Unaudited Interim condensed consolidated financial statements as of June 30, 2023


Contents

​
Unaudited condensed consolidated statements of financial position 1
Unaudited condensed consolidated statements of profit or loss and other comprehensive income 3
Unaudited condensed consolidated statement of changes in equity 4
Unaudited condensed consolidated statement of cash flows 5
Notes to the unaudited interim condensed consolidated financial statements 6


Zenvia Inc.

Unaudited condensed consolidated statements of financial position at June 30, 2023

(In thousands ofReais)

Assets

Note

June 30, 2023

December 31, 2022

Current assets

Cash and cash equivalents

6

142,579

100,243

Financial investment

6

-

8,160

Trade and other receivables

7

195,860

156,012

Tax assets

8

41,454

35,579

Prepayments

6,147

6,369

Other assets

7,913

6,821

Total current assets

393,953

313,184

Non-current assets

Tax assets

8

72

107

Prepayments

1,619

2,207

Other Assets

10

34

Deferred tax assets

20

108,504

91,769

Property, plant and equipment

9

15,979

19,590

Intangible assets and goodwill

10

1,364,090

1,377,232

Total non-current assets

1,490,274

1,490,939

Total assets

1,884,227

1,804,123

1

Zenvia Inc.

Unaudited condensed consolidated statements of financial position at June 30, 2023

(In thousands ofReais)

Liabilities

Note

June 30, 2023

December 31, 2022

Current liabilities

Trade and other payables

11

409,277

264,728

Loans, borrowings and debentures

12

92,545

89,541

Liabilities from acquisitions

14

122,106

60,778

Employee benefits

39,941

35,039

Tax liabilities

20

19,187

17,046

Lease liabilities

2,002

1,992

Deferred revenue

14,337

6,873

Derivative financial instruments

22.2

1,871

-

Taxes to be paid in installments

247

340

Total current liabilities

701,513

476,337

Non-current liabilities

Liabilities from acquisitions

14

209,745

290,852

Loans and borrowings

12

33,912

77,293

Provisions for tax, labor and civil risks

15

1,570

1,969

Lease liabilities

1,801

2,824

Trade and other payables

11

-

1,092

Employee benefits

335

62

Taxes to be paid in installments

357

454

Total non-current liabilities

247,720

374,546

Equity

16

Capital

957,525

957,525

Reserves

247,118

244,913

Translation reserve

6,805

9,485

Accumulated losses

(276,484)

(258,587)

Equity attributable to owners of the Company

934,964

953,336

Non-controlling interests

30

(96)

Total equity

934,994

953,240

Total equity and liabilities

1,884,227

1,804,123

See the accompanying notes to the interim condensed consolidated financial statements.

2

Zenvia Inc.

Unaudited condensed consolidated statements of profit or loss and other comprehensive income

for the three and six-months periods ended June 30, 2023

(In thousands ofReais)

Three months endedJune30,

Six months endedJune30,

Note

2023

2022

2023

2022

Revenue

17

192,919

203,897

371,966

401,478

Cost of services

18

(121,783)

(137,849)

(221,881)

(276,006)

Gross profit

71,136

66,048

150,085

125,472

Operating expenses

Sales and marketing expenses

18

(24,807)

(30,771)

(52,249)

(56,190)

General and administrative expenses

18

(37,348)

(39,607)

(68,795)

(74,340)

Research and development expenses

18

(11,109)

(15,883)

(25,113)

(29,193)

Allowance for expected credit losses

18

(3,379)

(1,957)

(5,540)

(3,997)

Other income and expenses, net

18

(451)

(11,826)

(536)

(19,984)

Operating loss

(5,958)

(33,996)

(2,148)

(58,232)

Financial Income (Expenses)

Finance expenses

19

(17,125)

(17,860)

(35,849)

(31,478)

Finance income

19

3,987

9,650

6,612

21,550

Financial expenses, Net

(13,138)

(8,210)

(29,237)

(9,928)

Loss before taxes

(19,096)

(42,206)

(31,385)

(68,160)

Income Tax and Social Contribution

Deferred income tax and social contribution

20

7,793

10,936

16,620

15,885

Current income tax and social contribution

20

(2,788)

(703)

(3,006)

(723)

Total Income Tax and Social Contribution

5,005

10,233

13,614

15,162

Loss of the period

(14,091)

(31,973)

(17,771)

(52,998)

Loss attributable to:

Owners of the Company

(14,147)

(31,957)

(17,897)

(52,982)

Non-controlling interests

56

(16)

126

(16)

Loss per share (expressed in Reais per share)

Basic

21

(0.361)

(0.634)

(0.451)

(1.274)

Diluted

21

(0.361)

(0.634)

(0.451)

(1.274)

Other comprehensive income

Items that are or may be reclassified subsequently to profit or loss

Cumulative translation adjustments from operations in foreign currency

1,237

9,279

(2,374)

(20,864)

Gain from variation of equity interest in subsidiary

(306)

-

(306)

-

Total comprehensive loss for the period

(13,160)

(22,694)

(20,757)

(73,862)

Total comprehensive loss attributable to:

Owners of the Company

(13,160)

(22,678)

(20,577)

(73,846)

Non-controlling interests

56

(16)

126

(16)

See the accompanying notes to the interim condensed consolidated financial statements.

3

Zenvia Inc.

Unaudited condensed consolidated statement of changes in equity

For the six months period ended June 30, 2023 and 2022

(In thousands ofReais)

Reserves

Capital

Capital reserve

Translation reserve

Retained earnings (loss)

Other
comprehensive
income

Attributable to owners of the Company

Non-controlling interests

Total
equity

Balance at January 1, 2022

957,523

226,599

34,638

(15,558)

-

1,203,202

-

1,203,202

Loss for the period

-

-

-

(52,982)

-

(52,982)

(16)

(52,998)

Cumulative translation adjustments from operations in foreign currency

-

-

(20,864)

-

-

(20,864)

-

(20,864)

Share-based compensation

-

2,036

-

-

-

2,036

-

2,036

Issuance of shares related to business combinations

1

15,739

-

-

-

15,740

-

15,740

Acquisition of subsidiary with NCI

-

-

-

-

-

-

(315)

(315)

Balance at June 30, 2022

957,524

244,374

13,774

(68,540)

-

1,147,132

(331)

1,146,801

Balance at January 1, 2023

957,525

244,913

9,485

(258,587)

-

953,336

(96)

953,240

Loss for the period

-

-

-

(17,897)

(17,897)

126

(17,771)

Gain from Variation of equity interest in subsidiary

-

-

-

-

(306)

(306)

-

(306)

Cumulative translation adjustments from operations in foreign currency

-

-

(2,374)

-

-

(2,374)

-

(2,374)

Share-based compensation

-

(1,909)

-

-

-

(1,909)

-

(1,909)

Issuance of shares

-

4,114

-

-

-

4,114

-

4,114

Balance at June 30, 2023

957,525

247,118

7,111

(276,484)

(306)

934,964

30

934,994

See the accompanying notes to the interim condensed consolidated financial statements.

4

Zenvia Inc.

Unaudited condensed consolidated statement of cash flows

For the six months period ended June 30, 2023 and 2022

(In thousands ofReais)

For the six months ended June 30,

2023

2022

Cash flow from operating activities

Loss for the period

(17,771)

(52,998)

Adjustments for:

Income tax and social contribution

(13,614)

(15,162)

Depreciation and amortization

41,318

33,489

Allowance for expected credit losses

5,540

4,923

Provisions for tax, labor and civil risks

2,382

1,176

Provision for bonus and profit sharing

12,830

9,288

Share-based compensation

1,854

2,036

Provision for earn-out and compensation

-

13,731

Interest from loans and borrowings

12,420

14,833

Interest on leases

212

302

Exchange variation loss (gain)

729

(3,402)

Loss on write-off of intangible assets

(2)

-

Loss on write-off of property, plant and equipment

276

1

Effect of hyperinflation

509

1,572

Changes in assets and liabilities

Trade and other receivables

(44,880)

8,017

Prepayments

810

15,447

Interest earning bank deposits

-

(504)

Other assets

(6,775)

(9,794)

Suppliers

143,022

19,016

Employee benefits

(7,655)

(854)

Other liabilities

13,687

(13,312)

Cash generated from operating activities

144,892

27,805

Interest paid on loans and leases

(11,560)

(14,383)

Income taxes paid

(762)

-

Net cash flow from operating activities

132,570

13,422

Cash flow from investing activities

Acquisition of property, plant and equipment

(357)

(4,159)

Redemption of interest earning bank deposits

8,160

-

Acquisition of Intangible assets

(25,241)

(15,189)

Acquisition of subsidiary, net of cash acquired

-

(300,075)

Net cash used in investing activities

(17,438)

(319,423)

Cash flow from financing activities

Proceeds from loans and borrowings

-

20,000

Payment of borrowings

(41,403)

(29,622)

Payment of lease liabilities

(834)

(1,585)

Payments in installments for acquisition of subsidiaries

(27,677)

(124,000)

Net cash used in financing activities

(69,914)

(135,207)

Exchange rate change on cash and cash equivalents

(2,882)

(20,864)

Net increase (decrease) in cash and cash equivalents

42,336

(462,072)

Cash and cash equivalents at January 1

100,243

582,231

Cash and cash equivalents at June 30

142,579

120,159

See the accompanying notes to the interim condensed consolidated financial statements.

