitration clause for all purposes of law.

 

 

 

 

XIII.       TERM AND TERMINATION

 

13.1.        Term. This Agreement shall be effective from the date of its signature and will remain valid and effective until your object is completed.

 

13.2.       Termination. Until the Closing occurs, this Agreement may be terminated or terminated, as the case may be (i) by mutual agreement between the Parties; (ii) unilaterally, by either Party, if SPA D1 is terminated; or (iii) unilaterally, at any time, by the innocent party, in the event of non-compliance with this Agreement or other Operating Documents, provided that, notified to the defaulting Party of its default, such defaulting Party has not complied with the breach within thirty (30) days of receipt of the notice. This Agreement may not be terminated after closing.

 

13.3.       Consequences of Termination.

 

(i)            If this Agreement is terminated pursuant to Clause 13.2 (i) above, this Agreement will cease to have effect before the Parties, being certain that no amount, fine, reimbursement of expenses or indemnification will be due by either Party to any of the other parties.

 

(ii)          If this Agreement is terminated pursuant to Clause 13.2(ii) above by virtue of the verification of the Preceding Conditions and provided that such fact does not sum up the performance with deceit, fraud or proven bad faith of the party responsible for its performance, this Agreement shall cease to have effect before the Parties, being certain that no amount, fine, reimbursement of expenses or indemnification will be due by either Party to any of the other parties.

 

(iii)          If this Agreement is terminated pursuant to Clause 13.2(ii) above by virtue of the verification of the Preceding Conditions by virtue of acting with intent, fraud or proven bad faith of the Party responsible for its compliance, or pursuant to Clause 13.2(iii) above, the defaulting Party shall indemnify the Indemnified Party for the Losses suffered pursuant to Clause XI above.

 

13.4.        Survival. The following clauses will survive the termination of this Agreement: Clause IX (Confidentiality), Clause XII (Dispute Resolution), Clause XIV (General Provisions) and Clause XI (Obligation to Indemnify), in the latter case, only with regard to acts, events or omissions occurring prior to the end date of this Agreement.

 

XIV.        MISCELLANEOUS

 

14.1.        Notices. All notices, consents, requests and other communications provided for in this Agreement shall only be deemed valid and effective if they comply with written form and are sent by letter with acknowledged receipt or protocol, or e-mail with proof of receipt, and shall be sent to the Parties at the following addresses:

 

(i)            To Sellers:

 

Name: Vanderlei Calejon / Heitor Sakoda / Cleber Calejon

Address: Rua Pequetita, n° 215, 7° andar, Parte, Vila Olímpia,

São Paulo, SP – Zip Code 04552-060

Emails: [XXXXX]

 

 

 

 

(ii)            To Buyer (and/or its successors and assignees):

 

Name: Zenvia Mobile Serviços Digitais Ltda., to the attention of Legal Manager amd M&A Manager.

Address: Avenida Paulista, 2300, 18º andar, cjto 182 e 184, Bela Vista

ZIP Code 01310-300, São Paulo-SP

Email: [XXXXX]

 

With a copy to:

 

(provided that the receipt of Notice by such recipients is intended to inform only, and will not be considered for Notice purposes)

 

Name: Pinheiro Neto Advogados, to the attention of [XXXXX]

[XXXXX]

 

(iii)          To the Company (and/or its successors and assignees):

 

Name: Vanderlei Calejon / Heitor Sakoda / Cleber Calejon

Address: Rua Pequetita, n° 215, 7° andar, Parte, Vila Olímpia,

São Paulo, SP – ZIP Code 04552-060

E-mails: [XXXXX]

 

14.1.1     The change of addressee, address or any of the information indicated above by a Party must be promptly communicated in writing to the other Party, as provided herein; if said communication is no longer made, any notice or communication delivered to the addressees or at the addresses indicated above will be deemed to have been duly made and received.

 

14.1.2      As provided for in Clause 5.1, where it is a jointly assigned right or obligation to Sellers, Vanderlei shall have general powers to send and receive Notices on behalf of all Sellers under this Agreement. For the purposes of this Clause, the Vanderlei is hereby appointed by each of the Sellers as its faithful attorney, empowered to receive and send, on behalf of such Seller, any notice, notification, court service or notice of arbitration, or communication of any nature provided for in or relating to this Agreement. The mandate provided for in this Clause is granted irrevocable, as a condition of the business, in the form of Article 684 and the sole paragraph of Article 686 of the Civil Code.

 

14.2         Irrevocability. This Agreement is irrevocable, and the obligations herein assumed by the Parties also bind their successors in any way.

 

14.3         Full Agreement. Any declaration by any court of nullity or the ineffectiveness of any of the covenants contained in this Agreement shall not affect the validity and effectiveness of the others, which shall be fully complied with, binding the Partners to do their best to validly adjust to obtain the same effects as the agreement that has been canceled or has become ineffective.

 

14.4         Exhibits and Addenda. This Agreement and its Exhibits constitute the entire understandings and agreements of the Parties with respect to the matters herein. This Agreement and its Exhibits may only be amended by means of a written instrument signed by the Parties. In the event of a conflict between this Agreement and its Exhibits, the provisions of the Agreement shall prevail.

 

 

 

 

14.5         Novation. The failure or Default of any of the PARTNERS in exercising any of their rights in this Articles of Incorporation shall not be considered as a waiver or novation and shall not affect the subsequent exercise of such right. Any waiver shall take effect only if specifically granted and in writing.

 

14.6        Assignment. Except for the authorization of Sellers assign the shares issued by Buyer and Zenvia Shares to a controlled company or to an investment fund which is Affiliated of Sellers or one SPA D1 sellers, which may be occur irrespective of Buyer’s consent, it is hereby expressly prohibited to assign any rights and obligations pertaining to Sellers hereunder, without Buyer’s previous and express consent, in writing. Likewise, Buyer shall not assign any rights and obligations hereunder without Sellers’ previous and express consent, in writing. In case of assignments subject to the terms of this Clause, assignors and assignees shall be jointly and severally liable for all obligations hereunder.

