6-K
Zenvia Inc. (ZENVF)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 UNDER
THE SECURITIES EXCHANGE ACT OF 1934
For the month of July 2024.
Commission File Number 333-
Zenvia Inc.
(Exact name of registrant as specified in its charter)
N/A
(Translation of registrant’s name into English)
Avenida Paulista, 2300, 18th Floor, Suites 182 and184
São Paulo, São Paulo, 01310-300
Brazil
**(**Address of principal executive office)
Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.
Form 20-F x Form 40-F ¨
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ¨
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ¨
| Zenvia Inc.<br><br> <br>Unaudited Interim condensed consolidated financial statements as of March 31, 2024 |
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Contents
| Unaudited interim condensed consolidated statement of financial position | 1 |
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| Unaudited interim condensed consolidated statement of profit or loss and other comprehensive income | 3 |
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| Unaudited interim condensed consolidated statement of changes in equity | 4 |
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| Unaudited interim condensed consolidated statement of cash flows | 5 |
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| Notes to the unaudited interim condensed consolidated financial statements | 6 |
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Zenvia Inc.
Unaudited interim condensed consolidated statement of financial position at March 31, 2024
(In thousands of Reais)
| Assets | Note | March 31, 2024 | December 31, 2023 |
|---|---|---|---|
| Current assets | |||
| Cash and cash equivalents | 5 | 71,525 | 63,742 |
| Trade and other receivables | 7 | 171,905 | 148,784 |
| Recoverable assets | 8 | 34,983 | 28,058 |
| Prepayments | 9,063 | 5,571 | |
| Other assets | 6,962 | 4,176 | |
| Total current assets | 294,438 | 250,331 | |
| Non-current assets | |||
| Restricted cash | 6 | 6,578 | 6,403 |
| Recoverable assets | 8 | 12 | - |
| Prepayments | 865 | 1,109 | |
| Other Assets | 10 | 10 | |
| Deferred tax assets | 20 | 108,054 | 91,971 |
| Property, plant and equipment | 9 | 14,518 | 14,413 |
| Intangible assets | 10 | 1,339,121 | 1,347,327 |
| Total non-current assets | 1,469,158 | 1,461,233 | |
| Total assets | 1,763,596 | 1,711,564 |
| 1 |
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Zenvia Inc.
Unaudited interim condensed consolidated statement of financial position at March 31, 2024
(In thousands of Reais)
| Liabilities | Note | March 31, 2024 | December 31, 2023 |
|---|---|---|---|
| Current liabilities | |||
| Trade and other payables | 11 | 367,851 | 353,998 |
| Loans, borrowings and debentures | 12 | 33,696 | 36,191 |
| Liabilities from acquisitions | 13 | 96,963 | 134,466 |
| Employee benefits | 59,257 | 50,085 | |
| Tax liabilities | 16,779 | 18,846 | |
| Lease liabilities | 2,314 | 2,056 | |
| Deferred revenue | 8,156 | 11,547 | |
| Taxes to be paid in installments | 137 | 185 | |
| Total current liabilities | 585,153 | 607,374 | |
| Non-current liabilities | |||
| Liabilities from acquisitions | 13 | 193,919 | 160,237 |
| Loans and borrowings | 12 | 59,844 | 51,605 |
| Provisions for tax, labor and civil risks | 14 | 1,412 | 1,721 |
| Lease liabilities | 2,004 | 752 | |
| Employee benefits | 1,036 | 615 | |
| Derivative financial instruments | 22 | 82,406 | - |
| Taxes to be paid in installments | 302 | 313 | |
| Total non-current liabilities | 340,923 | 215,243 | |
| Equity | 16 | ||
| Capital | 1,007,522 | 957,525 | |
| Reserves | 199,627 | 247,464 | |
| Foreign currency translation reserve | 5,419 | 3,129 | |
| Other components of equity | 283 | 283 | |
| Accumulated losses | (375,602) | (319,591) | |
| Equity attributable to owners of the Company | 837,249 | 888,810 | |
| Non-controlling interests | 271 | 137 | |
| Total equity | 837,520 | 888,947 | |
| Total equity and liabilities | 1,763,596 | 1,711,564 |
See the accompanying notes to the interim condensed consolidated financial statements.
| 2 |
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Zenvia Inc.
Unaudited interim condensed consolidated statement of profit or loss and other comprehensiveincome for the three months period ended March 31, 2024 and 2023
(In thousands of Reais)
| ****<br><br> <br>Three months period ended March 31 | |||
|---|---|---|---|
| Note | 2024 | 2023<br><br> <br>(Restated)* | |
| Revenue | 17 | 212,636 | 179,047 |
| Cost of services | 18 | (131,779) | (100,098) |
| Gross profit | 80,857 | 78,949 | |
| Operating expenses | **** | ||
| Sales and marketing expenses | 18 | (27,359) | (27,442) |
| General and administrative expenses | 18 | (31,270) | (31,447) |
| Research and development expenses | 18 | (14,796) | (14,004) |
| Allowance for expected credit losses | 18 | (5,431) | (18,269) |
| Other income and expenses, net | 18 | (11,353) | (83) |
| Operating loss | (9,352) | (12,296) | |
| Financial Income (Expenses) | **** | ||
| Finance expenses | 19 | (65,487) | (18,724) |
| Finance income | 19 | 5,283 | 2,625 |
| Financial expenses, Net | (60,204) | (16,099) | |
| Loss before taxes | (69,556) | (28,395) | |
| Income Tax and Social Contribution | **** | ||
| Deferred income tax and social contribution | 20 | 16,083 | 11,846 |
| Current income tax and social contribution | 20 | (2,420) | (218) |
| Total Income Tax and Social Contribution | 13,663 | 11,628 | |
| Loss for the period | (55,893) | (16,767) | |
| Gain (Loss) attributable to: | **** | ||
| Owners of the Company | **** | (56,011) | (16,839) |
| Non-controlling interests | **** | 118 | 72 |
| Loss per share (expressed in Reais per share) | |||
| Basic | (1.104) | (0.403) | |
| Diluted | (1.104) | (0.403) | |
| Other comprehensive income | **** | ||
| Items that are or may be reclassified subsequently to profit or loss | |||
| Cumulative translation adjustments from operations in foreign currency | 2,290 | (3,611) | |
| Total comprehensive loss for the period | (53,603) | (20,378) | |
| Total comprehensive loss attributable to: | **** | ||
| Owners of the Company | (53,721) | (20,450) | |
| Non-controlling interests | 118 | 72 |
* See Note 1.b for the discussion relating to the adjustments
See the accompanying notes to the interim condensed consolidated financial statements.
| 3 |
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Zenvia Inc.
Unaudited interim condensed consolidated statement of changes in equity
For the three months period ended March 31, 2024 and 2023
(In thousands of reais)
| Other comprehensive income | ||||||||
|---|---|---|---|---|---|---|---|---|
| Capital | Capital reserve | Retained earnings (loss) | Foreign currency translation reserve | Other components of equity | Attributable to owners of the Company | Non-controlling interests | Total equity | |
| Balance at January 1, 2023 | 957,525 | 244,913 | (258,587) | 9,485 | - | 953,336 | (96) | 953,240 |
| Loss for the period (Restated)* | - | - | (16,839) | - | - | (16,839) | 72 | (16,767) |
| Cumulative translation adjustments from operations in foreign currency | - | - | - | 288 | - | 288 | - | 288 |
| Issuance of shares | - | 2,890 | - | - | - | 2,890 | - | 2,890 |
| Issuance of shares related to business combinations | - | 185 | - | - | - | 185 | - | 185 |
| Share-based compensation | - | (2,580) | - | - | - | (2,580) | - | (2,580) |
| Balance at March 31, 2023 | 957,525 | 245,408 | (275,426) | 9,773 | - | 937,280 | (24) | 937,256 |
| Balance at January 1, 2024 | 957,525 | 247,464 | (319,591) | 3,129 | 283 | 888,810 | 137 | 888,947 |
| Loss for the period | - | - | (56,011) | - | - | (56,011) | 118 | (55,893) |
| Other components of equity | - | - | - | - | - | - | 16 | 16 |
| Cumulative translation adjustments from operations in foreign currency | - | - | - | 2,290 | - | 2,290 | - | 2,290 |
| Capital increase from private placement investments (Note 16) | 49,997 | (49,159) | - | - | - | 838 | - | 838 |
| Share-based compensation | - | 1,322 | - | - | - | 1,322 | - | 1,322 |
| Balance at March 31, 2024 | 1,007,522 | 199,627 | (375,602) | 5,419 | 283 | 837,249 | 271 | 837,520 |
* See Note 1.b for the discussion relating to the adjustments
See the accompanying notes to the interim condensed consolidated financial statements.
| 4 |
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Zenvia Inc.