5

Notes to the Consolidated Financial Statements

(In thousands ofReais)

1. Operations

Zenvia Inc. ("Company" or "Zenvia") was incorporated in November 2020, as a Cayman Islands exempted company with limited liability duly registered with the Registrar of Companies of the Cayman Islands. These consolidated financial statements comprise the Company and its subsidiaries (together referred to as "the Group"). The Group is involved in implementation of a multi-channel communication 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 and with a combination of the Group Service as a Software (SaaS) portfolio providing clients with unified end-to-end customer experience SaaS platform to digitally interact with their end-consumers in a personalized way.

As of June 30, 2023, the Company has negative consolidated working capital in the amount of R$307,560 (current assets of R$393,953 and current liabilities of R$701,513), mainly arising from a reduction in the Company's cash position as a result of payments made during the years related to business acquisitions, as described in item (b) to (d) below.

Zenvia's Management focused in 2022 to increase gross profit and to take into place cost-cutting initiatives, such as the review of its corporate structure, which reduced the Company's current workforce in 9% and is in line with the acceleration of the integration of acquisitions. These actions have been already presenting an improvement in cash generation, and management is committed to continue pursuing new operational efficiencies for the next 12 months. Also, management worked with alternatives to settle the Company's short-term obligations by renegotiating certain earn-out payment terms (as detailed in note 13) and renegotiating current outstanding loans (as detailed in note 12). Therefore, as a result of the above referred initiatives, although the Company has experienced decreases in operating cash flow, and increases in both financing and investing cash flow, the Company believes that it will increase its cash from operations during 2023 while at the same time, meeting its debt obligations as they come due. Considering the Company's short-term financial contractual obligations and commitments as of June 30, 2023, the Company will continue to fund its operations with its operating cash flow and incrementally to its operations, the Company expects a cash outlay of R$208,729 for the next 12 months mainly for its existing short-term indebtedness as it becomes due, including interest, and payments due from acquisitions. In order to satisfy such obligations, the Management expects that the continued expansion in profitability, as presented in the Company´s 2023 fiscal year guidance, will result in an increase in cash from operations. Therefore, the Company believes its working capital and projected cash flows from operations will be sufficient for the Company's requirements for the next twelve months. In addition to generating cash flow from operations, management has been evaluating and negotiating funding alternatives that include debt and equity, amongst others, to ensure, if necessary, new sources of financing that will enable the Company to meet its obligations. As a result of these factors, management continues to have a reasonable expectation that the Group will be able to continue operations in the foreseeable future.

a.Business combination - Movidesk Ltda. ("Movidesk")

On May 2, 2022, Zenvia Brazil acquired 98.04% of shares of Movidesk Ltda., referred to as "Movidesk", and with regards to the remaining 1.96% share capital, Zenvia Brazil had options to purchase such share capital through the payments of the applicable exercise price by Zenvia Brazil. Movidesk is a SaaS company that focuses on customer service solutions to define workflows, provide integration with communication channels, and monitor tickets through dashboards and reports, offering a fully-fledged end-to-end support platform.

Under the terms of the Movidesk original acquisition agreement, the total consideration transferred and then expected to be transferred by Zenvia Brazil were as follows: (1) R$301,258 paid in cash in May 2022 and; (2) Movidesk former controlling shareholders, and key executives have received 315,820 Zenvia's Class A common shares equivalent to an amount of R$15,740 at the time of closing; and (3) an earn-out structure based payment on the fulfillment of gross margin targets until the third quarter of 2023, which fair value is R$159,706 to be paid in December 2023; and (4) R$8,411 to be paid on the exercise price of purchase options. Earn-outs outcomes consider the achievement of certain milestones that variate from -50% to + 50%, reaching between R$94,441 and R$360,376 respectively.

6

Notes to the Consolidated Financial Statements

(In thousands ofReais)

The goodwill arising from the acquisition has been recognized as follows:

Movidesk

May 2, 2022

Consideration transferred

485,115

Other net liabilities, including PPE and cash

(3,367)

Intangible assets -- Digital platform

229,705

Intangible assets -- Customer portfolio

12,594

Total net assets acquired at fair value

238,932

Net assets attributable to NCI

(67)

Goodwill

246,250

The goodwill of R$246,250 comprises the skills and technical talent of the workforce and the value of future economic benefits arising from the synergies from the acquisition and in line with the strategy of the Company. At the time of the acquisition, future tax deductibility is probable as certain actions, necessary to integrate the businesses from a tax perspective, are intended by management and considered feasible from a legal perspective.

The fair value of Movidesk's intangible assets (digital platform, customer portfolio and non-compete) has been measured by valuation techniques that are summarized below.

Assets acquired

Valuation technique

Intangible assets - Allocation of the customer portfolio and digital 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.

On October 26, 2022, Zenvia Brazil reached an agreement with Movidesk former controlling shareholders to extend the remaining payments. The earn-out payment due to certain former shareholders, previously expected to total R$205,647, which could reach R$327,635, will now be paid in fixed and variable installments subject to accrued interest in line with Zenvia's current bank financing costs in the range of 130% and 140% of CDI. Per the terms of the amended Movidesk acquisition agreement, (i) 12 fixed monthly installments of R$100 will be paid from January 2023 until December 2023, (ii) R$204,447 in total will be paid in 36 fixed monthly installments subject to accrued interest from January 2024 until December 2026, and (iii) an additional variable amount calculated in terms of certain gross margin targets achieved by the end of September 2023, currently expected to total R$24,047, will be paid in 6 monthly installments subject to accrued interest from January 2024 until June 2024.

b.Business combination - Sensedata Tecnologia Ltda ("SenseData")

On November 1, 2021, Zenvia Brazil acquired all the shares of Sensedata Tecnologia Ltda., referred as "SenseData" which is a SaaS company that enables businesses to create communication actions and specific 360º customer journeys, supported by a customized proprietary scorecard called SenseScore.

Under the terms of the SenseData original acquisition agreement the total consideration transferred and then expected to be transferred were as follows: (i) R$30,112 in cash up front and; (ii) an earn-out cash structure based payment on the achievement of gross profit milestones until November 2023, which was estimated at R$35,018; (iii) an estimate of the range of outcomes considering the achievement of certain milestones varying from -50% to + 50% was between R$35,018 and R$100,349 respectively; and (iv) SenseData former controlling shareholders received 94,200 Zenvia's Class A common shares, subject to lock-up provisions, equivalent to an amount corresponding to R$6,793 in May 17, 2022.

7

Notes to the Consolidated Financial Statements

(In thousands ofReais)

The goodwill arising from the acquisition has been recognized as follows:

SenseData

November 1, 2021

Consideration transferred

71,923

Other net assets, including PPE and cash

2,120

Intangible assets -- Customer portfolio (a)

720

Intangible assets -- Digital platform (b)

48,271

Total net assets acquired at fair value

51,111

Goodwill

20,812

(a) The fair value of R$720 represents the customer portfolio and was calculated based on discounted future cash flows associated with the portfolio estimated at the acquisition date.
(b) The fair value of R$48,271 represents the digital platform acquired, measured based on discounted future cash flows associated with the asset at the acquisition date.

Valuation techniques are summarized below:

Assets acquired

Valuation technique

Intangible assets - Allocation of the customer portfolio and digital 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.

The goodwill of R$20,812 comprises the skills and technical talent of the workforce and the value of future economic benefits arising from the synergies from the acquisition and in line with the strategy of the Company. At the time of the acquisition, future tax deductibility is probable as certain actions, necessary to integrate the businesses from a tax perspective, are intended by management and considered feasible from a legal perspective.