 

14.7        Capacity. Each Party signs this Agreement and declares (a) to be aware of the obligations arising from this Agreement and the legislation governing this Agreement; (b) have been assisted by lawyers; (c) that the terms and conditions of this Agreement have all been negotiated in detail and commutatively; (d) that, by virtue of their day-to-day activities in the management of their respective companies, they have full understanding of all the terms and conditions of this Agreement; and (e) is not subject to any exceptional economic or financial necessity and fully assumes the charges and risks inherent in this Agreement, including, without limitation, the indemnification obligation set out in Section XI of this Agreement.

 

14.8        Free Stipulation. The Parties acknowledge that the legal agreement entered into by virtue of this Agreement has been established by free stipulation between the Parties, so that the terms and provisions set forth herein shall be fulfilled by the Parties. No public policy standard shall be used to benefit a part in a manner other than that agreed herein. The obligations provided herein are exclusively business in nature, and do not represent any obligation or provision of a labor nature.

 

14.9        Out-of Court Title and Specific Execution. All obligations under this Agreement are irrevocable and subject to specific performance. In accordance with the provisions of Section XII above, any Party has the right to use any legal or extrajudicial action or proceedings to comply with this Agreement and all obligations assumed herein, and either Party shall have the right to seek the defaulting Party in order to (a) the specific performance of the obligations; and/or (b) indemnification for Losses. This Agreement constitutes an out-of-court enforcement order, pursuant to Article 585, item II, of the Brazilian Code of Civil Procedure.

 

14.10      Liability. This Agreement and the Transaction Documents are irrevocably and irretrievably signed and binds the Parties and their successors in any way.

 

14.11      Consenting Intervening Parties. The Consenting Intervening Parties declare that they are fully aware of the Agreement and expressly agree to all of its terms and conditions, as well as to all obligations assumed by them in this Agreement.

 

14.12      Joint Liability and Guarantee. Buyer is committed to cause Zenvia Inc. to adhere to this Agreement on the Closing Date, as guarantor, under joint liability, without privilege of order, for the fulfillment of any and all obligations assumed by Buyer. For the avoidance of doubt, Zenvia Inc. shall guarantee to Buyer, as debtor and principal payer, before Sellers and the Indemnified Parties of Sellers, with waiver of the benefits provided for in Articles 333, paragraph, 364, 366, 821, 824, 827, 829, sole paragraph, 830, 831, 834, 835, 837, 838 and 839 of the Civil Code and articles 130 and 794 of the Code of Civil Procedure (and any successor or substitute provisions of such articles).

 

14.3        Digital Signature. The Parties agree and agree that the conclusion of this Agreement may be made in accordance with the provisions of Decree No. 10.278 of March 18, 2020, and the proof of authorship and integrity will be made through DocuSign, being considered valid only electronic signatures made by means of digital certificate validated according to the Brazilian Public Key Infrastructure ICP-Brazil, pursuant to Provisional Measure No. 2.200-2/2001.

 

 

 

 

14.14      Authorization for Execution. (a) Each Seller (including the Company) and the Consenting Party authorize Vanderlei or Cleber to execute the Agreement on their behalf; and (b) Buyer authorizes Letícia de Alencar Machado to execute the Agreement on its behalf.

 

14.15       Pandemic. The Parties are aware of the extraordinary situation experienced, arising from the pandemic of COVID-19, declared by the World Health Organization on March 11, 2020, and its present and future impacts, so that none of them may frame such event as justification for possible default or termination of this Agreement, claim this extraordinary situation as a fortuitous event, force greater , the fact that the prince or claims excessive burden in the context of the obligations hereunder, seeking the revision or termination of this Agreement, and hereby assume sums of any and all risks arising from such event and immediately waive any remedies to justify the fulfillment of obligations.

 

In witness whereof, the parties sign this Agreement in 5 (five) counterparts of equal contents, in the presence of the two (02) undersigned witnesses

 

Sao Paulo, March 18, 2021

 

/s/ Cassio Bobsin, CEO  
/s/ Renato Friedrich, CFO  
Zenvia Mobile Serviços Digitais S.A.  
   
/s/ Vanderlei Arcanjo Carnielo Calejon  
Vanderlei Arcanjo Carnielo Calejon  
   
/s/ Heitor Sakoda  
Heitor Sakoda  
   
/s/ Cleber Augusto Calejon  
Cleber Augusto Calejon  
   
/s/ Vanderlei Arcanjo Carnielo Calejon, Partner  
/s/ Cleber Augusto Calejon, Partner  
4 TI Participações Ltda  
   
/s/ Fernando Jorge Wosniak Steler, CEO  
One to One Engine Desenvolvimento e Licenciamento de Sistemas de Informática S.A.  
   
/s/ Fernando Jorge Wosniak Steler  
Fernando Jorge Wosniak Steler  
   
WITNESSES:  
   
/s/ Caio Figueiredo  
Identity: [XXXXX]  
   
/s/ Gabrielle Santos  
Identity: [XXXXX]  

 

 

 

 

Exhibit 14.01

  

7412-5-BA_1_PAGE_01.GIF ZENVIA Code of ethics and conduct. 1

 

 

 

 

7412-5-BA_1_PAGE_02.GIF 1. 2. 2.1. 2.2. 2.3. 2.4. 2.5. 2.6. 2.7. 2.8. 3. 3.1. 3.2. 3.3. 3.4. 3.5. 3.6. 3.7. 3.8. 3.9. 4. 4.1. 4.2. 5. 5.1. 5.2. 5.3. 5.4. INTRODUCTION.................................................................................................................. 4 FIND YOUR BALANCE, BE YOURSELF AND HAVE FUN ...............................................................10 Diversity and inclusion.......................................................................................................11 Conflict of interest ...........................................................................................................11 Volunteer work and/or other commercial activities .......................................................... 12 Internal marketing............................................................................................................ 13 Relations between employees, suppliers and customers.................................................13 Harassment and abuse of power.......................................................................................14 Celebrations and get-togethers....................................................................................... 14 Personal presentation.......................................................................................................15 OPEN YOUR MIND AND LEAD YOUR DEVELOPMENT FEELING AS AN OWNER...........................16 Fair treatment, equality, development and professional development............................... 17 Using the company’s assets and property............................................................................17 Anti-corruption.........................................................................................................17 Legal obligations............................................................................................................. 18 Privacy of personal information...................................................................................... 19 Confidentiality of information.......................................................................................... 19 Integrity of information................................................................................................... 19 Availability of information................................................................................................ 20 Privileged information..................................................................................................... 20 KEEP IT SIMPLE AND CONSISTENT WITH AGILE COLLABORATION........................................21 Entrepreneurial attitude.................................................................................................... 22 Innovation and openness to new ideas........................................................................... 22 DELIVER SUPERIOR VALUE WITH AWESOME PRODUCTS AND CONSTANT INNOVATION.......23 Defining objectives and goals......................................................................................... 24 Intellectual property........................................................................................................ 24 Using social media.......................................................................................................... 24 Corporate image preservation........................................................................................ 25 2 Table of Contents