Unaudited interim condensed consolidated statement of cash flows
For the three months period ended March 31, 2024 and 2023
(In thousands of reais)
| Three months period ended March 31 | |||
|---|---|---|---|
| Note | 2024 | 2023<br><br> <br>(Restated)* | |
| Cash flow from operating activities | |||
| Loss for the period | (55,893) | (16,767) | |
| Adjustments for: | |||
| Income tax and social contribution | (13,663) | (11,628) | |
| Depreciation and amortization | 18 | 22,797 | 20,133 |
| Allowance for expected credit losses | 7 | 5,431 | 1,850 |
| Provisions for tax, labor and civil risks | 14 | 696 | 741 |
| Provision for bonus and profit sharing | 10,307 | 7,159 | |
| Share-based compensation | 1,322 | 1,391 | |
| Interest from loans and borrowings | 12 | 3,794 | 6,788 |
| Interest on leases | 175 | 112 | |
| Exchange variation and Interest and adjustment to present value<br><br> <br>(APV) on liabilities from acquisition | 284 | 3,268 | |
| Gain (loss) on write-off of property, plant and equipment | (2) | 89 | |
| Effect of hyperinflation | 1,507 | 136 | |
| Increase of fair value of derivative financial instruments | 16 | 33.247 | 837 |
| Changes in assets and liabilities | **** | ||
| Trade and other receivables | 7 | (28,552) | (15,789) |
| Prepayments | (3,248) | (844) | |
| Other assets | (13,208) | (14,825) | |
| Suppliers | 14,355 | 115,101 | |
| Employee benefits | (714) | 2,663 | |
| Other liabilities | 12,894 | 6,358 | |
| Cash (used in)/ from operating activities | (8,471) | 106,773 | |
| Interest paid on loans and leases | (3,172) | (6,360) | |
| Income taxes paid | (1,222) | (853) | |
| Net cash flow (used in)/ from operating activities | (12,865) | 99,560 | |
| Cash flow from investing activities | **** | ||
| Proceeds from sale of financial instruments | - | 8,160 | |
| Restricted cash | 6 | (175) | - |
| Acquisition of property, plant and equipment | 9 | (57) | - |
| Acquisition of Intangible assets | 10 | (12,197) | (10,863) |
| Net cash used in investing activities | (12,429) | (2,703) | |
| Cash flow from financing activities | **** | ||
| Capital Increase | 16 | 49,997 | - |
| Proceeds from loans and borrowings | 12 | 11,867 | - |
| Payment of debt issuance costs | 12 | 99 | - |
| Payment of borrowings | 12 | (7,019) | (17,513) |
| Payment of lease liabilities | (501) | (423) | |
| Payments in installments for acquisition of subsidiaries | 13 | (21,109) | (20,430) |
| Net cash (used in)/from financing activities | 33,334 | (38,366) | |
| Exchange rate change on cash and cash equivalents | (257) | 288 | |
| Net (decrease)/ increase in cash and cash equivalents | 7,783 | 58,779 | |
| Cash and cash equivalents at January 1 | 63,742 | 100,243 | |
| Cash and cash equivalents at March 31 | 71,525 | 159,022 |
* See Note 1.b for the discussion relating to the adjustments
See the accompanying notes to the interim condensed consolidated financial statements.
| 5 |
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| **Notes to the unaudited interim condensed consolidated financial statements**<br><br>***\(In thousands of Reais\)*** |
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| 1. | Operations |
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Zenvia Inc. (“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 “Company”). The Company 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 Software as a Service (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 March 31, 2024, the Company has negative consolidated working capital in the amount of R$290,145 (current assets of R$294,438 and current liabilities of R$584,583), 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 by 9% and is in line with the acceleration of the integration of acquisitions. While these actions were instrumental for the Company to deliver improved cash generation in 2023, management is committed to continue pursuing new operational efficiencies for the next 12 months. On top of the improvement in operations, the Company has announced the conclusion of several renegotiations with its creditors, including banks, debenture holders and holders of other liabilities related to past M&A activity. These renegotiations include an extension of payment terms on bank loans and debentures from up to 18 months to 36 months (final maturity December 2026), extension of liabilities related to past M&As from up to 36 months to up to 60 months (final maturity December 2028) and the possibility of converting certain M&A liabilities into Zenvia´s equity (potential conversion estimated at circa 65% of total M&A liabilities). Additionally, the Company announced that Mr Cassio Bobsin, Zenvia´s Founder and CEO, has injected a total of R$50,000 as new equity in the Company. Management believes that the combination of the above mentioned initiatives and the expected future operating cash flow will be enough to cover for the Company's medium and long term financial obligations. Nevertheless, management will continue to seek to optimize the Company's working capital needs by renegotiating payment terms with suppliers and anticipating future revenues with
| 6 |
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| **Notes to the unaudited interim condensed consolidated financial statements**<br><br>***\(In thousands of Reais\)*** |
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clients. Considering the Company’s short-term financial contractual obligations and commitments after giving effect to the above-mentioned renegotiations and capital injection, management expects a cash outlay of R$76,728 for the next 12 months mainly for its existing short-term indebtedness as it becomes due, including interest, and payments due from acquisitions. The Company believes its working capital and projected cash flows from operations, combined with new sources of financing already under negotiations, will be sufficient for the Company’s requirements for the next twelve months. As a result of these factors, management continues to have a reasonable expectation that the Company will be able to continue operations in the foreseeable future.
a. Business combination – Movidesk Ltda. (“Movidesk”)
On February 6, 2024, Zenvia Brazil renegotiated the earnout with Movidesk, with a total balance of R$206,699 as of December 31, 2023. Payment terms have been extended to a total of 60 months, with final due date in December 2028, with Zenvia option to convert R$156,805 of total debt into equity, of which R$50,000 can be converted by September 2024, and the remaining balance can be converted in up to 6 installments from January 1, 2026, until the conclusion of the contract period.
b. Correction of error – effect in consolidated statement of profit or loss, consolidated statement of changes in equity andcash flow
In December 2023, the Company identified that the allowance for expected credit losses was understated. The calculation was reassessed in the annual financial statements and Management has retrospectively revised the first quarter of 2023 for comparison purposes.
The retrospective changes in the comparative periods can be summarized as follows:
| 7 |
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| **Notes to the unaudited interim condensed consolidated financial statements**<br><br>***\(In thousands of Reais\)*** |
| --- | | ● | Consolidated statement of financial position | | --- | --- | | | | | March 31, 2023 | | --- | --- | --- | --- | | | Originally<br><br> <br>presented | Effects of<br><br> <br>Change | After<br><br> <br>changes | | Assets | | | | | Trade and other receivables | 186,060 | (16,109) | 169.951 | | Total current assets | 407,918 | (16,109) | 391.810 | | Deferred tax assets | 100,601 | 3,019 | 103,620 | | Total non-current assets | 1,489,735 | 3,019 | 1,492,754 | | Total assets | 1,897,653 | (13.089) | 1,884,564 | | Shareholders' equity | | | | | Accumulated losses | (262,337) | (13,089) | (275,426) | | Equity holders of the parent company | 950,369 | (13,089) | 937,280 | | Total equity | 950,345 | (13,089) | 937,256 | | Total equity and liabilities | 1,897,653 | (13,089) | 1,884,564 | | ● | Consolidated statement of profit or loss | | --- | --- | | | | | March 31, 2023 | | --- | --- | --- | --- | | | Originally<br><br> <br>presented | Effects of<br><br> <br>Change | After<br><br> <br>changes | | Operating expenses | | | | | Allowance for expected credit losses | (2,161) | (16,108) | (18,269) | | Operating gain (loss) | 3,812 | (16,108) | (12,296) | | Profit (loss) before taxes | (12,287) | (16,108) | (28,395) | | Deferred income tax and social contribution | 8,827 | 3,019 | 11,846 | | Total Income Tax and Social Contribution | 8,609 | 3,019 | 11,628 | | Loss of the period | (3,678) | (13,089) | (16,767) | | Loss attributable to: | | | | | Owners of the Company | (3,750) | (13,089) | (16,839) | | Loss per share (expressed in Reais per share) | | | | | Basic | (0.090) | (0.313) | (0.403) | | Diluted | (0.090) | (0.313) | (0.403) | | Other comprehensive income | | | | | Cumulative translation adjustments from operations in foreign currency | (3,611) | 3,899 | 288 | | Total comprehensive income (loss) for the period | (7,289) | (9,190) | (16,479) | | Owners of the Company | (7,361) | (9,190) | (16,551) |
| 8 |
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| **Notes to the unaudited interim condensed consolidated financial statements**<br><br>***\(In thousands of Reais\)*** |
| --- | | ● | Changes in equity | | --- | --- | | March 31, 2023 | | | | | | | | | | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | | Originally<br><br> <br>presented | | | | Effects of<br><br> <br>Change | | | | | After<br><br> <br>changes | | | Capital reserve | Retained earnings (loss) | Translation reserve | Attributable to owners of the Company | Total equity | | Capital reserve | Retained earnings (loss) | Translation reserve | Attributable to owners of the Company | Total equity | | Balance at January 1, 2023 | 244,913 | (258,587) | 9,485 | 953,336 | 953,240 | - | 244,913 | (258,587) | 9,485 | 953,336 | 953,240 | | Loss for the period | - | (3,750) | - | (3,750) | (3,678) | (13,089) | - | (16,839) | - | (16,839) | (16,767) | | Cumulative translation adjustments from operations in foreign currency | - | - | (3,611) | (3,611) | (3,611) | 3,899 | - | - | 288 | 288 | 288 | | Issuance of shares | 4,082 | - | - | 4,082 | 4,082 | (1,192) | 2,890 | - | - | 2,890 | 2,890 | | Share-based compensation | 312 | - | - | 312 | 312 | (2,892) | (2,580) | - | - | (2,580) | (2,580) | | Issue of shares related to business combinations | - | - | - | - | - | 185 | 185 | - | - | 185 | 185 | | Balance at March 31, 2023 | 249,307 | (262,337) | 5,874 | 950,369 | 950,345 | (13,113) | 245,408 | (275,426) | 9,773 | 937,280 | 937,256 |
| 9 |
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| **Notes to the unaudited interim condensed consolidated financial statements**<br><br>***\(In thousands of Reais\)*** |
| --- | | ● | Cash flow | | --- | --- | | | | | March 31, 2023 | | --- | --- | --- | --- | | | Originally<br><br> <br>presented | Effects of<br><br> <br>Change | After<br><br> <br>changes | | Cash flow from operating activities | | | | | Profit (loss) for the period | (3,678) | (13,089) | (16,767) | | Income tax and social contribution | (8,609) | (3,019) | (11,628) | | Share-based compensation | 5,290 | (3,899) | 1,391 | | Allowance for expected credit losses | 1,850 | 8,878 | 10,728 | | Increase of fair value of derivative financial instruments | - | 837 | 837 | | Trade and other receivables | (31,898) | 16,109 | (15,789) | | Other assets | (14,824) | (1) | (14,825) | | Other liabilities | 3,548 | 2,810 | 6,358 | | Cash generated from (used in) operating activities | 99,812 | (252) | 99,<br><br> <br>560 | | Exchange rate change on cash and cash equivalents | 36 | 252 | 288 | | 2. | Company’s subsidiaries | | --- | --- | | | | March 31, 2024 | | December 31, 2023 | | | --- | --- | --- | --- | --- | --- | | | 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 three months period ended March 31, 2024, have been prepared in accordance with IAS 34, the Company has prepared the financial statements on the basis that the interim condensed consolidated financial statements do not include all the information and disclosures required in the annual financial statements, and should be read in conjunction with the Company’s annual consolidated financial statements as at December 31, 2023.