On December 21, 2022, Zenvia Brazil signed an agreement with SenseData former controlling shareholders to extend remaining payments. A payment which originally matured of R$23,751, due at the end of December 2022, was renegotiated as follows: (i) R$18,000 were paid in December 2022 and (ii) 12 monthly installments of R$479 will be paid throughout 2023, subject to accrued interests in line with Zenvia's current bank financing costs in the range of 130% and 140% of CDI, (iv) an estimate of the range of outcomes considering the achievement of certain milestones varying from -50% to + 50% is R$21,577 and R$72,488 respectively. Also, the total of R$40,407 related to the achievements of gross profit targets, as defined in the original agreement, Zenvia agreed to pay a fixed amount of R$20,000 in December 2023, with the remaining amount to be paid in 24 installments, subject to accrued interests in line with Zenvia's current bank financing costs in the range of 130% and 140% of CDI. SenseData´s founding partners will continue to manage the company as per the original agreement, until the end of 2023.

b.Business combination - Direct One ("D1")

On July 31, 2021, Zenvia Brazil completed the purchase agreement for the 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", including its wholly owned subsidiary Smarkio Tecnologia Ltda. ("Smarkio"). 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.

At the acquisition date, and under the terms of the original D1 acquisition agreement, the fair value of consideration was R$716,428 and was comprised of: (1) (i) Zenvia Brazil contributed R$21,000 in cash into D1 on May 31, 2021, and (ii) on the closing date, July 31, 2021, Zenvia Brazil contributed further R$19,000 in cash into D1; (2) the Company paid to D1 shareholders R$318,646 in cash; (3) the Company issued 1,942,750 of Class A common shares of Zenvia to certain D1 shareholders, equivalent to R$132,812; and (4) the Company agreed to make earn-outs payments to certain D1 shareholders which, at the acquisition date, were estimated to be (i) R$56,892 to be paid in the second quarter of 2022; and (ii) R$168,078 to be paid in the second quarter of 2023.

8

Notes to the Consolidated Financial Statements

(In thousands ofReais)

On February 15, 2022, the Company decided to accelerate D1 integration which resulted in a new agreement, replacing the previously estimated amounts and timing of the earn-outs payments. The new agreement provided that the Company would pay to D1 former shareholders a total earn-out amounting to R$164,000. The amount of R$124,000 was paid in the first quarter of 2022 and R$40,000 would be paid on March 31, 2023.

On October 26, 2022, the Company reached a new agreement with D1 to extend the then remaining payments under the D1 acquisition. The last fixed installment due to certain former shareholders on March 31, 2023, of R$40,000, will now be paid, as follows: (i) R$7,794 paid in January 2023, (ii) R$3,864 paid in February 2023, (iii) R$4,720 paid in March 2023 and (iv) 24 monthly installments of R$1,288 between April 2023 and February 2025, subject to interests in line with Zenvia's current bank financing costs in the range of 130% and 140% of CDI.

Goodwill arising from the acquisition has been recognized as follows:

D1

July 31, 2021

Consideration transferred

716,428

Cash and cash equivalents

59,447

Trade and other receivables (d)

16,516

Intangible assets and goodwill (c)

53,271

Loans and borrowings

(63,430)

Other net liabilities

(17,327)

Intangible assets -- Customer portfolio (a)

1,482

Intangible assets -- Digital platform (b)

58,489

Total net assets acquired at fair value

108,448

Goodwill

607,980

(a) The fair value of R$1,482 represents customer 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$58,489 represents the digital platform acquired, measured based on discounted future cash flows associated to the asset at the acquisition date;
(c) This amount refers to the intangible and goodwill from Smarkio which was acquired by D1 in November 2020 and merged into that entity in November 2021. The intangible assets related to Smarkio´s acquisition refer to goodwill (R$21,726), platform (R$22,037), customer portfolio (R$3,491), non-compete (R$2,628) where management evaluated the expectation of a possible loss with the recoverability of the amount of the fine imposed in the case of competition and others;
(d)
 Gross contractual amount of trade and other receivables amounted to R$16,998 of which R$482 are not expected to be collected.

Valuation techniques are summarized below:

Assets acquired

Valuation technique

Intangible assets - Allocation of the customer portfolio and digital 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.

9

Notes to the Consolidated Financial Statements

(In thousands ofReais)

The goodwill of R$607,980 comprises the skills and technical talent of the workforce and the value of future economic benefits arising from the synergies from the acquisition and in line with the strategy of the Company. At the time of the acquisition, future tax deductibility is probable as certain actions necessary to integrate the businesses from a tax perspective, are intended by management and considered feasible from a legal perspective.

2. Company's subsidiaries

June 30, 2023

December 31,2022

Country

Direct

Indirect

Direct

Indirect

Subsidiaries

%

%

%

%

Zenvia Mobile Serviços Digitais S.A.

Brazil

100

-

100

-

MKMB Soluções Tecnológicas Ltda.

Brazil

-

100

-

100

Total Voice Comunicação S.A.

Brazil

-

100

-

100

Rodati Motors Corporation

USA

-

100

-

100

Zenvia México

Mexico

-

100

-

100

Zenvia Voice Ltda

Brazil

-

100

-

100

One to One Engine Desenvolvimento e

Brazil

-

100

-

100

Licenciamento de Sistemas de Informática S.A.

Sensedata Tecnologia Ltda.

Brazil

-

100

-

100

Rodati Services S.A.

Argentina

-

100

-

100

Movidesk S.A.

Brazil

-

98.04

-

98.04

Rodati Servicios, S.A. de CV

Mexico

-

100

-

100

Rodati Motors Central de Informações de Veículos Automotores Ltda.

Brazil

-

100

-

100

3. Preparation basis

These interim condensed consolidated financial statements for the six months periods ended June 30, 2023, have been prepared in accordance with IAS 34, Interim Financial Reporting, and should be read in conjunction with the Group's last annual consolidated financial statements as at and for the year ended December 31, 2022 ('last annual financial statements'). They do not include all the information required for a complete set of financial statements prepared in accordance with IFRS Standards. However, selected explanatory notes are included to explain events and transactions that are significant to an understanding of the changes in the Group's financial position and performance since the last annual financial statements.

The issuance of these consolidated financial statements was approved by the Executive Board of Directors on August 16, 2023.

a.Measurement basis

The interim condensed consolidated financial statements were prepared based on historical cost, except for certain financial instruments measured at fair value and contingent consideration for business combinations, as described in the following accounting practices. See item (d) below for information on the measurement of financial information of subsidiaries located in hyperinflationary economies.

b.Functional and presentation currency

These interim condensed consolidated financial statements are presented in Brazilian Real (R$), which is the Company's functional currency. All amounts have been rounded to the nearest thousand, unless 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 Informações de Veículos Automotores Ltda. has the local currency, Brazilian Real (BRL), as its functional currency; Rodati Services S.A. has the local currency, Argentine Peso (ARG), as its functional currency; and Rodati Servicios, S.A. de CV. has the local currency, Mexican Pesos (MEX), as its functional currency.

10

Notes to the Consolidated Financial Statements

(In thousands ofReais)

c.Foreign currency translation

For the consolidated Group companies in which the functional currency is different from the Brazilian Real, the interim financial statements are translated to Real as of the 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 recognized 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 the hyperinflationary economy became mandatory in relation to the subsidiary Rodati Services S.A., located in Argentina.

Non-monetary assets and liabilities, the equity and the statement of profit or loss 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 based on current cost approach are 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 were reported as finance costs in the statements of profit or loss of the Company.

e.Use of estimates and judgments

In preparing these interim condensed 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.

Judgments:

Information about judgments referring to the adoption of accounting policies which impact significantly the amounts recognized in the interim condensed financial statements are included in the following notes:

Note 1 - Identification of assets acquired, and liabilities assumed.

Note 10 - Intangible assets: determination of useful lives of intangible assets.

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 1 - business combination: assumptions on the determination of fair value of consideration transferred, assets acquired, and liabilities assumed. The identification of the intangible assets acquired in the 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.

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 cash flows.

11

Notes to the Consolidated Financial Statements

(In thousands ofReais)

Note 15 - Provision for labor, tax and civil risks: main assumptions regarding the likelihood and magnitude of the cash outflows.

Note 20 - recognition of deferred tax assets: availability of future taxable profit against which deductible temporary differences and tax losses carried forward can be utilized.

(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.

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.

When measuring the 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.

4. Significant Accounting Policies

There have been no changes to the Company's significant accounting policies as described in its annual financial statements for the year ended December 31, 2022 and should be read in conjunction with these interim condensed consolidated financial statements.