 

 

 

 

7412-5-BA_1_PAGE_03.GIF 6. 6.1. 6.2. 6.3. 6.4. 6.5. 6.6. 6.7. 6.8. 6.9. 6.10. 6.11. 7. DELIGHT WITH A UNIQUE USER EXPERIENCE......................................................................26 Customer relations.......................................................................................................... 27 Channel relations............................................................................................................ 27 Relations with suppliers and service providers................................................................. 27 Relations with competitors............................................................................................. 28 Union relations................................................................................................................ 28 Relations with carriers................................................................................................... 28 Relations with shareholders..............................................................................................28 Relationship with the community................................................................................... 29 Press relations................................................................................................................. 29 Relations with public entities.......................................................................................... 29 Sustainability.............................................................................................................29 REPORTING CONCERNS AND ETHICS CHANNEL.................................................................30 3

 

 

 

 

7412-5-BA_1_PAGE_04.GIF “ by the goal simplifying the world “ At Zenvia, we are driven by the goal of simplifying the world through smart, personalized and contextualized communications, simplifying complex processes involving companies and customers. Based on our respect and transparency towards people, this document translates our values and principles, made evident in procedures and actions that guide and orient our daily professional activities. This Code of Ethics and Conduct most certainly does not address every scenario we face, but aims at guiding and providing support when trying to answer questions on how to proceed, so that we may implement our way of doing things. We know that making this dream come true is something really gratifying, but it is also challenging. Implementing our way of being and doing things, as well as our values and behaviors, thus making an impact on all stakeholders is a mission that drives us on a daily basis. With this initiative, we strengthen our culture on which our business and people management processes are based, specifying what is expected from each one of us. We believe that our ethical conduct - summarized herein - will contribute to the support and growth of our company, establishing compatible behaviors aimed at guaranteeing and consolidating Zenvia’s brand and reputation. Ensuring compliance with good practices and attitudes in our relations with all audiences is essential to the continuity of our business purpose and strategy. Hence, we put into this Code of Ethics and Conduct our way of doing things as well as encouraged and unauthorized practices in our relations with our customers, partners, shareholders, government authorities, society and other stakeholders. Cassio Bobsin, CEO 4 Introduction We are driven of Section 1

 

 

 

 

7412-5-BA_1_PAGE_05.GIF Main Serve as a practical guide for professional conducts and behaviors; goals of Strengthen our corporate culture, specifying and defining what is expected of each party; this code Translate Zenvia’s values, making all guidelines for our actions clear and transparent, aiming at ensuring a healthy work environment, with transparent relationships among colleagues, customers, suppliers, partners, shareholders, government authorities, society and other stakeholders; Contribute to the development of an outstanding work environment, with all professionals showing a high level of trust and engagement, regardless of their position or area. We believe in a balanced and healthy life, without any hindrances, without ever leaving aside the fun and freedom to be ourselves. THE With owner sense and an open mind towards the opportunities that surround us, we lead our own development instead of waiting for it to happen. WAY THERE IS NOTHING IMPOSSIBLE FOR PEOPLE WHO DREAM. We collaborate with each other in the pursuit of simplicity with consistency, which wins over markets and makes us stand proud. For us, time never stops. We innovate constantly in order to deliver higher value through outstanding products. Because when we achieve customers with unique experiences, we are able to charm them and take a step forward on the path toward our objectives and goals. With our values present in everyday life, we will simplify the world through intelligent conversations. 5

 

 

 

 

7412-5-BA_1_PAGE_06.GIF WHY Purpose: Sim plify the world Communication platform that enables companies to simplify customer experiences. HOW WHAT Our Values We believe that gathering people around a single purpose and multiplying knowledge, unique contributions and learning experiences generate outstanding results and exponential growth. Thus it is only right that we represent this essence - our values - like a mathematical equation, which takes into account three main pillars: employees, ZENVIA and our CUSTOMERS. Since we are talking about multiplying (instead of adding) the final result of this equation will be zero if one of these elements is zero. This means that it is important to find balance and constantly evolve and develop our five values so that our collective outcome results in “growing in a sustainable way and going beyond”. EMPLOYEE CUSTOMER X X SUSTAINABLE WAY AND GOING BEYOND GENERATING VALUE 6 GROWING IN A XX

 

 

 

 

7412-5-BA_1_PAGE_07.GIF Leadership Skills Our leaders must be an example in terms of running and managing our business and personnel so that we may achieve our Purpose and Strategy. In this case, there are two skills that clearly translate what we expect from our managers, who must also be an example of how to act in accordance with Zenvia’s values. People Management 7 Business Management It encompasses the company’s strategy and it reverberates throughout the areas where it is operated, generating a systemic view and promoting alignment with all business goals. It provides a view of inside and outside scenarios, observing trends, opportunities and threats that may impact the business, stimulating and directing efforts aimed at maximizing results. It takes a position and generates consistent decision-making, articulating expectations and impacts both internally and externally, based on the qualitative and quantitative analysis of multidisciplinary facts and data, taking responsibility and acting as a business owner. It is the main pillar of the company’s values and strategy, acting as an agent of change, leading and inspiring through example, in addition to engaging and mobilizing people around the company’s purpose. It attracts, manages and develops high-performance teams, placing people in the right places and preparing them so that they may achieve outstanding results for the business. It strongly influences the development of the company’s future through people, generating incentives and an environment where teams can act as protagonists in order to overcome challenges.