| 10 |
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| **Notes to the unaudited interim condensed consolidated financial statements**<br><br>***\(In thousands of Reais\)*** |
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The issuance of these interim condensed consolidated financial statements was approved by the Executive Board of Directors on July 13, 2024.
| a. | Measurement basis |
|---|
The interim condensed consolidated financial statements were prepared based on historical cost, except for certain financial instruments measured at fair value. 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.
c. Foreign currency translation
For the consolidated Company subsidiaries 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.
| 11 |
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| **Notes to the unaudited interim condensed consolidated financial statements**<br><br>***\(In thousands of Reais\)*** |
| --- | |
|---|---|
| --- | --- |
In March 2024, considering that the inflation accumulated in the past five 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 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.
| (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.
| 12 |
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| **Notes to the unaudited interim condensed consolidated financial statements**<br><br>***\(In thousands of Reais\)*** |
| --- |
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,<br>directly (prices) or indirectly (derived from prices). |
| --- | --- |
| — | Level 3: Inputs, for assets or liabilities, which are not based on observable market data (non-observable<br>inputs). |
| --- | --- |
The Company recognizes transfers between fair value hierarchy levels at the end of the financial statements’ period in which changes occurred.
| 4. | New standards, amendments, and interpretations of standards |
|---|---|
| 4.1. | New currently effective requirement |
| --- | --- |
The accounting policies adopted in the preparation of the interim condensed consolidated financial statements are consistent with those followed in the preparation of the Company’s annual consolidated financial statements for the year ended December 31, 2023, except for the adoption of new standards effective as of January 1^st^, 2024. The Company has not early adopted any standard, interpretation or amendment that has been issued but is not yet effective.
The following amended standards and interpretations did not have a material impact on the Company’s consolidated financial statements:
● Supplier Finance Arrangements - Amendments to IAS 7 and IFRS 7;
● Amendments to IFRS 16: Lease Liability in a Sale and Leaseback;
| 13 |
| --- |
| **Notes to the unaudited interim condensed consolidated financial statements**<br><br>***\(In thousands of Reais\)*** |
| --- | |
|---|---|
| --- | --- |
In January 2020 and October 2022, the IASB issued amendments to paragraphs 69 to 76 of IAS 1 to specify the requirements for classifying liabilities as current or non-current. The amendments clarify:
• What is meant by a right to defer settlement
• That a right to defer must exist at the end of the reporting period
• That classification is unaffected by the likelihood that an entity will exercise its deferral right
• That only if an embedded derivative in a convertible liability is itself an equity instrument would the terms of a liability not impact its classification
In addition, a requirement has been introduced whereby an entity must disclose when a liability arising from a loan agreement is classified as non-current and the entity’s right to defer settlement is contingent on compliance with future covenants within twelve months.
The Company reviewed our covenants disclosures to comply with the amendment of IAS 1.
| 5. | Cash and cash equivalents and financial investments | |
|---|---|---|
| March 31, 2024 | December 31, 2023 | |
| --- | --- | --- |
| Cash and banks | 25,138 | 30,053 |
| Short-term investments maturing in up to 90 days (a) | 46,387 | 33,689 |
| Total cash and cash equivalents | 71,525 | 63,742 |
| (a) | Highly liquid short-term interest earning bank deposits are readily convertible<br>into a known amount of cash and subject to an insignificant risk of change of value. They are substantially represented by interest earning<br>bank deposits at rates varying from 100.5% to 103.0% (2023 - 60% to 103.0%) of the CDI rate (Interbank Interest Rate in Brazil). | |
| --- | --- | |
| 6. | Restricted cash | |
| --- | --- |
The amount of R$6,578 invested in Bank Deposit Certificate in March 2024 refers to the contractual guarantee of Votorantim S.A.’s loan. Minimum Guarantee Percentage: 33% of the outstanding balance of the Guaranteed Operation.
| 14 |
| --- |
| **Notes to the unaudited interim condensed consolidated financial statements**<br><br>***\(In thousands of Reais\)*** |
| --- | | 7. | Trade and other receivables | | --- | --- | | | March 31, 2024 | December 31, 2023 | | --- | --- | --- | | Domestic | 211,025 | 185,099 | | Abroad | 22,900 | 21,013 | | | 233,925 | 206,112 | | Allowance for expected credit losses | (62,020) | (57,328) | | Total | 171,905 | 148,784 |
Changes in allowance for expected credit losses are as follows:
| March 31, 2024 | December 31, 2023 | |
|---|---|---|
| Balance at the Beginning period | (57,328) | (10,427) |
| Additions | (6,432) | (49,247) |
| Reversal | 1,001 | - |
| Foreign exchange variation | (551) | (277) |
| Write-offs | 1,290 | 2,623 |
| Balance at the End of the period | (62,020) | (57,328) |
The breakdown of accounts receivable from customers by maturity is as follows:
| March 31, 2024 | December 31, 2023 | |
|---|---|---|
| Current | 183,171 | 154,846 |
| Overdue (days): | ||
| 1–30 | 9,388 | 16,636 |
| 31–60 | 5,423 | 6,282 |
| 61–90 | 3,260 | 2,915 |
| 91–120 | 4,265 | 2,257 |
| 121–150 | 2,837 | 2,069 |
| >150 | 25,581 | 21,107 |
| Total | 233,925 | 206,112 |
| 15 |
| --- |
| **Notes to the unaudited interim condensed consolidated financial statements**<br><br>***\(In thousands of Reais\)*** |
| --- |
| 8. | Recoverable assets |
|---|
| March 31, 2024 | December 31, 2023 | |
|---|---|---|
| Corporate income tax (IRPJ) (a) | 1,960 | 2,141 |
| Social contribution (CSLL) (a) | 412 | 450 |
| Federal VAT (PIS/COFINS) (b) | 29,902 | 23,147 |
| Others | 2,721 | 2,320 |
| Total tax assets | 34,995 | 28,058 |
| Current | 34,983 | 28,058 |
| Non-current | 12 | - |
| (a) | Income tax and social contribution - the balance is composed by amounts withheld and advances of corporate<br>income tax and social contribution carried out in the previous years. | |
| --- | --- | |
| (b) | As a result of a taxes restructuring in 2021, there was a change in the tax classification in part of<br>services provided, consequently, the Company has started collecting contributions to PIS and COFINS (Federal VAT) on a noncumulative basis<br>under the rates of 1.65% and 7.6%, respectively. On a non-cumulative basis, the Company became eligible to PIS and COFINS tax credits<br>on SMS cost invoices issued by the operator. | |
| --- | --- |
| 16 |
| --- |
| **Notes to the unaudited interim condensed consolidated financial statements**<br><br>***\(In thousands of Reais\)*** |
| --- | | 9. | Property, plant and equipment | | --- | --- | | 9.1. | Breakdown of balances | | --- | --- | | | Average annual depreciation rates (%) | Cost | Accumulated depreciation | Net balance March 31, 2024 | | --- | --- | --- | --- | --- | | Furniture and fixtures | 10 | 800 | (601) | 199 | | Leasehold improvements | 10 | 1,607 | (1,303) | 304 | | Data processing equipment | 20 | 22,618 | (12,717) | 9,901 | | Right of use – leases | 20 to 30 | 6,211 | (2,181) | 4,030 | | Machinery and equipment | 10 | 93 | (9) | 84 | | Total | | 31,329 | (16,811) | 14,518 | | | Average annual depreciation rates (%) | Cost | Accumulated depreciation | Net balance December 31, 2023 | | --- | --- | --- | --- | --- | | Furniture and fixtures | 10 | 800 | (512) | 288 | | Leasehold improvements | 10 | 1,609 | (1,262) | 347 | | Data processing equipment | 20 | 22,500 | (11,341) | 11,159 | | Right of use – leases | 20 to 30 | 5,129 | (2,595) | 2,534 | | Machinery and equipment | 10 | 93 | (8) | 85 | | Total | | 30,131 | (15,718) | 14,413 |