5. New standards, amendments, and interpretations of standards

5.1. New currently effective requirement

The following amended standards are effective for annual periods beginning on or after January 1, 2023. The following amended standards and interpretations did not have a material impact on the Company's consolidated financial statements:

●Property, Plant and Equipment: Proceeds before Intended Use (Amendments to IAS 16);

●Classification of Liabilities as Current or Non-current (Amendments to IAS 1);

●Annual improvements to IFRS Standards 2018-2020; and

●Amendment to IFRS 3, adding an explicit statement that an acquirer does not recognize contingent assets acquired in a business combination.

●Disclosure of Accounting Policies (Amendments to IAS 1 and IRFS Practice Statement 2)

●Deferred tax related to assets and liabilities arising from a single transaction (Amendments to IAS 12).

12

Notes to the Consolidated Financial Statements

(In thousands ofReais)

5.2 Standards issued but not yet effective

A number of new standards are effective for annual periods beginning after January 1st, 2024 and earlier application is permitted; however, the Group has not early adopted the new or amended standards in preparing these consolidated financial statements.

●Classification of liabilities as current or non-current (Amendments to IAS 1)

6. Cash and cash equivalents and financial investments

June 30, 2023

December 31, 2022

Cash and banks

42,385

43,796

Short-term investments maturing in up to 90 days (a)

100,194

56,447

Financial investments (b)

-

8,160

Total

142,579

108,403

Cash and cash equivalents

142,579

100,243

Financial investments

-

8,160

(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 100.5% to 103.0% of the CDI rate (Interbank Interest Rate in Brazil).
(b) In March 2023, the total fund was redeemed, pursuant to the third amendment, signed in September 2022. As of December 31, 2022, the return on such investments was equivalent to 161% of the CDI. The fund's assets were divided into several different asset class pools such as Agribusiness, Real Estate, Direct Lending. Those investments were held as guarantee of the debentures borrowing contract entered into in May 2021.
7. Trade and other receivables

June 30, 2023

December 31, 2022

Domestic

190,527

157,578

Abroad

20,792

8,861

211,319

166,439

Allowance for expected credit losses

(15,459)

(10,427)

Total

195,860

156,012

13

Notes to the Consolidated Financial Statements

(In thousands ofReais)

Changes in allowance for expected credit losses are as follows:

June 30, 2023

December 31, 2022

Balance at the Beginning period

(10,427)

(8,298)

Additions

(5,540)

(23,320)

Reversal

-

15,531

Foreign exchange variation

508

-

Write-offs

-

5,660

Balance at the End of the period

(15,459)

(10,427)

The Company performs write-offs of trade accounts receivable against the allowance for expected credit losses past due over 150 days as this is the period for which management believes there is no reasonable expectation that accounts receivable will be recovered.

The breakdown of accounts receivable from customers by maturity is as follows:

June 30, 2023

December 31, 2022

Current

151,690

138,848

Overdue (days):

1-30

15,551

6,779

31-60

9,204

3,508

61-90

5,177

3,274

91-120

5,638

1,914

121-150

4,087

1,181

>150

19,972

10,935

Total

211,319

166,439

8.
 Tax assets

June 30, 2023

December 31, 2022

Corporate income tax (IRPJ)

5,802

5,203

Social contribution (CSLL)

599

513

Federal VAT (PIS/COFINS)

33,779

29,022

Others

1,346

948

Total tax assets

41,526

35,686

Current

41,454

35,579

Non-current

72

107

14

Notes to the Consolidated Financial Statements

(In thousands of Reais)

9.
Property, plant and equipment

9.1. Breakdown of balances

Average annual depreciation rates (%)

Cost

Accumulated depreciation

Net balance June 30, 2023

Furniture and fixtures

10

806

(466)

340

Leasehold improvements

10

1,607

(1,180)

427

Data processing equipment

20

26,291

(14,701)

11,590

Right of use - leases

20 to 30

5,129

(1,598)

3,531

Machinery and equipment

10

367

(276)

91

Total

34,200

(18,221)

15,979

Average annual depreciation rates (%)

Cost

Accumulated depreciation

Net balance December 31, 2022

Furniture and fixtures

10

724

(358)

366

Leasehold improvements

10

1,607

(1,100)

507

Data processing equipment

20

26,541

(12,548)

13,993

Right of use - leases

20 to 30

5,313

(709)

4,604

Machinery and equipment

10

374

(294)

80

Other fixed assets

10 to 20

158

(118)

40

Total

34,717

(15,127)

19,590

9.2. Changes in property, plant and equipment

Average annual depreciation rates %

December 31, 2022

Additions

Disposals

Hyperinflation adjustment

Transfers

Exchange variations

June 30, 2023

Furniture and fixtures

724

-

(68)

-

150

-

806

Leasehold improvements

1,607

-

-

-

-

-

1,607

Data processing equipment

26,541

357

(619)

410

148

(546)

26,291

Right of use - leases

5,313

-

(184)

-

-

-

5,129

Machinery and equipment

374

-

-

-

(7)

-

367

Other fixed assets

158

-

-

-

(158)

-

-

Cost

34,717

357

(871)

410

133

(546)

34,200

Furniture and fixtures

10

(358)

(49)

26

-

(85)

-

(466)

Leasehold improvements

10

(1,100)

(82)

-

-

2

-

(1,180)

Data processing equipment

20

(12,548)

(2,345)

382

(229)

(192)

231

(14,701)

Right of use - leases

20 to 30

(709)

(1,009)

120

-

-

-

(1,598)

Machinery and equipment

10

(294)

(5)

3

-

20

-

(276)

Other fixed assets

10 to 20

(118)

-

-

-

118

-

-

(-) Accumulated depreciation

(15,127)

(3,490)

531

(229)

(137)

231

(18,221)

Total

19,590

(3,133)

(340)

181

(4)

(315)

15,979

15

Notes to the Consolidated Financial Statements

(In thousands ofReais)

Average annual depreciation rates %

December 31, 2021

Additions

Additions due to acquisitions

Disposals

Hyperinflation adjustment

Exchange variations

December 31, 2022

Furniture and fixtures

1,169

-

384

(783)

(23)

(23)

724

Leasehold improvements

2,177

-

759

(1,328)

-

(1)

1,607

Data processing equipment

19,091

7,175

1,161

(863)

197

(220)

26,541

Right of use - leases

6,943

7,139

-

(8,769)

-

-

5,313

Machinery and equipment

408

23

-

(57)

-

-

374

Other fixed assets

332

2

5

(113)

(35)

(33)

158

Cost

30,120

14,339

2,309

(11,913)

139

(277)

34,717

Furniture and fixtures

10

(597)

(148)

-

363

12

12

(358)

Leasehold improvements

10

(1,086)

(251)

-

237

-

-

(1,100)

Data processing equipment

20

(9,061)

(4,590)

-

1,067

(163)

199

(12,548)

Right of use - leases

20 to 30

(3,097)

(2,432)

-

4,820

-

-

(709)

Machinery and equipment

10

(330)

(19)

-

55

-

-

(294)

Other fixed assets

10 to 20

(217)

(28)

-

95

17

15

(118)

(-) Accumulated depreciation

(14,388)

(7,468)

-

6,637

(134)

226

(15,127)

Total

15,732

6,871

2,309

(5,276)

5

(51)

19,590

10.

Intangible assets and goodwill

10.1. Breakdown of balances

Average annual amortization rates %

Cost

Amortization

Net balance on June 30, 2023

Intangible assets under development

-

46,232

-

46,232

Brands and patents

-

1

-

1

Software license

20 to 50

30,658

(7,451)

23,207

Database

10

-

-

-

Goodwill

-

923,439

-

923,439

Customer portfolio

10

131,448

(104,359)

27,089

Non-compete

20

2,697

(1,550)

1,147

Platform

10 to 20

453,160

(110,185)

342,975

Total

1,587,635

(223,545)

1,364,090

16

Notes to the Consolidated Financial Statements

(In thousands ofReais)

Average annual amortization rates %

Cost

Amortization

Impairment

Net balance on December 31, 2022

Intangible assets under development

-

41,707

-

-

41,707

Brands and patents

-

29

-

-

29

Software license

20 to 50

10,112

(5,135)

-

4,977

Database

10

800

(547)

-

253

Goodwill

-

1,060,162

-

(136,723)

923,439

Customer portfolio

10

131,448

(94,967)

-

36,481

Non-compete

20

2,697

(1,146)

-

1,551

Platform

10 to 20

452,814

(84,019)

-

368,795

Total

1,699,769

(185,814)

(136,723)