 

 

 

 

7412-5-BA_1_PAGE_08.GIF Getting to know the Code of Ethics and Conduct What is the purpose of a Code of Ethics and Conduct? Making all of Zenvia’s basic guidelines clear and transparent, this being the main instrument that guides our actions and procedures. To whom this code applies? This Code of Ethics and Conduct is applicable to all Zenvia administrators, managers, employees, third parties, suppliers, customers and partners. When dealing with the company’s customers and suppliers, these parties must be made aware of the regulations found on the Code and act in due accordance with its guidelines. This instrument shall be included as an attachment to agreements celebrated with service partners, and the services provided by these partners shall be discontinued in the event of any actions contrary to the specifications found in this code. Examples: 1. Breach of confidentiality or inappropriate use of the company’s information; 2. Offering free gifts, presents or any monetary advantages deemed incompatible with this code. What is ethics? It is a set of principles to which we must abide and observe in order to live well in society or the groups to which we belong, such as the company we work for. What is a Corporate Code of Ethics and Conduct? It is a set of principles specified by a company with guidelines to be followed by all of us. How important is this Code for employees and the company? Through this Code you will understand what we do and what we do not tolerate in terms of conducts and behaviors expressed by employees as well as by the company. Thus, If there is any questions on how to proceed in a given situation, all you have to do is refer to the Code of Ethics and Conduct and talk to your immediate manager or to the Human Resources area. What is the role of Zenvia leaders? Leaders must be an example and promote the enforcement of this code, providing orientations to the employees on their teams with regard to the guidelines found herein, treasuring and stimulating compliance with Zenvia’s values. 8

 

 

 

 

7412-5-BA_1_PAGE_09.GIF Cases of non-compliance with the Code of Ethics and Conduct All employees must know and act in accordance with the company’s values and ethical principles described herein, complying with its standards, rules, policies and guidelines. Everyone is expected to be proactive, reporting any difficulties regarding its compliance and contributing to its improvement. This information must be notified to the Ethics Channel, People Management Area, immediate manager, Ethics and Conduct Committee or Zenvia directors. In order to ascertain Human Resources conduct is ethical or not, we suggest that you make sure that such conduct is in accordance with: Current legislation; This Code and internal policies; If the answer to any of these questions is “no”, it is very likely that this conduct is inappropriate and not tolerated by Zenvia. Corporate values. Should there be any remaining questions regarding this conduct, we suggest you think about it based on the questions below: Would this conduct allow me to feel at peace with what I have done? Would other people see this conduct as correct? Would you publish this information on social media? 9 Important: If you have questions you have questions at any given time, talk to your immediate manager, the Human Resources area or submit your question to the Ethics Channel.

 

 

 

 

7412-5-BA_1_PAGE_10.GIF balance, have fun Our behaviors Understand and respect individual differences, without judgment, learning from them. Mobilize and encourage a relaxed and fun environment, where people feel free to be themselves and contribute in their own way, with responsibility and common sense. Seek a constant balance between personal and professional life, taking responsibility with regard to the commitments undertaken. Take a position and align expectations, respecting individual limits and values. Celebrate the company’s achievements and understand that we are a single team. 10 Find your be yourself and Section 2

 

 

 

 

7412-5-BA_1_PAGE_11.GIF Diversity and inclusion To Zenvia, including diversity in the workplace means to respect, listen and genuinely take into account numerous ways of being, thinking and acting. We do not tolerate any kind of prejudice, our basic premise being a respectful interaction among people, regardless of gender, race, nationality, ethnic, social or indigenous origin, age, or sexual orientation. We must all understand and respect everyone’s differences and uniqueness, without any judgment, aiming at learning from this. We believe that our attitude - that is, to include diversity in the workplace in an open-minded and inspiring way - enables creativity and innovation, which may be directed towards value generation for our business, employees, customers, suppliers and shareholders, in addition to stimulate an environment where everyone can be who they are. Conflict of interest All employees must avoid conflicts of interest involving their economic activities - both on a personal and family level - and the job they carry out at Zenvia so that these activities do not interfere with their ability to make impartial decisions or compromise their responsibilities. Examples that illustrate some potential scenarios of conflict of interest: Employees using their position or information acquired inside the company in outside activities, in dissonance with Zenvia’s interests; It is strictly forbidden to hand out gifts or presents in cash or other similar forms; additionally, cases that may be perceived or interpreted as attempted bribing or as an intention to improperly exert influence must be avoided; An opportunity for personal gain that involves any connection or association with Zenvia; 11 2.2 2.1

 

 

 

 

7412-5-BA_1_PAGE_12.GIF Financial or material advantages that may characterize an inappropriate relationship, financial losses or reputation damages for Zenvia. In order to avoid practices that may result in individual benefits or inappropriate advantages, employees must immediately report any situation that may be deemed a conflict of interest to the channels mentioned in this Code, asking for orientations; Receiving gifts and presents of no commercial value, usually of a promotional nature and bearing the brand of our suppliers, customers or partners, is deemed appropriate. This definition includes office supplies (such as pens, notebooks, calendars etc.), flowers and edible products (food baskets, a box of chocolate and beverages). Please pay close attention to how frequently you receive gifts from a given supplier so that this may not be characterized as a conflict of interest. Any present, gift, tickets/admissions to entertainment options or any other benefit of any given nature offered or received by Zenvia employees must not impact their ethical stance in the relationship they have with customers, suppliers and other partners, nor violate the principles found in this Code and current legislation; Volunteer work and/or other commercial activities The volunteer work carried out by our employees in connection with social projects, community action, events at universities and meet-ups, among others, are seen by Zenvia in a positive light. In these cases, we stress that employees are fully responsible for these activities. Thus, employees are not authorized to present themselves as representatives of the company or ask for support on its behalf without prior alignment with the Marketing and People Management areas. With regard to other commercial activities, Zenvia has no objection to employees carrying out other occupational activities (such as consulting, teaching activities etc.), Human Resources that they comply with their responsibilities as provided for in their employment agreements and do not come into conflict with the company’s interests. 12 2.3 Attention: If employees have any questions about whether to offer or accept any sort of gift or present, they may contact their direct manager or the Ethics Channel.