| 17 |
| --- |
| **Notes to the unaudited interim condensed consolidated financial statements**<br><br>***\(In thousands of Reais\)*** |
| --- | |||||||
|---|---|---|---|---|---|---|---|
| --- | --- | ||||||
| Average annual depreciation rates % | December 31, 2023 | Additions | Disposals | Hyperinflation adjustment | Exchange variations | March, 31, 2024 | |
| --- | --- | --- | --- | --- | --- | --- | --- |
| Furniture and fixtures | 800 | - | - | - | - | 800 | |
| Leasehold improvements | 1,607 | - | - | - | - | 1,607 | |
| Data processing equipment | 22,502 | 57 | - | 41 | 18 | 22,618 | |
| Right of use – leases | 5,129 | 3,010 | (1,928) | - | - | 6,211 | |
| Machinery and equipment | 93 | - | - | - | - | 93 | |
| Cost | 30,131 | 3,067 | (1,928) | 41 | 18 | 31,329 | |
| Furniture and fixtures | 10 | (512) | (89) | - | - | - | (601) |
| Leasehold improvements | 10 | (1,262) | (41) | - | - | - | (1,303) |
| Data processing equipment | 20 | (11,341) | (1,319) | 2 | (41) | (18) | (12,717) |
| Right of use – leases | 20 to 30 | (2,595) | (575) | 989 | - | - | (2,181) |
| Machinery and equipment | 10 | (8) | (1) | - | - | - | (9) |
| (-) Accumulated depreciation | (15,718) | (2,025) | 991 | (41) | (18) | (16,811) | |
| Total | 14,413 | 1,042 | (937) | - | - | 14,518 |
| 18 |
| --- |
| **Notes to the unaudited interim condensed consolidated financial statements**<br><br>***\(In thousands of Reais\)*** |
| --- | ||||||||
|---|---|---|---|---|---|---|---|---|
| --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Furniture and fixtures | 724 | 62 | (79) | - | 93 | - | 800 | |
| Leasehold improvements | 1,607 | 2 | - | - | - | - | 1,609 | |
| Data processing equipment | 26,541 | 2,940 | (6,636) | 18 | (108) | (255) | 22,500 | |
| Right of use – leases | 5,313 | - | (184) | - | - | - | 5,129 | |
| Machinery and equipment | 374 | - | (272) | - | (9) | - | 93 | |
| Other fixed assets | 158 | - | (306) | - | 148 | - | - | |
| Cost | 34,717 | 3,004 | (7,477) | 18 | 124 | (255) | 30,131 | |
| Furniture and fixtures | 10 | (358) | (98) | 29 | - | (85) | - | (512) |
| Leasehold improvements | 10 | (1,100) | (163) | 1 | - | - | - | (1,262) |
| Data processing equipment | 20 | (12,548) | (4,902) | 5,945 | (677) | 11 | 830 | (11,341) |
| Right of use – leases | 20 to 30 | (709) | (2,007) | 121 | - | - | - | (2,595) |
| Machinery and equipment | 10 | (294) | (8) | 237 | - | 57 | - | (8) |
| Other fixed assets | 10 to 20 | (118) | - | 225 | - | (107) | - | - |
| (-) Accumulated depreciation | (15,127) | (7,178) | 6,558 | (677) | (124) | 830 | (15,718) | |
| Total | 19,590 | (4,174) | (919) | (659) | - | 575 | 14,413 |
| 19 |
| --- |
| **Notes to the unaudited interim condensed consolidated financial statements**<br><br>***\(In thousands of Reais\)*** |
| --- | | 10. | Intangible assets | | --- | --- | | 10.1. | Breakdown of balances | | --- | --- | | | Average annual amortization rates % | Cost | Amortization | Net balance on March 31, 2024 | | --- | --- | --- | --- | --- | | Intangible assets under development | - | 49,639 | - | 49,639 | | Software license | - | 32,884 | (12,100) | 20,784 | | Database | 20 to 50 | 800 | (647) | 153 | | Goodwill | - | 923,439 | - | 923,439 | | Customer portfolio | 10 | 135,848 | (114,599) | 21,249 | | Non-compete | 20 | 2,697 | (2,155) | 542 | | Brands and patents | 20 | 29 | - | 29 | | Platform | 10 to 20 | 479,619 | (156,333) | 323,286 | | Total | | 1,624,955 | (285,834) | 1,339,121 | | | Average annual amortization rates % | Cost | Amortization | Net balance on December 31, 2023 | | --- | --- | --- | --- | --- | | Intangible assets under development | - | 47,124 | - | 47,124 | | Software license | 20 to 50 | 32,217 | (10,085) | 22,132 | | Database | 20 to 50 | 800 | (627) | 173 | | Goodwill | - | 923,439 | - | 923,439 | | Customer portfolio | 10 | 135,848 | (111,186) | 24,662 | | Non-compete | 20 | 2,697 | (1,954) | 743 | | Brands and patents | 20 | 29 | - | 29 | | Platform | 10 to 20 | 470,235 | (141,210) | 329,025 | | Total | | 1,612,389 | (265,062) | 1,347,327 |
| 20 |
| --- |
| **Notes to the unaudited interim condensed consolidated financial statements**<br><br>***\(In thousands of Reais\)*** |
| --- | |||||||
|---|---|---|---|---|---|---|---|
| --- | --- | ||||||
| Average annual amortization rates % | December 31, 2023 | Additions | Transfers | Hyperinflation<br><br> <br>adjustment | Exchange variations | March 31, 2024 | |
| --- | --- | --- | --- | --- | --- | --- | --- |
| Intangible asset in progress | 47,124 | 11,622 | (9,476) | 281 | 88 | 49,639 | |
| Software license | 32,217 | 575 | 92 | - | - | 32,884 | |
| Database | 800 | - | - | - | - | 800 | |
| Goodwill | 923,439 | - | - | - | - | 923,439 | |
| Customer portfolio | 135,848 | - | - | - | - | 135,848 | |
| Non-compete | 2,697 | - | - | - | - | 2,697 | |
| Brands and patents | 29 | - | - | - | - | 29 | |
| Platform | 470,235 | - | 9,384 | - | - | 479,619 | |
| Cost | 1,612,389 | 12,197 | - | 281 | 88 | 1,624,955 | |
| Software license | 20 – 50 | (10,085) | (2,015) | - | - | - | (12,100) |
| Database | 10 | (627) | (20) | - | - | - | (647) |
| Customer portfolio | 10 | (111,186) | (3,413) | - | - | - | (114,599) |
| Non-compete | 20 | (1,954) | (201) | - | - | - | (2,155) |
| Platform | 10 - 20 | (141,210) | (15,123) | - | - | - | (156,333) |
| (-) Accumulated amortizations | (265,062) | (20,772) | - | - | - | (285,834) | |
| Total | 1,347,327 | (8,575) | - | 281 | 88 | 1,339,121 |
| 21 |
| --- |
| **Notes to the unaudited interim condensed consolidated financial statements**<br><br>***\(In thousands of Reais\)*** |
| --- | ||||||||
|---|---|---|---|---|---|---|---|---|
| --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Intangible asset in progress | 41,707 | 47,253 | (40,714) | (5) | 522 | (1,639) | 47,124 | |
| Software license | 10,112 | 5,403 | 18,888 | (2,186) | - | - | 32,217 | |
| Database | 800 | - | - | - | - | - | 800 | |
| Goodwill | 923,439 | - | - | - | - | - | 923,439 | |
| Customer portfolio | 131,448 | - | 4,400 | - | - | - | 135,848 | |
| Non-compete | 2,697 | - | - | - | - | - | 2,697 | |
| Brands and patents | 29 | - | - | - | - | - | 29 | |
| Platform | 452,814 | - | 17,421 | - | - | - | 470,235 | |
| Cost | 1,563,046 | 52,656 | (5) | (2,191) | 522 | (1,639) | 1,612,389 | |
| Software license | 20 – 50 | (5,135) | (6,465) | 139 | 1,376 | - | - | (10,085) |
| Database | 10 | (547) | (80) | - | - | - | - | (627) |
| Customer portfolio | 10 | (94,967) | (13,652) | (2,567) | - | - | - | (111,186) |
| Non-compete | 20 | (1,146) | (808) | - | - | - | - | (1,954) |
| Platform | 10 - 20 | (84,019) | (59,624) | 2,433 | - | - | - | (141,210) |
| (-) Accumulated amortizations | (185,814) | (80,629) | 5 | 1,376 | - | - | (265,062) | |
| Total | 1,377,232 | (27,973) | - | (815) | 522 | (1,639) | 1,347,327 |
| 22 |
| --- |
| **Notes to the unaudited interim condensed consolidated financial statements**<br><br>***\(In thousands of Reais\)*** |
| --- |
The amortization of intangibles includes the amount of R$16,180 for the three months period ended March 31, 2024 (R$16,988 for the three-month period ended March 31, 2023) related to amortization of intangible assets acquired in business combinations, of which R$12,785 (R$13,511 for the three-month period ended March 31, 2023) was recorded in costs of services and R$3,395 (R$3,477 for the three-month period ended March 31, 2023) in administrative expenses.