1,377,232

10.2. Changes in intangible assets and goodwill

Average annual amortization rates %

December 31, 2022

Additions

Transfers

Disposals

Hyperinflation adjustment

June 30, 2023

Intangible asset in progress

41,707

24,232

(19,141)

(5)

(561)

46,232

Software license

10,112

1,009

19,603

(66)

-

30,658

Database

800

-

(800)

-

-

-

Goodwill

923,439

-

-

-

-

923,439

Customer portfolio

131,448

-

-

-

-

131,448

Non-compete

2,697

-

-

-

-

2,697

Brands and patents

29

-

(28)

-

-

1

Platform

452,814

-

346

-

-

453,160

Cost

1,563,046

25,241

(20)

(71)

(561)

1,587,635

Software license

20 - 50

(5,135)

(1,010)

(1,379)

73

-

(7,451)

Database

10

(547)

-

547

-

-

-

Customer portfolio

10

(94,967)

(6,826)

(2,566)

-

-

(104,359)

Non-compete

20

(1,146)

(404)

-

-

-

(1,550)

Platform

10 - 20

(84,019)

(29,588)

3,422

-

-

(110,185)

(-) Accumulated amortizations

(185,814)

(37,828)

24

73

-

(223,545)

Total

1,377,232

(12,587)

4

2

(561)

1,364,090

17

Notes to the Consolidated Financial Statements

(In thousands ofReais)

Average annual amortization rates %

December 31, 2021

Additions

Additions due to acquisitions

Transfers

Disposals

Hyperinflation adjustment

Impairment

December 31, 2022

Intangible asset in progress

7,723

39,714

-

(5,872)

-

142

-

41,707

Software license

7,449

2,777

-

-

(77)

(37)

-

10,112

Database

800

-

-

-

-

-

-

800

Goodwill

813,912

-

246,250

-

-

-

(136,723)

923,439

Customer portfolio

118,854

-

12,594

-

-

-

-

131,448

Non-compete

2,697

-

-

-

-

-

-

2,697

Brands and patents

25

4

-

-

-

-

-

29

Platform

217,237

-

229,705

5,872

-

-

-

452,814

Cost

1,168,697

42,495

488,549

-

(77)

105

(136,723)

1,563,046

Software license

20 - 50

(3,310)

(1,877)

-

-

52

-

-

(5,135)

Database

10

(467)

(80)

-

-

-

-

-

(547)

Customer portfolio

10

(80,103)

(14,864)

-

-

-

-

-

(94,967)

Non-compete

20

(337)

(809)

-

-

-

-

-

(1,146)

Platform

10 - 20

(34,123)

(49,896)

-

-

-

-

-

(84,0119)

(-) Accumulated amortizations

(118,340)

(67,526)

-

-

52

-

-

(185,814)

Total

1,050,357

(25,031)

488,549

-

(25)

105

(136,723)

1,377,232

The amortization of intangibles includes the amount of R$31,890 for the six-months period ended June 30, 2023 (R$26,281 for the six-month period ended June 30, 2022) related to amortization of intangible assets acquired in business combinations, of which R$26,361 ($18,377 for the six-months period ended June 30, 2022) was recorded in costs of services and R$5,529 (R$7,904 for the six-months period ended June 30, 2022) in administrative expenses.

11. Trade and other payables

June 30, 2023

December 31, 2022

Domestic suppliers

245,094

176,447

Abroad suppliers

2,105

106

Advance from customers

1,238

2,086

Related parties (a)

148,851

71,054

Other accounts payable

12,295

16,127

Total

409,583

265,820

Current

409,583

264,728

Non-current

-

1,092

(a) The outstanding balances Relate to transactions in the ordinary course of business with the Company's shareholder Twilio Inc. (note 23).
18

Notes to the Consolidated Financial Statements

(In thousands of Reais)

12. Loans, borrowings and debentures

Changes in cash

Changes not affecting cash

Interest rate p.a.

Current

Non-

current

December 31, 2022

Interest paid

Payments

Interest incurred

Adjustment to present value

Exchange rate change

June 30, 2023

Current

Non-

current

Working capital

100% CDI + 2.40% to 6.55% and 8.60% to 12.95%

62,335

63,499

125,834

(8,666)

(18,932)

9,853

(117)

(44)

107,928

76,891

31,037

Debentures

18.16%

27,206

13,794

41,000

(2,567)

(22,471)

2,567

-

-

18,529

15,654

2,875

89,541

77,293

166,834

(11,233)

(41,403)

12,420

(117)

(44)

126,457

92,545

33,912

Changes in cash

Changes not affecting cash

Interest rate p.a.

Current

Non-

current

December 31, 2021

Proceeds

Interest paid

Payments

Interest incurred

Adjustment to present value

Exchange rate change

December 31, 2022

Current

Non-

current

Working capital

100% CDI + 2.40% to 6.55% and 8.60% to 12.95%

64,415

98,723

163,138

34,000

(22,868)

(70,069)

22,342

(572)

(137)

125,834

62,335

63,499

Debentures

18.16%

-

45,000

45,000

-

(7,381)

(4,000)

7,381

-

-

41,000

27,206

13,794

64,415

143,723

208,138

34,000

(30,249)

(74,069)

29,723

(572)

(137)

166,834

89,541

77,293

The portion classified in non-current liabilities has the following payment schedule:

June 30, 2023

December 31, 2022

2024

25,221

68,602

2025

8,691

8,691

Total

33,912

77,293

Debentures

On May 10, 2021, D1 issued debentures, not convertible into shares, in three series totaling the amount of R$45,000 to be paid in 54 monthly installments. The interest is accrued and paid on a monthly basis. According to the deed of first private issuance of simple debentures, the debentures may have its early termination in the event of the following situations occur as per D1´s financial results:

On September 12, 2022, the Company signed an amendment, establishing an amortization schedule of 19 installments, the first being paid in September 2022, maturing in July 2024 and monthly interest at a fixed rate of 18.16% per annum (252 business days basis).

On March 17, 2023, the Company signed an amendment enabling itself, at its discretion, to carry out the fiduciary assignment of receivables to creditor as guarantee.

On April 17, 2023, the Company signed an amendment establishing a new amortization schedule comprised of an upfront payment in the amount of R$13,000 and 8 additional installments, the first one due in April 2023 and the remaining due from January to July 2024 respectively, with a monthly interest at a fixed rate of 18.16% per annum (252 business days basis). Covenants regarding the fiduciary assignment of receivables to creditor, as well as the fulfillment of certain performance criteria by the Company and D1 were put on hold until the end of the year.

The Group is currently not in breach of any of the financial obligations set forth in the private deed.

19

Notes to the Consolidated Financial Statements

(In thousands of Reais)

Contractual clauses

The Company has financing agreements in the amount of R$63,935 guaranteed by 20% of accounts receivable given as collateral and the balance of financial investment recorded as current assets, representing three times the amount of the first payment of principal plus interest.

D1 has entered into a financing agreement for the issuance of debentures guaranteed by: (i) the fiduciary assignment to creditor of receivables equivalent to two times the amount owed by D1 per month, which must go through an escrow account controlled by the creditor and, upon confirmation that the guarantees are in order, are subsequently released to the Company; and (ii) the fiduciary assignment to creditor of 10% of the Company's corporate stock.

13. Long-Term Incentive Programs and Management remuneration

The Company offers to its executives and employees long-term incentive plans ("ILPs") based on the issuance of restricted Class A common shares ("RSUs") and cash-based payments equivalent to RSU. The Company recognizes as expense the fair value of RSUs, measured at the grant date, on a straight-line basis during the vesting provided by the respective plan, with a corresponding entry: to shareholders' equity for plans exercisable in shares; and to liabilities for plans exercisable in cash. The accumulated expense recognized reflects the vesting period and the Company's best estimate of the number of shares to be delivered. The expense of the plans is recognized in the statement of profit or loss in accordance with the function performed by the beneficiary.

Since its Initial Public Offering (IPO), the Company settled four Long-Term Incentive Programs, being two totally concluded and two still in force. In July 2021 in connection with the consummation of the initial public offering, the Company approved the Long-Term Incentive Program number two and three ("ILP 2" and "ILP3") which entitled certain executives and employees to receive RSU and cash-based payments equivalent to RSU, establishing the terms, quantities, and conditions for the acquisition of rights related to the RSU. Beneficiaries of ILP 2 and 3 received 50% of the total granted RSU in cash in August 2021 and received RSU in January 2023 after a cliff vesting period of 24 months.