 

 

 

 

7412-5-BA_1_PAGE_13.GIF Internal marketing It is permitted to market products and carry out services (unrelated to Zenvia’s business activities) within the company’s facilities, aiming at promoting the well-being and quality of life to our employees, provided that the product or service is legal and previously authorized by the immediate manager. Relations between employees, suppliers and customers The relationships maintained by employees must, in all levels, be guided by transparency and respect. We shall not tolerate any conduct that may be characterized as harassment and/or duress of any kind. However, intimate relationships and/ or family relationships involving direct or indirect managers (higher in the hierarchy) and subordinates or employees on the same team are not permitted - in these cases, internal changes may occur to avoid discomfort or advantages in comparison with other employees. Intimate relationships or family relationships1 involving employees and suppliers, customers or colleagues in the same area are permitted provided that these do not interfere with labor relationships and are previously approved by the immediate manager. If this relationship involves a director, approval must be granted by the CAD (Administration Board). Employees are responsible for reporting these cases, regardless of whether these relationships are new or already existing, to the Human Resources area for assessment and referral. 1. Relatives up to the fourth level of kinship: spouse, child, sibling, grandparent, cousin, son/daughter-in-law, nephew/niece, great-nephew/niece, father/mother-in-law and a great-grandchild. 13 2.5 2.4

 

 

 

 

7412-5-BA_1_PAGE_14.GIF Harassment and abuse of power Employees shall not engage or suffer harassment of any given nature (sexual, economic, moral etc.), nor be involved in situations that may be characterized as disrespectful, intimidating or threatening. mental/physical condition. Even without the intention of offending, demonstrations of this kind result in inappropriate situations, which can generate a hostile work environment. Harassment is characterized when someone makes use of a perceived advantage in order to humiliate, disrespect or embarrass someone else. Moral harassment occurs when someone is exposed to humiliating or embarrassing situations. Sexual harassment consists of an insinuation, intimidation or the use of a perceived advantage of a sexual nature. By interacting with their colleagues, employees must refrain from making jokes, demeaning comments or impose nicknames making any reference to a person’s ethnicity, gender, race, ethnic, skin color, age, sexual orientation, religious belief, marital status, social or indigenous origin, place of origin or Celebrations and get-togethers Thus, the consumption of alcoholic beverages within the company’s facilities is allowed only on special occasions, provided that this does not interfere with professional activities - preferably after working hours. Excesses in this regard shall be addressed on a case-by-case basis, and all applicable disciplinary measures shall be taken. We encourage the celebration of small-, medium-and large-scale achievements. We believe we are one single team, and that it is essential to praise each step forward we take towards our purpose. At Zenvia we have a flexible environment, in which employees may fully enjoy the facilities available. We believe that everyone will make use of such resources in a conscious and responsible way. The execution of professional activities while inebriated is not permitted. Moreover, the use and possession of drugs - whether legal or not - is prohibited, as is being in the workplace under their influence, since this may affect the safety and performance of employees and their colleagues as well. In the case of internal celebration and get-togethers, we value respect and responsibility with regard to our resources, brand and positioning whenever people are at our facilities or when they are on social media. 14 2.7 2.6

 

 

 

 

7412-5-BA_1_PAGE_15.GIF Personal presentation We encourage and value a relaxed work environment where all employees are free to express themselves. We do not have a dress code, and we even encourage employees to express their own style and dress however they like. We only recommend that employees working closely with customers make adjustments to their dress code when having a meeting with or visiting the customer in question, according to the customer’s culture and work environment, in order to show respect and adjust to what is expected from people at that location. 15 2.8

 

 

 

 

7412-5-BA_1_PAGE_16.GIF and lead Our behaviors Identify with the company, are passionate about what they do and mobilize for Zenvia’s purpose. Be responsible for your growth, constantly seek to learn and also help with everyone’s development. Give and receive feedback as a form of development. Be open, instigate and try new things, without preconceptions, learning and evolve from your mistakes and successes. Understand the business, the company as a whole and how areas depend on one another. Question the status quo with freedom, placing the interests of the company above individual ones. Act with a sense of ownership, taking all necessary actions (difficult or not) in the best interest of the business, without violating ethical conduct and legal rules. 16 Open your mind your development feeling as an owner Section 3

 

 

 

 

7412-5-BA_1_PAGE_17.GIF Fair treatment, equality, development and professional development Decisions regarding people management (such as hiring, merit, promotion, remuneration, lay-off and transfer) shall be made based on professional criteria specified in our current management policies2. enabling conditions so that their teams may evolve . We value people who develop other people. Each employee must pursue their own professional development and growth, as well as contribute to other people’s professional development. Zenvia stimulates employees to fully develop and reach their maximum potential. Managers must be an example and a source of learning and inspiration, Talk to your manager so that they may provide support to your development, share your professional aspirations and outline your individual development plan. Using the company’s assets and property forbidden to use and access of a racist and pornographic nature, or any other kind of content that violates and/or goes against good practices, legislation, internal policies and this Code. We must care for the company’s assets and properties as if these belonged to us. Practices that must be carried out to achieve this end include using our work tools with care and fight against any kind of waste. Zenvia’s assets are destined for professional use. Technology equipment must be used in a professional and responsible way, in compliance with internal policies. It is strictly Furthermore, all the equipment provided to employees for a specific need or as a work tool must be returned in good conditions if the employment agreement be terminated. Anti-corruption Our employees are expected to have the highest level of integrity with regard to all of their business activities and relationships. The company repudiates any practices committed by its administrators, employees or third parties that are associated with actions aimed at favoring people that may be characterized as corruption or bribery; thus, everyone must make sure that situations of this kind are not committed or accepted. 2. You can find on our Intranet internal policies for: Positions, Careers and Remuneration; Recruitment and Selection. 17 3.3 3.2 3.1

 

 

 

 