The Company performs its annual impairment test in December and when circumstances indicate that the carrying value may be impaired. The Company impairment test for goodwill and intangible assets with indefinite lives is based on value-in-use calculations. The key assumptions used to determine the recoverable amount for the different cash generating units were disclosed in the annual consolidated financial statements for the year ended December 31, 2023. For the period ended March 31, 2024, The Company had no indications of impairment for its intangible assets, therefore an impairment test was not required.
| 11. | Trade and other payables |
|---|
| March 31, 2024 | December 31, 2023 | |
|---|---|---|
| Domestic suppliers | 248,676 | 243,186 |
| Abroad suppliers | 4,251 | 3,897 |
| Advance from customers | 1,102 | 2,220 |
| Related parties ^(a)^ | 108,143 | 89,594 |
| Other accounts payable | 5,679 | 15,101 |
| Total | 367,851 | 353,998 |
| Current | 367,851 | 353,998 |
| Non-current | - | - |
| (a) | The outstanding balances Relate to transactions in the ordinary course of<br>business with the Company’s shareholder Twilio Inc. (note 23). | |
| --- | --- |
| 23 |
| --- |
| **Notes to the unaudited interim condensed consolidated financial statements**<br><br>***\(In thousands of Reais\)*** |
| --- | | 12. | Loans, borrowings and debentures | | --- | --- | | | | | | | ****<br><br> <br>Changes in cash | | | | Changes not affecting cash | | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | Interest rate p.a. | Current | Non-<br><br> <br>current | December 31, 2023 | Proceeds | Interest paid | Amortized cost | Payments | Interest incurred | March 31, 2024 | Current | Non-<br><br> <br>current | | Working capital | 100% CDI + 2.51% to 6.55% | 30,148 | 39,519 | 69,667 | 11,867 | (2,509) | 65 | (5,990) | 3,061 | 76,161 | 26,893 | 49,268 | | Debentures | 18.16% | 6,043 | 12,086 | 18,129 | - | (488) | 34 | (1,029) | 733 | 17,379 | 6,803 | 10,576 | | | | 36,191 | 51,605 | 87,796 | 11,867 | (2,997) | 99 | (7,019) | 3,794 | 93,540 | 33,696 | 59,844 | | | | | | | ****<br><br> <br>Changes in cash | | | | Changes not affecting cash | | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | Interest rate p.a. | Current | Non-<br><br> <br>current | December 31, 2022 | Proceeds | Interest paid | Payments | Amortized cost | Interest incurred | December 31, 2023 | Current | Non-<br><br> <br>current | | Working capital | 100% CDI + 2.51% to 6.55% and 8.60% | 62,335 | 63,499 | 125,834 | 30,000 | (17,533) | (85,239) | (662) | 17,267 | 69,667 | 30,148 | 39,519 | | Debentures | 18.16% | 27,206 | 13,794 | 41,000 | - | (4,168) | (22,471) | (400) | 4,168 | 18,129 | 6,043 | 12,086 | | | | 89,541 | 77,293 | 166,834 | 30,000 | (21,701) | (107,710) | (1,062) | 21,435 | 87,796 | 36,191 | 51,605 |
| 24 |
| --- |
| **Notes to the unaudited interim condensed consolidated financial statements**<br><br>***\(In thousands of Reais\)*** |
| --- |
The portion classified in non-current liabilities has the following payment schedule:
| March 31, 2024 | December 31, 2023 | |
|---|---|---|
| 2025 | 25,776 | 26,856 |
| 2026 | 34,068 | 24,749 |
| Total | 59,844 | 51,605 |
Working Capital
On January 3, 2024, Zenvia Brazil signed an amendment with Banco Bradesco S.A. for a CCB (Cédula de Crédito Bancário) in the original aggregate amount of R$30,000, current balance R$11,073, establishing a new amortization schedule comprised of 36 installments, six months of grace period and 30 amortization period of principal.
On January 4, 2024, Zenvia Brazil entered into an agreement with Itaú Unibanco S.A. for a CCB (Cédula de Crédito Bancário), in the aggregate amount of R$ 12,000, establishing a amortization schedule comprised of 36 installments, six months of grace period and 30 amortization period of principal.
As of March 31, 2024, the Company assessed the covenant clauses of loans and financing for quarterly measurement. The Company renegotiated the covenants to ensure compliance, and no material adjustments were required in the interim condensed consolidated financial statements.
Contractual clauses
The Company has financing agreements in the amount of R$49,427 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.
The Company has a financing agreement with Bradesco in the amount of R$11,205 in which the guarantee is the receipt of credits from Bradesco as a client.
The Company, through its subsidiary One to One has entered into a financing agreement for the issuance of debentures guaranteed by: (i) the fiduciary assignment to creditor of receivables equivalent at least, (i) R$4,000 between November 30, 2023 and December 31, 2024; (ii) R$3,000 between January 1, 2025 and December 31, 2025; and (iii) R$2,000 between January 1, 2026 and December 31, 2026, which must go through an escrow account controlled by the creditor and, upon confirmation that
| 25 |
| --- |
| **Notes to the unaudited interim condensed consolidated financial statements**<br><br>***\(In thousands of Reais\)*** |
| --- |
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.
Covenants
In 2023, The Company has renegotiated new terms to be applied as of the year 2024 for the financial covenants of loans and financing. The most restrictive net debt-to-EBITDA financial covenant to which we are currently subject requires that such ratio does not exceed 2.5x and which is measured at the end of each fiscal year. In addition to these, the Company also has other covenants related to indebtedness level. Furthermore, our working capital agreements contain a cross-default provision that may be triggered by a default under one of our other financing agreements. A cross default provision means that a default on one loan would result in a default of our other loans.
On March 31, 2024, the Company assessed the covenant clauses of its loans and financings with the aim of mitigating non-compliance with the entirety of the restrictive clauses in its annual measurement. As part of the action plan, the Company renegotiated certain covenant clauses with financial institutions, obtained waivers to ensure compliance and received the necessary consents from these institutions. The Company does not anticipate short- and medium-term impacts on its operations resulting from possible breaches of restrictive clauses.
| 13. | Liabilities from acquisitions | |
|---|---|---|
| Liabilities from business combinations | ||
| --- | --- | --- |
| March 31, 2024 | December 31, 2023 | |
| Acquisition of Sirena | 2,254 | 3,496 |
| Acquisition of D1 (i) | 24,547 | 20,769 |
| Acquisition of SenseData | 38,005 | 41,943 |
| Acquisition of Movidesk (ii) | 226,076 | 228,495 |
| Total liabilities from acquisitions | 290,882 | 294,703 |
| Current | 96,963 | 134,466 |
| Non-current | 193,919 | 160,237 |
(i) On February 6, 2024, Zenvia Brazil renegotiated the D1 earnout, in the total outstanding amount of R$21,521. Payment terms were extended to a total of 36 months, with a six-month grace period and 30 monthly payments, with final maturity in December 2026.