On May 4, 2022, the Executive Board of Directors approved a new Long-Term Incentive Program ("ILP 4") that will grant a maximum of 240,000 RSUs (or cash-based payments equivalent to RSUs) to certain executives and employees of the Group subject to a vesting period of 28 months as of May 5, 2022 and, to certain executives and employees, the achievement of certain gross profit performance goals. The granting of RSU under ILP 4 partially occurred in the third quarter of 2022 and a provision was recorded as an expense in the consolidated statements of profit or loss.

On February 24, 2023, the Executive Board of Directors approved a new Long-Term Incentive Program ("ILP 5") that will grant a maximum of 2,300,000 RSUs (or cash-based payments equivalent to RSUs) to certain executives and employees of the Group subject to a vesting period of 36 months as of January 1, 2023.

As of June 30, 2023, the Company had outstanding 2,564,132 "RSUs" that were authorized but not yet issued, related with future vesting conditions. The total compensation cost related to unvested RSUs was R$1,326 (R$2,164 as of December 31, 2022) recorded in the consolidated financial statements. An expense amounting to R$2,260 (R$2,036 for the six-months period ended June 30, 2022) was recorded in the consolidated statements of profit or loss position as relative to the vesting period of the restricted share units.

Date

Quantity

Grant

Vesting

Shares granted

Outstanding shares

Weighted average grant date fair value (Per share)

08. 09. 2021

12. 22. 2022

45,522

22,077

59.11

08. 23. 2021

12. 22. 2022

11,436

5,854

84.50

08. 24. 2021

12. 22. 2022

3,833

1,658

86.68

05. 05. 2022

05. 09. 2024

240,000

234,543

75.72

03. 13. 2023

12. 31. 2025

2,300,000

2,300,000

8.34

2,600,791

2,564,132

The roll forward of the granted shares for the six-months period ended June 30, 2023, is presented as follows:

Consolidated

Outstanding RSU as of December 31, 2021

60,791

Shares granted

240,000

Shares delivered

(5,457)

Outstanding RSU on December 31, 2022

295,334

Shares granted

2,300,000

Shares delivered

(31,202)

Outstanding RSU on June 30, 2023

2,564,132

20

Notes to the Consolidated Financial Statements

(In thousands of Reais)

Key management personnel compensation

Key management personnel compensation comprised the following:

For the six-months period ended June 30

2023

2022

Short-term employee benefits

7,253

11,589

Other long-term benefits

330

-

Termination benefits

873

230

Share-based payments

1,034

775

Total

9,490

12,594

14.Liabilities from acquisitions

Liabilities from business combinations

June 30, 2023

December 31, 2022

Investment acquisition - Sirena

6,024

9,802

Investment acquisition - D1

27,314

45,931

Investment acquisition - SenseData

69,418

66,202

Investment acquisition - Movidesk

229,095

229,695

Total liabilities from acquisitions

331,851

351,630

Current

122,106

60,778

Non-current

209,745

290,852

21

Notes to the Consolidated Financial Statements

(In thousands of Reais)



15.Provisions for tax, labor and civil risks

15.1.Provisions for probable losses

The Company, in the ordinary course of its business, is subject to tax, civil and labor lawsuits. Management, supported by its legal advisors' opinion, assesses the probability of the outcome of the lawsuits in progress and the need to record a provision for risks that are considered sufficient to cover the probable losses.

The table below presents the position of provisions for disputes, probable losses and judicial deposits which refer to lawsuits in progress and social security risk.

June 30, 2023

December 31, 2022

Provisions

Service tax (ISSQN) Lawsuit - Company Zenvia (a)

38,502

37,525

Labor provisions and other provisions

2,193

2,225

Total provisions

40,695

39,750

Judicial deposits

Service tax (ISSQN) judicial deposits - Lawsuit Company Zenvia (a)

(38,540)

(37,561)

Labor appeals judicial and other deposits

(585)

(220)

Total judicial deposits

(39,125)

(37,781)

Total

1,570

1,969

(a) The amount of the liability related to the provision and judicial deposits for tax risk refers to the lawsuit filed by the City of Porto Alegre about the service tax (ISSQN) against Zenvia Brazil itself.

15.2.Contingencies with possible losses

The Company is involved in contingencies for which losses are possible, in accordance with the assessment prepared by Management with support from legal advisors. On June 30, 2023, the total amount of contingencies classified as possible was R$70,975 (R$66,725 as of December 31, 2022). The most relevant cases are set below:

Taxes: The Company is involved in disputes related to: (i) administrative claim imposed by the authority of the city of Porto Alegre related to differences in the tax classification and rates of SMS A2P (application-to-person short message service) services in the amount of R$22,527 (R$21,867 as of December 31, 2022); (ii) administrative claim imposed by the authority of the city of Porto Alegre related to the supposed debit of municipal tax (ISSQN) after Zenvia Mobile transferred its headquarters from the city of Porto Alegre to the city of São Paulo in the amount of R$7,132 (R$6,736 as of December 31, 2022); (iii) administrative claims in the amount of R$39,044 (R$37,396 as of December 31, 2022) related to a fine imposed by the Brazilian federal tax authority for failure to pay income taxes on capital gain from the acquisition of Kanon Serviços em Tecnologia da Informação Ltda. By Zenvia Mobile from Spring Mobile Solutions Inc. in previous years.

Labor: the labor contingencies assessed as possible losses totaled R$1,954 as of June 30, 2023 (R$68 as of December 31, 2022). Labor-related actions essentially consist of issues related to commission differences, variable compensation and salary parity.

Civil: the civil contingencies assessed as possible losses totaled R$290 as of June 30, 2023 (R$633 as of December 31, 2022).

22

Notes to the Consolidated Financial Statements

(In thousands of Reais)

16.Equity

Share Capital

Shareholder's

Class

June 30, 2023

% (i)

December 31, 2022

% (i)

Bobsin Corp

B

9,578,220

22.93

9,578,220

22.95

Bobsin Corp

A

897,635

2.15

897,635

2,15

Oria Zenvia Co-investment Holdings, LP (ii)

B

7,119,930

17.05

7,119,930

17.06

Oria Tech Zenvia Co-investment - Fundo de Investimento em Participações Multiestratégia

B

4,329,105

10.36

4,329,105

10.37

Oria Tech Zenvia Co-investment - Fundo de Investimento em Participações Multiestratégia

A

27,108

0.06

27,108

0.06

Oria Tech 1 Inovação Fundo de Investimento em Participações

B

2,637,670

6.31

2,637,670

6.32

Twilio Inc.

A

3,846,153

9.21

3,846,153

9.21

D1 former shareholders

A

1,942,750

4.65

1,942,750

4.65

Sirena former shareholders

A

89,131

0.21

89,131

0.21

SenseData former shareholders

A

94,200

0.23

94,200

0.23

Movidesk former shareholders

A

315,820

0.76

315,820

0.76

Spectra I - Fundo de Investimento em Participações

A

39,940

0.10

39,940

0.10

Spectra II - Fundo de Investimento em Participações

A

159,770

0.38

159,770

0.38

Others

A

10,693,754

25.60

10,662,551

25.55

41,771,186

100

41,739,983

100

(i) Percentage of economic rights.
(ii) The shares formerly held by OriaZenvia Co-investment Holdings II, LP have been transferred to OriaZenvia Co-investment Holdings, LP. The transfer is still undergoing bureaucratic proceedings to be registered with Zenvia's transfer agent.

On February 27, 2023, the Company issued 31,202 Class A common shares to certain key officers and employees as part of the Company's long-term incentive plans Nos. 2 and 3 equivalent to an amount of R$3,922.

17.Segment reporting

17.1.Basis for segmentation

The segment reporting is based on information used by the Company's Chief Operating Decision Maker (CODM) represented by the Chief Executive Officer (CEO).

Until the middle of 2022, the Company had a single operating segment, considering the information used by CODM, as well as the financial information structure. After the acquisitions made in 2022, the CODM, began monitoring operations, making decisions on resource allocation, and evaluating performance based on two reportable operating segments, CPaaS and SaaS. CODM analyzes revenue and costs within their respective segments.

The two operating segments offer different products and services and are managed separately because they require different technology and marketing strategies.

23

Notes to the Consolidated Financial Statements

(In thousands of Reais)

The following summary describes the operations of each reportable segment.

Reportable segments

Operations
SaaS (Software-as-a-Service) Includes the following solutions:
i. ZenviaAttraction:Active multi-channel end-customer acquisition campaigns utilizing data intelligence and multi-channel automation.
ii. ZenviaConversion:Converting leads into sales using multiple communication channels.
iii. ZenviaService:Enabling companies to provide customer service with structured support across multiple channels.
iv. ZenviaSuccess:Protect and expand customer revenue through cross-selling andupselling.
v. Consulting:A Business Intelligenceteam thatprovidessolutions to customer needs by usingSaaSandCPaaSto enhance the end-consumer experience.