7412-5-BA_1_PAGE_18.GIF Employees, partners and suppliers are prohibited from accepting, offering or providing - either directly or indirectly - favors, money, presents and hospitalities to Public Servants or third parties associated with a public servant in order to obtain advantages, influence or reward decisions made for their own benefit own or the benefit of the company. In order to comply with this provision, in addition to legal ones, they must abide by the following definitions of bribery and corruption: Corruption: It refers to a state or situation resulting from making available, requesting, authorizing, offering or receiving a bribe. Any form of corruption, bribery, and fraud is strictly forbidden and must be reported to the immediate manager, the Ethics Channel, Human Resources, directors or the Ethics Committee. If you have any questions regarding the possibility of offering or accepting any kind of gift or present as part of a relationship with public authorities, contact your manager or the Ethics Channel. Bribery: It is defined as the intentional offer, suggestion, payment or authorization of payment to someone for personal gain, with the intention to motivate someone to actively or passively deviate from professional duties or to ensure the performance of given activity. Legal obligations Zenvia fully complies with all laws, rules and regulations that may be applicable to its business activities, these being reflected on its internal policies. All employees must be familiar with the laws and regulations that may be applicable to the professional activities they carry out, including internal policies and guidelines, as well as act in accordance with them. All employees have the obligation to report any practice that they know or suspect that could compromise the accuracy of accounting records. Actions carried out by regulatory, inspection, police and legal/court authorities shall be facilitated, and all company information shall be made available whenever requested, in strict compliance with the law. Companies are responsible for recording all accounting and financial transactions in their reports and balance sheets in an accurate, consistent, precise, truthful and comprehensive way, with a high level of detail and contextualization in order to ensure the transparent nature that must be inherent to the situation addressed herein. In some cases, legal obligations may not be clear and questions may arise. In these situations, as well as in cases of suspected non-compliance, employees must seek advice from their Immediate Manager, the Legal area or the Ethics Channel. 18 3.4

 

 

 

 

7412-5-BA_1_PAGE_19.GIF Privacy of personal information Information Safety area in order to prevent information leaks and misuse. Employees may have access to personal information from customers or other employees, depending on their position within Zenvia, such as their names, ID card numbers, CPF (taxpayer ID) numbers, bank accounts, email addresses and IP addresses, among other information. Therefore, in accordance with the requirements specified in data privacy laws LGPD (General Data Protection Act) and GDPR (General Data Protection Regulation), employees must follow every personal data protection guideline provided by the Violations of these requirements found in data privacy laws may result in administrative penalties imposed by the ANPD (National Data Protection Agency), which may range from warnings and fines to the closing of Zenvia activities. Confidentiality of information This information may not be disclosed, communicated, released or removed from the company without Board approval. Due to their position or the work activities carried out, employees may have access to confidential information on the company’s business strategy, products/services, customers, suppliers and competitors. Therefore, employees must strictly comply with the Information Safety Policies. Information pertaining to employees or partners that have been generated or acquired internally or during the course of business relationships, may not be provided to third parties, apart from exceptions defined by the law. Integrity of information Employees are responsible for ensuring the integrity of the information on Zenvia and customers. They must protect such information from inappropriate changes by making correct use of all technology resources, in accordance with the orientations provided for in internal information safety policies and training sessions on the topic. We must be extremely careful when sharing information both internally and externally, and we must contact out immediate manager should there be any questions on whether the information in question may be shared or not. Sensitive information Zenvia cannot be stored on personal technology devices such as laptop computers, smartphones, flash drives or other devices in order to minimize the risk of leaks, loss or theft of this information. 19 3.7 3.6 3.5

 

 

 

 

7412-5-BA_1_PAGE_20.GIF Availability of information Employees must make use of all technology resources in an appropriate way in order to prevent the interruption of Zenvia’s activities. Any changes or maintenance works to which the equipment may be submitted can only be carried out by Zenvia’s Corporate Infrastructure area. Internet access through personal devices (such as smartphones) using Zenvia’s network can only occur through a connection with the “Zenvia Visitors” network. Privileged Information Privileged information is defined as information that is not known by the public in general and that may influence someone’s decision to invest in the company or not. Several kinds of privileged information are specified in the company’s Information Disclosure Policy3. Thus, any information of this kind must remain confidential, the following not being allowed: Use such information to make a decision to invest in the company or in its partners with stock traded in the Stock Market for your own benefit or for the benefit of third parties; Everyone who has - in any given way - contact with Privileged Information must maintain the highest level of confidentiality when handling such information. Take advantage of business opportunities or prospects that have been identified by the company; The use of Privileged Information to obtain - for yourself or for others - any kind of advantage, including when negotiating the company’s securities (shares or any other securities traded in the stock market), is strictly prohibited by law. This kind of conduct results in very severe penalties, imposed by authorities regulating the capital market. Disclose any kind of information that may interfere with the market value of the company’s shares. 3. Please refer to the policy found on our Intranet. 20 3.9 3.8

 

 

 

 

7412-5-BA_1_PAGE_21.GIF consistent with Our Behaviors Make bold decisions based on facts and data, considering the impact on the company as a whole. Communicate clearly and objectively, creating alignment and context for people. Seek simplicity and agility, privileging human interaction as a way to solve problems and build together. Be resilient, understand change and act quickly. Search for the simplest solutions to solve complex problems, with a systemic vision, delivering value in short cycles and evolving quickly. 21 Keep it simple and agile collaboration Section 4

 

 

 

 

7412-5-BA_1_PAGE_22.GIF Entrepreneurial attitude All employees are expected to act in an entrepreneurial way when carrying out their daily work activities and act with owner sense within their area of operation and level of responsibility. We value employees who are always seeking new opportunities, focusing on adding value and on the sustainability of our business. Innovation and openness to new ideas Zenvia is committed to a continuous search for innovation. For us, it is crucial that people have the courage to propose, seek and receive new ideas, identifying unconventional improvement opportunities and transforming them into practical actions to be applied in their daily activities. Within this context, all company employees are encouraged to constantly seek new ideas and ways of doing things. 22 4.2 4.1

 

 

 

 

7412-5-BA_1_PAGE_23.GIF value with Our behaviors Seek and foster new ideas and ways of doing things. Know the market, listen to the customer and know your consumers, aiming to add value in everything you do. Understand your role and contribution, working to make the product incredible for everyone. Constantly seek sustainable short, medium and long term results. Be attentive to trends, new technologies and methodologies that can generate innovation and add value, evaluating and proposing its adoption at Zenvia. 23 Deliver superior awesome products and constant innovation Section 5

 

 

 

 