(ii) On February 6, 2024, Zenvia Brazil renegotiated the earnout with Movidesk, with a total balance of R$206,699 as of December 31, 2023. Payment terms have been extended to a total of 60 months, with final due date in December 2028, with Zenvia option to convert approximately R$100,000 of total debt into equity, subject to certain conversion deadlines agreed between the parties.
| 26 |
| --- |
| **Notes to the unaudited interim condensed consolidated financial statements**<br><br>***\(In thousands of Reais\)*** |
| --- |
| For the three months period ended March 31, | ||||
|---|---|---|---|---|
| Sirena | D1 | Sensedata | Movidesk | |
| 2024 | 2,254 | 4,463 | 16,288 | 64,045 |
| 2025 | - | 8,926 | 21,717 | 1,249 |
| 2026 | - | 11,158 | - | 51,253 |
| 2027 | - | - | - | 55,852 |
| 2028 | - | - | - | 53,677 |
| Total | 2,254 | 24,547 | 38,005 | 226,076 |
| 14. | Provisions for tax, labor and civil risks | |||
| --- | --- | |||
| 14.1. | 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.
| March 31, 2024 | December 31, 2023 | |
|---|---|---|
| Provisions | ||
| Service tax (ISSQN) Lawsuit – Company Zenvia (a) | 40,833 | 39,855 |
| Labor provisions and other provisions | 2,070 | 2,352 |
| Total provisions | 42,903 | 42,207 |
| Judicial deposits | ||
| Service tax (ISSQN) judicial deposits – Lawsuit Company Zenvia (a) | (40,874) | (39,895) |
| Labor appeals judicial and other deposits | (617) | (591) |
| Total judicial deposits | (41,491) | (40,486) |
| Total | 1,412 | 1,721 |
| (a) | The amount of the liability related to the provision and judicial deposits<br>for tax risk refers to the lawsuit filed by the City of Porto Alegre about the service tax (ISSQN) against Zenvia Brazil itself. | |
| --- | --- | |
| 14.2. | 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
| 27 |
| --- |
| **Notes to the unaudited interim condensed consolidated financial statements**<br><br>***\(In thousands of Reais\)*** |
| --- |
March 31, 2024, the total amount of contingencies classified as possible was R$45,722 (R$75,655 as of December 31, 2023). The most relevant cases are set below:
Taxes: The Company is involved in disputes related to administrative claims in the amount of R$ 41,781 (R$40,640 as of December 31, 2023) 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$2,307 as of March 31, 2024 (R$2,551 as of December 31, 2023). 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$1,316 as of March 31, 2024 (R$961 as of December 31, 2023).
| 28 |
| --- |
| **Notes to the unaudited interim condensed consolidated financial statements**<br><br>***\(In thousands of Reais\)*** |
| --- |
Changes in provisions are as follows:
| Provision | |
|---|---|
| Balance at January 1, 2023 | 39,750 |
| Additions | 5,731 |
| Reversals | (1,689) |
| Payments | (1,585) |
| Balance at December 31, 2023 | 42,207 |
| Additions | 1,109 |
| Reversals | (413) |
| Balance at March 31, 2024 | 42,903 |
Changes in judicial deposits are as follows:
| Deposits | |
|---|---|
| Balance at January 1, 2023 | 37,781 |
| Additions | 2,705 |
| Balance at December 31, 2023 | 40,486 |
| Additions | 1,014 |
| Payments | (9) |
| Balance at March 31, 2024 | 41,491 |
| 15. | 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.
x
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 Company 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.
| 29 |
| --- |
| **Notes to the unaudited interim condensed consolidated financial statements**<br><br>***\(In thousands of Reais\)*** |
| --- |
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 Company subject to a vesting period of 36 months as of January 1, 2023.
On January 24, 2024, the Executive Board of Directors approved a new Long-Term Incentive Program (“ILP 6”) that will grant a maximum of 2,300,000 RSUs (or cash-based payments equivalent to RSUs) to certain executives and employees of the Company subject to a vesting period of 36 months as of January 1, 2024.
As of March 31, 2024, the Company had outstanding 4,750,849 “RSUs” that were authorized but not yet issued, related with future vesting conditions. The total compensation cost related to unvested RSUs was R$1,322 (R$2,314 as of December 31, 2023) recorded in the consolidated financial statements. An expense amounting to R$1,829 (R$500 for the three months period ended March 31, 2023) 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 | Weighted average grant date fair value (Per share) |
| 08. 09. 2021 | 12. 22. 2022 | 45,522 | 59.11 |
| 08. 23. 2021 | 12. 22. 2022 | 11,436 | 84.50 |
| 08. 24. 2021 | 12. 22. 2022 | 3,833 | 86.68 |
| 05. 05. 2022 | 05. 09. 2024 | 240,000 | 75.72 |
| 03. 13. 2023 | 12. 31. 2025 | 2,300,000 | 8.34 |
| 02. 06. 2024 | 12. 31. 2026 | 2,300,000 | 7.35 |
| 4,900,791 |
As of March 31, 2024 the Company has 4,750,849 shares issued (outstanding shares), reserved for the shared based payment plans.
The roll forward of the granted shares for the three months period ended March 31, 2024, is presented as follows:
| 30 |
| --- |
| **Notes to the unaudited interim condensed consolidated financial statements**<br><br>***\(In thousands of Reais\)*** |
| --- | |
|---|---|
| --- | --- |
| Outstanding RSU as of December 31, 2022 | 295,334 |
| Shares granted | 2,300,000 |
| Shares delivered | (144,485) |
| Outstanding RSU on December 31, 2023 | 2,450,849 |
| Shares granted | 2,300,000 |
| Outstanding RSU on March 31, 2024 | 4,750,849 |
Key management personnel compensation
Key management personnel compensation comprised the following:
| For the three months period ended March 31, | ||
|---|---|---|
| 2024 | 2023 | |
| Short-term employee benefits | 3,078 | 2,707 |
| Other long-term benefits | 241 | - |
| Termination benefits | - | 14 |
| Share-based payments | 610 | 38 |
| Total | 3,929 | 2,759 |
| 31 |
| --- |
| **Notes to the unaudited interim condensed consolidated financial statements**<br><br>***\(In thousands of Reais\)*** |
| --- | | 16. | Equity | | --- | --- |
Share Capital
| Shareholder’s | Class | March 31, 2024 | % (i) | December 31, 2023 | % (i) |
|---|---|---|---|---|---|
| Bobsin Corp | B | 9,578,220 | 18.88 | 9,578,220 | 22.92 |
| Bobsin Corp | A | 9,758,170 | 19.23 | 897,635 | 2.15 |
| Oria Zenvia Co-investment Holdings, LP | B | 7,119,930 | 14.03 | 7,119,930 | 17.04 |
| Oria Tech Zenvia Co-investment – Fundo de Investimento em Participações Multiestratégia | B | 4,329,105 | 8.53 | 4,329,105 | 10.36 |
| Oria Tech I Inovação Fundo de Investimento em Participações | B | 2,637,670 | 5.20 | 2,637,670 | 6.31 |
| Twilio Inc. | A | 3,846,153 | 7.58 | 3,846,153 | 9.20 |
| D1 former shareholders | A | 1,942,750 | 3.83 | 1,942,750 | 4.65 |
| SenseData former shareholders | A | 94,200 | 0.19 | 94,200 | 0.23 |
| Movidesk former shareholders | A | 315,820 | 0.62 | 315,820 | 0.76 |
| Spectra I - Fundo de Investimento em Participações | A | 39,940 | 0.08 | 39,940 | 0.10 |
| Spectra II - Fundo de Investimento em Participações | A | 159,770 | 0.31 | 159,770 | 0.38 |
| Others | A | 10,923,277 | 23.52 | 10,834,150 | 25.90 |
| 50,745,005 | 100 | 41,795,343 | 100 |
On February 6, 2024, the Company issued 8,860,535 Class A common shares to Bobsin Corp due to a private placement investment in the Company, resulting in a capital increase in the amount of R$49,997. Pursuant to the terms of the investment agreement, for a period of 3 years from the closing date of the investment, Bobsin Corp. will be entitled to receive, as a return on its investment, additional cash or an equivalent amount in common shares issued by us, upon the occurrence of certain future liquidity or corporate transaction events (such as the occurrence of an equity follow-on or a transaction resulting in a change of our control) “Trigger Event”. The calculation of such investment returns will be linked to the appreciation of our share price over this period of time.
The return on investment (premium) to be paid upon the occurrence of a liquidity event is based on the value of the Company's shares. According to IFRS 9, this premium meets the characteristics of an embedded derivative in the investment agreement. At initial recognition, the derivative is measured at fair value, separate from the investment value, and recognized as a derivative financial liability without impacting the profit or loss. In subsequent measurements, any changes in the fair value of the derivative are recognized in profit or loss.
| 32 |
| --- |
| **Notes to the unaudited interim condensed consolidated financial statements**<br><br>***\(In thousands of Reais\)*** |
| --- |
On February 6, 2024 (initial recognition), a capital increase of 838 was recognized, and the embedded derivative was valued at 49,159. As of March 31, 2024, mainly due to the appreciation of the Company’s share price, the fair value of the embedded derivative increased to R$82,406, and R$33,248 was recorded in the statements of profit or loss as finance expenses.