CPaaS (Communications Platform as a Service)

Includes services such as SMS, Voice, WhatsApp, Instagram and Webchat, all such applications being orchestrated and automated by chatbots, single customer view, journey designer, documents composer and authentication.

17.2.Information about reportable segments

The following table present revenue and cost of services information for the Company operations segments for the six months ended June 30, 2023 and 2022, respectively:

For the six months period ended June 30, 2023

For the six months period ended June 30, 2022

CPaaS

SaaS

Consolidated

CPaaS

SaaS

Consolidated

Revenue

235,917

136,049

371,966

286,692

114,786

401,478

Cost of services

(147,892)

(73,989)

(221,881)

(213,780)

(62,226)

(276,006)

Gross profit

88,025

62,060

150,085

72,912

52,560

125,472

Operational expenses, finance income, finance expenses, taxes and fair values gains and losses on certain financial assets and liabilities are not allocated to individual segments as these are managed on an overall group basis.

17.3.Major customer

In June 2023, the Company had one customer representing more than 10% of consolidated revenue. For the six-months period ended June 30, 2023and 2022, this customer represented 12.1% and 9.1%, respectively, of consolidated revenue.

24

Notes to the Consolidated Financial Statements

(In thousands of Reais)

17.4.Revenue geographic information

The Company's revenue by geographic region is presented below:

For the three months period ended June 30


For the six months period ended June 30

2023

2022


2023

2022

Primary geographical markets


Brazil

173,566

186,372


333,666

367,061

USA

6,519

4,427


10,090

8,915

Argentina

3,051

2,837


6,191

5,185

Mexico

3,002

3,190


7,233

7,074

Switzerland

13

419


95

512

Colombia

1,463

1,340


3,089

2,576

Peru

1,078

1,088


2,121

2,091

Chile

956

912


1,853

1,742

Others

3,267

3,312


7,659

6,321

Total

192,916

203,897


371,966

401,478

17.5.Seasonality of operations

Although the Company has not historically experienced significant seasonality with respect to revenues throughout the year, some moderate seasonality has been observed in the use of the platforms in cases such as education and brick-and-mortar retail stores. The Company has experienced revenue growth during the Carnival period in February, the back-to-school periods in July and August, Black Friday at the end of November and the Christmas season. The rapid growth in the business has offset this seasonal trend to date, but its impact on revenue may be more pronounced in future periods.

25

Notes to the Consolidated Financial Statements

(In thousands of Reais)

18.Costs and expenses by nature

Three months ended June 30,

Six months ended June 30,

2023

2022

2023

2022

Personnel expenses (a)

(51,708)

(64,116)

(104,638)

(110,388)

Costs with operators/Other costs

(97,559)

(116,661)

(176,360)

(245,311)

Depreciation and amortization

(21,185)

(18,725)

(41,318)

(33,489)

Outsourced services

(9,175)

(7,260)

(19,943)

(17,442)

Rentals/insurance/condominium/water/energy

301

(509)

(216)

(910)

Allowance for credit losses

(3,379)

(1,957)

(5,540)

(3,997)

Marketing expenses / events (*)

(4,705)

(5,261)

(7,462)

(8,989)

Communication (*)

(151)

(623)

(832)

(1,408)

Travel expenses

(483)

(613)

(1,016)

(866)

Other expenses (i)

(10,382)

(10,240)

(16,253)

(16,942)

Other income and expenses, net (b)

(451)

(11,928)

(536)

(19,968)

(198,877)

(237,893)

(374,114)

(459,710)

Cost of services

(121,783)

(137,849)

(221,881)

(276,006)

Sales and marketing expenses

(24,807)

(30,771)

(52,249)

(56,190)

General administrative expenses

(37,348)

(39,607)

(68,795)

(74,340)

Research and development expenses

(11,109)

(15,883)

(25,113)

(29,193)

Allowance for credit losses

(3,379)

(1,957)

(5,540)

(3,997)

Other income and expenses, net

(451)

(11,826)

(536)

(19,984)

(198,877)

(237,893)

(374,114)

(459,710)

(*) The Company reclassified some comparative balances for better presentation and comparability with the current period, without any impact on its result, without changes in the totalizing subgroups and without impact on the assessment of covenants.

(i)

For the six-months period ended June 30, 2023, the total amount is primarily composed of R$9,314 (R$8,868 for the six-months period ended June 30, 2022) referring to software license; R$2,626 (R$2,196 for the six-months period ended June 30, 2022) referring to Commissions; and R$1,420 referring to taxes (R$1,424 for the six-months period ended June 30, 2022).

26

Notes to the Consolidated Financial Statements

(In thousands of Reais)

(a)Personnel expenses:

Three months ended June 30,

Six months ended June 30,

2023

2022

2023

2022

Salary

(20,252)

(32,775)

(42,242)

(57,821)

Benefits

(6,224)

(7,030)

(12,330)

(9,891)

Compulsory contributions to social security

(10,668)

(8,045)

(19,677)

(14,474)

Compensation

(1,317)

(800)

(1,535)

(970)

Provisions (vacation/13th salary)

(7,309)

(6,961)

(14,653)

(12,032)

Provision for bonus and profit sharing

(5,240)

(5,481)

(12,830)

(10,135)

IPO Bonus and share-based payment

-

(1,394)

-

(2,035)

Compensation to former shareholders

-

(1,560)

-

(1,560)

Other

(698)

(70)

(1,371)

(1,470)

(51,708)

(64,116)

(104,638)

(110,388)

(b)Other income and expense:

Three months ended June 30,

Six months ended June 30,

2023

2022

2023

2022

-

(13,733)

-

(13,733)

Result of disposal of assets

(276)

5,525

(276)

(1)

Other income and expenses, net

(175)

(3,720)

(259)

(6,234)

(451)

(11,928)

(535)

(19,968)

27

Notes to the Consolidated Financial Statements

(In thousands of Reais)

19.Financial Income (Expenses)

Three months ended June 30,

Six months ended June 30,

2023

2022

2023

2022

Finance expenses

Interest on loans and financing

(4,730)

(5,604)

(9,853)

(11,188)

Interest on Debentures

(902)

(1,891)

(2,567)

(3,751)

Discount

(3,746)

-

(7,681)

-

Foreign exchange losses

(1,420)

(2,886)

(3,737)

(5,486)

Bank expenses and IOF (tax on financial transactions)

(745)

(1,193)

(1,248)

(1,850)

Other financial expenses

(4,075)

(3,864)

(8,171)

(4,317)

Interests on leasing contracts

(100)

(148)

(212)

(297)

Losses on derivative instrument

(1,034)

(161)

(1,871)

(856)

Inflation adjustment

(373)

(2,113)

(509)

(3,733)

Total financial expenses

(17,125)

(17,860)

(35,849)

(31,478)

Finance income

Interest

3

198

4

621

Foreign exchange gain

1,341

4,254

2,084

9,714

Interests on financial instrument

2,059

3,904

3,212

9,912

Other financial income

584

146

1,312

155

Gain on financial instrument

-

482

-

482

Adjustment to present value (APV)

-

666

-

666

Total finance income

3,987

9,650

6,612

21,550

Net finance costs

(13,138)

(8,210)

(29,237)

(9,928)

20.Income tax and social contribution

Income tax expense is recognized in each interim period based on the best estimate of the weighted average annual income tax rate expected for the full financial year. Amounts accrued for income tax expense in these interim condensed consolidated financial statements may have to be adjusted in a subsequent interim period if the Company's estimate of the annual income tax rate changes in future periods.

Three months ended June 30,

Six months ended June 30,

2023

2022

2023

2022

Deferred taxes on temporary differences and tax losses

7,794

10,936

16,620

15,885

Current tax expenses

(2,788)

(703)

(3,006)

(723)

Tax (income) expense

5,006

10,233

13,615

15,162

28

Notes to the Consolidated Financial Statements

(In thousands of Reais)

20.1.Reconciliation between the nominal income tax and social contribution rate and effective rate

Three months ended June 30,

Six months ended June 30,

2023

2022

2023

2022

Income before income tax and social contribution

(19,093)

(42,206)

(31,385)

(68,160)

Basic rate

34%

34%

34%

34%

Income tax and social contribution

6,492

14,350

10,671

23,174

Tax incentives

(493)

-

-

-

Net operating loss carryforward not recorded from subsidiaries (a)

1,613

(1,782)

5,969

(4,402)

Bonus

(508)

(1,745)

(508)

(1,849)

Others

(2,097)

(590)

(2,518)

(1,761)

Tax benefit (expense)

5,006

10,233

13,614

15,162

Effective rate

26.22%

24.25%

43.38%

22.24%

(a) For certain subsidiaries of Rodati Motor Corporation no deferred tax assets were recognized from temporary differences and tax loss carryforward in the amount of R$12,822 for the six-months ended June 30, 2023 (R$4,843 for the six-months ended June 30, 2022) because it is not probable that future taxable profit will be available against which the Company can use the benefits.