7412-5-BA_1_PAGE_24.GIF Defining objectives and goals Managers have a very important role in guiding and defining individual goals for their employees, as well as monitoring their teams. They must assess their teams in a fair and honest way, giving transparent feedback on their results, encouraging them and always pursuing the development, growth and optimal performance of their teams. Every employee must understand their role and what the company expects from their performance. In addition to carrying out excellence-imbued deliveries and pursuing optimal performance on a continuous basis, we must also think about new ways to leverage Zenvia’s continuous improvement and sustainability. Objectives and goals are agreed upon with the immediate manager, and these must be in alignment with their position and the company’s strategy. Intellectual property The results of the work associated with intellectual property assets4 that have been, either directly or indirectly, created by Zenvia employees while carrying out their activities within the organization are exclusively owned by Zenvia. Employees are responsible for treating confidentially any information about intellectual property that they may have access to as a result of their work, using it carefully. It is not permitted to disclose this information without Board authorization. Using social media Zenvia allows employees to make use of social media, provided that they do not violate the regulations found in the Code of Ethics and Conduct and in the Information Safety Policy. Employees are expected to have common sense and even balance, refraining from using Zenvia’s technological resources in a massive and excessive way for personal purposes. We promote a casual environment, with freedom and responsibility. 4. Intellectual property includes the following: generation of new ideas, improvements made to processes, projects, know-how, methodologies or any other activities of an intellectual nature that have been developed by the company’s employees or a result of an agreement celebrated by the company. 24 5.3 5.2 5.1

 

 

 

 

7412-5-BA_1_PAGE_25.GIF Corporate image preservation The image portrayed by Zenvia in the market is extremely important to the company’s success in the segments in which it operates. Thus, every employee is a Zenvia representative both inside and outside the company, and as such they must take care of its image and reputation when dealing with audiences in order to protect the company’s image. Requests for information on the company made by the media to any employees must be forwarded to the Marketing area, and any interviews or announcements made on the company’s behalf without prior authorization or orientation is forbidden. Additionally, any internal information must be previously approved and authorized by the area responsible for such information before it is shared externally, such as in academic papers, lectures, events etc. Actions in violation of the ethical principles found in this Code may be subject to company scrutiny. 25 5.4

 

 

 

 

7412-5-BA_1_PAGE_26.GIF experience Our behaviors Prioritize the user’s perspective (internal client, external client and consumer), make decisions focused on their enchantment. Act with excellence during the customer journey within Zenvia. Treat the client with empathy. Establish connections, aim to meet their needs and strengthen relation. Be responsible for solving problems. Never acting like: “this is not my business”. Proactively act, anticipate the delivery of solutions (products or not) that meet the expectations of clients and consumers, in a sustainable manner. 26 Delight with a unique user Section 6

 

 

 

 

7412-5-BA_1_PAGE_27.GIF Customer relations Company-customer relations are primarily established via Commercial, Customer Service and Operations teams as well as our partners/ Channels, aiming at providing customers with services that comply with the quality standards defined by Zenvia. Our main goal is to charm users with a unique experience. Channel relations We value transparency and partnership in all of our relationships. These partners are selected on the basis of objective assessments of their ethical stance - that is - their alignment with our values, ability to provide services with quality and productivity, as well as their sustainable financial health. Relations with suppliers and service providers We see our suppliers as strategic partners, and we seek to build and maintain an ethical relationship, with mutual respect and directed towards the pursuit of solutions that generate mutual gains. The acquisition of goods and services, as well as the selection of suppliers, are carried out based on objective assessments in terms of quality, prices, ethical stands, supply capacity, appropriate provision of services and alignment with Zenvia’s values, objectives and needs, without any kind of prejudice or favor. It is forbidden to receive any kind of “incentive” offered by third parties, with the exception of commemorative gifts, in alignment with the principles described in this code or when previously approved by the immediate manager. Any service and/or supply agreement celebrated with companies that have one of our employees - or their spouses or relatives up to the fourth level of kinship - as a partner must be approved by the CEO. When an agreement involves Related Parties, additional precaution must be taken, such precaution consisting of previous approval by the Administration Board. What are Related Parties? 27 • Zenvia directors and their relatives up to the fourth level of kinship, or companies in which they have a majority stake; • Zenvia’s shareholders or companies in which these shareholders have a majority stake; • Also, with regard to Zenvia’s shareholders that are legal entities, major partners of these legal entities shall also be deemed related parties. 6.3 6.2 6.1

 

 

 

 

7412-5-BA_1_PAGE_28.GIF Relations with competitors Zenvia operates in markets under conditions of free competition, respecting its partners and competitors. We meet and comply with all laws and regulations, aiming at promoting healthy and fair competition. Thanks to this, we carry out our business activities in accordance with antitrust and fair competition laws. Union relations Zenvia recognizes the legally-established union and respects their employees’ freedom to make a decision about joining the union as well as the collective agreement. The company complies with the statutes, codes of ethics and principles of the class entities of which it is a formal member. Relations with carriers Relationships with phone carriers are exclusively restricted to employees whose duties and responsibilities are associated with this specific activity. Phone carriers are strategic partners that are important for our business, and the relationships established with these companies must be guided by respect, transparency, ethics and lawfulness, as is the case with our other partners. Relations with shareholders Concerning our relationship with shareholders and investors, it is our duty to faithfully observe the laws that may be applicable to Zenvia’s business, as well as the guidelines found in our Internal Policies and in our Bylaws. Zenvia is committed to the continuity of the business and to value generation for our shareholders and all other stakeholders. Our relationship with shareholders and investors must be based on accurate, transparent and relevant communication, with reliable information that allows them to monitor the company’s activities and performance. Due to their proximity to Zenvia’s internal information, employees that purchase company’s shares must refrain from carrying out any operations or transactions in case they are in possession of privileged information, especially in the case of financial information disclosed from time to time (see item 3.9). When trading shares, people in possession of privileged information must observe and comply with the Company’s Securities Trading Policy5. 5. Please refer to the policy found on our Intranet. 28 6.7 6.6 6.5 6.4

 

 

 

 

7412-5-BA_1_PAGE_29.GIF Relationship with the community thinking about how our solutions and products may contribute to growth and development of the ecosystem in which we operate. Zenvia supports important causes of the communities in which it operates, respecting their recognized cultural, religious and political aspects. Whenever possible we must stimulate and encourage communities, Press relations Whenever requested to provide information or give interviews to entities or the press (newspapers, radio stations, TV stations, websites, blogs and other media) in connection with Zenvia, their activities in the company or their public image associated with the organization, employees must forward these requests to the Marketing area. The area will assess the appropriateness, interests, suitability or indication of the person to be interviewed. Relations with public entities We treat public entities - at any given level and whether they are a supplier or customer - with impartiality and transparency, in accordance with current legislation. Sustainability We operate in a socially-responsible way, respecting all the audiences with which we have a relationship: customers, employees, suppliers and communities. Our purpose, values and behaviors are basic premises for carrying out serious work that contributes to sustainable development. We also stress the company’s commitment to sustainable development, aiming at simultaneously promoting economic growth, environmental preservation and social justice. 29 6.11 6.10 6.9 6.8