| 17. | Segment reporting |
|---|---|
| 17.1. | Basis for segmentation |
| --- | --- |
For management purposes, the Company is organized into business units based on its products and services and has two reportable segments, as follows:
| Reportable segments | Operations |
|---|---|
| SaaS (Software-as-a-Service) | Includes the following solutions:<br><br> <br>**i.**Zenvia Attraction: Active multi-channel end-customer acquisition<br> campaigns utilizing data intelligence and multi-channel automation.<br><br> <br>**ii.**Zenvia Conversion: Converting leads into sales using multiple<br> communication channels.<br><br> <br>**iii.**Zenvia Service: Enabling companies to provide customer service<br> with structured support across multiple channels.<br><br> <br>**iv.**Zenvia Success: Protect and expand customer revenue through<br> cross-selling and upselling.<br><br> <br>**v.**Consulting: A Business Intelligence team that provides solutions<br> to customer needs by using SaaS and CPaaS to 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 three months period ended March 31, 2024 and 2023, respectively:
| 33 |
| --- |
| **Notes to the unaudited interim condensed consolidated financial statements**<br><br>***\(In thousands of Reais\)*** |
| --- | ||||||
|---|---|---|---|---|---|---|
| --- | --- | --- | --- | --- | --- | --- |
| 2024 | 2023 | |||||
| CPaaS | SaaS | Consolidated | CPaaS | SaaS | Consolidated | |
| Revenue | 135,816 | 76,820 | 212,636 | 110,462 | 68,585 | 179,047 |
| Cost of services | (85,528) | (46,251) | (131,779) | (64,429) | (35,669) | (100,098) |
| Gross profit | 50,288 | 30,569 | 80,857 | 46,033 | 32,916 | 78,949 |
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 March 2024, the Company had one customer representing more than 10% of consolidated revenue. For the three months period ended March 31, 2024 and 2023, this customer represented 11.7% and 11.8%, respectively, of consolidated revenue.
| 17.4. | Revenue geographic information |
|---|
The Company’s revenue by geographic region is presented below:
| For the three months ended March 31, | ||
|---|---|---|
| 2024 | 2023 | |
| Primary geographical markets | ||
| Brazil | 178,122 | 160,095 |
| USA | 16,083 | 3,571 |
| Argentina | 3,213 | 3,110 |
| Mexico | 4,235 | 4,231 |
| Switzerland | 58 | 82 |
| Colombia | 980 | 1,625 |
| Peru | 1,946 | 1,043 |
| Chile | 505 | 897 |
| Others | 7,494 | 4,393 |
| Total | 212,636 | 179,047 |
| 34 |
| --- |
| **Notes to the unaudited interim condensed consolidated financial statements**<br><br>***\(In thousands of Reais\)*** |
| --- | | 18. | Costs and expenses by nature | | --- | --- | | | For the three months period ended March 31, 2024 | | | | | | | | --- | --- | --- | --- | --- | --- | --- | --- | | | Cost of services | Sales and marketing expenses | General administrative expenses | Research and development expenses | Allowance for credit losses | Other income and expenses, net | Total | | Personnel expenses | | | | | | | | | Salary | (3,747) | (9,280) | (7,098) | (1,733) | - | - | (21,858) | | Benefits | (1,238) | (1,772) | (1,688) | (1,566) | - | - | (6,264) | | Compulsory contributions to social security | (1,052) | (2,600) | (2,718) | (2,783) | - | - | (9,153) | | Compensation | (14) | (298) | (93) | (151) | - | - | (556) | | Provisions (vacation/13th salary) | (956) | (2,062) | (1,678) | (2,177) | - | - | (6,873) | | Provision for bonus and profit sharing | (750) | (2,753) | (4,334) | (2,470) | - | - | (10,307) | | Other | (2) | (106) | (282) | (53) | - | - | (443) | | Total | (7,759) | (18,871) | (17,891) | (10,933) | - | - | (55,454) | | Costs with operators/Other costs | (107,500) | - | - | - | - | - | (107,500) | | Depreciation and amortization | (16,520) | (423) | (4,571) | (1,283) | - | - | (22,797) | | Outsourced services | - | (937) | (5,783) | (997) | - | - | (7,717) | | Rentals/insurance/condominium/water/energy | - | - | (88) | - | - | - | (88) | | Allowance for credit losses | - | - | - | - | (5,431) | - | (5,431) | | Marketing expenses / events | - | (4,165) | (13) | - | - | - | (4,178) | | Software license | - | (1,285) | (1,977) | (974) | - | - | (4,236) | | Commissions | - | (1,444) | - | - | - | - | (1,444) | | Communication | - | (28) | (243) | (335) | - | - | (606) | | Travel expenses | - | (78) | (126) | (32) | - | - | (236) | | Other expenses | - | (128) | (578) | (242) | - | - | (948) | | Earn-out | - | - | - | - | - | (10,081) | (10,081) | | Other income and expenses, net | - | - | - | - | - | (1,272) | (1,272) | | Total expenses by nature | (131,779) | (27,359) | (31,270) | (14,796) | (5,431) | (11,353) | (221,988) |
| 35 |
| --- |
| **Notes to the unaudited interim condensed consolidated financial statements**<br><br>***\(In thousands of Reais\)*** |
| --- | |||||||
|---|---|---|---|---|---|---|---|
| --- | --- | --- | --- | --- | --- | --- | --- |
| Cost of services | Sales and marketing expenses | General administrative expenses | Research and development expenses | Allowance for credit losses | Other income and expenses, net | Total | |
| Personnel expenses | |||||||
| Salary | (2,887) | (9,032) | (9,104) | (966) | - | - | (21,989) |
| Benefits | (821) | (1,840) | (1,816) | (1,629) | - | - | (6,106) |
| Compulsory contributions to social security | (648) | (2,376) | (2,731) | (3,036) | - | - | (8,791) |
| Compensation | (22) | (166) | (549) | (29) | - | - | (766) |
| Provisions (vacation/13th salary) | (801) | (2,207) | (1,958) | (2,531) | - | - | (7,497) |
| Provision for bonus and profit sharing | (320) | (1,783) | (2,879) | (2,177) | - | - | (7,159) |
| Share-based payment | (1) | (65) | (318) | (46) | - | - | (430) |
| Other | - | (179) | (208) | 196 | - | - | (191) |
| Total | (5,500) | (17,648) | (19,563) | (10,218) | - | - | (52,929) |
| Costs with operators/Other costs | (78,812) | - | - | - | - | - | (78,812) |
| Depreciation and amortization | (15,418) | (424) | (4,200) | (91) | - | - | (20,133) |
| Outsourced services | (333) | (658) | (4.137) | (3.524) | - | - | (8.652) |
| Rentals/insurance/condominium/water/energy | - | (462) | (55) | - | - | - | (517) |
| Allowance for credit losses (i) | - | - | - | - | (18,269) | - | (18,269) |
| Marketing expenses / events (ii) | - | (2,738) | (19) | - | - | - | (2,757) |
| Software license | - | (2,697) | (1,292) | (1,191) | - | - | (5,180) |
| Commissions | - | (838) | - | (65) | - | - | (903) |
| Communication (ii) | (29) | (46) | (177) | (429) | - | - | (681) |
| Travel expenses | - | (193) | (286) | (54) | - | - | (533) |
| Other expenses | (6) | (1.738) | (1.718) | 1.568 | - | - | (1,894) |
| Other income and expenses, net | - | - | - | - | - | (83) | (83) |
| Total expenses by nature | (100,098) | (27,442) | (31,447) | (14,004) | (18,269) | (83) | (191,343) |
(i) The 2023 was restated (Note 1 - b) to reflect the adjustment to the provisional amounts.
(ii) The Company reclassified some comparative balances for better presentation and comparabilitywith the current period, without any impact on its result, without changes in the totalizing subgroups and without impact on the assessmentof covenants.