20.2.Breakdown and Changes in deferred income tax and social contribution

June 30, 2023

December 31, 2022

Deferred tax assets

Provision for labor, tax and civil risk

13,091

12,583

Allowance for doubtful accounts

3,507

2,160

Tax losses and negative basis of social contribution tax

15,223

13,039

Provision for compensation or renegotiation from acquisitions

52,542

52,837

Goodwill impairment

33,059

33,059

Customer portfolio and platform

10,018

901

Other temporary differences

7,849

3,975

Total deferred tax assets

135,289

118,554

Deferred Tax liabilities

Goodwill

(26,785)

(26,785)

Total deferred tax liabilities

(26,785)

(26,785)

Net deferred tax

108,504

91,769

Deferred taxes - assets

108,504

91,769

Deferred taxes - liabilities

-

-

29

Notes to the Consolidated Financial Statements

(In thousands of Reais)

Balance at December 31, 2022

91,769

Additions

17,030

Reversal

(295)

Balance at June 30, 2023

108,504

The Company did not present taxable income in prior periods, 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.

21. Earnings per share

The calculation of basic earnings per share is calculated by dividing loss of the period by the weighted average number of common shares existing during the period. Diluted earnings per share are calculated by dividing net income for the period by weighted average number of common shares existing during the period plus weighted average number of common shares that would be issued upon conversion of all potentially diluting common shares into common shares.

For the six-month period June 30, 2023 and 2022, the number of shares used to calculate the diluted net loss per share of common stock attributable to common shareholders is the same as the number of shares used to calculate the basic net loss per share of common stock attributable to common shareholders for the period presented because potentially dilutive shares would have been antidilutive if included in the calculation. The tables below show data of income and shares used in calculating basic and diluted earnings per share.

Six months period ended June 30

2023

2022

Basic and diluted earnings per share

Numerator

Loss of the period assigned to Company's shareholders

(17,771)

(21,025)

Denominator

Weighted average for number of common shares

41,621,751

32,616,258

Class A common stock subject to future vesting

(2,220,207)

-

39,401,544

32,616,258

Basic and diluted loss per share (in reais)

(0.451)

(0.645)

30

Notes to the Consolidated Financial Statements

(In thousands ofReais)

22. Risk management and financial instruments

22.1. Classification of financial instruments

The classification of financial instruments is presented in the table below:

June 30, 2023

December 31, 2022

Amortized cost

Fair value through profit or loss

Level 1

Level 2

Level 3

Amortized cost

Fair value through profit or loss

Level 1

Level 2

Level 3

Assets

Cash and cash equivalents

42,385

100,194

100,194

-

-

43,796

56,447

56,447

-

-

Financial investment

-

-

-

-

-

-

8,160

8,160

-

-

Trade accounts receivable

195,860

-

-

-

-

156,012

-

-

-

-

Derivative financial instruments

-

-

-

-

-

-

-

-

-

-

Total assets

238,245

100,194

100,194

-

-

199,808

64,607

64,607

-

-

Liabilities

Loans and financing

126,457

-

-

-

-

166,834

-

-

-

-

Trade and other payable

409,583

-

-

-

-

265,820

-

-

-

-

Liabilities from acquisition

293,021

38,830

-

-

38,830

285,428

66,202

-

-

66,202

Total liabilities

829,061

38,830

-

-

38,830

718,082

66,202

-

-

66,202

31

Notes to the Consolidated Financial Statements

(In thousands ofReais)

22.1.1.Level 3 measurement

The fair value of acquisitions is determined using unobservable inputs, therefore it is classified in the level 3 of the fair value hierarchy. The main assumptions used in the measurement of the fair value of acquisitions on measurement are presented below.

Type

Valuation technique

Significant unobservable inputs

Inter-relationship between significant unobservable and fair value measurement

Liabilities from acquisition

Market Comparison: The valuation model considered the acquisition price of companies of similar size, sector.

-Acquisitions multiples ranges depending on the gross profit business plan achievement

The estimated fair value would increase (decrease) if:

-The gross profit was higher (lower) in the period of the earn-out calculation.

From the amount to be paid related to liabilities from acquisitions, the Company has a liability arising from its acquisitions that will be settled as certain milestones established in the contract are reached. As of June 30, 2023, the Company had a total of R$38,830 (R$66,202 on December 31, 2022) recorded under Liabilities from acquisition.

22.2.Financial risk management

The main financial risks to which the Company and its subsidiaries are exposed when conducting their activities are:

(a)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.

32

Notes to the Consolidated Financial Statements

(In thousands ofReais)

Credit risk exposure

The book value of financial assets represents the maximum credit exposure. The maximum credit risk exposure on financial information date was:

June 30, 2023

December 31, 2022

Cash and cash equivalents

142,579

100,243

Financial investment

-

8,160

Trade accounts receivable

195,860

156,012

Total

338,439

264,415

The Company determines its allowance for expected credit 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 receivable past due for more than 150 days;

● 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.

(b)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.

(c)Operations with derivatives

The Company uses derivative financial instruments to hedge against the risk of change in the foreign exchange rates. Therefore, they are not speculative. The derivative financial instruments designated in hedge operations are initially recognized at fair value on the date on which the derivative contract is executed and are subsequently remeasured to their fair value. Changes in the fair value of any of these derivative instruments are immediately recognized in the statement of profit or loss under "net financial cost". As of June 30, 2023, the Company has an obligation of R$1,871 registered as derivative financial instruments.

(d)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 closely monitored by Company's Management, so as to ensure that cash operating generation and previous fund raising, as necessary, are sufficient to maintain the payment schedule, thus not generating liquidity risk for the Company and its subsidiaries.

33

Notes to the Consolidated Financial Statements

(In thousands ofReais)

We are committed to and have been taking all the necessary actions that we consider necessary to enable the Company to obtain the funding to ensure it will continue its regular operations in the next twelve months, including raising new credit lines and/or issuing new equity, among other alternatives.

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, borrowings and debentures

126,457

137,852

101,426

36,426

-

-

Trade and other payables

409,583

409,583

409,583

-

-

-

Liabilities from acquisitions

331,851

331,851

116,449

102,097

79,230

34,075

Lease liabilities

3,803

3,803

2,002

1,610

191

-

Total

871,694

883,089

629,460

140,133

79,421

34,075

(e)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. 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.

Investments indexed to CDI are recorded at fair 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 or increasing of the CDI indexes. The base scenario was the index as of June 30, 2023 of 12.50% p.a. Scenario II represents a 25% increase or decrease and scenario III a 50% increase or decrease. The Company has loans and borrowings linked to the CDI rate (long-term interest rate).

Operation

Balance at June 30, 2023

Risk

Scenario I Current scenario

Scenario II

Scenario III

Financial investments

100,194

CDI decrease

12,524

9,383

6,262

12.50%

9.38%

6.25%

Financial liabilities - financing

126,457

CDI increase

15,807

19,759

23,711

12.50%

15.63%

18.75%

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Notes to the Consolidated Financial Statements

(In thousands ofReais)

(f)Capital management

The Company's capital management aims to ensure that an adequate credit rating is maintained, as well as a 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, obtain funding from new loans, issue promissory notes and contract derivative transactions.

The Company considers its net debt structure as loans and financing less cash and cash equivalents. The financial leverage ratios are summarized as follows:

June 30, 2023

December 31, 2022

Loans and borrowings

126,457

166,834

Cash and cash equivalents

(142,579)

(100,243)

Net debt

(16,122)

66,591

Total equity

934,658

953,336

Net debt/equity (%)

(0.02)

0.07

23. Related Parties

Related parties transactions are carried out under conditions and prices established by the parties, the intercompany transactions are eliminated in consolidation.

As of June 30, 2023, the Company has in trade and other payables R$148,851 (R$71,054 as of December 31, 2022) with shareholder Twilio Inc. related to agreement established between the Company and Twilio Inc. which establish for the reimbursement of SMS costs.

35

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Disclaimer

Zenvia Inc. published this content on 17 August 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 17 August 2023 10:07:07 UTC.