 

 

 

 

7412-5-BA_1_PAGE_30.GIF It is important that Zenvia recognize any questions and possible violations in connection with this Code so that it may provide orientations and prevent/correct deviations. This is the reason why employees must handle their concerns internally, solving questions and notifying the company about any acts in non-compliance with this Code. Usually, your manager is your best ally to assist you when it comes to ethical concerns. That is why you must talk to them at first. However, this is not the only alternative. You should also consider talking to someone above your manager. For questions associated with our work environment, you can talk to the Human Resources area. Every complaint submitted shall be appropriately investigated by Zenvia so that all associated elements may be clarified, the necessary control, mitigation or correction measures being applied for any non-conformities. Employees that fail to comply with this Code shall be held liable for their actions according to the degree of the violation, which may result in a disciplinary measure, warning, suspension and even employment termination. The Ethics Channel is a confidential tool, and is available 24 hours a day throughout the year. Contact can be made anonymously and all measures shall be taken in order to ensure the confidentiality of the information provided. It is important to stress that the company shall not tolerate any kind of retaliation and shall seek to prevent this type of conduct in every possible way. 30 Reporting concerns and Ethics Channel Section 7

 

 

 

 

7412-5-BA_1_PAGE_31.GIF Reporting Channel: 31 Zenvia’s Reporting Channel is available for all employees and for third parties as well. It may be reached by calling the following phone number: 0800 602 6911 https://contatoseguro.com.br/zenvia

 

 

 

 

7412-5-BA_1_PAGE_32.GIF II 1a zenv1• a.com

 

 

 

 

Exhibit 21.01

 

List of Subsidiaries of the Registrant

 

Name of Subsidiary   Jurisdiction of Incorporation or Organization
     
Zenvia Mobile Serviços Digitais S.A.   Brazil
Rodati Motors Corporation   United States
Rodati Motors Central de Informações de Veículos Automotores Ltda.   Brazil
Rodati Servicios, S.A. de C.V.   Mexico
Rodati Services S.A.   Argentina
Zenvia Mexico, S.de RL de C.V.   Mexico
Total Voice Comunicações S.A.   Brazil
MKMB Soluções Tecnológicas Ltda.   Brazil

 

 

 

 

Exhibit 23.01

 

Consent of Independent Registered Public Accounting Firm

 

We consent to the use of our report dated March 24, 2021, with respect to the consolidated statements of financial position of Zenvia Mobile Serviços Digitais S.A. as of December 31, 2020 and 2019, the related consolidated statements of profit or loss and other comprehensive income, cash flows, and changes in equity for each of the years in the three-year period ended December 31, 2020, and the related notes, included herein and to the reference to our firm under the heading ‘Experts’ in the registration statement.

 

/s/ KPMG Auditores Indepedentes
KPMG Auditores Indepedentes

 

April 15, 2021

 

 

 

 

Exhibit 23.02

 

Consent of Independent Registered Public Accounting Firm

 

We consent to the use of our report dated March 24, 2021, with respect to the consolidated statements of financial position of Rodati Motors Corporation as of July 23, 2020 and December 31, 2019, the related consolidated statements of profit or loss and other comprehensive income, cash flows, and changes in equity for the period from January 1 to July 23,2020 and for the year ended December 31,2019, and the related notes, included herein and to the reference to our firm under the heading ‘Experts’ in the registration statement.

 

Our qualified report dated March 24, 2021, contains an explanatory paragraph that states the consolidated financial statements are not presented in accordance with International Accounting Standard 1 – Presentation of Financial Statements, as they do not include the consolidated statement of financial position and related notes as of July 23, 2019 and the related statements of consolidated profit or loss and other comprehensive income, changes in equity, cash flows and the related notes for the comparative period from January 1 to July 23, 2019, which constitute a departure from International Financial Reporting Standards as issued by the International Accounting Standards Board.

 

/s/ KPMG Auditores Indepedentes

KPMG Auditores Indepedentes

 

April 15, 2021

 

 

 

 

Exhibit 23.03

Consent of Independent Accountant

 

Zenvia Inc

The Cayman Islands

 

We hereby consent to the use in the Prospectus constituting a part of this Registration Statement of our report dated March 18, 2021, relating to the consolidated financial statements of One to One Engine Desenvolvimento e Licenciamento de Sistemas de Informática S.A., which is contained in that Prospectus.

 

We also consent to the reference to us under the caption “Experts” in the Prospectus.

 

/s/ BDO RCS Auditores Independentes S.S.

 

BDO RCS Auditores Independentes S.S.

São Paulo, Brazil

 

April 15, 2021

 

 

 

 

Exhibit 23.04

 

Consent of Independent Accountant

 

Zenvia Inc

The Cayman Islands

 

We hereby consent to the use in the Prospectus constituting a part of this Registration Statement of our report dated March 18, 2021, relating to the financial statements of Smarkio Tecnologia S.A., which is contained in that Prospectus.

 

We also consent to the reference to us under the caption “Experts” in the Prospectus.

 

/s/ BDO RCS Auditores Independentes S.S.

 

BDO RCS Auditores Independentes S.S.

São Paulo, Brazil

 

April 15, 2021

 

 

 

 

Exhibit 99.01

 

CONSENT OF DIRECTOR NOMINEE

 

In accordance with Rule 438 under the Securities Act of 1933, as amended, the undersigned hereby consents to being named as a director nominee of Zenvia Inc. (the “Company”) in the Company’s registration statement on Form F-1 and in all amendments thereto, including post-effective amendments (the “Registration Statement”), in connection with the initial public offering of the Company’s Class A common shares. The undersigned also consents to the filing of this consent as an exhibit to such Registration Statement and any amendments thereto.

 

/s/ Fernando Jorge Wosniak Steler  

 

Name: Fernando Jorge Wosniak Steler