| 36 |
| --- |
| **Notes to the unaudited interim condensed consolidated financial statements**<br><br>***\(In thousands of Reais\)*** |
| --- | | 19. | Financial Income (Expenses) | | --- | --- | | | For the three months period ended March 31, | | | --- | --- | --- | | | 2024 | 2023 | | Finance expenses | | | | Interest on loans and financing | (3,062) | (5,123) | | Interest on Debentures | (732) | (1,665) | | Discount | (4,345) | (3,935) | | Foreign exchange losses | (4,287) | (2,316) | | Bank expenses and IOF (tax on financial transactions) | (1,111) | (503) | | Other financial expenses | (6,023) | (311) | | Interests on leasing contracts | (175) | (112) | | Losses on derivative instrument | (33,248) | (837) | | Inflation adjustment | (1,507) | (136) | | Interest and adjustment to present value (APV) on liabilities from acquisition | (10,997) | (3,786) | | Total financial expenses | (65,487) | (18,724) | | Finance income | | | | Interest | 84 | 1 | | Foreign exchange gain | 906 | 732 | | Interests on financial instrument | 319 | 1,153 | | Other financial income | 1,317 | 184 | | Interest and adjustment to present value (APV) on liabilities from acquisition | 2,657 | 555 | | Total finance income | 5,283 | 2,625 | | Net finance costs | (60,204) | (16,099) |
| 37 |
| --- |
| **Notes to the unaudited interim condensed consolidated financial statements**<br><br>***\(In thousands of Reais\)*** |
| --- | | 20. | Income tax and social contribution | | --- | --- | | Three months period ended March 31 | | | | --- | --- | --- | | | 2024 | 2023 | | Deferred taxes on temporary differences and tax losses | 16,083 | 11,846 | | Current tax expenses | (2,420) | (218) | | Tax (income) expense | 13,663 | 11,628 |
| 20.1. | Reconciliation between the nominal income tax and social contributionrate and effective rate | |
|---|---|---|
| Three months period ended March 31 | ||
| --- | --- | --- |
| 2024 | 2023 | |
| Loss before income tax and social contribution | (69,556) | (28,395) |
| Basic rate | 34% | 34% |
| Income tax and social contribution | 23,649 | 9,654 |
| Tax incentives - “Lei do Bem 11.196/05” | 3,548 | 493 |
| Tax loss carryforward not recorded from subsidiaries | (2,084) | 4,356 |
| Others | (1,457) | (2,875) |
| Losses on derivative instrument | (9,993) | - |
| Tax benefit (expense) | 13,663 | 11,628 |
| Effective rate | 19,81% | 54,94% |
| 38 |
| --- |
| **Notes to the unaudited interim condensed consolidated financial statements**<br><br>***\(In thousands of Reais\)*** |
| --- | ||
|---|---|---|
| --- | --- | |
| March 31, 2024 | December 31, 2023 | |
| --- | --- | --- |
| Deferred tax assets | ||
| Provision for labor, tax and civil risk | 13,883 | 13,551 |
| Allowance for doubtful accounts | 5,948 | 4,781 |
| Tax losses and negative basis of social contribution tax | 14,285 | 8,059 |
| Provision for compensation or renegotiation from acquisitions | 37,595 | 34,908 |
| Goodwill impairment | 33,059 | 33,059 |
| Customer portfolio and platform | 19,268 | 16,154 |
| Interest and adjustment to present value (APV) on liabilities from acquisition | 4,959 | 4,200 |
| Other temporary differences | 5,842 | 4,044 |
| Total deferred tax assets | 134,839 | 118,756 |
| Deferred Tax liabilities | ||
| Goodwill | (26,785) | (26,785) |
| Total deferred tax liabilities | (26,785) | (26,785) |
| Net deferred tax | 108,054 | 91,971 |
| Deferred taxes – assets | 108,054 | 91,971 |
| Deferred taxes – liabilities | - | - |
| Balance at December 31, 2023 | 91,971 |
|---|---|
| Additions | 16,083 |
| Balance at March 31, 2024 | 108,054 |
| 39 |
| --- |
| **Notes to the unaudited interim condensed consolidated financial statements**<br><br>***\(In thousands of Reais\)*** |
| --- | | 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 dilutive common shares into common shares.
For the three months period March 31, 2024 and 2023, 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 loss and shares used in calculating basic and diluted earnings per share.
| Three months period ended March 31 | ||
|---|---|---|
| 2024 | 2023 | |
| Basic and diluted earnings per share | ||
| Numerator | ||
| Loss of the period assigned to Company’s shareholders | (56,011) | (16,839) |
| Denominator | ||
| Weighted average for number of common shares | 50,745,005 | 41,766,228 |
| Basic and diluted loss per share (in reais) | (1.104) | (0.403) |
| 40 |
| --- |
| **Notes to the unaudited interim condensed consolidated financial statements**<br><br>***\(In thousands of Reais\)*** |
| --- | | 22. | Risk management and financial instruments | | --- | --- | | 22.1. | Classification of financial instruments | | --- | --- |
The classification of financial instruments is presented in the table below:
| March 31, 2024 | December 31, 2023 | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| 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 | 71,525 | - | - | - | - | 63,742 | - | - | - | - |
| Restricted cash | 6,578 | - | - | - | - | 6,403 | - | - | - | - |
| Trade accounts receivable | 171,905 | - | - | - | - | 148,784 | - | - | - | - |
| Total assets | 250,008 | - | - | - | - | 218,929 | - | - | - | - |
| Liabilities | - | - | - | - | ||||||
| Loans and financing | 93,540 | - | - | - | - | 87,796 | - | - | - | - |
| Trade and other payable | 367,851 | - | - | - | - | 353,998 | - | - | - | - |
| Derivative financial instruments | - | 82,406 | - | - | 82,406 | - | - | - | - | - |
| Liabilities from acquisition | 290,882 | - | - | - | - | 292,152 | - | - | - | - |
| Total liabilities | 752,273 | 82,406 | - | - | 82,406 | 733,946 | - | - | - | - |
| 41 |
| --- |
| **Notes to the unaudited interim condensed consolidated financial statements**<br><br>***\(In thousands of Reais\)*** |
| --- |
22.1.1. Level3 measurement
The fair value of returns from private placement investments is determined using unobservable inputs, therefore it is classified at the level 3 of the fair value hierarchy. The main assumptions used in the measurement of the fair value of the derivative financial instruments of measurement and the sensitivity analysis are presented below.
| Type | Valuation technique | Significant unobservable inputs | Inter-relationship between significant unobservable and fair value measurement |
|---|---|---|---|
| Derivative financial instruments (see note 16) | Black-Scholes model.: The valuation model considered inputs including volatility of the share price, time to expiration, risk-free interest rate | The observable inputs are historical volatility<br> for the shares’ historical prices does not represent current market participants' expectations about the future volatility. | The estimated fair value would increase (decrease) if:<br><br> <br>The volatility of the Company's market cap or the occurrence<br> of a trigger event within 36 months of the investment contract's closing date. |
Sensitivity Analysis of Fair Value Measurements:
| March 31, 2024 | |||||
|---|---|---|---|---|---|
| Variable | DB Value | +10% Shock | -10% Shock | Return (+10%) | Return<br><br> <br>(-10%) |
| Volatility of the Asset | 95.14% | 104.66% | 85.63% | 84,517 | 81,230 |
| USD Risk Free | 4.22% | 4.64% | 3.80% | 83,505 | 82,296 |
| BRL Risk Free | 9.75% | 10.72% | 8.77% | 81,737 | 84,077 |
| USD/BRL Exchange Rate | 4.9962 | 5.4958 | 4.4966 | 91,189 | 74,609 |
| Correlation (Asset & Parity) | -30.83% | -33.91% | -27.74% | 83,372 | 82,428 |
| 42 |
| --- |
| **Notes to the unaudited interim condensed consolidated financial statements**<br><br>***\(In thousands of Reais\)*** |
| --- | |
|---|---|
| --- | --- |
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.
Credit risk exposure
The book value of financial assets represents the maximum credit exposure. The maximum credit risk exposure on financial information date was:
| March 31, 2024 | December 31, 2023 | |
|---|---|---|
| Cash and cash equivalents | 71,525 | 63,742 |
| Restricted cash | 6,578 | 6,403 |
| Trade accounts receivable | 171,905 | 148,784 |
| Total | 250,008 | 218,929 |
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 180 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.
| 43 |
| --- |
| **Notes to the unaudited interim condensed consolidated financial statements**<br><br>***\(In thousands of Reais\)*** |
| --- | |
|---|---|
| --- | --- |
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) | 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.
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 | 93,540 | 106,086 | 39,274 | 38,594 | 28,218 | - |
| Trade and other payables | 367,851 | 367,851 | 367,851 | - | - | - |
| Liabilities from acquisitions | 290,882 | 321,618 | 106,561 | 54,556 | 68,744 | 91,757 |
| Lease liabilities | 4,318 | 5,073 | 2,790 | 1,196 | 1,087 | - |
| Total | 756,591 | 800,628 | 516,476 | 94,346 | 98,049 | 91.757 |
| (d) | 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.
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| **Notes to the unaudited interim condensed consolidated financial statements**<br><br>***\(In thousands of Reais\)*** |
| --- |
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:
| March 31, 2024 | December 31, 2023 | |
|---|---|---|
| Loans and borrowings | 93,540 | 87,796 |
| Cash and cash equivalents | (71,525) | (63,742) |
| Net debt | 22,015 | 24,054 |
| Total equity | 837,819 | 888,810 |
| Net debt/equity (%) | 0.03 | 0.03 |
| 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 March 31, 2024, the Company has in trade and other payables R$108,143 (R$89,594 as of December 31, 2023) with shareholder Twilio Inc. related to agreement established between the Company and Twilio Inc. which establish for the reimbursement of SMS costs. During the three months period ended March 31, 2024, the Company in profit or loss the total amount of R$4.347 (R$3.933 for the three months period ended March 31, 2023).
As explained in note 16, as of March 31, 2024, the Company recognized a liability in the amount of R$82,406 (R$33,247 of finance expenses) with the controlling shareholder related to the investment agreement signed for the capital increase.
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| --- |
| **Notes to the unaudited interim condensed consolidated financial statements**<br><br>***\(In thousands of Reais\)*** |
| --- | | 24. | Events after the reporting period | | --- | --- |
On April 12, 2024, Zenvia Brazil entered into an agreement with Banco ABC Brasil S.A. for a Commercial Notes, in the aggregate amount of R$15,000, establishing an amortization schedule comprised of 18 installments, six months of grace period and 12 installments of principal.
On April 18, 2024, Zenvia Brazil entered into an agreement with Banco Santander S.A. for a CCB (Cédula de Crédito Bancário) in the aggregate amount of R$25,000, establishing an amortization schedule comprised of 12 installments, three months of grace period and 9 installments of principal.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereto duly authorized.
Date: July 15, 2024
| Zenvia Inc. | |
|---|---|
| By: | /s/ Cassio Bobsin |
| --- | --- |
| Name: Cassio Bobsin | |
| --- | |
| Title: Chief Executive Officer | |
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